Summary of Consolidated Financial Results for the Six Months Ended May 31, 2016 (Based on Japanese GAAP)

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1 Translation Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Company name: K.R.S.Corporation Summary of Consolidated Financial Results for the Six Months Ended May 31, 2016 (Based on Japanese GAAP) Stock exchange listing: Tokyo Stock code: 9369 URL Representative: President and Representative Director Hideaki Nishio Inquiries: Director Corporate Officer General Manager Administration Division Tomoari Sasajima TEL Scheduled date to file Quarterly Securities Report: July 15, 2016 Scheduled date to commence dividend payments: August 8, 2016 Preparation of supplementary material on quarterly financial results: Yes Holding of quarterly financial results meeting: Yes (for institutional investors and analysts) July 4, 2016 (Amounts less than one million yen are rounded down) 1. Consolidated financial results for the six months ended May 31, 2016 (from December 1, 2015 to May 31, 2016) (1) Consolidated operating results (cumulative) Percentages indicate year-on-year changes Operating revenue Operating income Ordinary income Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % May 31, ,190 (0.9) 2, , , May 31, , , , Earnings per share Diluted earnings per share Yen Yen May 31, May 31, (2) Consolidated financial position Total assets Net assets Equity ratio Millions of yen Millions of yen % As of May 31, ,975 32, As of November 30, ,203 31, Cash dividends Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Year ended November 30, Year ending November 30, Year ending November 30, 2016 (Forecast) Forecast of consolidated financial results for the year ending November 30, 2016 (from December 1, 2015 to November 30, 2016) Percentages indicate year-on-year changes Profit attributable to Operating revenue Operating income Ordinary income Earnings per share owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full year 153,000 (0.4) 4, , ,

2 4. Notes (1) Changes in significant subsidiaries during the six months ended May 31, 2016 (changes in specified subsidiaries resulting in the change in scope of consolidation): No (2) Application of special accounting methods for preparing quarterly consolidated financial statements: No (3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: Yes Changes in accounting policies due to other reasons: No Changes in accounting estimates: Yes Restatement of prior period financial statements: No (4) Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) As of May 31, ,677,900 shares As of November 30, ,677,900 shares Number of treasury shares at the end of the period As of May 31, ,240 shares As of November 30, ,240 shares Average number of shares during the period (cumulative from the beginning of the fiscal year) May 31, ,428,660 shares May 31, ,469,735 shares 2

3 Quarterly consolidated financial statements Consolidated balance sheets Assets Current assets As of November 30, 2015 As of May 31, 2016 Cash and deposits 4,262 4,515 Notes and operating accounts receivable 17,514 17,127 Merchandise Supplies Other 1,596 1,937 Allowance for doubtful accounts (1) (1) Total current assets 23,623 23,881 Non-current assets Property, plant and equipment Buildings and structures, net 10,413 10,103 Machinery, equipment and vehicles, net 5,025 6,857 Tools, furniture and fixtures, net Land 17,201 17,127 Leased assets, net 1,942 2,049 Construction in progress 531 1,311 Total property, plant and equipment 35,575 37,978 Intangible assets Investments and other assets Investment securities 2,257 2,298 Lease and guarantee deposits 3,697 3,810 Net defined benefit asset Other 1,218 1,211 Allowance for doubtful accounts (51) (51) Total investments and other assets 7,343 7,507 Total non-current assets 43,579 46,093 Total assets 67,203 69,975 3

4 As of November 30, 2015 As of May 31, 2016 Liabilities Current liabilities Notes and operating accounts payable - trade 12,819 12,429 Short-term loans payable 2,448 2,988 Income taxes payable 1,279 1,017 Provision for bonuses 926 1,218 Provision for directors' bonuses Other 8,211 7,049 Total current liabilities 25,773 24,739 Non-current liabilities Long-term loans payable 6,339 8,955 Net defined benefit liability Asset retirement obligations Other 2,578 2,464 Total non-current liabilities 9,980 12,755 Total liabilities 35,754 37,495 Net assets Shareholders' equity Capital stock 4,063 4,063 Capital surplus 4,209 4,209 Retained earnings 21,219 22,054 Treasury shares (360) (360) Total shareholders' equity 29,131 29,966 Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges (19) (23) Foreign currency translation adjustment Remeasurements of defined benefit plans (422) (359) Total accumulated other comprehensive income Non-controlling interests 1,945 2,079 Total net assets 31,448 32,480 Total liabilities and net assets 67,203 69,975 4

5 Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative) Consolidated statements of income (cumulative) May 31, 2015 May 31, 2016 Operating revenue 75,871 75,190 Operating cost 72,249 71,118 Operating gross profit 3,622 4,071 Selling, general and administrative expenses 1,884 1,947 Operating income 1,737 2,124 Non-operating income Interest income 4 5 Dividend income 6 5 Rent income Share of profit of entities accounted for using equity method 0 Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Expenses on facilities rented to others Loss on valuation of derivatives Share of loss of entities accounted for using equity method 2 Other 13 6 Total non-operating expenses Ordinary income 1,699 2,273 Extraordinary income Gain on sales of non-current assets Gain on sales of investment securities Gain on sales of shares of subsidiaries and associates 46 Total extraordinary income Extraordinary losses Loss on sales and retirement of non-current assets Loss on cancellation of leases 9 35 Impairment loss Other 1 0 Total extraordinary losses Income before income taxes and minority interests 1,734 2,138 Income taxes - current 891 1,067 Income taxes - deferred (228) (126) Total income taxes Profit 1,071 1,197 Profit attributable to non-controlling interests Profit attributable to owners of parent 962 1,009 5

6 Consolidated statements of comprehensive income (cumulative) May 31, 2015 May 31, 2016 Profit 1,071 1,197 Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges 0 (4) Foreign currency translation adjustment 36 (35) Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income 1,312 1,255 Comprehensive income attributable to Comprehensive income attributable to owners of parent 1,188 1,071 Comprehensive income attributable to non-controlling interests

7 Consolidated statements of cash flows May 31, 2015 May 31, 2016 Cash flows from operating activities Income before income taxes and minority interests 1,734 2,138 Depreciation 1,821 1,708 Impairment loss Increase (decrease) in allowance for doubtful accounts 1 0 Increase (decrease) in provision for bonuses Increase (decrease) in net defined benefit liability (82) (77) Increase (decrease) in provision for directors' bonuses (25) (52) Interest and dividend income (11) (11) Interest expenses Share of (profit) loss of entities accounted for using equity method 2 (0) Loss (gain) on sales of investment securities (28) (24) Loss (gain) on sales of shares of subsidiaries and associates (46) Loss (gain) on sales of property, plant and equipment (61) (53) Loss on retirement of property, plant and equipment Decrease (increase) in notes and accounts receivable - trade Decrease (increase) in inventories 48 (49) Increase (decrease) in notes and accounts payable - trade (752) (239) Increase (decrease) in long-term accounts payable - other (74) (3) Increase (decrease) in accrued consumption taxes (265) (519) Other, net 241 (642) Subtotal 3,811 3,075 Interest and dividend income received Interest expenses paid (51) (51) Income taxes paid (747) (1,347) Income taxes refund 10 0 Net cash provided by (used in) operating activities 3,037 1,692 Cash flows from investing activities Purchase of property, plant and equipment (1,546) (4,292) Proceeds from sales of property, plant and equipment Purchase of intangible assets (90) (64) Purchase of investment securities (15) (35) Proceeds from sales of investment securities Purchase of shares of subsidiaries (21) Payments of loans receivable (9) (11) Collection of loans receivable Proceeds from sales of shares of subsidiaries and associates 58 Other, net 1 1 Net cash provided by (used in) investing activities (1,464) (4,005) 7

8 May 31, 2015 May 31, 2016 Cash flows from financing activities Net increase (decrease) in short-term loans payable (250) 150 Proceeds from long-term loans payable 600 3,800 Repayments of long-term loans payable (712) (794) Repayments of lease obligations (351) (337) Purchase of treasury shares (347) Cash dividends paid (139) (173) Dividends paid to non-controlling interests (34) (50) Net cash provided by (used in) financing activities (1,234) 2,593 Effect of exchange rate change on cash and cash equivalents 26 (26) Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period 2,985 4,262 Cash and cash equivalents at end of period 3,349 4,515 8