Hamee : FY Apr 2021 Q1, HAMEE CORP 3134, Financial report

Consolidated Financial Results for the First Quarter FY04/21 [Japanese GAAP]

Name of listed companyHamee Corp.

Code Number	3134
Representative	(Title)	President
Contact:	(Title)	Chief Financial Officer

Scheduled date to file QuarterlySeptember 14, 2020 Securities Report

Supplementary materials for financial results: Yes

		September 14, 2020
Listed stock exchanges	East
URL https://hamee.co.jp/
(Name)	Atsushi Higuchi
(Name)	Yukihiro Toyama	(TEL) [phone]
Scheduled date of
commencement of dividend	-
payment

Results briefing

: Yes

(Millions of yen are rounded down)

Q1 FY04/2021 consolidated result (May 1, 2020 to July 31, 2020)

(1) Consolidated operating results

(Percentages indicate year-on-year changes.)

Net sales

Operating Income

Ordinary Income

Net profit

Attributable to

owners of Parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Q1 FY04/21

2,684

4.9

415

8.2

400

0.2

260

10.6

Q1 FY04/20

2,557

14.5

384

63.9

399

66.7

291

△66.7

(NOTE) Comprehensive incomeQ1 FY04/21

281Millions of yen 26.2%

Q1 FY04/21

222Millions of yen

39.2%

Earnings Per Share

Diluted Earnings Per

Share

Yen

Yen

Q1 FY04/21

16.54

16.39

Q1 FY04/20

18.41

18.26

(2) Consolidated Financial Position

Total assets

Net assets

Equity Ratio

Millions of yen

Millions of yen

%

Q1 FY04/21

7,879

4,975

61.7

Q1 FY04/20

8,096

4,824

57.9

(Reference)Shareholders' equity

Q1 FY04/21

4,863Millions of yen

Q1 FY04/20

4,685Millions of yen

2. Dividends

Dividend per share

End of first

End of second

End of the third

Year end

Total

quarter

quarter

quarter

Yen

Yen

Yen

Yen

Yen

FY04/20

-

0.00

-

7.00

7.00

FY04/21

-

FY04/21 (Forecast)

0.00

-

8.00

8.00

(NOTE) Revisions to the most

recently announced dividend forecast

:None

Forecasts for the fiscal year ended April 30, 2021 (May 1, 2020 to April 30, 2021)

(Percentages indicate year-on-year changes.)

										Net profit
		Net sales		Operating income	Ordinary income	attributable to	Earnings Per Share
										owners of parent
		Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen		%	Yen
	Full year	12,832		13.3	1,778	1.9	1,764		0.4	1,260		17.9	79.84
	(NOTE) Revisions to the most recently announced consolidated earnings forecasts	:None

(NOTE) As we manage our performance on an annual basis, our earnings forecasts are for the full fiscal year only.

※ Notes

(1) Changes of important subsidiaries during the period

: None

(changes in specified subsidiaries resulting in changes in scope of consolidation)

New -CompanyExclusion -Company

(2) Application of particular accounts procedures to the preparation of quarterly consolidated financial statements :None

(3) Changes in accounting policies and changes or restatement of accounting estimates
① Changes in accounting policies caused by revision of accounting standards	:	None
② Changes in accounting policies other than ①	:	None
③ Changes in accounting estimates	:	None
④ Restatement	:	None

1. Number of shares outstanding (common stock)
2. • Number of shares outstanding at the end of the period (including treasury stock)
     ② Number of treasury shares at the end of the period

• Average number of shares during the period

Q1 FY04/21	16,203,400Shares	FY04/20	16,135,600Shares
Q1 FY04/21	392,678Shares	FY04/20	343,925Shares
Q1 FY04/21	15,766,779Shares	Q1 FY04/20	15,846,656Shares

• 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 results, (3) Explanation of future forecast information such as the forecast of the consolidated results" on page 3 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....................................................................................................................................	3
(3)	Explanation of future forecasts such as consolidated performance forecasts..................................................................	3
2. Quarterly Consolidated Financial Statements....................................................................................................................	4
(1)	Quarterly Consolidated Balance Sheets ...........................................................................................................................	4

1. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of

Comprehensive Income.......................................................................................................................................................	6
(3) Notes to Quarterly Consolidated Financial Statements.....................................................................................................	8
(Notes on the Going Concern Assumption).....................................................................................................................	8
(Notes on Significant Changes in the amount of Shareholders' Equity)..........................................................................	8
(Segment information, etc.)..............................................................................................................................................	9
(Significant Subsequent Events)......................................................................................................................................	9

1

1. Qualitative information on the current quarter's performance

(1) Explanation of Operating Results

During the first quarter of the fiscal year under review, the Japanese economy faced extremely severe conditions, with socioeconomic activity stagnating rapidly due to COVID-19. Economic activity has been resumed gradually and is expected to recover gradually in the future. However, the period of convergence became protracted due to, such as the second wave, and the possibility of its impact continuing throughout the fiscal year under review could not be ruled out. Both in Japan and overseas, conditions were affected by downside risks to the economy.

The Group is making various efforts to continue its business under the influence of this infectious disease. Specifically, the Group takes measures according to the situation, such as securing liquidity on hand to ensure management stability, implementing telecommuting, strengthening restrictions on business trips and travel to Japan and abroad, thoroughly disseminating measures to prevent infections, and ascertaining trends in each region through the Group's domestic and overseas networks. We will continue to place the highest priority on the safety of our group employees and stakeholders. In order to fulfill our social responsibilities as a group, we will work to prevent infectious diseases and spread infectious diseases based on the government's policies, action plans and requests, and at the same time strive to grow our business.

In this business conditions, iFace Reflection, a transparent iFace series that utilizes reinforced glass, continues to capture market demand in sales of mobile phone accessories, leading the overall Commerce Business. Domestic wholesale recovered steadily as economic activity gradually resumed, despite a significant decline due to restraints on the outings of consumers caused by the spread of this infectious disease and temporary suspension of physical stores operations. Domestic retail sales grew at a significantly higher pace than in the previous fiscal year due to major changes in consumer behavior, such as the conspicuous shift in house spending due to changes in daily lives and the shift to digital e-commerce.

As a result, in the first quarter under review, sales were JPY2,684,108 thousand (up 4.9% YoY), operating income was JPY 415,976 thousand (up 8.2%), ordinary income was JPY400,401 thousand (up 0.2%), and net income attributable to owners of the parent was JPY260,712 thousand (down 10.6%).

In addition, the Ministry of Economics, Industries and the Tokyo Stock Exchange selected HAMEE as "Aggressive IT Management Brand" for three consecutive years from 2016 to 2018 and "IT Management Focus Firm 2019" for 2019 to select businesses that are actively utilizing IT to improve management innovation, income level, and productivity. In this year, the "Aggressive IT Management Brand" was changed to "Digital Transformation Brand" and was selected as the DX Brand in the first time in which it was nutritious, resulting in an award for five consecutive years.

Results by business segment are as follows.

• Commerce Business

Sales of iFace Reflection series continued to be favorable, buoyed by an increase in product recognition following the launch of a series of new products in 2019, and the launch of the second-generation iPhone SE in April 2020. The mainstay iFace First Class series also performed well.

In the domestic wholesale business, although the monthly results fell down due to voluntary restraints by consumers on going out, and temporary suspension of operations by actual stores, recovered significantly due to the resumption of economic activities and other factors. Domestic retail sales increased significantly by 134% due to the impact of the expansion of the EC market as a result of major changes in consumer behavior, such as the demand for in house consumptions due to requests to refrain from going abroad and temporary holidays at various schools, as well as the shift in consumer spending to digital (EC).

Overseas, sales increased compared with the same period in the previous year due to strong retail sales in the same way as in Japan, despite a decline in wholesale sales due to the impact of COVID-19 in the United States.

As a result, sales in the Commerce Business increased 0.5% YoY to JPY2,084,678 thousand and segment profit increased 1.1% to JPY506,731 thousand.

2

• Platform Business

As a result of the market expansion caused by changes in consumption behavior, such as the aforementioned conspicuous consumption in house and a digital shift to EC use, the number of orders received by next-engine client businesses also increased, and sales of the next engine, which is a volume-based charge system related to the EC transaction by client, were also strong. In addition, with the aim of providing support to companies wishing to enter the EC business and supporting the introduction of various services and tools to companies that have already entered the EC business, the Group worked to improve added value as a platform by compiling support measures provided by the next engine and partner companies. In addition, cost reductions, such as a relative decline in server costs, contributed to higher sales and profits.

As a result of these activities, the total number of subscribers was 4179 (up 182 from the end of the previous fiscal year) and the number of subscribing EC shops was 31,771 (up 936 from the end of the previous fiscal year, according to our own research).

For Hamee Consulting, which provides sales support consulting services for e-commerce businesses, profits increased in the first quarter of the current fiscal year due to a decline in certain expenses, including a reduction in expenses for new recruitment activities due to improvements in the turnover rate of consultants.

As a result, sales in the platform business for the first quarter of the current fiscal year were JPY549,632 thousand (up 21.9% from the same quarter of the previous year). Segment Profit (Operating Profit) was JPY230,720 thousand (up 81.2%) due primarily to an increase in gross margin resulting from an increase in sales of the next engine.

• Others

New services that cannot be clearly classified into neither the commerce or platform, include Hometown tax payment support services, voice messaging robots for children who do not have smartphones named Hamic BEAR, and RUKAMO, which was opened in March 2020. In particular, sales of the hometown tax payment support service grew significantly, partly due to an increase in the market (donations). As a result, sales for the first quarter of the fiscal year under review amounted to JPY50,126 thousand (up 54.6% year on year). Segment operating loss was JPY81,559 thousand (compared with an operating loss of JPY37,743 thousand in the same period of the previous fiscal year), mainly due to upfront expenditures in RUKAMO, which we launched in March 2020, and in Hamic new series, which we are currently developing.

(2) Explanation of Financial Position

Assets at the end of the first quarter of the current fiscal year decreased by JPY216,755 thousand from the end of the previous fiscal year to JPY7,879,770 thousand. This was mainly attributable to a decrease in income taxes payable due to the payment of income taxes, a decrease in consumption taxes payable due to the payment of consumption taxes, and a decrease in cash and deposits of JPY163,935 thousand due to the acquisition of treasury stock.

Total liabilities amounted to JPY2,903,984 thousand, a decrease of JPY368,176 thousand from the end of the previous fiscal year. This was mainly due to a 251,672 thousand yen decrease in income taxes payable resulting from the payment of income taxes, and a 153,644 thousand yen decrease in accounts payable-other. As in the previous fiscal year, to ensure management stability in response to the spread of COVID-19, we increased liquidity on hand by borrowing from financial institutions, and short-term borrowings amounted to JPY1,611,850 thousand.

Net assets stood at JPY4,975,786 thousand, an increase of JPY151,421 thousand from the end of the previous fiscal year. This was mainly attributable to profit attributable to owners of parent of JPY260,712 thousand, an increase of JPY35,871 thousand in capital stock and capital surplus due to the exercise of stock options, dividends of surplus of JPY110,541 thousand, and an increase of JPY65,064 thousand in treasury stock.

1. Explanation of future forecasts such as consolidated performance forecasts

There are no changes to the full-year consolidated earnings forecasts announced on June 12, 2020.

3

2. Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Balance Sheets

				(Thousands of yen)
		End of previous fiscal year	End of 1st quarter of the year
		(As of April 30, 2020)	(As of July 31, 2020)
Assets
	Current assets
	Cash and deposits	3,453,297	3,289,362
	Notes and accounts receivable	1,230,062	1,134,152
	Inventory	1,054,844	1,125,788
	Work in process		3,382		3,124
	Raw materials and supplies		5,207		5,507
	Others	523,676	496,999
	Allowance for doubtful accounts		11,723		37,408
	Total current assets	6,258,748	6,017,525
	△		△
	Fixed assets
	Property, plant and equipment
	Buildings and structures	204,725	205,030
	Accumulated depreciation		45,517		49,999
	Buildings and structures, net	159,208	155,030
	△		△
	Tools, furniture and fixtures	440,696	517,931
	Accumulated depreciation	329,805	376,437
	Tools, furniture, and fixtures, net	△110,891	△141,493
	Construction in progress	299,015	301,697
	Total property, plant and equipment	569,114	598,221
	Intangible assets
	Goodwill	514,544	468,830
	Software	230,164	224,128
	Trademark rights		16,577		15,939
	Others		28		28
	Total intangible assets	761,315	708,928
	Investments and other assets
	Investment securities		15,342		18,677
	Stocks of subsidiaries and affiliates		43,200		47,164
	Deferred tax assets	289,000	334,491
	Others	159,803	154,760
	Total investments and other assets	507,347	555,095
	Total noncurrent assets	1,837,777	1,862,244
	Total assets	8,096,525	7,879,770

4

					(Thousands of yen)
			End of previous fiscal year	End of 1st quarter of the fiscal year
			(As of April 30, 2020)	(As of July 31, 2020)
Liabilities
	Current liabilities
		Accounts payable	166,127		189,634
		Short-term loans	1,600,000	1,611,850
		Current portion of long-term loans payable		48,036		48,036
		Accounts payable-other	660,915		507,270
		Accrued expenses	182,402		178,855
		Income taxes payable		453,119		201,447
		Provision for bonuses		2,789		1,613
		Reserve for sales returns		6,716		3,396
		Provision for discount points		2,414		2,457
		Others		23,529		41,050
		Total current liabilities	3,146,051	2,785,613
	Noncurrent liabilities
		Long-term loan		91,889		79,880
		Obligations for retirement		9,365		10,666
		Others		24,853		27,824
		Total Noncurrent liabilities	126,108		118,370
	Total liabilities	3,272,160	2,903,984
Net assets
	Shareholders' equity
		Common stock	536,677		572,548
		Capital surplus	456,677		492,548
		Retained earnings	4,166,941	4,317,111
		Treasury stock		313,117		378,181
		Total shareholders' equity	4,847,178	5,004,026
		△		△
	Other accumulated comprehensive income
		Adjustments on Foreign currency statement	161,192		140,831
		translation
		△	△
			161,192	140,831
		Total other accumulated comprehensive income
	Stock Option	△138,380	△112,591
	Total net assets	4,824,365	4,975,786
Total liabilities and net assets	8,096,525	7,879,770

5

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

Quarterly Consolidated income statement

First 1st quarter of the fiscal year

			(Thousands of yen)
		1st quarter of previous fiscal year	1st quarter of fiscal year
		(From May 1, 2019 to July 31,	(From May 1, 2020 to July 31,
		2019)	2020)
Net sales	2,557,816	2,684,108
Cost of sales	1,152,921	1,053,295
Gross profit	1,404,894	1,630,813
	Reversal of reserve for sales returns	6,807		6,716
	Provision for reserve for sales returns	5,203		3,396
Gross profit after adjustment of reserve for sales	1,406,498	1,634,133
returns
Selling, general and administrative expenses	1,021,986	1,218,156
Operating profit	384,511	415,976
Non-operating income
	Interest income	85		158
	Refund on insurance	19,351		-
	Equity in earnings of affiliates	6,280		1,155
	Compensation income	1,449		3,295
	Others	765		960
	Total non-operating income	27,933		5,570
Non-operating expenses
	Interest expenses	633		2,642
	Payment Guarantee Fee	1,629		1,337
	Foreign exchange losses	5,391		10,454
	Others	5,097		6,710
	Total non-operating expenses	12,751		21,145
Ordinary Profit	399,693	400,401
Extraordinary income
	Gain on sales of noncurrent assets	-		378
	Gain on reversal of subscription rights to shares	2,516		1,258
	Total extraordinary income	2,516		1,636
Extraordinary losses
	Loss on retirement of noncurrent assets	1,298		-
	Loss on valuation of investment securities	-		10,164
	Loss on reversal of foreign currency translation	-		868
	adjustments
	Total extraordinary loss	1,298		11,032
Quarter net profit before income taxes and	400,910	391,004
minority interests
Income taxes	108,423	174,852
Income taxes-deferred	799		44,560
			130,292
Total income taxes	109,223	△
Quarterly net profit	291,687	260,712
Quarterly net profit attributable to owners of parent	291,687	260,712

6

Quarterly Consolidated Statements of Comprehensive Income

First 1st quarter of the fiscal year

					(Thousands of yen)
			1st quarter of previous fiscal year	1st quarter of fiscal year
			(From May 1, 2019 to July 31,	(From May 1, 2020 to July 31,
			2019)		2020)
Quarterly net profit		291,687	260,712
Other comprehensive income
	Adjustments on foreign currency	statement	△	68,913
	20,361
	translation		△
	Total other comprehensive income		68,913	20,361
Quarterly Comprehensive income		222,773	281,073
(Details)

Quarterly Comprehensive income attributable to owners of parent

Comprehensive income attributable to non- controlling interests

222,773281,073

-

-

7

(3) Notes to Quarterly Consolidated Financial Statements

(Notes on the Going Concern Assumption) Not applicable.

(Notes on Substantial Changes in the Amount of Shareholders' Equity) Not applicable.

8

(Segment information, etc.) [Segment Information]

I Previous 1st Quarter (From May 1, 2019 to July 31, 2019)

1. Information on net sales and profits or losses by reported segment

						(Thousands of yen)
	Reportable segments				Quarterly
				consolidated
						Adjusted
				Others		Amount
				Total	amount	recorded in
	Commerce	Pratform		(NOTE) 1
	Total		(NOTE) 2	the statement
	Business	Business
					of income
							(NOTE) 3
Net sales
Sales to 1st party	2,074,602	450,786	2,525,389	32,427	2,557,816	-	2,557,816
Intersegment sales	-	-	-	-	-	-	-
Total	2,074,602	450,786	2,525,389	32,427	2,557,816	-	2,557,816
Segment profit or (loss)	501,373	127,303	628,676	△37,743	590,933	△206,422	384,511

(NOTE) 1. "Other" refers to business segment that are not included in reportable segments, and includes Services for EC businesses that are not linked to the main functions of Next Engine.

(NOTE) 2. adjustments to segment profit of △206,422 thousand is corporate expenses that are not allocated to reportable segments, and mainly general and administrative expenses.

(NOTE) 3. Segment profit is consistent with operating income in the quarterly consolidated statements of income. 2. Information on impairment loss on noncurrent assets and goodwill by reportable segment

Not applicable.

1. Current 1st Quarter (From May 1, 2020 to July 31, 2020)
   1. Information on net sales and profits or losses by reported segment

(Thousands of yen)

	Reportable segments				Quarterly
				Consolidated
						Adjusted
				Others		Amount
				Total	amount	Recorded in
	Commerce	Platform		(NOTE) 1
	Total		(NOTE) 2	the statement
	Business	Business
					of imcome
							(NOTE) 3
Net sales
Sales to 1st party	2,084,678	549,303	2,633,981	50,126	2,684,108	-	2,684,108
Intersegment sales	-	329	329	-	329	△329	-
Total	2,084,678	549,632	2,634,310	50,126	2,684,437	△329	2,684,108
Segment profit or (loss)	506,731	230,720	737,451	△81,559	655,892	△239,916	415,976

(NOTE) 1. "Other" is a business segment not included in the reporting segments, which includes Hometown tax payment services and services for EC companies that are not linked to the main functions of Next Engine.

(NOTE) 2. adjustments to segment profit of △239,916 thousand are mainly corporate expenses that are not allocated to reportable segments, and mainly general and administrative expenses.

(NOTE) 3. Segment profit is consistent with operating income in the quarterly consolidated statements of income.

2. Information on impairment loss on noncurrent assets and goodwill by reportable segment Not applicable.

(Significant Subsequent Events) Not applicable.

9