Ｈａｍｅｅ（3134） – Financial Results for the Third Quarter of the Fiscal Year Ending April 30, 2022

March 14, 2022 East Consolidated Financial Results for the Third Quarter FY04/22 [Japanese GAAP] 3134 Name of listed company Hamee Corp. Code Number Representative (Title) President and CEO Contact file Scheduled date Quarterly Securities Report Preparation of supplementary material on quarterly financial results : Yes Quarterly results briefing Scheduled commencement dividend payment March 14, 2022 date to Listed stock exchanges URL https://hamee.co.jp/ : None of – of (Title) Officer, Corporate Planning Dept.Manager (Name) Ippei Takahashi (TEL) +81-465-42-9181 (Name) Ikuhiro Mizushima (Millions of yen are rounded down.) FY04/22 Q3 consolidated result(May 1, 2021 to January 31, 2021) (1)Consolidated Operating Results (Percentages indicate year-on-year changes.) Net sales Operating income Ordinary income Q3 FY04/22 Q3 FY04/21 % Millions of yen 1,874 1,654 (NOTE) Comprehensive income Q3 FY04/22 1,439 Millions of yen (11.4 %) Q3 FY04/21 1,291 Millions of yen (43.9 %) % Millions of yen 1,448 1,145 % Millions of yen 1,928 1,610 Millions of yen 9,979 9,055 19.7 17.3 10.2 4.6 13.3 21.6 Attributable to owners of parent Quarter net income % 26.5 21.8 Earnings Per share Diluted Earnings Per share Q3 FY04/22 Q3 FY04/21 (2)Consolidated Financial Position Yen 91.15 72.45 Yen 90.88 71.84 Total assets Net assets Equity Ratio Q3 FY04/22 FY04/21 Millions of yen 10,667 8,338 Millions of yen 7,826 6,528 (Reference) Shareholders’ equity Q3 FY04/22 7,730 Millions of yen FY04/21 2.Dividends % 72.5 77.1 6,429 Millions of yen Dividend per share End of first quarter End of second quarter End of the third quarter Term end Total Yen – – Yen 0.00 0.00 Yen – – Yen 10.00 20.50 Yen 10.00 20.50 FY04/21 FY04/22 FY04/22 (Forecast) (NOTE) Revisions to the most recently announced dividend forecasts 3.Forecasts for the fiscal year ended April 31, 3.2022 (May 1, 2021 to April 30, 2022) : None Net sales Operating income Ordinary income Millions of yen % Millions of yen 2,250 % Millions of yen 2,248 Full year 14,000 13.2 4.6 (NOTE) Revisions to the consolidated forecasts most recently announced : None (NOTE) Because we manage our performance on an annual basis, our earnings forecasts are only for the full fiscal year. 3.2 (Percentages indicate year-on-year changes.) Net profit Attributable to owners of parent % 3.6 % Millions of yen 1,612 Earnings Per Share Yen 101.53 ※ Notes (1)Changes of important subsidiaries during the period : None (changes in specified subsidiaries resulting in change in scope of consolidation) New – Exclusion – (2)Application of particular accounts procedures to the preparation of quarterly consolidated financial statements (3)Changes in accounting policies and changes or restatement of accounting estimates ① Changes in accounting policies caused by revision of accounting standards : Yes ② Changes in accounting policies other than ① ③ Changes in accounting estimates ④ Restatement : None : None : None : None (4) Number of shares of outstanding(common stock) ①Number of shares outstanding at the end of the period(including treasury stock) Q3 FY04/22 16,267,200 Shares FY04/21 16,255,200 Shares ②Number of treasury stock at the end of the period Q3 FY04/22 369,481 Shares FY04/21 377,523 Shares ③Average number of shares during the period Q3 FY04/22 15,892,214 Shares Q3 FY04/21 15,808,571 Shares ※ Quarterly financial results are not subject to quarterly review by certified public accountants or auditing firms. ※ Explanations and other special notes concerning the appropriate use of business performance forecasts The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed reasonable by the Company. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to “1. Qualitative Information on Quarterly Financial Results, (3) Explanation of future forecasts such as Consolidated performance Forecasts and Other Forward-Looking Information” on page 4 of the attached material for the assumptions underlying the earnings forecasts and notes on the use of the earnings forecasts. ○Accompanying Materials – Contents 1.Qualitative Information on the current quarter’s performance ……………………………………………….. 2 (1) Explanation of Operating Results ……………………………………………………………………. 2 (2) Explanation of Financial Position……………………………………………………………………… 4 (3) Explanation of future forecasts such as Consolidated performance Forecasts……………….. 4 2. Quarterly Consolidated Financial Statements and Major Notes……………………………………………….. 5 (1)Quarterly Consolidated Balance Sheets………………………………………………………………. 5 (2)Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income………………………………………………………………. 7 (3) Notes to Quarterly Consolidated Financial Statements…………………………………………….. 9 (Notes on the Going Concern Assumption)………………………………………………………….. 9 (Change in scope of consolidation or scope of application of the equity method)……………. 9 (Notes on Significant Changes in the Amount of Shareholders’ Equity)………………………… 9 (Changes in Accounting Policies) ……………………………………………………………………… 9 (Segment Information, etc.) ……………………………………………………………………………11 (Significant Subsequent Events) ……………………………………………………………………… 13 1 1. Qualitative Information on the current quarter’s performance (1) Explanation of Operating Results In the third quarters of the current fiscal year, the outlook for the Cumulative economy remained unclear. Although the economy regained stability once due to a substantial decrease in the number of new infections of COVID-19, the outlook remained unclear due to the implementation of priority measures to prevent the spread of spread, etc. due to the spread of new variant stocks. Under these circumstances, the status of each business segment in the third quarter of the current fiscal year was as follows. ① Commerce Business a. Domestic business In the third quarter of the fiscal year under review, in addition to the momentum of the new iPhone sales in the second quarter, sales of iFace series were firm during the year-end sales, which is the biggest shopping season in a year, due in part to the sales measures taken by carriers for old models. Retail: We showed our presence in the market, including winning the Rakuten Shop of the Year 2021 Smartphone, Tablet, and Peripheral Equipment Genre Award for 3 years straight. Wholesale: Due to the effects of sales measures for old models by carriers, we were able to win more repeat orders than anticipated for both new and old models, resulting in solid sales. As a result, sales were on a par with the same quarter of the previous fiscal year even in a situation in which people’s popularity declined due to the spread of COVID-19 by new variants from mid-January onwards. The gaming monitor brand Pixio, which we have been working to expand into business categories since this fiscal year, was affected by a worldwide shortage of semiconductor supplies. However, as the prospect of product procurement is coming up and we were able to roll out new products in December and January, sales in January 2022 exceeded JPY70 million. In addition, on January 13, we released ByUR, a cosmetics brand launched as a challenge to the different categories of iFace brands. We are aggressively developing such initiatives as WebCM employing well-known models and creators, postings on social media, and tie-up videos utilizing YouTuber and TikTok. b. Overseas Business In the U.S., which is the core of our overseas business, our organizational strength was strengthened to the extent that we can roll out localized products. As a result, iFace increased 82.0% compared with the same quarter of the previous fiscal year, and sales in all categories increased due to favorable sales of our music toys, Otamaton, and low rebound general merchandise. As a result, net sales in the U.S. grew significantly by 105.7% compared with the same quarter of the previous fiscal year. We will continue to enhance localization products. As a result, the Commerce Business posted net sales of JPY7,532,764 thousand for the third quarter of the current fiscal year (up 6.2% from the same quarter of the previous fiscal year), but segment income (operating income) was JPY1,783,655 thousand (down 4.9%) due to investment in advertising associated with the launch of the Cosmetics Business. ② Platform Business a. Next Engine At the end of the third quarter, the number of Next Engine contracts totaled 5,236 (up 143 from the second quarter). In addition, against the backdrop of the seasonal trend of the holiday season, which is the busiest season, transactions were brisk through Next Engine, with GMV (order processing amount) at JPY307.5 billion (up 21.3% from the same quarter of the previous year) and average spend per customer at JPY37,077 (up 0.3% from the same quarter of the previous year), all of which were higher than the same quarter of the previous year. As a result, sales exceeded JPY200 million for the first time 2 in December on a monthly basis, and in the third quarter of the fiscal year under review, net sales were JPY601,177 thousand (up 18.8% from the same quarter of the previous fiscal year), a record high for quarterly sales. In terms of costs, we continued to invest in the development of cloud infrastructure, and despite a decrease in the operating income margin due to an increase in fixed costs stemming from an increase in server costs of JPY26,475 thousand compared to the same quarter of the previous fiscal year, both sales and profits steadily increased, up 15.5% compared to the same quarter of the previous fiscal year. In January, we released NEHUB, a service that matches the apps and services of Next Engine platforms that are best suited to solving issues faced by Next Engine users. By creating an environment in which it is easy to match these Next Engine users with the services of partners in the platform, we will strive to realize a robust partner ecosystem. b. Hamee Consulting Corp. At Hamee Consulting Corp., which provides sales support consulting for EC businesses, continued to grow. Incomes from EC consulting contracts remained firm, and large-scale orders were received in the EC website production and construction business, which was launched as a new organizational unit from the fiscal year under review. As a result, net sales in the Platform Business increased 21.4% year-on-year to JPY2,051,494 thousand and segment profit increased 19.6% to JPY850,961 thousand. ③ Others “Others” includes Hometown Tax Payment Support Service, “Hamic POCKET” watch mobile terminal for elementary school students, and “RUKAMO” ethical net shop. The Hometown Tax Payment Support Service worked to improve the donation amount of existing contract municipalities by implementing various EC marketing measures, including the use of advertising and e-mail magazine distribution, which were strengthened by increasing the number of web designers from the beginning of the fiscal year under review, and by developing new returns, and steadily proceeded with preparations for the November-December quarter, when the hometown tax payment market will be the most active. As a result, the amount of donations in the third quarter of the fiscal year under review increased 35.5% from the same quarter of the previous fiscal year, and net sales increased 41.8% from the same quarter of the previous fiscal year, a record high for quarterly sales. As a result, sales in the cumulative third quarter of the fiscal year under review amounted to JPY394,876 thousand (up 45.5% from the same quarter of the previous year). On the other hand, segment income (operating loss) amounted to a loss of JPY90,316 thousand (loss of JPY174,497 thousand for the same quarter of the previous year). As a result of the above, sales in the cumulative third quarter of the fiscal year under review amounted to JPY9,979,134 thousand (up 10.2% from the same quarter of the previous fiscal year), operating margin was JPY1,874,393 thousand (up 13.3%), ordinary margin was JPY1,928,444 thousand (up 19.7%), and quarterly net profit attributable to owners of parent was JPY1,448,573 thousand (up 26.5%). As a change in accounting policy, we have applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and other standards from the beginning of the first quarter of the current fiscal year. For details, please refer to “2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies).” 3 (2) Explanation of Financial Position Assets at the end of the third quarter of the current fiscal year increased by JPY2,329,047 thousand from the end of the previous fiscal year to JPY10,667,801 thousand. This was mainly attributable to an increase of JPY368,265 thousand in notes and accounts receivable-trade due to an increase in net sales, an increase of JPY1,014,238 thousand in other current assets due to an increase in advances paid, etc., and an increase of JPY514,001 thousand in buildings and structures and JPY318,123 thousand in land due to the relocation of offices of Hamee Global Inc. Liabilities increased by JPY1,030,678 thousand from the end of the previous fiscal year to JPY2,841,379 thousand. This was mainly due to an increase of JPY887,822 thousand in short-term loans payable. Net assets increased by JPY1,298,369 thousand from the end of the previous fiscal year to JPY 7,826,421 thousand. This was mainly due to an increase of JPY 1,289,655 thousand in retained earnings resulting from an increase in retained earnings carried forward. (3) Explanation of future forecasts such as Consolidated performance Forecasts There are no changes to the full-year consolidated earnings forecast announced on June 14, 2021. 4 2.Quarter Consolidated Financial Statements and Major Notes (1)Quarterly Consolidated Balance Sheets (Thousands of yen) End of previous fiscal year (As of April 30, 2021) End of 3rd quarter of the year (As of January 31, 2022) Assets Current assets Cash and deposits Notes and accounts receivable Inventory Work in process Raw materials and supplies Others Allowance for doubtful accounts Total current assets Fixed assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Automotive equipment Accumulated depreciation Vehicles, net Tools, furniture and fixtures Accumulated depreciation Tools, furniture, and fixtures, net Land Construction in progress Total property, plant and equipment Intangible assets Goodwill Software Trademark rights Others Total intangible assets Investments and other assets Investment securities Stocks of subsidiaries and affiliates Net defined benefit asset Deferred tax assets Others Allowance for doubtful accounts Total investments and other assets Total noncurrent assets Total assets – – – – 3,354,616 1,590,162 962,612 4,674 5,800 571,999 △33,133 6,456,733 208,420 △60,667 147,753 638,447 △501,983 136,464 334,921 619,139 340,255 235,794 14,002 13,720 603,772 34,407 46,749 15,197 417,860 150,945 △6,052 659,108 1,882,020 8,338,753 5 3,254,484 1,958,427 1,527,309 6,029 7,481 1,586,238 △46,678 8,293,292 722,422 △66,524 655,897 2,277 △427 1,849 789,282 △534,545 254,736 318,123 243 1,230,850 184,781 272,092 11,760 7,128 475,763 48,851 33,778 – 464,028 121,235 – 667,894 2,374,508 10,667,801 long-term loans Liabilities Current liabilities Accounts payable Short-term loans Current portion of payable Accounts payable-other Accrued expenses Income taxes payable Provision for bonuses Reserve for sales returns Provision for discount points Others Total current liabilities Noncurrent liabilities Long-term loan Obligations for retirement pay Asset retirement obligations Others Total Noncurrent liabilities Total liabilities Net assets Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Other accumulated comprehensive income Valuation difference on securities on Adjustments statement translation Total other accumulated comprehensive income currency Foreign Stock Option Total net assets Total liabilities and net assets (Thousands of yen) End of previous fiscal year (As of April 30, 2021) End of 3rd quarter of the year (As of January 31, 2022) 208,741 12,177 48,036 729,990 185,142 478,607 51,096 6,938 217 25,114 1,746,062 43,853 20,785 64,638 1,810,701 594,043 532,785 5,612,726 △363,636 6,375,918 – – – 54,009 54,009 98,124 6,528,052 8,338,753 159,883 900,000 48,036 1,158,575 199,029 248,273 2,802,629 30,333 – – 58,497 7,826 4,611 10,703 15,609 38,750 2,841,379 597,785 541,735 6,902,381 △355,929 7,685,973 179 44,660 44,840 95,608 7,826,421 10,667,801 6 (2)Quarterly Consolid7ated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income nine-month period of previous fiscal year (From May 1, 2020 To January 31, 2021) (Thousands of yen) nine-month period of fiscal year (From May 1, 2021 To January 31, 2022) Consolidated income statement for the quarter 3rd Quarter of the fiscal year Net sales Cost of sales Gross profit Reversal of reserve for sales returns Provision for reserve for sales returns Gross profit after adjustment of reserve for sales returns Selling, general and administrative expenses Operating income Non-operating income Interest income Compensation income Equity in earnings of associated companies Foreign exchange gains Others Total non-operating income Non-operating expenses Interest expenses Payment Guarantee Fee Foreign exchange losses Settlement money Others Total non-operating expenses Ordinary profit Extraordinary gains Gain on sales of noncurrent assets Gain on sales of investment securities Gain on sales of stock of affiliates Gain on reversal of subscription rights to shares Total extraordinary income Extraordinary loss Loss on retirement of noncurrent assets Loss on valuation of investment securities foreign currency Loss on reversal of translation adjustments Total extraordinary loss Quarter net profit before income taxes and minority interests Income taxes Income taxes-deferred Total income taxes Quarterly net profit Quarterly net profit attributable to owners of parent 7 9,055,834 3,444,390 5,611,443 6,716 7,901 5,610,259 3,955,497 1,654,761 635 10,737 1,176 – 2,425 14,975 7,846 4,932 36,444 – 10,059 59,282 379 4,999 – 1,258 6,637 489 10,164 868 11,522 1,610,454 1,605,570 576,855 △116,571 460,283 1,145,286 1,145,286 9,979,134 3,568,043 6,411,091 – – 6,411,091 4,536,698 1,874,393 987 11,109 2,517 32,761 30,913 78,289 1,630 5,674 – 8,456 8,477 24,238 1,928,444 1,416 – 172,307 173,723 3,664 27,611 – – 31,275 2,070,892 667,689 △45,370 622,318 1,448,573 1,448,573 Quarterly Consolidated Statements of Comprehensive Income Third Quarter Consolidated Cumulative Period nine-month period of previous fiscal year (From May 1, 2020 To January 31, 2021) (Thousands of yen) nine-month period of fiscal year (From May 1, 2021 To January 31, 2022) 1,145,286 146,269 146,269 1,291,555 – – 1,448,573 179 △9,348 △9,169 1,439,404 – 1,291,555 1,439,404 Quarterly net profit Other comprehensive income Valuation difference on securities Adjustment on foreign currency statement translation Total other comprehensive income Quarterly comprehensive income (Details) Quarterly comprehensive income attributable to owners of the parent Comprehensive income attributable to non-controlling interests 8 (3)Notes to Quarter Consolidated Financial Statements (Notes on the Going Concern Assumption) Not applicable. (Change in scope of consolidation or scope of application of equity method) Significant changes in the scope of application of the equity method In the second quarter of the consolidated fiscal year under review, the Company sold a portion of its shares in Shippinno INC. and removed it from the scope of application of the equity method. Not applicable. (Notes on Significant Changes in the Amount of Shareholders’ Equity) (Changes in Accounting Policies) (Application of Accounting Standard for Revenue Recognition) The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020, hereinafter referred to as the “Accounting Standard for Revenue Recognition”) and other standards are applied from the beginning of the first quarter of the current fiscal year to recognize revenue when control of promised goods or services is transferred to customers in an amount that is expected to be received in exchange for those goods or services. As a result, sales discounts, which were previously recorded as non-operating expenses, have been reduced from net sales. In the Commerce segment, we changed our method of recognizing as income and cost of sales the allowance for sales returns, which was recorded as a current liability based on the amount equivalent to gross profit, excluding the amount equivalent to revenue and cost of sales of products expected to be returned. Consequently, the consideration for products expected to be returned is included in “Other” in current liabilities as a refund liability, and assets recognized as the right to recover products from customers when the refund liability is settled are included in “Other” in current assets as a return asset. In the past, the unused portion of the in-house points granted to customers was recorded as “Provision for points.” However, due to the immateriality of the amount of these points, we have changed to a method that does not identify separate performance obligations. The Commerce business applies the alternative treatment set forth in Item 98 of “Guidance on Accounting Standards for income Recognition” and recognizes revenue upon shipment for domestic sales of merchandise when the period between the time of shipment and the time when control of the merchandise is transferred to the customer is normal. With regard to the application of the revenue recognition accounting standard, etc., in accordance with the transitional treatment stipulated in the provisions of paragraph 84 of the Accounting Standard for Revenue Recognition, the cumulative effect of retrospectively applying the new accounting policy prior to the beginning of the first quarter of the current fiscal year is added or deducted from retained earnings at the beginning of the first quarter of the current fiscal year, and the new accounting policy is applied from the beginning balance of the current fiscal year. However, the new accounting policy has not been applied retrospectively to contracts for which the method set forth in paragraph 86 of the Revenue Recognition Accounting Standard has been applied and substantially all revenue amounts have been recognized in accordance with previous treatment prior to the beginning of the first quarter of the current fiscal year. In addition, we apply the method stipulated in paragraph 86 of the Revenue Recognition Accounting Standard and paragraph (1) of the Written Accounting Standard. Contract modifications made prior to the beginning of the first quarter of the current fiscal year are accounted for under the terms of the contract after reflecting all contract modifications, and the cumulative effect of these modifications is adjusted to retained earnings at the beginning of the first quarter of the current fiscal year. 9 As a result, for the third quarter of the current fiscal year, net sales decreased by JPY17,901 thousand, cost of sales decreased by JPY9,538 thousand, operating income decreased by JPY8,362 thousand, and ordinary income and income before income taxes decreased by JPY 4,692 thousand each. In addition, the balance of retained earnings at the beginning of the fiscal year decreased by JPY 1,826 thousand. In accordance with the transitional treatment stipulated in paragraph 28-15 of the “Accounting Standard for Quarterly Financial Statements” (ASBJ Statement No. 12, March 31, 2020), information disaggregated by revenue from contracts with customers for the third quarter of the previous fiscal year is not presented. 10 (Thousands of yen) Quarterly consolidated amount recorded in the income statement (NOTE)3 Adjusted amount (NOTE)2 – (Segment information, etc.) [Segment Information] I Previous Third Quarter (From May 1, 2020 to January 31, 2021) 1.Information on net sales and profits or losses by reported segment Reportable segments Commerce Business Platform Form Business Total Others (NOTE)1 Total Net sales 7,095,257 1,689,277 8,784,534 271,299 9,055,834 – 9,055,834 to Sales customers Inter-segment Sales or reclasses – 771 771 771 △771 – Total 7,095,257 1,690,049 8,785,306 271,299 9,056,606 △771 9,055,834 profit/ 1,875,624 711,397 2,587,021 △174,497 2,412,523 △757,762 1,654,761 Segment (loss) (△) (NOTE)1. The “Others” category is a business segment that is not included in the reportable segments, and includes Hometown tax payment support services, Hamic POCKET, a watch mobile device for elementary school students, and RUKAMO, an ethical net shop. (NOTE)2. Adjusted amount of segment profit or loss (△) △JPY757,762 thousand is mainly corporate expenses that are not allocated to reportable segments, and mainly general and administrative expenses. (NOTE)3. Segment profit or loss (△) is consistent with operating profit in the quarterly consolidated statements of income. 2.Information on impairment loss on noncurrent assets and goodwill by reportable segment Not applicable. II Current Third Quarter (From May 1, 2021 to January 31, 2022) 1.Information on net sales and income (loss) by reportable segment and revenue decomposition information Reportable segments Commerce Business Platform Form Business Total Others (NOTE)1 Total (Thousands of yen) Quarterly consolidated amount recorded in the income statement (NOTE)3 Adjusted amount (NOTE)2 Net sales 7,532,764 2,051,494 9,584,258 394,876 9,979,134 – 9,979,134 Sales to customers 7,532,764 2,051,494 9,584,258 394,876 9,979,134 – 9,979,134 – – – – – – – Total 7,532,764 2,051,494 9,584,258 394,876 9,979,134 – 9,979,134 1,783,655 850,961 2,634,617 △90,316 2,544,300 △669,907 1,874,393 Segment profit / (loss) (△) (NOTE)1. The “Others” category is a business segment that is not included in the reportable segments, and includes Hometown Tax Payment support services, Hamic POCKET, a watch mobile device for elementary school students, and RUKAMO, an ethical net shop. (NOTE)2. Adjusted amount of segment profit or loss (△) △JPY669,907 thousand are mainly corporate expenses that are not allocated to reportable segments, and mainly general and administrative expenses. (NOTE)3. Segment profit or loss (△) is consistent with operating profit in the quarterly consolidated statements of income. Arise from contracts with customers revenue Inter-segment Sales or reclasses 11 2.Information on impairment loss on noncurrent assets and goodwill by reportable segment Not applicable. 3.Changes in reportable segments As stated in Changes in Accounting Policies, we have applied the Revenue Recognition Accounting Standard and other standards from the beginning of the first quarter of the current fiscal year, and changed the accounting method for revenue recognition. As a result, the method of calculating income or loss for business segments have been changed in the same manner. As a result of this change, compared with the previous method, net sales in the Commerce Business for the third quarter of the current fiscal year decreased by JPY18,118 thousand, segment income decreased by JPY8,580 thousand, net sales in the Other Business increased by JPY217 thousand, and segment income increased by JPY217 thousand. (Significant Subsequent Events) Not applicable. 12