Istyle : Securities Report FY2022

Securities Report

(For the 23rd term,

from July 1, 2021, to June 30, 2022)

istyle Inc.

Some information in the original securities report in Japanese, such as "Part 1. Information on the

Company, V. Financial Information and 2. Nonconsolidated Financial Statements,"are not included in

this English translation of the securities report.

Table of Contents

			Page
Part 1. Information on the Company ........................................................................................................	1
I.	Overview of the Company.........................................................................................................................	1
	1.	Key financial data and trends .......................................................................................................................	1
	2.	Information on subsidiaries and affiliates ....................................................................................................	3
	3.	Employees ....................................................................................................................................................	5
II.	Business Overview........................................................................................................................................	6
	1.	Management policy, management environment, issues to be addressed, etc. ..............................................	6
	2.	Business and other risks ...............................................................................................................................	7
	3.	Analysis of financial position, operating results, and cash flows by management.....................................	11
III. Equipment and Facilities .........................................................................................................................	15
	1.	Overview of capital investments, etc..........................................................................................................	15
	2.	Major facilities ...........................................................................................................................................	16
	3.	Plans for new additions, retirement, etc. ....................................................................................................	17
IV. Corporate Information.............................................................................................................................	18
	1.	Information on the Company's shares, etc. ................................................................................................	18
	2.	Dividend policy ..........................................................................................................................................	20
	3.	Corporate governance and others ...............................................................................................................	21
V.	Financial Information...............................................................................................................................	38
	1.	Consolidated Financial Statements.............................................................................................................	39

INDEPENDENT AUDITOR'S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

Part 1. Information on the Company

I. Overview of the Company

1. Key financial data and trends

(1) Consolidated financial data

Term		19th	20th	21st	22nd	23rd
Year ended		June 30,	June 30,	June 30,	June 30,	June 30,
	2018	2019	2020	2021	2022
Net sales	(Millions	28,470	32,193	30,564	30,950	34,401
of yen)
Ordinary income (loss)	(Millions	2,147	380	(2,438)	(795)	(593)
of yen)
Net income (loss) attributable	(Millions
to owners of the parent	1,184	(519)	(5,020)	379	(571)
of yen)
company
Comprehensive income	(Millions	650	(780)	(5,210)	624	571
of yen)
Net assets	(Millions	12,008	10,761	5,413	8,109	8,652
of yen)
Total assets	(Millions	21,911	22,003	24,157	22,235	22,168
of yen)
Net assets per share	(Yen)	180.65	159.76	79.44	110.60	118.31
Net income (loss) per share	(Yen)	18.62	(8.05)	(76.94)	5.50	(8.00)
Diluted net income per share	(Yen)	17.12	―	―	5.28	―
Equity ratio	(%)	53.0	47.1	21.5	35.5	38.1
Return on equity	(%)	10.6	(4.7)	(64.6)	5.8	(7.0)
Price-earnings ratio	(Times)	65.4	―	―	94.5	―
Cash flows from operating	(Millions	1,750	154	(202)	1,553	1,276
activities	of yen)
Cash flows from investing	(Millions	(3,779)	(4,096)	(2,399)	389	(1,529)
activities	of yen)
Cash flows from financing	(Millions	1,877	1,176	6,026	(1,557)	(1,354)
activities	of yen)
Cash and cash equivalents at	(Millions	5,985	3,184	6,584	7,094	5,690
end of period	of yen)
Employees		1,016	1,175	1,161	1,009	967
[ ] represents the average number of	(Persons)
[124]	[170]	[177]	[169]	[158]
part-time employees not included

Notes: 1. The number of employees represents the number of persons in employment (excluding persons seconded from istyle Inc. (the "Company") and its subsidiaries (collectively, the "Group") to outside the Group and including persons seconded from outside the Group to the Group), and the number of part-time employees in brackets (part-time employees only, excluding dispatch workers from staffing companies) shows the average annual number of employees not included above.

1. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the 23rd period. The key management indicators for the 23rd period reflect those accounting standards.
2. Diluted net income per share has not been disclosed for the 20th and 21st terms because of diluted net loss per share for these fiscal years. Diluted net income per share has not been disclosed for the 23rd term because there were no residual shares with a dilutive effect, resulting in a net loss per share.
3. Price-earningsratio has not been disclosed for the 20th, 21st, and 23rd terms because of net loss attributable to owners of the parent company for these fiscal years.

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(2) Nonconsolidated financial data

Term		19th	20th	21st	22nd	23rd
Year ended		June 30,	June 30,	June 30,	June 30,	June 30,
	2018	2019	2020	2021	2022
Net sales	(Millions	6,244	6,682	6,973	6,632	7,012
of yen)
Ordinary income (loss)	(Millions	618	(449)	(1,659)	(732)	458
of yen)
Net income (loss)	(Millions	398	(858)	(4,579)	(1,106)	517
of yen)
Capital stock	(Millions	3,556	3,647	3,703	4,756	4,756
of yen)
Number of shares issued	(Shares)	66,927,600	67,497,200	68,043,800	74,146,800	74,146,800
Net assets	(Millions	9,529	8,825	4,310	5,288	6,116
of yen)
Total assets	(Millions	17,987	18,520	20,477	19,354	19,988
of yen)
Net assets per share	(Yen)	147.20	134.08	64.47	73.18	85.58
Dividend per share		0.50	―	―	―	―
[Interim cash dividends	(Yen)
				[―]
included herein]		[-]	[-]	[-]	[-]
Net income (loss) per share	(Yen)	6.26	(13.29)	(70.18)	(16.04)	7.23
Diluted net income per share	(Yen)	5.76	―	―	―	―
Equity ratio	(%)	52.6	46.9	20.6	27.0	30.6
Return on equity	(%)	4.3	(9.5)	(71.0)	(23.4)	9.1
Price-earnings ratio	(Times)	194.3	―	―	―	31.7
Payout ratio	(%)	8.0	―	―	―	―
Employees
[ ] represents the average number	(Persons)	442	524	513	479	449
of part-time employees not	[11]	[12]	[15]	[10]	[7]
included above
Total shareholder return	(%)	137.2	84.2	30.3	58.7	25.9
[Comparative indicator:	(%)	[109.7]	[100.6]	[103.8]	[132.1]	[130.3]
TOPIX Total Return Index]
Highest stock price	(Yen)	1,807	1,561	994	607	571
Lowest stock price	(Yen)	610	604	176	229	147

Notes: 1. The number of employees represents the number of full-time employees (excluding persons seconded from the Company to outside the Company and including persons seconded from outside the Company to the Company), and the number of part-time employees in brackets (part-time employees only, excluding dispatch workers from staffing companies) shows the average annual number of employees not included above.

1. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the 23rd period. The key management indicators for the 23rd period reflect those accounting standards.
2. Diluted net income per share has not been disclosed for the 20th, 21st, and 22nd terms because of diluted net loss per share for these fiscal years. Diluted net income per share has not been disclosed for the 23rd term because there were no residual shares with a dilutive effect.
3. Price-earningsratio has not been disclosed for the 20th, 21st, and 22nd terms because of net loss for these fiscal years.
4. The highest and lowest stock prices are those recorded in the First Section of the Tokyo Stock Exchange (now the Prime Market).

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2. Information on subsidiaries and affiliates

			Principal	Percentage of
Name of the company	Location	Capital stock	voting rights	Business relationship
businesses
			held (%)
					Officers holding concurrent posts
(Consolidated subsidiary)	Minato-ku,	95	Beauty		Employees seconded
istyle retail Inc.	100.0	Facility leasing, etc.
Tokyo, Japan	million yen	Service
(Notes 1 and 5)		Lending of funds
					Supply of promotional services
(Consolidated subsidiary)					Officers holding concurrent posts
Minato-ku,	50			Employees seconded
istyle trading Inc.	Global	100.0
Tokyo, Japan	million yen	Facility leasing, etc.
(Note 1)
				Borrowing of funds
(Consolidated subsidiary)					Officers holding concurrent posts
Minato-ku,	51			Employees seconded
istyle career Inc.	Others	100.0
Tokyo, Japan	million yen	Facility leasing, etc.
(Note 1)
				Borrowing of funds
					Officers holding concurrent posts
(Consolidated subsidiary)					Employees seconded
Minato-ku,	30			Outsourcing of production,
IS Partners Inc.	On Platform	100.0
Tokyo, Japan	million yen	operation, and editing businesses
(Note 1)
				Facility leasing, etc.
					Borrowing of funds
					Officers holding concurrent posts
(Consolidated subsidiary)					Advertising services sales agent
MEDIA GLOBE CO.,	Minato-ku,	10	On Platform	100.0	Public relations activity
LTD.	Tokyo, Japan	million yen	Subcontracting
(Note 1)					Facility leasing, etc.
					Borrowing of funds
(Consolidated subsidiary)	Minato-ku,	5			Officers holding concurrent posts
Over The Border Inc.	Global	100.0	Facility leasing, etc.
Tokyo, Japan	Million yen
(Note 1)			Borrowing and lending of funds
(Consolidated subsidiary)	Minato-ku,	10			Officers holding concurrent posts
istyle me Inc.	On Platform	80.0	Facility leasing, etc.
Tokyo, Japan	million yen
(Note 1)			Borrowing and lending of funds
(Consolidated subsidiary)	People's	70		100.0	Officers holding concurrent posts
istyle China Co., Limited	Republic of	Global
million yen	[100.0]	Employees seconded
(Notes 1 and 2)	China
(Consolidated subsidiary)		(Local
istyle Global (Singapore)	Singapore	currency)	Global	100.0	Officers holding concurrent posts
Pte. Limited	SGD 41	Borrowing of funds
(Notes 1 and 3)		million
(Consolidated subsidiary)		(Local
istyle China Corporation	Hong Kong	currency)	Global	100.0	Officers holding concurrent posts
Limited	HKD 26
(Note 1)		million
(Consolidated subsidiary)		(Local			Officers holding concurrent posts
istyle Retail (Hong Kong)		currency)
Hong Kong	Global	100.0	Employees seconded
Co., Limited	HKD 18
			Lending of funds
(Note 1)		million

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