Bengo4 com : Non-Consolidated Financial Results for the First Quarter Ended June 30,2022

Non-Consolidated Financial Results for the First Quarter Ended June 30, 2022

		July 27, 2022
Name of Listed Company: Bengo4.com, Inc.	Listed Stock Exchange: Tokyo Stock Exchange
Securities Code:	6027	URL https://www.bengo4.com/corporate/
Representative:	Taichiro Motoe, Representative Director and President
Contact:	Masaoki Sawada, Director	TEL: [phone]

Scheduled date to submit quarterly report:

August 12, 2022

Scheduled date to commence dividend payments:

‒

Preparation of supplementary materials on financial results: Yes

Holding of financial results briefing session:

Yes (for institutional investors and analysts)

(Million yen with fractional amounts rounded down)

1. Financial results for the first quarter ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Operating results (cumulative totals)

(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit

First quarter ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

June 30, 2022

1,959

27.4

138

-36.1

138

-36.8

90

-34.1

June 30, 2021

1,537

32.5

216

‒

218

‒

137

‒

Basic earnings

Diluted earnings

per share

per share

First quarter ended

Yen

Yen

June 30, 2022

4.08

3.98

June 30, 2021

6.17

6.15

(2) Financial position

Total assets

Net assets

Equity ratio

As of

Million yen

Million yen

%

June 30, 2022

3,622

2,489

68.7

March 31, 2022

3,812

2,398

62.9

Reference: Equity capital

As of June 30, 2022: 2,487 million yen

As of March 31, 2022: 2,397 million yen

2. Cash dividends

Dividend per share

First quarter-end

Second quarter-

Third quarter-end

Fiscal year-end

Annual

end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2022

‒

0.00

‒

0.00

0.00

Fiscal year ending March 31, 2023

‒

Fiscal year ending March 31, 2023

0.00

‒

0.00

0.00

(Forecast)

(Note) Revisions to dividend forecasts published most recently: No

3. Earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit

Basic earnings

per share

Fiscal year ending

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

March 31, 2023

8,800

28.0

‒

‒

‒

‒

‒

‒

‒

(Note) Revisions to earnings forecasts published most recently: No

In our earnings forecasts for the fiscal year ending March 31, 2023, the Company aims to maintain positive operating profit and has a policy not to disclose concrete forecasts for all profit items from operating profit onwards, from the viewpoint that agile investment judgment responding to rapid changes in the market environment is needed.

* Notes

1. Application of particular accounting treatment concerning preparation of quarterly financial statements: None
2. Changes in accounting policies and changes or restatement of accounting estimates

a. Changes in accounting policies due to revisions to accounting standards and other regulations: None

b. Changes in accounting policies other than a:	None
c. Change in accounting estimates:	None
d. Restatement:	None

1. Number of shares issued (common stock)

a. Total number of shares issued at the end of the period (including treasury shares)

As of June 30, 2022	22,264,500 shares	As of March 31, 2022	22,264,500 shares
b. Number of treasury shares at the end of the period
As of June 30, 2022	101,259 shares	As of March 31, 2022	101,259 shares
c. Average number of shares during the period
First quarter ended June 30, 2022	22,163,241 shares	First quarter ended June 30, 2021	22,262,785 shares

• Quarterly financial results are outside the scope of the quarterly review by certified public accountants or audit corporations.
• Proper use of earnings forecasts, and other special matters

The forward-looking statements such as earnings forecasts stated in this document are based on the information currently available to the Company and certain assumptions that the Company judges as rational. These statements are not guarantees of future performance. Actual results may differ substantially from the forecasts due to various factors. For the assumptions underlying the forecasts and precautions when using the forecasts, please refer to "1. Qualitative Information on Financial Results for the First Quarter Ended June 30, 2022, (3) Explanation regarding earnings forecasts and other forward-looking statements" on page 2 of the supplementary materials.

○ Supplementary Materials - Contents
1. Qualitative Information on Financial Results for the First Quarter Ended June 30, 2022 ...............	2
(1)	Summary of operating results .....................................................................................................	2
(2)	Summary of financial position ....................................................................................................	2
(3)	Explanation regarding earnings forecasts and other forward-looking statements.......................	2
2. Quarterly Financial Statements and Key Notes................................................................................	3
(1)	Quarterly balance sheet...............................................................................................................	3
(2)	Quarterly statement of income ....................................................................................................	5
(3)	Notes to quarterly financial statements .......................................................................................	6
	(Notes on going concern assumptions) .......................................................................................	6
	(Notes in the case of significant changes in shareholders' equity) ..............................................	6
	(Application of particular accounting treatment concerning preparation of
	quarterly financial statements) ....................................................................................................	6
	(Segment information) ................................................................................................................	6
	(Significant subsequent events)...................................................................................................	7

―1―

1. Qualitative Information on Financial Results for the First Quarter Ended June 30, 2022

(1) Summary of operating results

During the first quarter under review, the Japanese economy saw a moderate recovery in activities in response to an increase in the vaccination rate and the effect of the government's economic measures amid the prolonged impact of COVID-19. However, future outlook remains uncertain due to a resurgence of the risk of COVID-19 infection caused by variant strains, another steep rise in market prices caused by the outbreak of the Ukrainian crisis, and other factors.

Under the corporate mission "Bringing professionals closer," the Company has been operating the Internet media business through portal sites such as Bendo4.com for legal consultation and zeiri4.com for tax consultation, while also providing IT and solution services including CloudSign, a contract management platform.

As a result, net sales reached 1,959 million yen, up 27.4% year on year, operating profit amounted to 138 million yen, down 36.1% year on year, ordinary profit was 138 million yen, falling 36.8% year on year, and profit came to 90 million yen, dropping 34.1% from a year earlier.

Operating results by business segment are as follows.

(Media business)

In the Media business, the Company engages in the Internet media business through the legal consultation portal site Bendo4.com and the tax consultation portal site zeiri4.com.

In the bengo4.com business, the Company focused on providing content that is helpful for users and improving usability. It also sought to increase recognition through the distribution of articles of bengo4.com news, an owned media channel which lawyers use to explain familiar topics from a legal perspective. Consequently, monthly site visitors increased 3.5% year on year, to 12.44 million in June 2022. The number of registered lawyers as of the end of the first quarter under review rose 4.1% year on year, to 22,703, of which the number of lawyers with paid member subscriptions to the lawyer support service stood at 5,152 (an increase of 0.2% year on year). Meanwhile, the number of paid subscribers to bengo4.com paid services grew 14.7% year on year, to 182,569.

As a result, net sales and segment profit increased 7.8% and 22.0% year on year, to 977 million yen and 410 million yen, respectively, in the first quarter under review.

(IT/Solutions business)

In the IT/Solutions business, the Company provides IT and solution services including CloudSign, a contract management platform.

In the CloudSign service, the Company sought to reinforce its development and sales systems by actively recruiting human resources, while simultaneously improving usability, increasing recognition and expanding its customer base through the placement of advertisements in a range of media, among other efforts. As a result, the number of contracts transmitted increased 48.3% year on year, to 1,350,849 in the first quarter under review.

As a result, net sales increased 55.7%, to 981 million yen, and segment loss came to 11 million yen (as opposed to a segment profit of 90 million yen in the same period of the previous year) in the first quarter under review.

(2) Summary of financial position

Total assets at the end of the first quarter under review stood at 3,622 million yen, a decrease of 189 million yen from the end of the previous fiscal year. This mainly reflected decreases in cash and deposits and software, which were partially offset by increases in prepaid expenses and software in progress.

(Current assets)

Current assets at the end of the first quarter under review stood at 2,697 million yen, down 199 million yen from the end of the previous fiscal year. The main changes were decreases of 260 million yen in cash and deposits and 18 million yen in accounts receivable, and an increase of 79 million yen in prepaid expenses.

(Non-current assets)

Non-current assets at the end of the first quarter under review climbed 10 million yen from the end of the previous fiscal year, to 924 million yen. The main changes were an increase of 85 million yen in software in progress, and decreases of 53 million yen in software and 26 million yen in deferred tax assets.

(Current liabilities)

Current liabilities at the end of the first quarter under review decreased 280 million yen from the end of the previous fiscal year, to 1,133 million yen. This was chiefly attributable to decreases of 438 million yen in income taxes payable and 91 million yen in accrued consumption taxes, and an increase of 233 million yen in accounts payable - other.

(Net assets)

Net assets at the end of the first quarter under review stood at 2,489 million yen, rising 90 million yen from the end of the previous fiscal year. This mainly reflects an increase of 90 million yen in retained earnings.

(3) Explanation regarding earnings forecasts and other forward-looking statements

There is no change to the earnings forecasts for the fiscal year ending March 31, 2023 announced on May 13, 2022.

―2―

2. Quarterly Financial Statements and Key Notes

(1) Quarterly balance sheet

			(Thousand yen)
		Previous fiscal year	First quarter under review
		(As of March 31, 2022)	(As of June 30, 2022)
	Assets
	Current assets
	Cash and deposits	1,676,476	1,416,099
	Accounts receivable	1,015,467	996,735
	Supplies	1,569	1,236
	Prepaid expenses	214,275	294,083
	Accounts receivable - other	9,484	5,774
	Other	8,740	11,632
	Allowance for doubtful accounts	-28,643	-27,898
	Total current assets	2,897,370	2,697,662
	Non-current assets
	Property, plant and equipment
	Buildings, net	47,105	45,949
	Tools, furniture and fixtures, net	25,214	27,807
	Total property, plant and equipment	72,319	73,757
	Intangible assets
	Software	465,752	412,231
	Software in progress	103,514	188,658
	Patent right	908	1,756
	Trademark right	2,069	2,218
	Total intangible assets	572,245	604,864
	Investments and other assets
	Investment securities	3,874	2,992
	Shares of subsidiaries and associates	49,000	49,000
	Distressed receivables	9,203	15,630
	Leasehold and guarantee deposits	110,836	109,944
	Long-term prepaid expenses	9,604	13,942
	Deferred tax assets	96,961	70,409
	Allowance for doubtful accounts	-9,203	-15,630
	Total investments and other assets	270,276	246,289
	Total non-current assets	914,841	924,911
	Total assets	3,812,211	3,622,573

―3―