King Jim : Consolidated Financial Results for the Fiscal Year Ended June 20, 2023

Disclaimer: This document is an English translation of the original document in Japanese and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results

for the Fiscal Year Ended June 20, 2023

[Japanese GAAP]

August 1, 2023

Company name: KING JIM CO., LTD.

Stock exchange listing: Tokyo Stock Exchange

Code number: 7962

URL: https://www.kingjim.co.jp/english/

Representative: Akira Miyamoto, President & CEO

Contact: Shinichi Harada, Director and Managing Executive Officer, General Manager, Administration Division

Phone: [phone]

Scheduled date of Annual General Meeting of Shareholders: September 14, 2023

Scheduled date of filing annual securities report: September 14, 2023

Scheduled date of commencing dividend payments: September 15, 2023

Availability of supplementary briefing material on annual financial results: Available

Schedule of annual financial results briefing session: None (video distribution only)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended June 20, 2023 (June 21, 2022 to June 20, 2023)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Fiscal year ended	Million yen		%	Million yen	%	Million yen	%	Million yen	%
	June 20, 2023	39,393		7.5	368	(63.4)	637	(52.4)	419	(46.8)
	June 20, 2022	36,636		0.9	1,007	(58.3)	1,338	(51.4)	788	(59.8)

(Note) Comprehensive income: Fiscal year ended June 20, 2023: ¥1,209 million [40.8%]
				Fiscal year ended June 20, 2022: ¥859 million [(67.6)%]
			Basic earnings		Diluted earnings	Rate of return		Ordinary profit to	Operating profit
			per share		per share	on equity		total assets			to net sales
	Fiscal year ended			Yen			Yen	%			%	%
	June 20, 2023		14.72			14.66	1.7			1.8	0.9
	June 20, 2022		27.69			27.57	3.3			4.2	2.8
(Reference) Share of profit (loss) of investments accounted for using equity method:
	Fiscal year ended June 20, 2023: ¥－ million
	Fiscal year ended June 20, 2022: ¥－ million
(2) Consolidated Financial Position
				Total assets	Net assets		Equity ratio		Net assets per share
					Million yen		Million yen		%			Yen
	As of June 20, 2023			35,812		24,833		69.1			867.29
	As of June 20, 2022			33,512		24,231		72.0			846.80

(Reference) Equity: As of June 20, 2023: ¥24,746 million As of June 20, 2022: ¥24,135 million

(3) Consolidated Cash Flows

			Cash flows from		Cash flows from		Cash flows from		Cash and cash
						equivalents at end of
			operating activities		investing activities		financing activities
						period
	Fiscal year ended			Million yen		Million yen				Million yen			Million yen
	June 20, 2023			166			(1,234)			1,065			5,923
	June 20, 2022			(1,278)			(3,578)			3,206			5,637
2. Dividends
					Annual dividends					Total		Payout		Dividends
			1st		2nd	3rd						ratio		to net assets
				Year-end	Total		dividends
		quarter-end	quarter-end	quarter-end		(consolidated)		(consolidated)
	Fiscal year ended		Yen	Yen	Yen	Yen	Yen	Million yen	%	%
	June 20, 2022		-	7.00	-	15.00	22.00	627	79.5	2.6
	June 20, 2023		-	7.00	-	7.00	14.00	399	95.1	1.6
	Fiscal year ending
	June 20, 2024		-	7.00	-	7.00	14.00			66.6
	(Forecast)

3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 20, 2024 (June 21, 2023 to June 20, 2024)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable	Basic earnings
		to owners of parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	19,900		7.1	0	-	80	-	40	-	1.40
Full year	42,000		6.6	700	90.1	900	41.2	600	42.9	21.03

* Notes:

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): No
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
4. Total number of issued shares (common shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares):

June 20, 2023: 31,459,692 shares

June 20, 2022: 31,459,692 shares

1. Total number of treasury shares at the end of the period: June 20, 2023: 2,926,776 shares
   June 20, 2022: 2,957,834 shares
2. Average number of shares during the period:

Fiscal year ended June 20, 2023: 28,520,767 shares

Fiscal year ended June 20, 2022: 28,491,160 shares

(Reference) Summary of Non-consolidated Financial Results

Non-consolidated Financial Results for the Fiscal Year Ended June 20, 2023 (June 21, 2022 to June 20, 2023)

(1) Non-consolidated Operating Results				(% indicates changes from the previous corresponding period.)
			Net sales				Operating profit		Ordinary profit	Profit
	Fiscal year ended		Million yen		%			Million yen		%			Million yen	%	Million yen		%
	June 20, 2023	23,820		(0.5)		27		(94.9)	264	(65.3)	254		(46.2)
	June 20, 2022	23,929		(6.8)		543		(61.9)	762	(53.6)	473		(58.8)
			Basic earnings		Diluted earnings
			per share				per share
	Fiscal year ended				Yen				Yen
	June 20, 2023	8.94				8.90
	June 20, 2022	16.63				16.56
(2) Non-consolidated Financial Position
			Total assets	Net assets		Equity ratio	Net assets per share
				Million yen		Million yen			%			Yen
	As of June 20, 2023				29,065		19,835			67.9			692.11
	As of June 20, 2022				26,914		19,670			72.8			687.09

(Reference) Equity: As of June 20, 2023: ¥19,747 million As of June 20, 2022: ¥19,583 million

• These consolidated financial results are outside the scope of an audit by certified public accountants or audit firms
• Explanation of the proper use of financial results forecast and other notes
• • The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and certain assumptions deemed reasonable as of the date of publication of this document, and are not intended as a guarantee by the Company that they will be achieved. Actual results may differ significantly from these forecasts due to a wide range of factors. For assumptions underlying the financial results forecast and precautions regarding their use, please refer to "1. Overview of Business Results, etc. (4) Future Outlook" on page 4.
  • Supplementary briefing materials for the financial results will be posted on the Company's website today. In addition, a financial results briefing video will be distributed on the Company's website around the end of August 2023.
    Supplementary briefing material (Japanese only): https://www.kingjim.co.jp/ir/library/tansin.html
    Financial results briefing video (Japanese only): https://www.kingjim.co.jp/ir/event/presentation.html

Table of Contents - Attachments
1. Overview of Business Results, etc	2
(1)	Overview of Business Results for the Period Under Review	2
(2)	Overview of Financial Position for the Period Under Review	3
(3)	Overview of Cash Flows for the Period Under Review	3
(4)	Future Outlook	4
(5)	Basic Policy Regarding Distribution of Profits and Dividends for the Current and Next Fiscal Years	5
2. Basic Stance Concerning Selection of Accounting Standards	5
3. Consolidated Financial Statements and Primary Notes	6
(1)	Consolidated Balance Sheets	6
(2)	Consolidated Statements of Income and Comprehensive Income	8
(3)	Consolidated Statements of Changes in Equity	10
(4)	Consolidated Statements of Cash Flows	12
(5)	Notes to the Consolidated Financial Statements	14
(Notes on going concern assumption)	14
(Segment information)	14
(Per share information)	16
(Significant subsequent events)	16

1

1. Overview of Business Results, etc.

(1) Overview of Business Results for the Period Under Review

During the fiscal year ended June 20, 2023, the Japanese economy showed signs of a moderate recovery from the contraction trend of economic activities caused by COVID-19, but the situation remained harsh due to the impact of continued rising prices, as well as volatile financial and capital markets reflecting monetary tightening policies globally.

Under these circumstances, KING JIM CO., LTD. (the "Company") has been implementing measures to achieve the goals of its 10th Medium-Term Management Plan (fiscal year ended June 20, 2022 to fiscal year ending June 20, 2024).

While further strengthening its core businesses such as TEPRA and filing tools, the Company is focusing on growth fields, such as by expanding sales of the interior lifestyle business and hygiene and health products, and expanding its business domain through mergers and acquisitions.

As for the consolidated business results for the fiscal year ended June 20, 2023, the contribution of sales by Life on Products, Inc., which was turned into a subsidiary in November 2021, and by HIM Co., Ltd., which was absorbed and merged with the Group in February 2023, resulted in net sales amounting to ¥39,393.89 million (up 7.5% year on year). In terms of profit, operating profit was ¥368.30 million (down 63.4% year on year) and ordinary profit was ¥637.27 million (down 52.4% year on year). The decreases were due to the sharp depreciation of the yen and a surge in distribution costs and others, in addition to continued higher prices of raw materials, despite the Company's efforts to assure profitability by revising the prices of products. Profit attributable to owners of parent was ¥419.79 million (down 46.8% year on year). The decrease was due to gain on sale of investment securities through the sale of cross-shareholdings recorded as extraordinary income and settlement income in connection with the delayed restructuring of the sales distribution system.

Business results by segment are as follows.

A. Stationery and office supply business

In the stationery and office supply business, the core business of the Company, we strived to expand sales by proposing new applications and renewing products to stimulate demand. In the TEPRA category, we released the SR-R2500P, which enables easy label creation with a smartphone. In stationery, the Company launched the "COLOR SELECTION" series, a renewal of regular products in trendy colors, and "favluv" binder series which is available in a wide variety of eight colors for those who enjoy cheering on their favorite anime characters and idols. As for each category of growth fields, the Company developed and released products that meet the needs of the market. In digital stationery, the Company released pomera DM250, a new model of the pomera digital memo. In hygiene and health products, we released DROPLET CATCHER that absorbs droplets in the air generated during a conversation. In office and living environment products, we launched Alcohol Checker that can detect alcohol in breath, ahead of the revision of the Regulations for Enforcement of the Road Traffic Act, under which a breath test for alcohol will be mandatory even for general business operators.

In terms of measures to expand sales channels, in addition to continuing to develop new channels, the Company proactively promoted initiatives such as the use of television shopping channels and proposals for our hygiene and health products to educational institutions and the construction industry. To meet the growing interest in power-saving measures, we are running a campaign for HYBRID-FAN that can be attached to air conditioners to improve air conditioning efficiency. In addition, we strived to increase the level of recognition and achieve the sale of our disaster supplies kits by exhibiting at the 18th Office Disaster Prevention EXPO [Spring] held at Tokyo Big Sight from May 10 to May 12, 2023, as well as creating a pamphlet titled "All You Need to Know About Disaster Prevention Goods." We thus worked to capture new demand from a perspective unique to an office supply manufacturer. Furthermore, the EC business grew due to the addition of sales in connection with the absorption-type merger of HIM Co., Ltd.

2