Retty : Non-consolidated Financial Results for the Second Quarter of the Fiscal Year ending September 30, 2022 Japanese GAAP

Non-consolidated Financial Results for the Second Quarter of the Fiscal Year

ending September 30, 2022

			May 13, 2022
Company name:	Retty Inc.		Listing: Tokyo
Share code:	7356	URL http://corp.retty.me/
Representative:	(Title)	CEO	(Name) Kazuya Takeda
Contact:	(Title)	Executive Officer in charge	(Name) Yuzaburo TsuchiyaPhone: +81+3-6852-1002
		of corporate division

Scheduled date of filing

Scheduled date of

May 13, 2022commencing dividend -

quarterly report

payments

Preparation of supplementary materials for financial results: Yes Holding of financial results

presentation meeting: Yes

(for institutional investors and securities analysts)

(All amounts are rounded down to the nearest million yen)

1. Non-consolidated Financial Results for the Second Quarter of the Fiscal Year Ending September 30, 2022 (from October 1, 2021 to March 31, 2022)

(1) Result of operations (aggregated)

(Percentages indicate changes from the same period of

the previous fiscal year)

Net sales

Operating profit

Ordinary profit

Profit

million yen

%

million yen

%

million yen

%

million yen

%

Second quarter of the

fiscal year ending

842

(14.9)

(324)

-

(325)

-

(326)

-

September 30, 2022

Second quarter of the

fiscal year ended

989

-

(43)

-

(114)

-

(115)

-

September 30, 2021

Diluted net profit per

Basic earnings per share

share

Profit

Basic earnings per share

Profit

Yen

Yen

Second quarter of the

fiscal year ending

(27.86)

-

September 30, 2022

Second quarter of the

fiscal year ended

(10.19)

-

September 30, 2021

(2) Financial Conditions

Total assets

Net assets

Equity ratio

million yen

million yen

%

Second quarter of the

fiscal year ending

2,138

814

38.1

September 30, 2022

Fiscal year ended

1,727

1,114

64.5

September 30, 2021

Second quarter of the

814millio

As of

1,113millio

Reference: Equity

fiscal year ending

September 30,

September 30, 2022

n yen

2021

n yen

2. Dividends

- 1 -

			Annual dividends
	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended	-	0.00	-	0.00	0.00
September 30, 2021
Fiscal year ending	-	0.00
September 30, 2022
Fiscal year ended
September 30, 2022			-	0.00	0.00
(forecast)

Note: Revision of previously announced dividend forecast during the period under review: None

3. Earnings Forecast for the Fiscal Year Ended September 30, 2022 (from October 1, 2021 to September 30, 2022)

(Percentages indicate year-on-year changes)

													Basic earnings per
	Net sales		Operating profit		Ordinary profit		Profit		share
													Profit
	million		%	million		%	million		%	million		%	Yen
	yen		yen		yen		yen
Full year	1,810		(6.6)	(764)		-	(770)		-	(772)		-	(66.43)

(Note) Revision of previously announced earnings forecast during the period under review: None

- 2 -

*Notes

1. Use of special accounting methods for preparation of quarterly consolidated financial statements: Yes
2. Changes in accounting policies and estimates, and retrospective restatement
   ① 1) Changes in accounting policies due to revision of accounting standards : Yes

②	2)	Changes in accounting policies other than those due to item 1) above	:
	None
③	3)	Changes in accounting estimates		: None
④	4)	Restatement after modification		: None
(3) Number of shares outstanding (common share)
			Second quarter
①	1)	Shares outstanding at the end	of the fiscal	sh	Fiscal year	sh
	of the period (including treasury	year ending	11,762,604ar	ended September	11,627,804ar
	shares)	September 30,	es	30, 2021	es
			2022
			Second quarter
②	2)	Total number of treasury shares	of the fiscal	sh	Fiscal year	sh
	at the end of the period	year ending	161ar	ended September	121ar
	September 30,	es	30, 2021	es
			2022
			Second quarter		Second quarter
③	3)	Average number of shares	of the fiscal	sh	sh
of the fiscal
	outstanding during the three	year ending	11,723,876ar	11,305,601ar
	year ended March
	months	September 30,	es	es
	31,	2021
			2022

*This quarterly report is exempt from the audit procedures by certified public accountants or accounting firms.

*Cautionary statement regarding earnings forecast and special notes (Notes on forward-looking statements)

Forward-looking statements including earnings forecast in these materials are based on information available to the management at the time this report was prepared and assumptions that management believes are reasonable, and do not represent a guarantee from the Company that they will be achieved. Actual results may differ significantly from these statements for several reasons.

- 3 -

○Accompanying Materials -Table of Contents

1. Qualitative Information on Quarterly Financial Results for the Period under Review	2
(1)	Explanation about Operating Results	2
(2)	Explanation about Financial Position	2
(3)	Explanation about Forward-looking Information, Including Earnings Forecast	3
2. Quarterly Non-consolidated Financial Statements and Primary Notes	4
(1)	Quarterly Non-consolidated Balance Sheets	4
(2)	Quarterly Non-consolidated Statements of Income	6
	Six-Month Period Ended at the End of the Second Quarter	6
(3)	Non-consolidated Cash Flow Statements	7
(4)	Notes to Quarterly Non-consolidated Financial Statements	8
	(Notes to Going Concern Assumptions)	8
	(Notes on significant changes in the amount of shareholders' equity)	8
	(Use of special accounting methods for preparation of quarterly non-consolidated financial	9
	statements)
	(Segment Information) …………………………………………………………………………	9

- 4 -

1. Qualitative Information on Quarterly Financial Results for the Period under Review

1. Explanation about Operating Results

Our businesses are still affected by the novel coronavirus ("COVID-19") infections and remain unpredictable. With respect to the Fan Relationship Management ("FRM"), one of our key businesses, the number of new member restaurants gradually increased from October to December 2021 after the declaration of the state of emergency had been lifted at the end of September 2021; however, the number of new member restaurants turned downward again after a quasi-state of emergency was declared in January 2022 and restaurants became less willing to promote sales. As a result, the average number of new member restaurants per month was 321 for the six-month period ended at the end of the second quarter under review (October 2021 to March 2022). Some trial contracts that had been designed for and concluded with large corporations such as pub chains were also unexpectedly cancelled due partly to the closure of their pubs and restaurants. Accordingly, the number of member restaurants decreased to 7548, down 802 from the end of the previous fiscal year to the end of the second quarter under review. On the other hand, the number of member restaurants from the end of November to the end of December 2021 showed a net increase of approximately 45, due to the steady increase in the number of new paying member restaurants in December. This is the first time since December 2020 that the number of new paying member restaurants has recorded a net increase on a monthly basis. The Company believes this indicates that, even under the impact of COVID-19, if a certain number of new member restaurants can be secured due to the lifting of the state-of-emergency declaration, etc., which improves the external environment and recovers customer traffic to restaurants, the total number of member restaurants will also tend to increase along with it.

As for advertisement and contents, the impact of the decline of the advertisement unit price has continued since the state of emergency declaration in April 2020. Although the number of users has been recovering to a certain extent due to the lifting of the state of emergency declaration at the end of September 2021, it has not yet fully recovered compared to the figures prior to the impact of COVID-19.

As a result of the above, net sales for the six-month period ended at the end of the second quarter under review amounted to 842 million yen (down 14.9% year on year).

In terms of expenses, as a result of the recruitment of development personnel and sales personnel to strengthen the development structure and restaurant sales channels disclosed in the presentation material on the full-year financial results for the fiscal year ended September 2021, cost of sales was 385 million yen (up 22.8% year on year), and selling, general and administrative expenses were 781 million yen (up 8.6% year on year).

In addition, non-operating income of 2 million yen (up 228.0% year-on-year) was recorded mainly consisting of interest subsidy related to the New Corona Virus Special Loans, etc., and non- operating expenses of 3 million yen (down 94.9% year-on-year) were recorded consisting of interest expenses.

As a result of the above, the Company, in the six-month period ended at the end of the second quarter under review, reported an operating loss of 324 million yen (an operating loss of 43 million yen a year ago), an ordinary loss of 325 million yen (an ordinary loss of 114 million yen a year ago), and a net loss of 326 million yen (a net loss of 115 million yen a year ago).

Segment information is omitted because the Company is engaged only in the operation of "Retty," a restaurant review platform service with reviewers using real names.

(2) Explanation about Financial Position

1. Financial situation (Assets)
   Current assets at the end of the second quarter under review increased by 402 million yen compared with the end of the previous fiscal year to 1,825 million yen. This is mainly because cash and deposits increased by 590 million yen due to borrowing from banks and advances paid decreased by 108 million yen as the payment of the project expenses under the "Go To Eat" Campaign on behalf of the Ministry of Agriculture, Forestry and Fisheries were reimbursed. Non-current assets at the end of the second quarter under review increased by 8 million yen compared with the end of the previous fiscal year to 313 million yen. This was mainly due to an increase of 11 million yen in the long-term prepaid expenses due to the recording of the long-term prepayment of sales fees to the Company's sales agents.
   As a result, total assets at the end of the period under review increased by 410 million yen
2. • 5 -