TENPOS : Consolidated Financial Results for the Fiscal Year Ended April 30, 2022

June 14, 2022

Consolidated Financial Results

for the Fiscal Year Ended April 30, 2022 （Japan GAAP-Unaudited）

Scheduled date of the Ordinary General Meeting of Shareholders: July 27, 2022

Scheduled date to commence dividend payments: July 28,2022

Scheduled date of securities report submission: July 28,2022

Preparation of supplementary materials for financial results: Yes

Financial Results Briefing Session: Yes (for analysts and institutional investors)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated Financial Results for the Fiscal Year Ended April 30, 2022 (May 1, 2021 – April 30, 2022)

Reference: Equity in earnings(losses) of affiliates Year Ended April 30, 2022:¥154 million Year Ended April 30, 2021:¥96 million

(2) Consolidated financial position

Accompanying Materials – Contents

1. Overview of Business Results………………………………………………………………………………………. 2

1. Summary of Business Results for the Current Period…………………………………………………………. 2

1. Information on the Future Outlook, Including Consolidated Business Results Forecasts……………………. 9

2. Basic approach to the selection of accounting standards …………………………………………………………… 10

3. Consolidated Financial Statements and Key Notes ………………………………………………………………… 11

1. Consolidated Balance Sheets ………………………………………………………………………………….. 11
2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ….……………. 13
3. Consolidated Statement of Changes in Net Assets ……………………………………………………………. 15
4. Consolidated Statement of Cash Flows………………………………………………………………………… 16
5. Notes to Consolidated Financial Statements ………………………………………………………………….. 18

(Significant subsequent events) ………………………………………………………………………………. 23

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1. Overview of Business Results, etc.

(1) Summary of Business Results for the Current Period

In the domestic economy, the performance of the restaurant industry has changed rapidly from favorable to unfavorable due to the infection situation of the new type of coronavirus, but after the lifting of the priority measures to prevent the spread of the virus in March 2022, the number of customers has gradually recovered.

The Group, which sells kitchen appliances to restaurants and provides restaurant management support and restaurant management, reported consolidated net sales of 29,008 million yen (up 7.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on-year), operating income of 1,871 million yen (up 90.6{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on-year), ordinary income of 2,919 million yen (up 101.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on-year), and net income attributable to owners of the parent of the Company of Net income attributable to shareholders of the parent company was 1,564 million yen (up 686.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} y-o-y), marking a record high for ordinary income for the year. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and others were applied from the beginning of the first quarter of the current consolidated fiscal year. As a result, net sales, cost of sales, and selling, general and administrative expenses decreased by 429 million yen, 237 million yen, and 191 million yen, respectively, during the current consolidated accounting period, but there was no impact on operating income, ordinary income, and income before income taxes and minority interests.

(note) The above are non-consolidated segment results and do not correspond to the results in the segment information and consolidated statements of income.

(Note) The above figures are the results of the segment on a non-consolidated basis and do not correspond to the results of the segment information.

A summary by business segment is as follows.

Sales by business segment, which until the previous consolidated fiscal year had been stated in terms of sales to outside customers, are stated in terms of segment sales from the first quarter of the consolidated fiscal year under review.

1.Product sales

Due to an increase in orders from customers opening new restaurants and replacement demand for kitchen equipment using subsidies, segment sales for the full year were 21,003 million yen (up 16.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} y-o-y) and segment income was 2,373 million yen (up 28.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} y-o-y), reaching record high results.

[Store Sales of used kitchen equipment, etc. Tenpos Busters Co., Ltd.]

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Sales: 16,106 million yen (+19.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} YoY) Operating income: 2,127 million yen (+24.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} YoY)

Tempos Busters Co., Ltd. is Japan’s largest seller of used kitchen equipment, and is working to attract new restaurant openings and increase customer spend by offering “Dr. Tempos,” an information and service useful for restaurant management in addition to product sales. Tempos Busters is working to acquire customers opening new restaurants and increase the number of customers per customer by providing “Dr. Tempos,” a service that not only sells products but also provides useful information and services for restaurant management. The number of new restaurant opening customers for the full year totaled 24,303, up 15.5{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} from the same period last year and up 36.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} from the same period last year before the Corona disaster. This is due to the thoroughness of our approach to customer calls to capture customers who visit our stores. As a result, sales focused on customers opening new stores increased 16.1{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} y-o-y to 6,104 million yen.

On the other hand, as a measure to increase the sales per customer for new restaurant openings, we are working on comprehensive order-taking activities for product sales triggered by DIY work for restaurants, but it takes time to acquire the quality of sales talk and knowledge, and customers do not believe that Tempo is supporting the opening of new restaurants because of the employees’ appearance and rough clothes. We have yet to achieve any significant results. Employees who used to be just customer service staff are now struggling, but we will continue to do so because we see this market as a large one. In addition, starting in March 2022, when a restaurant closes and we receive a request to purchase the equipment, we will not immediately pull the equipment after purchasing it, but negotiate with the landlord to leave the equipment as is and sell the kitchen equipment to the next customer who opens a new restaurant. The new customers purchase only the kitchen equipment they want to use, and Tempos Busters will continue to salvage and recondition unneeded equipment and sell it at Tempos Busters’ stores. This allows us to have contact with customers from the early stage of preparation for opening a new restaurant, when restaurants sign real estate contracts, and we intend to link this to interior work necessary for opening, support for hiring and attracting customers, and proposal and sale of missing equipment, furniture, and tableware and cooking utensils. Although you may be frustrated by our company’s inability to harvest the various business seeds we have sown, we will continue to take various steps toward our long-term vision of “becoming an unshakable provider of hardware and software to the restaurant industry.

Finally, with regard to new store openings, we opened a store in Ibaragi Prefecture (Mito Store) in February 2022 and in Hyogo Prefecture (Himeji City) in March. The Mito store was profitable in the month it opened, and the Himeji store was profitable in the month following its opening. The reason for the low number of new store openings over the past 10 years was that it was difficult to turn a profit even after opening new stores. However, we are now experimenting with the “Dr. Tempos” method of serving customers in stores to increase the number of times customers are served and sell products, and we feel that this method will work for new stores as well, and it has become a foothold for our store opening offensive.

[Direct sales of kitchen appliance to major food service companies KITCHEN TECHNO CORPORATION] Sales: 2,973 million yen (+11.3{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} YoY) Operating income: 219 million yen (+20.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} YoY)

As a result of the attention paid to ventilation inside restaurants in the Corona Disaster, unit sales of our own product, “Smokeless Yakiniku Roaster Tetsujin 29 (Niku) Go,” increased 108.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year on year. Other factors such as a 37.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on-year increase in unit sales of our own product “noodle-making machines” and a 23.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on- year increase in unit sales of used and new ticket-vending machines resulted in a 20.7{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on-year increase in full-year operating income, mainly due to higher unit sales of products with high gross margins. We feel that there is still a strong appetite for investment in labor-saving products in the food and beverage industry, which is experiencing a labor shortage, so we believe that there are still elements of growth potential.

As for new initiatives, in the fourth quarter of the fiscal year, we started sales activities for take-out counters for major restaurant chains and a project to support the opening of restaurants for foreign residents visiting Japan.

[Sales of kitchen appliances and food products for consumers through web-based shopping TENPOS.COM Co., Ltd.]

Sales: 2,545 million yen (-0.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} YoY) Operating income: 89 million yen (-6.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} YoY)

Tempos.com Co., Ltd. operates Japan’s largest mail-order kitchen equipment website, and unlike Tempos Busters, which sells in stores, the majority of its sales come from the sale of new kitchen equipment. Therefore, a major blow to the company came when domestic kitchen equipment manufacturers suspended orders and extended delivery dates due to the global shortage of semiconductors and damage to material manufacturers beginning in the fall of 2021. However, “A pinch is an opportunity!” and focused on expanding sales and proposing alternatives to used kitchen equipment, sales in the used equipment segment increased 9.4{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} year-on-year in the first half of the year, while in the second half of the year sales grew a significant 40.8{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5}. As a result, despite the problem of shortages of new equipment, full-year sales declined only 0.2{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} from the same period of the previous year, resulting in sales of 2,854 million yen, up 12.0{4e908c29df01d999f087e4f922633998e2ded1c72f05851cd6252034960daee5} from the same period of the previous year when the accounting standards of the previous period were applied.

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