IDOM : Consolidated and Non-consolidated Results – Fiscal Year Ended February 29, 2024

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Year Ended February 29, 2024

(Based on Japanese GAAP)

April 12, 2024

Company name:

IDOM Inc.

Stock exchange listing:

Tokyo

Stock code:

7599

URL https://221616.com

Representative:

President

Yusuke Hatori

Inquiries:

Director CFO

Ryo Nishihata

TEL [phone]

Scheduled date of ordinary general meeting of shareholders:

May 28, 2024

Scheduled date to file Securities Report:

May 29, 2024

Scheduled date to commence dividend payments:

May 29, 2024

Preparation of supplementary material on financial results:

Yes

Holding of financial results meeting:

Yes

(for analysts and institutional investors)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the year ended February 29, 2024 (from March 1, 2023 to February 29, 2024)

(1) Consolidated operating results

Percentages indicate year-on-year changes

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Year ended February 29, 2024

419,852

0.8

16,117

(13.7)

15,826

(12.8)

11,442

(19.5)

Year ended February 28, 2023

416,514

(9.4)

18,684

1.1

18,146

3.3

14,205

31.6

Earnings per share

Diluted earnings per

Profit attributable to

Ordinary profit/total

Operating profit/net

share

owners of

assets

sales

parent/equity

Yen

Yen

%

%

%

Year ended February 29, 2024

113.96

-

17.5

8.9

3.8

Year ended February 28, 2023

141.48

-

24.5

10.0

4.5

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

As of February 29, 2024

184,031

69,930

37.5

687.34

As of February 28, 2023

173,293

62,702

35.8

618.34

(3) Consolidated cash flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Year ended February 29, 2024

11,648

(10,367)

(8,230)

30,548

Year ended February 28, 2023

2,275

(166)

(10,634)

37,473

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2. Cash dividends

		Annual dividends per share		Total cash	Dividend payout	Ratio of dividends
						to net assets
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total	dividends (Total)	ratio (Consolidated)	(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Year ended February 28, 2023	-	16.20	-	26.30	42.50	4,267	30.0	7.4
Year ended February 29, 2024	-	14.41	-	19.78	34.19	3,432	30.0	5.2
Year ending February 28, 2025	-	20.02	-	20.61	40.63		30.0
(Forecast)

3. Forecast of consolidated financial results for the year ending February 28, 2025 (from March 1, 2024 to February 28, 2025)

Percentages indicate year-on-year changes

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Earnings per share
			owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six months ending	223,200	9.6	10,100	42.3	9,850	42.4		6,700	38.9	66.73
August 31, 2024
Full year	456,500	8.7	20,300	26.0	19,800	25.1		13,600	18.9	135.45
4. Notes
(1) Changes in significant subsidiaries during the year ended February 28, 2023			No
(changes in specified subsidiaries resulting in the change in scope of consolidation):
(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:	No
Changes in accounting policies due to other reasons:					No
Changes in accounting estimates:							No
Restatement of prior period financial statements:					No

(3) Number of issued shares (common shares)

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

	As of February 29, 2024	106,888,000	shares	As of February 28, 2023	106,888,000	shares
Number of treasury shares at the end of the period
	As of February 29, 2024	6,480,691	shares	As of February 28, 2023	6,480,651	shares
Average number of shares during the period
	Year ended February 29, 2024	100,407,339	shares	Year ended February 28, 2023	100,407,349	shares

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1. Overview of Operating Results, Etc.

(1) Analysis of operating results

In the fiscal year under review (March 1, 2023 February 29, 2024), total unit sales at directly managed stores in Japan were 268,844 (up 8.7% year on year). Retail unit sales to consumers reached a record high of 144,487 (up 6.6% year on year). In addition, gross profit per retail unit stood at an average of 410,000 yen on a full-year basis, maintaining the level in the previous year. Wholesale unit sales to business operators were 124,357 (up 11.2% year on year) partly due to solid auto auction market prices, and a record high total unit sales of 268,844 was achieved. This is an aggregation of retail unit sales and wholesale unit sales. Retail unit sales were 53.7% of total unit sales while wholesale unit sales were 46.3%. Retail gross profit was approximately 80% of non- consolidated gross profit which totaled 71,062 million yen.

Selling, general and administrative expenses increased, chiefly reflecting higher advertising expenses linked to the opening of large stores and higher personnel expenses due to a rise in the number of employees as the result of increased new hiring for the implementation of growth strategies and recruitment costs.

As a result of the above, the consolidated business results for the fiscal year under review were net sales of 419,852 million yen (up 0.8% year on year), operating profit of 16,117 million yen (down 13.7%), ordinary profit of 15,826 million yen (down 12.8%) and profit attributable to owners of parent of 11,442 million yen (down 19.5%).

Regional segment-specific earnings are as indicated below:

I. Japan

The results of the Japan segment were net sales of 417,031 million yen (up 12.9% year on year) and segment profit (operating profit) of 16,076 million yen (down 7.8% year on year). Selling, general and administrative expenses increased due to investments for growth. Despite net sales increased due to strong business performance at large stores, the Japan segment recorded higher revenue and lower profit.

II. Others

The results of the Other (Differences) segment were net sales of 2,820 million yen (up 17.7% year on year) and segment profit (operating profit) of 43 million yen (down 38.8% year on year).

The Australia segment has been excluded from the scope of consolidation, because all equity shares in the Australian subsidiary were sold in the previous consolidated fiscal year.

Outlook for the Next Fiscal Year

The forecasts for the next fiscal year are based on the following assumptions.

(i) Japan

The Company will steadily take steps to improve price setting and increase incidental earnings associated with retail sales in the next fiscal year. By doing so, it expects to increase gross profit per retail unit.

Furthermore, retail unit sales are expected to rise year on year due to the opening of 15 large capital efficiency-focused stores in the next fiscal year, as well as the contributions of large stores opened in or before the previous fiscal year.

(ii) Others

It had been assumed that IDOM Innovations Pty Ltd., which researches and develops new services in Australia, would be included in consolidated results in the fiscal year under review. The Company, however, decided not to include IDOM Innovations Pty Ltd. in the scope of consolidation due to the materiality of the business. It is assumed that this scope of consolidation will apply in the next fiscal year.

Based on the above assumptions, the Company forecasts that in the next fiscal year, it will post net sales of 456,500 million yen, operating profit of 20,300 million yen, ordinary profit of 19,800 million yen and profit attributable to owners of parent of 13,600 million yen.

(2) Analysis of financial position

Status of assets, liabilities and net assets

(Assets)

As of the end of the fiscal year under review, total assets stood at 184,031 million yen (up 6.2 % compared to the end of the previous fiscal year).

Current assets were 134,281 million yen (up 2.1% compared to the end of the previous fiscal year), due primarily to an increase in notes and accounts receivable - trade (up 8,703 million yen), despite a decrease in cash and deposits (down 6,925 million yen).

Non-current assets were 49,749 million yen (up 19.0% compared to the end of the previous fiscal year) chiefly due to an increase in buildings and structures (up 4,330 million yen).

(Liabilities)

As of the end of the fiscal year under review, total liabilities were 114,101 million yen (up 3.2% compared to the end of the previous fiscal year).

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Current liabilities stood at 63,327 million yen (down 1.3% from the end of the previous fiscal year) due primarily to a fall in the current portion of long-term borrowings (down 7,845 million yen).

Non-current liabilities were 50,773 million yen (up 9.4% compared to the end of the previous fiscal year) due to an increase in long-term borrowings (up 3,700 million yen), among other factors.

(Net assets)

As of the end of the fiscal year under review, total net assets amounted to 69,930 million yen (up 11.5% compared to the end of the previous fiscal year), largely due to an increase in retained earnings (up 7,355 million yen).

Status of cash flows

Cash and cash equivalents (hereinafter, "cash") for the fiscal year under review were 30,548 million yen, a decrease of 6,925 million yen (down 18.5%) compared to the end of the previous fiscal year.

The status of cash flows for FY2024 and respective relevant cash flows are as follows.

(Cash flows from operating activities)

Net cash provided by operating activities was 11,648 million yen.

This was mainly attributable to profit before income taxes of 15,664 million yen and depreciation of 2,890 million yen and an increase in trade receivables of 7,846 million yen.

(Cash flows from investing activities)

Net cash used in investing activities was 10,367 million yen.

This mainly reflected 9,508 million yen used for purchase of property, plant and equipment.

(Cash flows from financing activities)

Net cash used in financing activities was 8,230 million yen.

This mainly reflects 20,000 million yen of proceeds from long-term borrowings and 24,145 million yen for the repayment of long-term borrowings.

(Reference) Changes in cash flow indicators

	FY2020	FY2021	FY2022	FY2023	FY2024
Equity ratio (%)	22.9	24.8	28.5	35.8	37.5
Shareholders' equity (mark-to-	28.3	35.1	34.8	49.1	49.4
market) ratio (%)
Debt redemption years	6.7	4.1	9.5	29.5	5.4
Interest coverage ratio	10.2	18.6	9.0	3.7	34.1
Notes:
1. Breakdown of each indicator

Equity ratio = Shareholders' equity/Total assets

Shareholders' equity (mark-to-market) ratio = Market capitalization/Total assets

Debt redemption years = Interest bearing debt/Operating cash flow

Interest coverage ratio = Operating cash flow/Interest payments

1. Each index is calculated from consolidated figures.
2. Market capitalization is calculated using the following formula: closing share price at period-end x number of shares issued (excluding treasury stock)

1. Basic Policy on Profit Distribution and Dividends for Fiscal Years Ended February 2024 and Ending February 2025
   (i) Basic policy on dividends and targets
   The Company adopted performance-linked dividends as its dividend policy, based on which dividends are determined in sync with consolidated results. In principle, the Company will use 30% of profit attributable to owners of parent in the current fiscal year as total dividends for the determination of dividends per share for the current fiscal year.

(ii) Dividends for the fiscal year under review

Under the policy above, annual dividends per share for the fiscal year under review will be 34.19 yen (14.41 yen at the end of the first half and 19.78 yen at the end of the fiscal year).

(iii) Dividends for next fiscal year

Based on the above, the Company has calculated dividends per share (forecast) for the next fiscal year based on profit attributable to owners of parent in the fiscal year under review. It is planned that annual dividends per share for the next fiscal year will be 40.63 yen (20.02 yen at the end of the first half and 20.61 yen at the end of the fiscal year).

4

2. Basic Policy for the Selection of Accounting Standards

In light of the convergence of Japanese GAAP and IFRS, the Group intends to create financial statements using Japanese GAAP for the time being.

5

Consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of February 28, 2023	As of February 29, 2024
Assets
Current assets
Cash and deposits	37,473	30,548
Notes and accounts receivable - trade	3,927	12,631
Merchandise	84,432	85,994
Other	6,173	5,606
Allowance for doubtful accounts	(528)	(498)
Total current assets	131,478	134,281
Non-current assets
Property, plant and equipment
Buildings and structures	41,306	47,376
Accumulated depreciation	(16,873)	(18,611)
Buildings and structures, net	24,433	28,764
Vehicles	236	2,214
Accumulated depreciation	(148)	(186)
Vehicles, net	88	2,027
Tools, furniture and fixtures	5,077	5,735
Accumulated depreciation	(3,362)	(3,73)
Tools, furniture and fixtures, net	1,715	2,000
Land	136	136
Construction in progress	67	683
Other	-	217
Total property, plant and equipment	26,441	33,829
Intangible assets
Software	1,300	1,249
Goodwill	86	78
Other	2	2
Total intangible assets	1,389	1,330
Investments and other assets
Investment securities	0	0
Shares of subsidiaries and associates	29	29
Long-term loans receivable	76	1,574
Leasehold and guarantee deposits	5,045	5,514
Construction assistance fund receivables	3,955	3,537
Deferred tax assets	4,435	3,471
Other	449	464
Allowance for doubtful accounts	(6)	(2)
Total investments and other assets	13,984	14,589
Total non-current assets	41,815	49,749
Total assets		173,293	184,031

6

			(Millions of yen)
		As of February 28, 2023	As of February 29, 2024
Liabilities
Current liabilities
Accounts payable - trade	4,822	5,783
Current portion of long-term borrowings	24,145	16,300
Accounts payable - other	3,812	4,151
Income taxes payable	864	2,556
Contract liabilities	25,336	26,809
Deposits received	309	247
Provision for bonuses	897	1,046
Other provisions	342	48
Other	3,635	6,384
Total current liabilities	64,165	63,327
Non-current liabilities
Long-term borrowings	43,000	46,700
Long-term guarantee deposits	599	679
Asset retirement obligations	2,643	3,085
Other	183	308
Total non-current liabilities	46,426	50,773
Total liabilities	110,591	114,101
Net assets
Shareholders' equity
Share capital	4,157	4,157
Capital surplus	5,250	4,726
Retained earnings	56,738	64,093
Treasury shares	(4,344)	(4,344)
Total shareholders' equity	61,801	68,631
Accumulated other comprehensive income
Foreign currency translation adjustment	284	381
Total accumulated other comprehensive income	284	381
Share acquisition rights	147	10
Non-controlling interests	468	906
Total net assets	62,702	69,930
Total liabilities and net assets		173,293	184,031

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Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

			(Millions of yen)
		Fiscal year ended	Fiscal year ended
		February 28, 2023	February 29, 2024
Net sales	416,514	419,852
Cost of sales	341,964	346,519
Gross profit	74,549	73,333
Selling, general and administrative expenses	55,865	57,216
Operating profit	18,684	16,117
Non-operating income
Interest income	107	189
Subsidy income	26	－
Other	－	14
Reversal of allowance for doubtful accounts	67	59
Total non-operating income	202	264
Non-operating expenses
Interest expenses	571	350
Foreign exchange losses	71	131
theft loss	87	52
Other	9	20
Total non-operating expenses	739	554
Ordinary profit	18,146	15,826
Extraordinary income
Gain on sale of non-current assets	54	14
Gain on sale of shares of subsidiaries and associates	795	－
Gain on liquidation of subsidiaries	19	－
Subsidy income	91	83
Other	48	13
Total extraordinary income	1,008	110
Extraordinary losses
Loss on retirement of non-current assets	222	76
Impairment losses	103	109
Information security expenses	－	81
Other	76	4
Total extraordinary losses	402	273
Profit before income taxes	18,752	15,664
Income taxes - current	2,859	3,344
Income taxes - deferred	1,621	964
Total income taxes	4,480	4,308
Profit	14,272	11,355
Profit (loss) attributable to non-controlling interests	67	(87)
Profit attributable to owners of parent		14,205	11,442

8

Consolidated statements of comprehensive income

					(Millions of yen)
				Fiscal year ended	Fiscal year ended
				February 28, 2023	February 29, 2024
Profit				14,272	11,355
Other comprehensive income
Foreign currency translation adjustment		303	97
Total other comprehensive income		303	97
Comprehensive income			14,576	11,452
Comprehensive income attributable to
Comprehensive	income	attributable to owners of	14,321	11,540
parent
Comprehensive	income	attributable	to non-	255	(87)
controlling interests

9

Consolidated statements of changes in equity

Fiscal year ended February 28, 2023

									(Millions of yen)
							Shareholders' equity
					Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders'
					equity
Balance at beginning of period		4,157	4,361	49,673	(4,344)	53,847
Changes during period					(5,288)		(5,288)
Cumulative	effects	of	changes	in	4,157	4,361	44,384	(4,344)	48,558
accounting policies
Restated balance
Dividends of surplus					(1,857)		(1,857)
Profit attributable to owners of			14,205		14,205
parent
Purchase of treasury shares					(0)	(0)
Change in scope of consolidation			23	6		29
Change in ownership interest of		866			866
parent due to transactions with non-
controlling interests
Net changes in items other than					-
shareholders' equity
Total changes during period		-	889	12,354	(0)	13,243
Balance at end of period			4,157	5,250	56,738	(4,344)	61,801
					Accumulated other comprehensive income
							Share acquisition	Non-controlling
					Foreign currency	Total accumulated	Total net assets
					other comprehensive	rights	interests
					translation adjustment
					income
Balance at beginning of period		168	168	-	1,693	55,709
Changes during period							(5,288)
Cumulative	effects	of	changes	in	168	168	-	1,693	50,420
accounting policies
Restated balance
Dividends of surplus							(1,857)
Profit attributable	to	owners	of					14,205
parent
Purchase of treasury shares						(0)
Change in scope of consolidation						29
Change in ownership interest of
parent due to transactions with non-					866
controlling interests
Net changes in items	other than	115	115	147	(1,224)	(961)
shareholders' equity
Total changes during period		115	115	147	(1,224)	12,281
Balance at end of period			284	284	147	468	62,702

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