Nojima : Summary of Consolidated Financial Results for the Fiscal Year Ended March 2022

Nojima Corporation (7419) summary of consolidated financial results for the Fiscal Year Ended March 31, 2022 (Japanese accounting standards)

Summary of Consolidated Financial Results for

the Fiscal Year Ended March 31, 2022

(Japanese accounting standards)

Released: May 6, 2022

Name of listed firm:

Nojima Corporation

Listed on the Tokyo Stock Exchange

Code No.:

7419

URL:

https://www.nojima.co.jp

Representative:

Hiroshi Nojima, President & Representative Executive Officer

Tel.: [phone]

Contact:

Jiro Shinohara, Director/Executive Officer/General Manager, Finance and Accounting Division

Scheduled date of regular general meeting of shareholders:

June 17, 2022

Scheduled start date of dividend payments:

June 3, 2022

Scheduled date of quarterly report filing:

June 24, 2022

Supplemental materials on quarterly financial results:

Yes

Briefing session on quarterly financial results for analysts:

Yes

(Amounts are rounded down to the nearest million yen.)

1. Consolidated financial results for the fiscal year ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Consolidated results of operations

(Percentages indicate year-on-year

changes.)

Net income attributable

Net sales

Operating income

Ordinary income

EBITDA

to shareholders of the

parent company

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Million yen

%

FY ended March 2022

564,989

8.0

33,166

-2.0

35,890

-44.5

53,504

3.4

25,862

-51.0

FY ended March 2021

523,327

-0.1

33,826

49.8

64,647

166.9

51,759

30.3

52,827

232.0

Note: Comprehensive income:

FY ended March 31, 2022: 27,075 million yen (-54.2 %)

FY ended March 31, 2021: 56,169 million yen (458.1 %)

• For detailed information, including definitions and methods used to calculate indicators, see p. 2, 1. "Overview of operating results and other indicators: (1)

Overview of operating results."

Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29), etc. has been applied since the beginning of the fiscal year ended March 2022. The consolidated financial results for the FY ended March 31, 2022 are amounts obtained after applying the relevant accounting standards.

As a result, sales decreased 20,843 million yen, and year-on-year change excluding this effect is 11.9% in real terms.

	Net income per share	Diluted net income per	ROE	ROA	Operating income
	share	margin
	Yen	Yen	%	%	%
FY ended March 2022	522.89	513.09	18.6	10.8	5.9
FY ended March 2021	1,068.42	1,040.81	45.9	20.6	6.5

Reference: Equity in net income (losses) of affiliates:	FY ended March 2022: 111 million yen	FY ended March 2021: 28,510 million yen
(2) Consolidated financial position
	Total assets			Net assets			Equity ratio		Net assets per share
	Million yen			Million yen				%				Yen
As of March 31, 2022		326,952				140,101				41.6				2,761.22
As of March 31, 2021		340,183				144,296				41.8				2,879.19
Reference: Equity: FY ended March 2022: 136,067 million yen	FY ended March 2021: 142,030 million yen
(3) Consolidated cash flow
	Cash flow from operating	Cash flow from	Cash flow from		Cash and cash
		equivalents at end of
	activities	investment activities	financing activities
		year
		Million yen		Million yen		Million yen		Million yen
FY ended March 2022		42,895		9,029		-19,964		51,004
FY ended March 2021		41,702		-6,607		-34,056		18,513
2. Dividends
		Dividends per share		Total dividends	Payout ratio	Ratio of dividends
	End of Q1	End of Q2		End of Q3	Year-end		Total	for the year	(consolidated)	to net assets
			(consolidated)
	Yen	Yen		Yen	Yen		Yen	Million yen	%	%
FY ended March 2021	-	22.00		-	24.00		46.00	2,279	4.3	2.0
FY ended March 2022	-	24.00		-	26.00		50.00	2,477	9.6	1.8
FY ending March 2023 (planned)	-	26.00		-	26.00		52.00			10.3

3. Forecasts of consolidated financial results for the fiscal year ending March 2023 (April 1, 2022 - March 31, 2023)

(Percentages indicate changes from the previous year for full-year forecasts and changes from the same quarter of the previous fiscal year for quarterly forecasts) )

	Net sales		Operating income	Ordinary income	EBITDA		Net income attributable to	Net income per share
			shareholders of the parent
											company
	Million yen		%	Million yen	%	Million yen	%	Million yen		%	Million yen		%	Yen
Q2 (Cumulative)	271,000		0.1	15,000	8.4	16,000	5.4	25,100		7.0	11,000		12.7	223.22
Full-year	565,000		0.0	34,000	2.5	36,500	1.7	54,800		2.4	25,000		-3.3	507.33

Nojima Corporation (7419) summary of consolidated financial results for the Fiscal Year Ended March 31, 2022 (Japanese accounting standards)

* Notes
(1) Significant changes in subsidiaries during this period
(changes in designated subsidiaries resulting in changes in the scope of consolidation):	No
Added: __ company(ies) (name(s): ____________) Removed: ___ company(ies) (name(s): ____________)

1. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

i.	Changes in accounting policies due to revisions in accounting standards and other regulations:	Yes
ii.	Changes in accounting policies for reasons other than i.:				No
iii.	Changes in accounting estimates:					No
iv.	Restatement of prior period financial statements:				No
	For detailed information, see page 18, "3. Quarterly Consolidated Financial Statements and Main Notes: (5) Notes to the consolidated financial statements (Changes
	in accounting policies)."
(3) Number of shares issued and outstanding (common stock)
i.	Number of shares issued and outstanding at	FY ended	51,289,616	shares	FY ended	51,289,616	shares
	the end of the period (including treasury stock)	March 2022	March 2021
ii.	Number of shares of treasury stock at the end
FY ended	2,011,544	shares	FY ended	1,959,508	shares
	of the period	March 2022	March 2021
iii.	Average number of shares during the period	FY ended	49,461,545	shares	FY ended	49,444,809	shares
March 2022	March 2021

Note: The number of shares of treasury stock above includes shares held in trust accounts (0 shares as of March 31, 2022 and 267,400 shares as of March 31, 2021) for the employee stock ownership plan (ESOP). Shares of the Company's own stock held in ESOP trust accounts are included in treasury stock subtracted from the calculation of the average number of shares during the period (129,027 shares for the Fiscal Year Ended March 2022 and 310,327 shares for the Fiscal Year Ended March 2021.

Reference:

Suruga Bank Ltd. became our equity-method affiliate on June 26, 2020. Accordingly, share of profit of entities accounted for using the equity method of 28,510 million yen, including negative goodwill associated with the application of the equity-method for an affiliate of Suruga Bank Ltd. etc., was recorded as non-operating income in the consolidated financial results for the fiscal year ended March 31, 2021.

Consolidated results for the fiscal year excluding the effects of that impact are as follows.

Consolidated financial results for the fiscal year ended March 31, 2022 (April 1, 2021 - March 31, 2022) (Excluding profit and loss using the equity method)

(1) Consolidated results of operations (Cumulative)																(Percentages indicate year-on-year changes.)
																													Net income attributable
				Net sales				Operating income		Ordinary income			EBITDA		to shareholders of the
																													parent company
		Million yen		%		Million yen	%		Million yen	%	Million yen			%	Million yen		%
FY ended March 2022		564,989		8.0			33,166	-2.0		35,778	-1.0			53,504			3.4	25,751		5.9
FY ended March 2021		523,327		-0.1			33,826	49.8		36,137	49.7			51,759			30.3	24,317		53.7
			Net income per share			Diluted net income per share
										Yen							Yen
FY ended March 2022						520.63						510.87
FY ended March 2021						491.81						479.10
(2) Consolidated financial position
				Total assets					Net assets				Equity ratio					Net assets per share
				Million yen						Million yen								%								Yen
As of March 31, 2022						326,840						139,989								41.6					2,758.95
As of March 31, 2021						311,418						115,530								36.4					2,296.05
Reference: Equity: FY ended March 2022: 135,955 million yen	FY ended March 2021: 113,264 million yen
Reference: Summary of nonconsolidated financial results
Nonconsolidated financial results for the fiscal year ended March 2022 (April 1, 2021 - March 31, 2022)
(1) Nonconsolidated results of operations																	(Percentages indicate year-on-year changes.)
				Net sales					Operating income			Ordinary income			Net income
				Million yen			%			Million yen	%			Million yen		%		Million yen		%
FY ended March 2022		269,349				2.9				19,514	-2.7		29,906		5.1			25,649		22.0
FY ended March 2021		261,882				11.4				20,060	43.0		28,448		31.0			21,025		34.3
				Net income per share	Diluted net income per share
										Yen						Yen
FY ended March 2022									518.57				508.86
FY ended March 2021									425.24				414.25
(2) Nonconsolidated financial position
				Total assets					Net assets				Equity ratio					Net assets per share
				Million yen						Million yen							%								Yen
As of March 31, 2022						198,401						114,035								56.2					2,262.23
As of March 31, 2021						177,064						95,105								52.4					1,882.02

Reference: Equity:

FY ended March 2022: 111,478 million yen

FY ended March 2021: 92,840 million yen

Nojima Corporation (7419) summary of consolidated financial results for the Fiscal Year Ended March 31, 2022 (Japanese accounting standards)

• Financial statements are not subject to audits by certified public accountants or auditing firms
• Explanation concerning the appropriate use of forecasts of business performance and other notes
  Note on forward-looking statements:
  Forecasts of business performance and other forward-looking statements in this release are based on information currently available and certain assumptions the Company deems reasonable at the time of preparation. They do not constitute a guarantee of future results. Actual results may differ materially from those of any forward-looking statements for various reasons.

Nojima Corporation (7419) summary of consolidated financial results for the Fiscal Year Ended March 31, 2022 (Japanese accounting standards)

• Contents of attached documents

1. Overview of operating results and other indicators ..............................................................................................................	2
(1)	Overview of operating results .........................................................................................................................................	2
(2)	Overview of financial position........................................................................................................................................	4
(3)	Overview of cash flow ....................................................................................................................................................	4
(4)	Future outlook.................................................................................................................................................................	6
2. Basic approach to selecting accounting standard ..............................................................................................................	6
3. Consolidated financial statements and main notes ...............................................................................................................	7
(1)	Consolidated balance sheet .............................................................................................................................................	7
(2)	Consolidated income statement and consolidated statement of comprehensive income .................................................	9
Consolidated income statement ........................................................................................................................................	9
Consolidated statement of comprehensive income ...........................................................................................................	10
(3)	Consolidated statement of changes in net assets .............................................................................................................	11
(4)	Consolidated cash flow statement ...................................................................................................................................	13
(5)	Notes to the consolidated financial statements................................................................................................................	15
(Notes on going concern assumption) ..............................................................................................................................	15
(Important principles for preparing consolidated financial statements) ............................................................................	15
(Changes in accounting policies)......................................................................................................................................	18
(Notes to the consolidated balance sheet) .........................................................................................................................	19
(Segment information, etc.) ..............................................................................................................................................	19
(Per-share information) ....................................................................................................................................................	22
(Important subsequent events) .........................................................................................................................................	23

1

Nojima Corporation (7419) summary of consolidated financial results for the Fiscal Year Ended March 31, 2022 (Japanese accounting standards)

1. Overview of operating results and other indicators

1. Overview of operating results

During the fiscal year ended March 31, 2022, vaccinations against the spread of novel coronavirus (COVID-19) infections achieved progress. Signs of a recovery in economic activities began to appear as priority measures to prevent the spread of the virus were terminated. However, the future of the economy remains uncertain due to the effects of the situation in Russia and Ukraine, in addition to the semiconductor supply problem and soaring raw material prices.

Under these circumstances, the Nojima Group focused on being the leader in the digital field and achieving the industry's highest customer satisfaction. To achieve these goals, we sought to establish sales floors where shoppers can easily find what they want and to provide customer services reflecting the perspectives of customers, while working to improve consulting-based sales and enhance customer services to meet their needs.

In addition, from October 1, 2021, AXN Co., Ltd. became a wholly owned subsidiary and started a pay satellite broadcasting business. By providing high-quality broadcasting services, we are working to deliver even more comprehensive and excellent services. In March 2022, the capital and business alliance with Suruga Bank, Ltd. was dissolved and shares held were sold; in addition, shares of CYGNI Corporation, a subsidiary, were sold and the business portfolio was reorganized.

As a result, for the consolidated fiscal year under review, we recorded net sales of 564,989 million yen (108.0% of the figure for the previous fiscal year) and operating income of 33,166 million yen (98.0% of the figure for the previous fiscal year). In addition, ordinary income after deducting investment gains and losses due to the exemption from the equity method of Suruga Bank in June 2021 was 35,778 million yen (99.0% of the figure for the previous fiscal year) and net income attributable to owners of the parent company was 25,751 million yen (105.9% of the figure for the previous fiscal year); net income was a record high for the fifth consecutive term. The year-on-year rate of increase/decrease before deducting equity in earnings of affiliates was 55.5% for ordinary income and 49.0% for net income attributable to owners of the parent company.

The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. has been applied since the beginning of the fiscal year ended March 2022. As a result, sales decreased 20,843 million yen, cost of sales decreased 2,298 million yen, selling, general and administrative expenses decreased 18,722 million yen, and operating income, ordinary income, and net income before tax adjustment each increased 177 million yen. For details, please refer to "3. Consolidated Financial Statements and Main Notes (5) Notes to the Financial Statements (Changes in Accounting Policy)."

EBITDA (*), which the Group considers to be an important indicator of business performance, stood at 53,504 million yen (103.4% of the figure for the previous fiscal year).

1. EBITDA = ordinary income + interest expenses + interest on bonds + depreciation + amortization of goodwill - gain on equity method investment

Business performance by segment is outlined below. (Operation of digital home electronics retail stores)

In response to a reaction to last year's demand for nesting and benefits, we promoted consulting sales that reflected demand for a "new normal" and an increase in time spent at home, supported by thorough measures taken against COVID- 19 infections in stores. We continued efforts to satisfy our customers and encourage them to visit our stores. By product, sales of organic EL TVs and other similar products were strong, as were sales of large and high-performance refrigerators, washing machines, cooking appliances, and beauty appliances, resulting in higher sales for the digital home appliances business than in the previous year. In addition, we aggressively opened stores at attractive locations in front of stations, such as Shinjuku and Ikebukuro, opening a total of 17 new stores, while renovating existing stores.

As a result, net sales in this segment totaled 251,443 million yen (102.2% of the figure for the previous fiscal year) and ordinary income was 20,685 million yen (100.4% of the figure for the previous fiscal year). Due to the application of the "Accounting Standard for Revenue Recognition" for the current fiscal year, sales decreased 19,890 million yen and ordinary income increased 194 million yen.

(Operation of mobile carrier stores)

As the switch to low-priced plans such as online-only plans progress, support provided by carriers has changed from quantity to quality, and the industry as a whole is in a difficult situation.

Under these circumstances, we created an environment where customers can use our products with peace of mind, in addition to providing consulting and services for plans that reflect our customers' lifestyles. We actively promoted store relocation and refurbishment to improve convenience. Sales exceeded the previous year's level, but profits fell below the previous year's level due to an increase in sales promotion expenses, including business travel.

In October 2021, ITX Corporation (hereinafter, ITX), which operates a carrier shop business, was spun off and ITX Communications Co., Ltd. (hereinafter, "ITXC") started business. As a result, ITX focused on the DoCoMo business and ITXC concentrated on the KDDI business, making it possible to provide higher quality consulting services.

As a result, net sales in this segment totaled 187,953 million yen (102.9% of the figure for the previous fiscal year) and ordinary income was 5,887 million yen (69.4% of the figure for the the previous fiscal year). The impact of the application of the "Accounting Standard for Revenue Recognition" in the current fiscal year is minor.

2