Nojima : Summary of Consolidated Financial Results for the Nine-month Period Ended December 31, 2021

Nojima Corporation (7419) summary of consolidated financial results for the Nine-month Period Ended December 31, 2021 (Japanese accounting standards)

Summary of Consolidated Financial Results for the Nine-month Period Ended December 31, 2021 (Japanese accounting standards)

Released: January 31, 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 quarterly report filing:

February 10, 2022

Scheduled start date of dividend payments:

-

Supplemental materials on quarterly financial results:

No

Briefing session on quarterly financial results for analysts: No

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

1. Consolidated financial results for the nine-month period ended December 31, 2021 (April 1, 2021 - December 31, 2021)

(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

%

Nine-month period ended

413,833

9.3

21,625

-11.6

23,731

-55.0

36,614

-3.8

15,065

-65.6

December 31, 2021

Nine-month period ended

378,470

-4.1

24,469

40.4

52,767

176.0

38,056

24.6

43,824

227.9

December 31, 2020

Note: Comprehensive income: Nine-month period ended December 31, 2021: 16,126 million yen (-67.4%)

Nine-month period ended December 31, 2020: 49,421 million yen (251.3 %)

• For detailed information, including definitions and methods used to calculate indicators, see p. 2, "1. Qualitative Information on Quarterly Consolidated Financial

Performance: (1) Explanation 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 ending March 2022. The consolidated financial results for the nine-month period ended December 31, 2021 are amounts obtained after applying the relevant accounting standards. As a result, sales decreased 13,682 million yen, and year-on-year change excluding this effect is 13.0% in real terms.

	Net income per share	Diluted net income per share
	Yen	Yen
Nine-month period ended December 31, 2021	304.42	298.21
Nine-month period ended December 31, 2020	885.24	863.64

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of December 31, 2021	331,470	129,487	37.9	2,539.84
As of March 31, 2021	340,183	144,296	41.8	2,879.19

Reference: Equity: As of December 31, 2021: 125,624 million yen	As of March 31, 2021: 142,030 million yen
2. Dividends
				Dividends per share
	End of 1Q		End of 2Q	End of 3Q		Year-end	Total
	Yen		Yen	Yen		Yen	Yen
FY ended March 2021	-		22.00	-		24.00	46.00
FY ended March 2022	-		24.00	-
FY ending March 2022 (planned)						24.00	48.00

Note: Revisions to the most recently announced dividend forecast: No

3. Forecasts of consolidated financial results for the fiscal year ending March 2022 (April 1, 2021 - March 31, 2022)

(Percentages indicate changes from the previous year)

	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
Full year	565,000		8.0	35,000	3.5	39,000	-39.7	53,000		2.4	27,000		-48.9	545.88

Note: Revisions to the most recently announced consolidated earnings forecast: No

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

Nojima Corporation (7419) summary of consolidated financial results for the Nine-month Period Ended December 31, 2021 (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. Application of special accounting methods in the preparation of quarterly consolidated financial statements: No
2. 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 11, "2. Quarterly Consolidated Financial Statements and Main Notes: (3) Notes to the consolidated financial statements (Changes
	in accounting policies)."
(4) Number of shares issued and outstanding (common stock)
i.	Number of shares issued and outstanding at	As of	51,289,616	shares	As of		51,289,616	shares
	the end of the period (including treasury stock)	December 31, 2021	March 31, 2021
ii.	Number of shares of treasury stock at the end
As of	1,828,144	shares	As of		1,959,508	shares
	of the period	December 30, 2021	March 31, 2021
		Nine-month period			Nine-month period
iii.	Average number of shares during the period	ended December 31, 49,490,328	shares	ended December 31,	49,506,075	shares
		2021			2020

Note: The number of shares of treasury stock above includes shares held in trust accounts (41,000 shares as of December 31, 2021 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 (167,894 shares for the nine-month period ended December 31, 2021 and 314,340 shares for the nine-month period ended December 31, 2020.

• Quarterly 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 disclosure 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.

(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 26,118 million yen, including negative goodwill associated with the application of the equity-method for an affiliate to Suruga Bank Ltd. etc., was recorded as non-operating income in the consolidated financial results for the nine-month period ended December 31, 2021.

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

Consolidated financial results for the nine-month period ended December 31, 2021 (April 1, 2021 - December 31, 2021) (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	%
Nine-month period ended	413,833		9.3		21,625	-11.6	23,635	-11.3	36,614		-3.8	14,970	-15.5
December 31, 2021
Nine-month period ended	378,470		-4.1		24,469	40.4	26,649	39.7	38,056		24.6	17,706	32.9
December 31, 2020

Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29), etc. has been applied since the beginning of the fiscal year ending March 2022. The consolidated financial results for the nine-month period ended December 31, 2021 are amounts obtained after applying the relevant accounting standards. As a result, sales decreased 13,682 million yen, and year-on-year change excluding this effect is 13.0% in real terms.

	Net income per share	Diluted net income per share
		Yen		Yen
Nine-month period	302.49	296.32
ended December 31, 2021
Nine-month period	357.66	348.93
ended December 31, 2020
(2) Consolidated financial position
	Total assets		Net assets		Equity ratio	Net assets per share
	Million yen		Million yen		%	Yen
As of December 31, 2021	331,375		129,392		37.9	2,537.91
As of March 31, 2021	311,418		115,530		36.4	2,296.05
Reference: Equity: As of December 31, 2021: 125,528 million yen	As of March 31, 2021: 113,264 million yen

Nojima Corporation (7419) summary of consolidated financial results for the Nine-month Period Ended December 31, 2021 (Japanese accounting standards)

• Contents of attached documents

1. Qualitative Information on Quarterly Consolidated Financial Performance.........................................................................	2
(1)	Explanation of operating results......................................................................................................................................	2
(2)	Explanation of financial position ....................................................................................................................................	4
(3)	Information on forward-looking statements forecasts of consolidated financial results .................................................	4
2. Quarterly Consolidated Financial Statements and Main Notes ............................................................................................	5
(1)	Consolidated balance sheet .............................................................................................................................................	5
(2)	Consolidated income statement and consolidated statement of comprehensive income .................................................	7
Consolidated income statement
(For the nine-month period) ..............................................................................................................................................	7
Consolidated statement of comprehensive income
(For the nine-month period) ..............................................................................................................................................	8
(3)	Notes to the consolidated financial statements................................................................................................................	9
(Notes on going concern assumption) ...............................................................................................................................	9
(Significant changes in shareholders' equity)....................................................................................................................	9
(Changes in accounting policies) ......................................................................................................................................	9
(Segment information, etc.) ..............................................................................................................................................	10

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Nojima Corporation (7419) summary of consolidated financial results for the Nine-month Period Ended December 31, 2021 (Japanese accounting standards)

1. Qualitative Information on Quarterly Consolidated Financial Performance

1. Explanation of operating results

During the nine-month period ended December 31, 2021, although priority measures against new coronavirus infectious diseases such as the declaration of a state of emergency and actions to prevent their spread have been lifted, the situation is still unpredictable due to the emergence of new mutant strains such as Omicron. In addition, while consumer spending is picking up, supply chains are affected by semiconductor supply problems and soaring raw material prices, and the outlook for the economic situation is expected to remain uncertain.

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 provide customer services reflecting the perspectives of customers, while working to improve consulting-based sales and enhancing 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.

As a result, for the nine-month period ended December 31, 2021, we recorded net sales of 413,833 million yen (109.3% of the figure for the nine-month period ended December 31, 2020), operating income of 21,625 million yen (88.4% of the figure for the nine-month period ended December 30, 2020), ordinary income of 23,635 million yen (88.7% year-on-year after deducting investment profit and loss due to the exclusion from the equity method for Suruga Bank, Ltd. in June 2021), and net income attributable to shareholders of the parent company of 14,970 million yen (84.5% of the figure compared to the same quarter of the previous year after deducting the investment profit/loss). Year-on-year changes before deducting equity in earnings of affiliates are 45.0% year-on-year in ordinary income and 34.4% year-on-year in net income attributable to shareholders 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 ending March 2022. As a result, sales decreased 13,682 million yen, cost of sales decreased 1,573 million yen, selling, general and administrative expenses decreased 11,517 million yen, and operating income, ordinary income and net income before tax adjustment decreased by 590 million yen, respectively. For details, please refer to "2. Quarterly Financial Statements and Main Notes (3) Notes on Quarterly Financial Statements (Changes in Accounting Policy)."

EBITDA (*), which the Group considers to be an important indicator of business performance, stood at 36,614 million yen (96.2% of the figure for the nine-month period ended December 31, 2020).

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)

Sales of PCs and air conditioners were sluggish as a consequence of a reaction to last year's demand for nesting and increased demand stimulated by government benefits, but there was also an increase resulting from time spent at home, such as for household appliances, including refrigerators and washing machines, and organic EL TVs. Sales were strong, and the digital home appliances business as a whole performed well.

Under these circumstances, we will continue to invest in human resources and provide higher quality services, as well as aggressively open stores in those areas that do not yet have stores, such as Nojima Shinjuku Takashimaya Times Square, to increase the number of stores. We have been promoting the opening and renovation of attractive stores in order to enhance customer experience. In October 2021, we marked the milestone of 200 stores with the opening of "Tokyu Store Kamakura."

As a result, net sales in this segment totaled 182,405 million yen (100.2% of the figure for the nine-month period ended December 31, 2020), and ordinary income was 12,976 million yen (77.8% of the figure for the nine-month period ended December 31, 2020). Due to the application of the "Accounting Standard for Revenue Recognition" for the current fiscal year, sales decreased 12,932 million yen and ordinary income decreased 623 million yen.

(Operation of mobile carrier stores)

In the midst of significant changes in the industry, such as the launch of new rate plans support by telecommunications carriers, the abolition of preferential treatment for high-priced plans, and a delay in the production of mobile devices due to the semiconductor supply problem.

Under these circumstances, we have continued to operate stores that provide accurate consulting services to customers regarding their problems, and have aggressively relocated and renovated stores to further improve sales performance. .

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

As a result, net sales in this segment totaled 136,279 million yen (105.9% of the figure for the nine-month period ended December 31, 2020), and ordinary income was 3,647 million yen (70.8% of the figure for the nine-month period ended December 31, 2020). The impact of the application of the "Accounting Standard for Revenue Recognition" in the current fiscal year is minor.

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Nojima Corporation (7419) summary of consolidated financial results for the Nine-month Period Ended December 31, 2021 (Japanese accounting standards)

(Internet business)

Responding to the continuous increase in the use of ultra-high-speed broadband services, which form an indispensable infrastructure for daily life, we aggressively provided information on FLET'S Hikari service "@nifty Hikari," security services, and mailing services provided by NTT East and NTT West at Group stores, and maximized group synergies.

In addition, on December 24, 2021, NIFTY Lifestyle Co., Ltd., which develops behavior support platform services, was listed on the Tokyo Stock Exchange Mothers.

Regarding Cecile Co., Ltd., which became a subsidiary in March 2021, we are continuing to review the business structure and have made proposals to enrich new lifestyles utilizing the resources of the Group.

As a result, net sales in this segment totaled 56,030 million yen (160.7% of the figure for the nine-month period ended December 31, 2020), and ordinary income was 4,764 million yen (158.6% of the figure for the nine-month period ended December 31, 2020). Due to the application of the "Accounting Standard for Revenue Recognition" in the current fiscal year, sales decreased 746 million yen and ordinary income increased 35 million yen.

(Overseas business)

In Asian countries, while individual governments are taking various measures to curb the spread of infectious diseases, there are signs of convergence, but due to the rapid spread of the Delta strain infection, economic activities in each country, there have been disparities in infection control measures within the region, such as restrictions to curb infection.

Under these circumstances, we enhanced education and training of human resources to provide higher quality customer services.

In Singapore, on November 6, 2021, the new commercial facility "COURTS Nojima," which is conveniently located on Orchard Road, started the first overseas facility operation by its own company, and the floor of the home appliance and furniture specialty store "COURTS" was opened in advance. (The entire building will open in the spring of 2022). In Malaysia, we are reviewing store management through the scrap and build system.

As a result, net sales in this segment totaled 32,067 million yen (110.1% of the figure for the nine-month period ended December 31, 2020), and ordinary income was 1,336 million yen (101.2% of the figure for the nine-month period ended December 31, 2020).

(Stores in operation)

With 16 new store openings and three store closures, including scrap-and-build, the number of digital home electronics retail stores stood at 204, or 226 including 22 dedicated communications device stores following the sale of two stores.

In the operation of mobile carrier stores, following new store openings and acquisition of nine stores, and closure and sale of 21 stores, including scrap-and-build, the number of stores, including both directly-operated carrier stores and franchises, stood at 586.

In overseas business, with one store opening and four store closures, the number of stores stood at 65. In the light of these factors, the numbers of stores as of December 31, 2021 are as shown below.

Stores in operation

	Classification	Directly operated	Franchises	Total
		stores
Operation of digital home electronics retail stores	226	-	226
	Digital home electronics retail stores	204	-	204
	Dedicated communications device stores	22	-	22
Operation of mobile carrier stores	399	187	586
	Carrier stores	386	182	568
	Others	13	5	18
Overseas business	65	-	65
Total	690	187	877

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