Nojima : Summary of Consolidated Financial Results for the Six-month Period Ended September 30, 2021

Nojima Corporation (7419) summary of consolidated financial results for the Six-month Period Ended September 30, 2021 (Japanese accounting standards)

Summary of Consolidated Financial Results for the Six-month Period Ended September 30, 2021 (Japanese accounting standards)

Released: October 28, 2021

Name of listed firm:

Nojima Corporation

Listed on the Tokyo Stock Exchange

Code No.:

7419

URL

http://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:

November 12, 2021

Scheduled start date of dividend payments:

December 7, 2021

Supplemental materials on quarterly financial results:

Available

Briefing session on quarterly financial results for analysts: Scheduled

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

1. Consolidated financial results for the six-month period ended September 30, 2021 (April 1, 2021 - September 30, 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

%

Six-month period ended

270,605

12.4

13,838

-20.9

15,184

-65.6

23,455

-11.3

9,762

-74.5

September 30, 2021

Six-month period ended

240,787

-10.7

17,505

49.2

44,199

239.1

26,449

28.6

38,269

313.6

September 30, 2020

Note: Comprehensive income: Six-month period ended September 30, 2021: 7,058 million yen (-83.8%)

Six-month period ended September 30, 2020: 43,636 million yen (436.8 %)

• 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."

	Net income per share	Diluted net income per share
	Yen	Yen
Six-month period ended September 30, 2021	197.36	192.44
Six-month period ended September 30, 2020	770.12	752.87

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of September 30, 2021	300,873	118,613	38.7	2,340.48
As of March 31, 2021	340,183	144,296	41.8	2,879.19

Reference: Equity: As of September 30, 2021: 116,337 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	543.19

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. Percentage changes compared to the previous year are percentage changes compared to the amount before application because the amount of the impact after application is minor.

Nojima Corporation (7419) summary of consolidated financial results for the Six-month Period Ended September 30, 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)	September 30, 2021	March 31, 2021
ii.	Number of shares of treasury stock at the end
As of	1,583,044	shares	As of		1,959,508	shares
	of the period	September 30, 2021	March 31, 2021
		Six-month period			Six-month period
iii.	Average number of shares during the period	ended September 30, 49,465,635	shares	ended September	49,692,322	shares
		2021			30, 2020

Note: The number of shares of treasury stock above includes shares held in trust accounts (131,800 shares as of September 30, 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 (197,133 shares for the six-month period ended September 30, 2021 and 288,099 shares for the six-month period ended September 30, 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)

Nojima Corporation made Suruga Bank, Ltd. an equity method affiliate on June 26, 2020. As a result, in the consolidated financial statements for the six-month period ended September 30, 2020, a gain on equity method investment of 25,146 million yen of Suruga Bank, Ltd. etc., including an amount equivalent to negative goodwill, was recorded as non-operating income. The consolidated financial results for the cumulative period excluding the impact are as follows.

Consolidated financial results for the six-month period ended September 30, 2021 (April 1, 2021 - September 30, 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	%
Six-month period ended	270,605		12.4			13,838	-20.9	15,132	-20.6	23,455		-11.3	9,710	-26.0
September 30, 2021
Six-month period ended	240,787		-10.7			17,505	49.2	19,052	46.5	26,449		28.6	13,122	42.3
September 30, 2020
	Net income per share		Diluted net income per share
					Yen					Yen
Six-month period			196.30				191.40
ended September 30, 2021
Six-month period			264.07				258.15
ended September 30, 2020
(2) Consolidated financial position
	Total assets			Net assets			Equity ratio		Net assets per share
	Million yen				Million yen				%					Yen
As of September 30, 2021			300,815				118,554				38.7				2,339.30
As of March 31, 2021			311,418				115,530				36.4				2,296.05
Reference: Equity: As of September 30, 2021: 116,278 million yen	As of March 31, 2021: 113,264 million yen

Nojima Corporation (7419) summary of consolidated financial results for the Six-month Period Ended September 30, 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 ....................................................................................................................................	3
(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 six-month period) ................................................................................................................................................	7
Consolidated statement of comprehensive income
(For the six-month period) ................................................................................................................................................	8
(3) Consolidated cash flow statement ...................................................................................................................................	9
(4)	Notes to the consolidated financial statements................................................................................................................	11
(Notes on going concern assumption) ...............................................................................................................................	11
(Significant changes in shareholders' equity)....................................................................................................................	11
(Changes in accounting policies) ......................................................................................................................................	11
(Segment information, etc.) ..............................................................................................................................................	12

1

Nojima Corporation (7419) summary of consolidated financial results for the Six-month Period Ended September 30, 2021 (Japanese accounting standards)

1. Qualitative Information on Quarterly Consolidated Financial Performance

1. Explanation of operating results

During the six-month period ended September 30, 2021, while the novel coronavirus (COVID-19) remained unresolved, economic activities were restricted due to the implementation of the declaration of a state of emergency and containment priority measures over a long period of time, and the severe situation continued. Private consumption is sluggish due to a deterioration of the employment and income environment; therefore, the outlook 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.

As a result, for the six-month period ended September 30, 2021, we recorded net sales of 270,605 million yen (112.4% of the figure for the six-month period ended September 30, 2020), operating income of 13,838 million yen (79.1% of the figure for the six-month period ended September 30, 2020), ordinary income of 15,184 million yen (34.4% of the figure for the six-month period ended September 30, 2020), and net income attributable to shareholders of the parent company of 9,762 million yen (25.5% of the figure for the six-month period ended September 30, 2020). Due to the exemption from application of the equity method of Suruga Bank in June of this year, the year-on-year rate of increase/decrease after deducting equity method investment gains/losses of ordinary income is 79.4% and net income attributable to shareholders of the parent company is 74.0% compared to the six-month period ended September 30, 2020.

EBITDA (*), which the Group considers to be an important indicator of business performance, stood at 23,455 million yen (88.7% of the figure for the six-month period ended September 30, 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)

In addition to moderate spending by people staying at home, the amount of rainfall was greater than usual, mainly in the Kanto area, so sales of air conditioners were sluggish and sales of refrigerators were almost flat. Our strength in consulting sales has been accepted by customers; the digital home electronics business as a whole performed steadily; and, sales of organic ELTVs to view the Tokyo Olympic games, as well as sales of washing machines, housework and hair/beauty appliances, etc. increased.

Under these circumstances, we have continued to invest in human resources and have endeavored to provide higher quality services. We have also been working to attract new customers by actively opening stores in areas not served previously, such as the Nojima Ikebukuro Tobu store.

As a result, net sales in this segment totaled 120,413 million yen (101.9% of the figure for the six-month period ended September 30, 2020), and segment income was 8,814 million yen (70.0% of the figure for the six-month period ended September 30, 2020).

(Operation of mobile carrier stores)

In the midst of significant changes in the industry, such as the launch of new rate plans limited to online support by telecommunications carriers and the abolition of preferential treatment for high-priced plans, etc., we have continued to operate stores that provide reliable consulting services to customers regarding their problems and to improve the quality of customer services so that customers who come to our stores have a good experience. Looking toward the future, we have also invested in human resources, while relocating and renovating stores aggressively to improve sales performance.

As a result, net sales in this segment totaled 89,001 million yen (112.4% of the figure for the six-month period ended September 30, 2020), and segment income was 2,510 million yen (72.2% of the figure for the six-month period ended September 30, 2020).

(Internet business)

In addition to continuous increase of 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.

We continue to review the business structure, including optimizing expenses at Cecile Co. Ltd., which became a subsidiary in March 2021.

As a result, net sales in this segment totaled 37,151 million yen (159.6% of the figure for the six-month period ended September 30, 2020), and segment income was 2,729 million yen (129.0% of the figure for the six-month period ended September 30, 2020).

(Overseas business)

In Asian countries, under circumstances where the governments of individual countries are taking various measures to control the spread of COVID-19, there are differences in measures and infection status, such as mass vaccinations, restrictions on activities, lockdown measures, etc., by country.

In Singapore, almost all stores continued to operate in the midst of movements toward a normalization of economic activities, while restricting behavior. In Indonesia, stores were closed due to lockdowns, but there are signs that there will be a gradual easing. In Malaysia, since the lockdown was issued, we have been forced to operate under restrictions on sales items and activities depending on the region. Under these circumstances, we enhanced the education and training of human resources to provide higher quality customer services.

2

Nojima Corporation (7419) summary of consolidated financial results for the Six-month Period Ended September 30, 2021 (Japanese accounting standards)

As a result, net sales in this segment totaled 20,279 million yen (115.2% of the figure for the six-month period ended September 30, 2020), and segment income was 824 million yen (128.8% of the figure for the six-month period ended September 30, 2020).

(Stores in operation)

With nine new store openings and three store closures, including scrap-and-build, the number of digital home electronics retail stores stood at 197, or 219 including 22 dedicated communications device stores following the sale of two stores.

In the operation of mobile carrier stores, following the new store openings and acquisition of nine stores and the 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 two store closures, the number of stores stood at 66.

In the light of these factors, the numbers of stores as of September 30, 2021 are as shown below. Stores in operation

	Classification	Directly operated	Franchises	Total
Operation of digital home electronics retail stores	219	stores		-	219	stores
	Digital home electronics retail stores	197	stores		-	197	stores
	Dedicated communications device stores	22	stores		-	22	stores
Operation of mobile carrier stores	399	stores	187	stores	586	stores
	Carrier stores	386	stores	182	stores	568	stores
	Others	13	stores	5	stores	18	stores
Overseas business	66	stores		-	66	stores
Total	684	stores	187	stores	871	stores

(2) Explanation of financial position Assets, liabilities and net assets

(Assets)

Total assets as of September 2021 were 300,873 million yen, a decrease of 39,310 million yen from the end of the previous fiscal year.

This decrease was due mainly to a decrease of 15,698 million yen to 135,099 million yen in current assets and a decrease of 23,611 million yen to 165,774 million yen in non-current assets.

The primary factors underlying the decrease in current assets included decreases of 15,032 million yen in accounts receivable-trade, 3,698 million yen in accounts receivable-other, and 3,052 million yen in merchandise and products, despite an increase of 5,228 million yen in cash and deposits.

The main causes of the decrease in non-current assets included decreases of 31,004 million yen in investment securities and 2,147 million yen in contractual intangible assets, despite increases of 4,420 million yen and 4,055 million yen in buildings and structures and land, respectively.

(Liabilities)

Total liabilities as of September 2021 were 182,260 million yen, a decrease of 13,627 million yen from the end of the previous fiscal year.

This decrease was due mainly to a decrease of 17,412 million yen to 106,878 million yen in current liabilities and an increase of 3,785 million yen to 75,382 million yen in non-current liabilities.

The primary factors underlying the decrease in current liabilities included decreases of 10,379 million yen, 4,723 million yen, and 4,276 million yen in notes and account payable-trade,short-term loans payable, and reserve for points, respectively, despite increases of 5,000 million yen in current portion of bonds and 3,903 million yen in contract liabilities.

The main causes of the increase in non-current liabilities included increases of 11,843 million yen and 1,751 million yen in contract liabilities and lease obligations, respectively, despite decreases of 5,000 million yen in bonds and 3,891 million yen in reserve for guarantees for merchandise sold.

(Net assets)

Net assets as of September 30, 2021 totaled 118,613 million yen, a decrease of 25,682 million yen from the end of the previous fiscal year, due to factors including decreases of 2,636 million yen in valuation difference on available-for- sale securities and 23,608 million yen in retained earnings.

These factors resulted in an equity ratio of 38.7% (41.8% at the end of the previous fiscal year).

3