Term 2021.3(Apr.2020～Sep.2020) Outline of Financial Results Potomac Mills ( Woodbridge, Virginia, USA) September 26, 2020 Open！ Analysis of consolidated operating results Apr. 2020~Sep.2020 Actual [Year-on-year] ※(Unit ¥bn) ※Figures below ¥10 million have been truncated. Percentage is rounded off to one decimal place. ① [Differ in number of stores] Japan(103 stores) Term 2020.3 Actual Term 2021.3 Actual Differ Unit The USA(43 stores):9 stores opened (2019.4~2019.09) (2020.4~2020.09) (%) ② 【No. of months stores were open during the term】 Total stores at the Due to the effect of the closing down, the description Store end of the term ① 137 146 +6.6 is not included. Stores No. of months total ③ 【Ordinary income】 stores operation Month 818 ② ― ― Term 2020.3 2nd Q Actual Ordinary income ¥5.70bn Bowling 12.05 5.25 (56.4) ◆Japan Ordinary income & loss ¥(14.13)bn Amusement 27.08 12.96 (52.1) [Breakdown] Decrease in sales ¥(22.23)bn Karaoke Decrease in promotion exp. +¥1.65bn (including other sales of The USA) 5.66 1.67 (70.5) (Amusement merchandise exp., etc.) Spo-cha 6.81 2.28 (66.5) Decrease in personnel exp. +¥1.32bn Decrease in purchases +¥0.78bn Others 1.58 1.08 (31.7) Decrease in rent exp. +¥0.72bn Total sales 53.18 23.26 (56.3) Decrease in advertising exp. +¥0.65bn Decrease in utility exp. +¥0.63bn Cost of sales 45.69 36.03 (21.1) Decrease in communication exp. +¥0.58bn Gross profit 7.49 (12.77) ― Decrease in other exp. +¥1.77bn ◆The USA Ordinary income & loss ¥(5.52)bn P / L S.G.A. expenses 1.68 1.53 (8.6) [Breakdown] Decrease in income of existing stores ¥(3.86)bn Operating income 5.81 (14.31) ― Decrease in income of new stores ¥(1.72)bn Non-operating income & Decrease in initial investment cost +¥0.06bn expenses (0.11) 0.13 ― ◆China & Russia preparation exp. ¥(0.20)bn Ordinary income ③ 5.70 (14.17) ― for opening stores Ordinary income margin 10.7％ ― ― Term 2021.3 2nd Q Actual Ordinary income ¥(14.17)bn Extraordinary income & loss ④ (0.29) (0.19) ― ④ 【 Extraordinary income & loss breakdown 】 Net income before tax 5.40 (14.37) ― Term 2020.3 2nd Actual Extraordinary loss ¥(0.29)bn ・ Loss on disposal of fixed assets, etc. ¥(0.29)bn Corporate tax 1.69 (3.17) ― Term 2021.3 2nd Actual Extraordinary loss ¥(0.19)bn ・ Loss on disposal of fixed assets, etc. ¥(0.01)bn Net income 3.70 (11.19) ― ・ Impairment loss ¥(0.18)bn -1- Total sales and Year-on-year comparison of existing stores (Japan and The USA) 【Japan】 Total sales and Year-on-year comparison of existing stores ※Figures below ¥10 million have been truncated. Percentage is rounded off to one decimal place. Unit 1st Q 2nd Q 1st half 3rd Q 4th Q 2nd half Term Total Year- Total Year- Total Year- Total Year- Total Year- Total Year- Total Year- sales on-Year sales on-Year sales on-Year sales on-Year sales on-Year sales on-Year sales on-Year Bowling ¥bn ％ 1.27 (75.5) 3.77 (31.4) 5.04 (52.8) Amusement ¥bn ％ 2.76 (70.9) 8.57 (21.3) 11.33 (44.4) Karaoke ¥bn ％ 0.36 (80.3) 1.14 (43.3) 1.50 (60.9) Spo-cha ¥bn ％ 0.48 (85.1) 1.80 (49.4) 2.28 (66.5) Others ¥bn ％ 0.35 (52.5) 0.72 (11.1) 1.08 (31.0) Total sales ¥bn ％ 5.23 (74.5) 16.01 (29.7) 21.25 (50.9) No. of Sat./Sun./Holidays over previous year Days (2) +1 (1) No. of stores at the end of each term in Japan ( All stores / existing stores) 103／103 103／103 103／103 Please refer to page 9 and 10 for the number of stores. 【The USA】 Total sales and Year-on-year comparison of existing stores ※Figures below ¥10 million have been truncated. Percentage is rounded off to one decimal place. Unit 1st Q 2nd Q 1st half 3rd Q 4th Q 2nd half Term Total Year- Total Year- Total Year- Total Year- Total Year- Total Year- Total Year- sales on-Year sales on-Year sales on-Year sales on-Year sales on-Year sales on-Year sales on-Year Bowling ¥bn ％ 0.02 (97.0) 0.17 (81.2) 0.20 (89.1) Amusement ¥bn ％ 0.34 (91.6) 1.28 (75.4) 1.63 (83.4) Karaoke, etc. ¥bn ％ 0.01 (98.7) 0.15 (89.4) 0.17 (94.1) Total sales ¥bn ％ 0.39 (93.6) 1.61 (78.7) 2.00 (86.1) No. of Sat./Sun./Holidays over previous year Days ±0 ±0 ±0 No. of stores at the end of each term in The USA ( All stores / existing stores) 41／32 43／34 43／34 ※ In calculation of sales actual exchange rate $1 = ¥106.93 is used. ※ Comparison of existing stores with the previous year is calculated in dollars for stores that have been opened for 13 months or longer. ※ Sales at the reopened stores compared to normal operations were down 40~50% in the second quarter and down 30~40% in the last month. -2- Term 2021.3 Business plan and Finance status Business plan Term 2021.3 The business plan for the term 2021.3 is difficult to determine since the financial impact such as the closing down of stores and the delays of opening stores in abroad from COVID-19 can not be calculated at this point. The information will be released once it is possible to draw up the plan. Financial status【consolidated】 【 Cash and deposits and current cash flow 】 During September-October 2020, we raised ¥20.8bn in funding mainly from our main （As of October 30，2020） banks , and we are planning to raise approximately ¥18.0bn additionally by December Guarantee deposits Approx. ¥ 8.7bn 2020. If we add ¥16.0bn from commitment line agreement(a contract enabling immediate borrowing), which was set on May 1, 2020, we will have approximately Cash and deposits Approx. ¥ 40.0bn ¥83.0bn on hand. The total monthly expenditure in Japan and The USA at the time of Approx. ¥ 48.7bn closure of all our stores was approximately ¥4.5bn(from table below※),so we are secured working capital for the time being. 【 Breakdown of capital outflow at the time of closure of all stores 】 (Unit ¥bn) ＜ Personnel expenses ＞ Monthly Interest- (Japan) expenses Personnel exp. Rent exp. Lease fee bearing debt Others Total Leave allowance will be paid to employees and part-time workers during Japan 0.7 1.1 0.7 0.6 0.8 3.9 closing period. (The USA) The USA Health insurance for employees from 0.1 0.3 0.1 － 0.1 0.6 store will be paid from the company and national unemployment insurance will be Total 0.8 1.4 0.8 0.6 0.9 ※ 4.5 paid from the government. 【 Cost reduction 】 ・ Rent expenses : [Japan and The USA] Negotiation with owners is underway, including free rent. ・ Advertising expenses : [Japan and The USA] Consider it as “0” in this term (Included in "Others" in the above table). ・ Other fixed costs: [Japan and The USA] Negotiation is underway to reduce all fixed costs. -3- Business conditions Operating situations and Policies for resumption of operations ◆ Operating situations （As of 10 AM November 5, 2020 in Japan） 【Japan】 All 103 stores are in operation 【The USA】 29 stores are in operation (including 3 stores opened from July to October) and 14 stores are temporally closed ◆ Resumption of operations 【Japan】 Since May 15, stores had reopened sequentially and on June 1, all of stores were reopened with restrictions on business hours and operating areas. 【The USA】 21 stores until August, 3 stores in September and 2 stores in October have reopened and 14 stores are currently closed. Reopened stores are also affected by restrictions from local governments such as shortened operating hours and limited operation and it is possible to be requested to close depends on the situation of the infection. Countermeasures to prevent the infection of COVID-19 in stores ・ The employees : Implementation temperature inspection before work / hands washing and alcohol sterilization regular basis / wearing a mask during work ・ The customers : Implementation temperature inspection and requesting to wear a mask at the time of entering (in Japan) ・ Installation of alcohol sanitizer in each place of the store. ・ Antimicrobial and antiviral coating (KYOPARA) for facilities and play equipment (in Japan) ・ Sterilization of each game machine and play equipment by alcohol ・ Rental sterilized microphone for each person at Karaoke area (in Japan) ・ Operation with sufficient ventilation and secure distance between customers etc. -4- Trend in P/L status No change has made since the disclosure data on May 11, 2020 Trend in P / L (Consolidated) (Unit ¥bn) ※Figures below ¥100 million have been truncated. Percentage is rounded off to one decimal place. Term 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 No. of stores at the end of term 110 113 114 118 122 122 129 137 144 Total sales 89.5 85.9 84.2 83.9 83.5 87.7 95.9 101.3 104.7 Ordinary income 11.4 8.2 7.8 6.1 5.4 5.8 10.2 11.2 8.7 Ordinary income margin 12.8% 9.6% 9.3% 7.3％ 6.5％ 6.7％ 10.7％ 11.1％ 8.3％ Net income 2.7 0.6 (19.7) (4.5) 0.4 2.7 8.4 7.1 4.7 ROI (Return on investment) ① 5.0％ 4.0％ 5.1％ 5.9％ 5.9％ 6.8％ 12.0％ 12.4％ 8.5％ ROE (Return on equity) ② 3.5％ 0.8％ (28.9)％ (8.4)％ 0.9％ 5.4％ 15.6％ 12.0％ 7.5％ ROA (Return on assets) ③ 1.2％ 0.3％ (11.8)％ (3.8)％ 0.4％ 2.7％ 8.1％ 6.4％ 3.8% ① ROI calculation: Ordinary income ÷ [{(Net assets at the beginning of term ＋ Net assets at the end of term ) ÷ 2} ＋ {(Interest-bearing liabilities including lease liabilities at the beginning of term ＋ Interest-bearing liabilities including lease liabilities at the end of term) ÷ 2}] ② ROE calculation: Net income ÷ {(Shareholder equity at the beginning of term ＋ Shareholder equity at the end of term) ÷ 2} ③ ROA calculation: Net income ÷ {(Total assets at the beginning of term ＋ Total assets at the end of term) ÷ 2} Trend in P / L (Japan) Term 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 No.