Hamee : FY Apr 2022 Q2, Hamee Corp. 3134, Financial report

Consolidated Financial Results for the Second Quarter

FY04/22 [Japanese GAAP]

			December 13, 2021
Name of listed company	Hamee Corp.	Listed stock exchanges	East
Code Number		3134	URL https://hamee.co.jp/
Representative	(Title) President and CEO	(Name) Ikuhiro Mizushima
Contact	(Title) Officer,Corporate Planning Dept. Manager(Name) Ippei Takahashi	(TEL)[phone]
Scheduled date to	file
Quarterly Securities ReportDecember 13, 2021 Scheduled date of commencement of dividend payment-
Preparation of supplementary material on	quarterly: Yes
financial results
Quarterly results briefing	: Yes
			(Millions of yen are rounded down.)

FY04/2022 Q2 consolidated result(May 1, 2021 to October 31, 2021)

(1)Consolidated Operating results				(Percentages indicate year-on-year changes.)
																Net profit
		Net sales		Operating income	Ordinary income	attributable to
																owners of parent
	Millions of yen	%		Millions of yen	%		Millions of yen			%	Millions of yen		%
Q2 FY04/22		5,948	5.8	1,134	14.3		1,202				24.1	943		40.5
Q2 FY04/21		5,621	3.8			992	17.8		968				10.4	671		11.5
(NOTE) Comprehensive incomeQ2 FY04/22 849Millions of yen	(19.2%)	Q2 FY04/22	712Millions of yen (48.3%)
	Earnings Per share		Diluted Earnings Per share
				Yen							Yen
Q2 FY04/22			59.40						59.18
Q2 FY04/21			42.54						42.16
(2)Consolidated Financial Position
	Total assets			Net assets		Equity Ratio
		Millions of yen				Millions of yen				%
Q1 FY04/22			9,975				7,236						71.6
FY04/21			8,338				6,528						77.1
(Reference) Shareholders' equity	Q2 FY04/22 7,141Millions of yen	FY04/21 6,429Millions of yen
2.Dividends
						Dividend per share
	End of first		End of	End of the
		second		Term end		Total
	quarter		quarter	third quarter
		Yen			Yen		Yen			Yen			Yen
FY04/21			-		0.00		-		10.00			10.00
FY04/22			-		0.00
FY04/22 (Forecast)								-		20.50			20.50

(NOTE) Revisions to the most recently announced dividend forecasts :None

3.Forecasts for the fiscal year ended April 31, 2022 (May 1, 2021 to April 30, 2022)

(Percentages indicate year-on-year changes.)

							Net profit		Earnings Per
	Net sales	Operating income	Ordinary income	Attributable to
							owners of parent	Share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Yen
Full year	14,000	13.2	2,250	3.2	2,248	4.6	1,612		3.6	101.53
(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.

※ 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

• Changes in accounting policies caused by revision of accounting standards
  ② Changes in accounting policies other than ①
  ③ Changes in accounting estimates
  ④ Restatement

(4)Number of shares of outstanding(common stock)

• None
• Yes
• None
• None
• None

① Number of shares outstanding at the end of	Q2 FY04/22	16,267,200Shares	FY04/21	16,255,200Shares
the period(including treasury stock)
② Number of treasury shares at the end of the
Q2 FY04/22	369,481Shares	FY04/21	377,523Shares
period
③ Average number of shares during the period	Q2 FY04/22	15,889,462Shares	Q2 FY04/21	15,794,423Shares

※ This quarterly financial report is not subject to quarterly review by a certified public accountant or auditing firm. ※ Explanations and other special notes concerning the appropriate use of business performance forecasts

The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable, and are not promises by the Company regarding future performance. Actual results may differ significantly from these forecasts due to various factors. Please refer to "1. Qualitative information on the current quarter's performance, (3) Explanation of future forecasts such as Consolidated performance Forecasts" on page 5 of the attached material for the assumptions on the performance forecast and notes on the use of the performance forecast.

(Reference only)

In case of any discrepancies between Japanese version and English version, Japanese Language version shall Prevail.

○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...........................	5
2. Quarterly Consolidated Financial Statements and Major Notes...............................................................	6
(1)Quarterly Consolidated Balance Sheets ...............................................................................	6
(2)Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
Comprehensive Income.....................................................................................................	8
(3)Quarterly Consolidated Statements of Cash Flows ...............................................................	10
(4) Notes to Quarterly Consolidated Financial Statements..........................................................	12
(Notes on the Going Concern Assumption)........................................................................	12
(Change in scope of consolidation or scope of application of the equity method)....................	12
(Notes on Significant Changes in the Amount of Shareholders' Equity)..................................	12
(Changes in Accounting Policies) ......................................................................................	12
(Segment Information, etc.) ...........................................................................................	14
(Significant Subsequent Events) .....................................................................................	15

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1. Qualitative Information on the current quarter's performance

(1) Explanation of Operating Results

In the second quarter of the cumulative year under review, the outlook for the Japanese economy remained uncertain due to concerns over the re-expansion of COVID-19 and the global shortage of semiconductors, while expectations for a recovery in the real economy are expected due to the stabilization of the expansion of COVID-19 and the lifting of the declaration of an emergency situation.

Under these circumstances, the status of each of our segments in the second quarter of the current fiscal year was as follows.

• Commerce Business a. Domestic business

In the new iPhone shopping season, which was the biggest shopping season in the second quarter of the current fiscal year, we developed products that captured market trends, such as the launch of Pail Blue in iFace Reflection, maximized the number of new products to be launched on the handset launch date, delivered numerous new product presses before and after the handset's launch, resulting in "visibility ➡ customer referrals," and introduced a new series (Look in Clear, Cardina) in accordance with the initial plan. In addition, we controlled inventories to prevent stock shortages and excessiveness while watching sales and sales forecasts for each model in advance. As a result, we were able to greatly increase our overall responsiveness compared to the previous fiscal year and maximize sales.

Retailing: iFace has received nominated purchases due to its strong brand power (awareness and repeat rate), and is performing well compared to its competitors, further enhancing its presence within the market.

Wholesale: Sale continued track record of sales to carriers helped us expand sales through new carrier sales channels, which led to a significant increase in sales.

b. Overseas Business

In the U.S., which is the core of our overseas business, strengthening organizational strength of EC sales, e-commerce sales of music toys remained strong, and orders from Retailer increased due to the impact of the resuming economic activity in the country. Strengthening organizational strength of product planning and low rebound general merchandise development progressed. Especially sales of low-rebound general merchandise were supported by many consumers by strengthening character development, and iFace was able to increase sales by developing characters tailored to low-rebound general merchandise. As a result of the above, in the consolidated cumulative second quarter under review, retail sales grew significantly by 15.0% from the same quarter of the previous year, and wholesale sales grew by 209.7% from the same quarter of the previous year.

As a result, the Commerce Business posted net sales of JPY4,486,877 thousand (up 1.4% year on year) and segment income (operating income) of JPY1,178,699 thousand (down 3.7% year on year) for the second quarter of the current fiscal year.

• Platform Business a. Next Engine

Since the launch of this service in 2008, Next Engine has pursued operational efficiency and automation in its e-commerceback-office by developing functions that leverage the strengths of its own Internet shop operations. In 2013, we realized platformization with the API that we released, and in 2018, we made upfront investments in call center BPO (business process outsourcing) in order to shift our Next Engine operating resources to more important customer success activities for further business growth. Currently, we have provided even better quality than in-house call center operations. As a result, the total number of contracted clients exceeded 5,000 as of September 2021, and grew to 5,093 as of the end of the second quarter (up 17.1% from the same quarter of the previous year). In addition,

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during the second quarter of the fiscal year under review, GMV (the amount of orders processed) among Next Engine clients was JPY268.5 billion (an increase of 28.8% from the same quarter of the previous fiscal year), and the unit price per client was JPY35,141 (an increase of 0.7% from the same quarter of the previous fiscal year), maintaining a high level compared to the level before the expansion of COVID-

19. As a result, net sales rose 20.1% year on year to JPY552,213 thousand. On the cost front, we recorded steady increases in both sales and profits, up 21.3% year on year, despite a moderate increase in the operating income margin. This was due to an increase in fixed costs stemming from a temporary increase of JPY12,137 thousand year on year in server costs as a result of promote in investment in the shift to cloud infrastructure. Hamee Consulting Corp., which had been planned at the beginning of the fiscal year, started the establishment agent in this quarter, and we will further strengthen cross-selling with this company and pursue synergies.

1. Hamee Consulting Corp.

Hamee Consulting Corp., which provides sales support consulting for e-commerce businesses, continued to expand sales through consulting from large customers, and we were able to significantly increase revenues. In addition, we are seeing an increase in orders for e-commerce website management agency and production and renewal. Accordingly, we will establish a new specialized department in November 2021 to make it a new pillar of our business.

As a result, net sales in the Platform Business increased 21.7% year on year to JPY1,323,078 thousand and segment profit increased 20.4% to JPY545,156 thousand.

• Others

This is new services that includes Hometown Tax Payment Support Service, Hamic POCKET mobile devices for elementary school students, and RUKAMO, ethical net shops.

With regard to the Hometown Tax Payment Support Service, the service has been expanded to meet front-side needs such as the conversion and renovation of local government portal sites and advertising production, and the amount of donations in the second quarter of the current fiscal year increased significantly by 53.4% from the same quarter of the previous fiscal year. We will continue to leverage the strengths of our e-commerce operations while aiming to expand our business by utilizing Next Engine to improve operational efficiency.

Regarding Hamic POCKET, we plan to release Hamic POCKET L which has significantly improved recharging functions compared to conventional products. Going forward, we will continue to verify issues while deepening communication with users, with the aim of achieving PMF.

As a result, sales in the cumulative second quarter of the fiscal year under review amounted to JPY138,501 thousand (up 26.5% from the same quarter of the previous year). On the other hand, segment income (operating loss) amounted to a loss of JPY151,325 thousand (loss of JPY168,467 thousand for the same quarter of the previous year).

As a result, in the first half of the current fiscal year, net sales were JPY5,948,457 thousand (up 5.8% year on year); operating income was JPY1,134,415 thousand (up 14.3%); ordinary income was JPY1,202,276 thousand (up 24.1%); and Net profit attributable to owners of parent was JPY943,795 thousand (up 40.5%).

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, (4) Notes to Quarterly Consolidated Financial Statements(Changes in Accounting Policies)."

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