This filing was originally prepared and published by the Company in Japanese as it contained timely disclosure information to be submitted to the Tokyo Stock Exchange (1st section). The English translation is for your reference only. To the extent there is any discrepancy between this English translation and the original Japanese filing, the Japanese filing will prevail. The following financial information was prepared in accordance with generally accepted accounting principles in Japan (JGAAP).
Financial Results (Consolidated) for Fiscal Year of 2019
January 29, 2020 | ||
Corporate Name: | ValueCommerce Co., Ltd. | Listed: TSE 1st section |
Ticker Symbol: | 2491 | URL: https://www.valuecommerce.com/en/ |
Representative: | Representative Director, President and CEO | (Name) Jin Kagawa |
Contact person: | Director of the Board, CFO | (Name) Masatomo Endo |
TEL: 81 3 6438 6860 | |
Scheduled date of commencement of dividend payment: | March 9, 2020 |
Scheduled date of ordinary shareholders' meeting: | March 25, 2020 |
Scheduled date of filing the securities report: | March 26, 2020 |
Results supplementary materials to be created: | Yes |
An explanatory presentation to investors: | Yes |
(Amounts less than one million yen rounded down)
1. Consolidated Operating Results for the Fiscal Year Ended Dec. 31 2019 (Jan. 1 to Dec. 31, 2019)
(1) Consolidated Operating Results | (Percentage figures refer to comparisons with the previous fiscal year) | |||||||||
Net income | ||||||||||
Revenue | Operating income | Ordinary income | attributable to owners | |||||||
of the parent | ||||||||||
Million Yen | % | Million Yen | % | Million Yen | % | Million Yen | % | |||
FY2019 | 25,694 | 23.7 | 4,966 | 32.3 | 4,988 | 31.5 | 3,345 | 28.4 | ||
FY2018 | 20,764 | 22.9 | 3,755 | 68.9 | 3,793 | 68.1 | 2,604 | 157.8 |
(Note) Comprehensive income: | Year ended December 31, 2019: | 3,372 million yen, 30.3% | |||||
Year ended December 31, 2018: | 2,587 million yen, 139.3% | ||||||
Diluted EPS | ROA | ||||||
Basic EPS | ROE | (Ratio of ordinary | Operating profit | ||||
(Diluted Earnings | |||||||
(Earnings per share) | (Return on Equity) | income to total | margin | ||||
per share) | |||||||
assets) | |||||||
Yen | Yen | % | % | % | |||
FY2019 | 103.57 | 103.47 | 32.4 | 30.5 | 19.3 | ||
FY2018 | 80.78 | 80.62 | 32.4 | 28.8 | 18.1 |
(Reference) Equity in earnings/loss of an affiliate:
Year ended December 31, 2019: | - |
Year ended December 31, 2018: | -31 million yen |
(2) Consolidated Financial Positions
Total assets | Net worth | Equity ratio | Book-value per share | |
Million Yen | Million Yen | % | Yen | |
As of December 31, 2019 | 18,011 | 11,491 | 63.8 | 355.60 |
As of December 31, 2018 | 14,706 | 9,145 | 62.1 | 283.02 |
(Reference) Owners' equity: | As of December 31, 2019: | 11,485 million yen | ||
As of December 31, 2018: | 9,137 million yen |
(Note) Starting from the consolidated fiscal year under review, "Partial amendment of accounting standards about accounting for income taxes (Corporate Accounting Standards No.28, February 16, 2018)" has been applied. Figures as of December 31, 2018 have been
prepared/analyzed retrospectively based on the new calculation method.
(3) Consolidated Cash Flows
Operating cash flows | Investing cash flows | Financing cash flows | Ending cash balance | |
Million Yen | Million Yen | Million Yen | Million Yen | |
FY2019 | 4,041 | -3,135 | -1,021 | 7,862 |
FY2018 | 2,756 | 627 | -407 | 7,978 |
2. Dividends
Dividend per share | Total dividend | Payout ratio | Dividend on | |||||||
Equity (DOE) | ||||||||||
Q1 | Q2 | Q3 | Q4 | Total | amount | (Consolidated) | ||||
(Consolidated) | ||||||||||
Yen | Yen | Yen | Yen | Yen | Million Yen | % | % | |||
FY2018 | - | 7.00 | - | 18.00 | 25.00 | 806 | 30.9 | 10.0 | ||
FY2019 | - | 14.00 | - | 19.00 | 33.00 | 1,065 | 31.9 | 10.3 | ||
FY2020 (Forecast) | - | 16.00 | - | 18.00 | 34.00 | 30.5 | ||||
3. Consolidated Operating Forecast for the Fiscal Year Ended Dec. 31, 2020 (Jan. 1 to Dec. 31, 2020)
(Percentage figures refer to comparisons with the previous fiscal year)
Net income | Basic EPS | ||||||||||
Revenue | Operating income | Ordinary income | attributable to owners | (Earnings | |||||||
of the parent | per share) | ||||||||||
Million Yen | % | Million Yen | % | Million Yen | % | Million Yen | % | Yen | |||
H1(cumulative) FY2020 | 14,300 | 16.1 | 2,550 | 7.5 | 2,550 | 7.0 | 1,670 | 5.1 | 51.70 | ||
FY2020 | 30,000 | 16.8 | 5,500 | 10.7 | 5,500 | 10.3 | 3,600 | 7.6 | 111.45 |
- Notes
- Significant changes in scope of consolidation during this year: No
- Changes in accounting policies and accounting estimates, retrospective restatement
1. | Changes in accounting policies due to amendment of accounting standards, etc. | : | No |
2. | Changes in accounting policies other than 1. | : | No |
3. | Changes in accounting estimates | : | No |
4. | Retrospective restatement | : | No |
(3) Number of issued shares (Common stock) | |||
as of | as of | ||
December 31, 2019 | December 31, 2018 | ||
1. | Common stock (including treasury stock) | 34,471,000 shares | 34,471,000 shares |
2. | Treasury stock | 2,170,779 shares | 2,185,700 shares |
3. | Average number of shares issued | 32,296,168 shares | 32,244,336 shares |
(Reference)
1. Non-Consolidated Operating Results for the Fiscal Year Ended Dec. 31 2019 (Jan. 1 to Dec. 31, 2019)
(1) Non-Consolidated Operating Results
(Percentage figures refer to comparisons with the previous fiscal year)
Revenue | Operating income | Ordinary income | Net income | |||||||||
Million Yen | % | Million Yen | % | Million Yen | % | Million Yen | % | |||||
FY2019 | 25,253 | 21.6 | 5,172 | 34.4 | 5,195 | 32.5 | 3,552 | 11.7 | ||||
FY2018 | 20,764 | 22.9 | 3,849 | 67.7 | 3,921 | 68.9 | 3,181 | 809.9 | ||||
Basic EPS | Diluted EPS | |||||||||||
(Earnings per share) | (Earnings per share diluted) | |||||||||||
Yen | Yen | |||||||||||
FY2019 | 109.98 | 109.87 | ||||||||||
FY2018 | 98.66 | 98.46 |
(2) Non-Consolidated Financial Position
Total assets | Net worth | Equity ratio | Book-value per share | |
Million Yen | Million Yen | % | Yen | |
As of December 31, 2019 | 17,621 | 11,437 | 64.9 | 353.91 |
As of December 31, 2018 | 14,440 | 8,884 | 61.5 | 274.92 |
(Reference) Owners' equity: | As of December 31, 2019: | 11,431 million yen | ||
As of December 31, 2018: | 8,875 million yen |
2. Forecast of Non-Consolidated Operating Results for the Fiscal Year Ended Dec. 31, 2020 (Jan. 1 to Dec. 31, 2020) (Percentage figures refer to comparisons with the previous fiscal year)
Basic EPS | |||||||||||
Revenue | Operating income | Ordinary income | Net income | (Earnings | |||||||
per share) | |||||||||||
Million Yen | % | Million Yen | % | Million Yen | % | Million Yen | % | Yen | |||
H1(cumulative) FY2020 | 13,000 | 5.6 | 2,620 | 7.9 | 2,640 | 8.2 | 1,800 | 9.4 | 55.73 | ||
FY2020 | 27,400 | 8.5 | 5,600 | 8.3 | 5,660 | 8.9 | 3,880 | 9.2 | 120.12 |
* Audit
This filing is not subject to the audit procedures under the Financial Instruments and Exchange Act.
-
Note on proper use of the earnings outlook and other special notes (Note on description about outlook in the future)
This filing contains an earnings outlook and other forward-looking statements. They are based on information currently available to the Company and on certain assumptions we deem reasonable. They are not intended to constitute the Company's guarantee that the outlook and statements will be realized. The actual results may differ materially from those described in this filing due to various factors. For the assumptions for the earnings outlook and notes on use of the earnings forecast, please refer to "(1) Qualitative Information about Analysis of Operating Results" in "1. Qualitative Information Concerning Consolidated Business Results" on page 2 of the Accompanying Materials.
(Method to reach supplementary materials and contents of explanatory presentation)
The company schedules to hold an explanatory presentation to investors on January 29, 2020. The supplementary materials on financial results will be posted on the Company's website soon after the presentation meeting.
1. Qualitative Information Concerning Consolidated Business Results
(1) Analysis of Operating Results
During the consolidated fiscal year under review, the Japanese economy overall, employment environment improved and consumer spending recovered while solid corporate earnings. Though there were partial hurried purchase regarding consumption trend right before consumption tax hike, its effect was small and reaction of decrease was also small.
In marketing domain the Company belongs, competition among commerce business operators is intense according to e-commerce market expansion. Thus the demand of effective marketing solution increases.
In this environment, the Group focus on providing marketing solution from customer attraction to retention to maximize commerce business operators' performance, "Gross Merchandise Value (GMV)".
For the consolidated fiscal year under review, revenue was JPY 25,694,601 thousand (up 23.7% Y/Y). This was attributable to 1; good performance in "STORE's R∞ (R Eight)", CRM tool for stores in online mall operated by Yahoo! Shopping, "Storematch", pay-per-click advertising, and "Affiliate Marketing", pay-per-performance advertising and 2; Dynatech inc. have consolidated on September 27, 2019 and its revenue have accounted from the fourth quarter of the consolidated fiscal year.
Selling, general and administrative expenses was JPY 3,857,059 thousand (up 22.6% Y/Y) due to expenses such as 1; increased recruiting and system introduction for operational optimization and 2; selling, general and administrative expenses of Dynatech inc. and amortization of goodwill according to acquisition of its share.
Operating income was JPY 4,966,944 thousand (up 32.3% Y/Y) due to growth driven by existing services.
Ordinary income was JPY 4,988,359 thousand (up 31.5% Y/Y) due to recognizing operating gains on investment in partnership of JPY 12,389 thousand under non-operating income.
Net income attributable to owners of the parent was JPY 3,345,026 thousand (up 28.4 % Y/Y) due to the recording of income taxes of JPY 1,561,941 thousand.
Also, the Company announced that the meeting of its Board of Directors held on November 27, 2019 resolved to acquire all shares of B- SLASH Corporation, new company to be incorporated as incorporation type company split by Commerce21 Corporation. Consolidating B- SLASH Corporation, we focus for strengthing sales promotion services for stores on commerce business operators' EC site such as online shopping mall operated by Yahoo Japan Corporation.
Segment performance was as follows:
(i) Marketing Solution Business
Marketing Solution Business provides solutions of customer attraction to commerce providers' EC site. Main service is "Affiliate Marketing", pay-per-performance advertising.
Commerce business operators' conversion (purchase/application) expanded due to proposal based on ad-technologies and marketing data in "Affiliate Marketing".
Also, as a main engagement of product planning and development, the Company developed "MyLinkBox" and starts providing in June 2019. "MyLinkBox" is a new feature that media operator can easily create parts to introduce products/services on affiliate administration page.
As a result, this segment attained revenue of JPY 17,040,314 thousand (up 10.8% Y/Y) and segment operating income of JPY 2,884,503 thousand (up 8.2% Y/Y).
(ii) EC Solution Business
EC Solution Business provides solutions of sales promotion on commerce providers' EC site. Main services are "STORE's R∞", CRM tool for stores in online shopping mall operated by Yahoo Japan Corporation, and "Storematch", pay-per-click advertising.
During the consolidated fiscal year under review, some engagements contributed to increase revenue such as 1; some business measures to promote service use of stores by collaborating with Yahoo Japan Corporation, and 2; expansion of ad distribution space in the preceding consolidated fiscal year. Also the Company starts providing "STORE's R∞" for stores in "PayPay mall" in October 2019.
The Company acquired all shares of Dynatech inc. on September 27, 2019 and Dynatech has become a 100% consolidated subsidiary of the Company. Its profit and loss and amortization of goodwill according to acquisition of its share are accounted from the fourth quarter of consolidated fiscal year.
As a result, this segment attained revenue of JPY 8,654,286 thousand (up 60.5% Y/Y) and segment operating income of JPY 3,395,969 thousand (up 40.1% Y/Y).
Regarding the outlook for the next fiscal year, domestic economy in 2020 is expected to remain on a slow recovery despite the temporaly possibility of consumer spending drop by consumption tax hike.
In e-commerce market, it is expected to continue to grow steadily and increase the marketing solution demand.
In this environment, the Group continue to focus on providing marketing solution from customer attraction to retention to maximize commerce business operators' performance, "Gross Merchandise Value (GMV)".
- 1 -
As a result of the above, for the consolidated earnings outlook for the next fiscal year, the Group forecasts revenues of JPY 30,000 million (up 16.8% Y/Y), operating income of JPY 5,500 million (up 10.7% Y/Y), ordinary income of JPY 5,500 million (up 10.3% Y/Y), and net income attributable to owners of the parent of JPY 3,600 million (up 7.6% Y/Y).
(Note) The forecasts and other forward-looking statements contained in this report are based on information currently available to management, and various factors may cause actual results to differ materially from these estimates.
- Analysis of Financial Positions
1. The status of assets, liabilities and net assets (Assets)
Total assets at the end of the consolidated fiscal year under review amounted to JPY 18,011,572 thousand, an increase of JPY 3,305,069 thousand from the end of the preceding consolidated fiscal year.
Current assets amounted to JPY 13,472,525 thousand, an increase of JPY 809,076 thousand from the end of the preceding consolidated fiscal year. This was mainly due to an increase in notes and accounts receivable-trade of JPY740,835 thousand.
Noncurrent assets amounted to JPY 4,539,047 thousand, an increase of JPY 2,495,992 thousand from the end of the preceding consolidated fiscal year. This was mainly due to an increase in software of JPY 293,309 thousand, software in progress of JPY 941,725 thousand and goodwill of JPY 1,096,408 thousand.
(Liabilities)
Total liabilities at the end of the consolidated fiscal year under review amounted to JPY 6,519,652 thousand, an increase of JPY 959,044 thousand from the end of the preceding consolidated fiscal year.
Current liabilities amounted to JPY 6,437,645 thousand, an increase of JPY 952,380 thousand from the end of the preceding consolidated fiscal year. This was mainly due to an increase in accounts payable-other of JPY 475,597 thousand and income taxes payable of JPY 242,958 thousand.
Noncurrent liabilities amounted to JPY 82,006 thousand, an increase of JPY 6,663 thousand from the end of the preceding consolidated fiscal year.
(Net assets)
Total net assets at the end of the consolidated fiscal year under review amounted to JPY 11,491,920 thousand, an increase of JPY 2,346,025 thousand from the end of the preceding consolidated fiscal year. This was mainly due to an increase in net income attributable to owners of the parent of JPY 3,345,026 thousand despite a decrease in retained earnings of JPY 1,033,333 thousand as a result of a dividend of surplus.
Starting from the consolidated fiscal year under review, "Partial amendment of accounting standards about accounting for income taxes (Corporate Accounting Standards No.28, February 16, 2018)" has been applied. Figures of consolidated financial positions for the end of the preceding consolidated fiscal year have been prepared/analyzed retrospectively based on the new calculation method.
- 2 -
2. Cash Flows
At the end of the consolidated fiscal year under review, the balance of cash and cash equivalents stood at JPY 7,862,912 thousand, a decrease of JPY 115,142 thousand from the end of the preceding consolidated fiscal year.
The cash flows during the consolidated fiscal year under review and their causes are as follows.
(Operating Cash Flows)
Net cash provided by operating activities amounted to JPY 4,041,227 thousand (compared to net cash provided of JPY 2,756,637 thousand in the preceding fiscal year), mainly due to income before income taxes of JPY 4,906,967 thousand. Positive factors include depreciation of JPY 298,783 thousand, amortization of goodwill of JPY 175,966 thousand and an increase in accounts payable-other of JPY 245,672 thousand. Negative factors include and an increase in accounts receivable-trade of JPY 367,774 thousand and income taxes paid of JPY 1,372,646 thousand.
(Investing Cash Flows)
Net cash used in investing activities amounted to JPY 3,135,057 thousand (compared to net cash provided of JPY 627,155 thousand in the preceding fiscal year), mainly due to purchase of intangible assets of JPY 424,608 thousand and payment of acquisition of subsidiaries' shares resulting in change in scope of consolidation of JPY 2,640,918 thousand.
(Financing Cash Flows)
Net cash used in financing activities amounted to JPY 1,021,135 thousand (compared to net cash used of JPY 407,624 thousand in the preceding fiscal year), mainly due to cash dividends paid of JPY 1,027,558 thousand.
Cash flow indicators
FY2015 | FY2016 | FY2017 | FY2018 | FY2019 | |
Shareholders' equity ratio (%) | 61.2 | 61.3 | 59.5 | 62.1 | 63.8 |
Shareholders' equity ratio based on market prices (%) | 165.7 | 107.0 | 205.4 | 269.1 | 420.4 |
(Notes) 1. The formulas for the indicators above are as follows. Shareholders' equity ratio: Shareholders' equity/Total assets
Shareholders' equity ratio based on market prices: Market capitalization/Total assets
- Market capitalization is calculated by multiplying the share price at the end of the period by the number of shares issued and outstanding at the end of the period, after the deduction of treasury stock.
- The cash flow to debt ratio and interest coverage ratio has been omitted since there has been no interest-bearing debt or interest payment.
- All indicators are calculated based on consolidated figures.
2. Basic Policy to Select the Accounting Principle
The Company is going to adapt JGAAP to prepare the consolidated financial statements for the moment considering consolidated financial statements' period comparability and inter-company comparability.
Regards to adaption of International accounting standards (IFRS), the Company are going to corresponds appropriately considering several situation inside/outside Japan.
- 3 -
3. Earnings Results for the Fiscal Year Ended December 31, 2019
- Consolidated Balance Sheet
(Thousand yen) | |||
As of | As of | ||
December 31, 2018 | December 31, 2019 | ||
(Assets) | |||
Current assets | |||
Cash and deposits | 7,978,055 | 7,862,912 | |
Notes and accounts receivable- trade | 3,550,095 | 4,290,931 | |
Accounts receivable- other | 1,059,346 | 1,172,858 | |
Other current assets | 89,300 | 161,466 | |
Allowance for doubtful accounts | -13,348 | -15,642 | |
Current assets in total | 12,663,448 | 13,472,525 | |
Noncurrent assets | |||
Property, plant and equipment | |||
Buildings and accompanying facilities | 231,888 | 268,170 | |
Accumulated depreciation | -41,955 | -83,246 | |
Buildings and accompanying facilities, net | 189,933 | 184,923 | |
Tools, instruments and fixtures | 277,415 | 510,444 | |
Accumulated depreciation | -175,264 | -353,862 | |
Tools, instruments and fixtures, net | 102,150 | 156,582 | |
Leased assets | - | 9,014 | |
Accumulated depreciation | - | -1,282 | |
Leased assets, net | - | 7,731 | |
Property, plant and equipment in total | 292,083 | 349,237 | |
Intangible assets | |||
Software | 553,722 | 847,031 | |
Software in progress | 68,813 | 1,010,539 | |
Goodwill | 224,695 | 1,321,103 | |
Other intangible assets | 11,169 | 11,010 | |
Intangible assets in total | 858,401 | 3,189,685 | |
Investments and other assets | |||
Investment securities | 490,638 | 544,822 | |
Guarantee deposits | 243,455 | 311,369 | |
Deferred tax assets | 136,691 | 119,299 | |
Other investments | 21,785 | 25,626 | |
Allowance for doubtful accounts | - | -993 | |
Investments and other assets in total | 892,569 | 1,000,124 | |
Noncurrent assets in total | 2,043,054 | 4,539,047 | |
Total assets | 14,706,503 | 18,011,572 |
- 4 -
(Thousand yen) | |||
As of | As of | ||
December 31, 2018 | December 31, 2019 | ||
(Liabilities) | |||
Current liabilities | |||
Accounts payable- trade | 2,566,017 | 2,622,733 | |
Accounts payable- other | 1,803,002 | 2,278,599 | |
Income taxes payable | 820,947 | 1,063,905 | |
Provision for bonuses | - | 19,075 | |
Other current liabilities | 295,298 | 453,330 | |
Current liabilities in total | 5,485,264 | 6,437,645 | |
Noncurrent liabilities | |||
Other noncurrent liabilities | 75,343 | 82,006 | |
Noncurrent liabilities in total | 75,343 | 82,006 | |
Liabilities in total | 5,560,607 | 6,519,652 | |
(Net assets) | |||
Shareholders' equity | |||
Capital stock | 1,728,266 | 1,728,266 | |
Capital surplus | 1,157,284 | 1,162,922 | |
Retained earnings | 6,664,609 | 8,976,301 | |
Treasury stock | -533,656 | -530,161 | |
Shareholders' equity in total | 9,016,504 | 11,337,329 | |
Accumulated other comprehensive income | |||
Valuation difference on available-for-sale securities | 120,941 | 148,497 | |
Accumulated other comprehensive income in total | 120,941 | 148,497 | |
Subscription rights to shares | 8,448 | 6,093 | |
Net assets in total | 9,145,895 | 11,491,920 | |
Liabilities and net assets | 14,706,503 | 18,011,572 |
- 5 -
(2) Consolidated Statement of Income and Comprehensive Income
(Thousand yen) | ||
Year ended | Year ended | |
December 31, 2018 | December 31, 2019 | |
(Jan. 1 to Dec. 31, 2018) | (Jan. 1 to Dec. 31, 2019) | |
Revenue | 20,764,976 | 25,694,601 |
Cost of revenue | 13,862,949 | 16,870,597 |
Gross profit | 6,902,026 | 8,824,003 |
Selling, general and administrative expenses | 3,146,426 | 3,857,059 |
Operating income | 3,755,600 | 4,966,944 |
Non-operating income | ||
Operating gains on investment in partnership | 51,988 | 12,389 |
Gain on non-refundable commissions for publishers | 3,640 | 9,107 |
Others | 15,475 | 3,502 |
Non-operating income in total | 71,105 | 24,998 |
Non-operating expenses | ||
Equity in losses of an affiliate | 31,699 | - |
Foreign exchange losses | 1,077 | 1,394 |
Others | 308 | 2,189 |
Non-operating expenses in total | 33,085 | 3,583 |
Ordinary income | 3,793,621 | 4,988,359 |
Extraordinary income | ||
Gain on sales of shares of an affiliate | 12,743 | - |
Gain on sales of investment securities | 45,398 | - |
Extraordinary income in total | 58,141 | - |
Extraordinary losses | ||
Impairment losses | 26,522 | 38,432 |
Expense on corresponding system failure | - | 42,959 |
Others | 503 | - |
Extraordinary losses in total | 27,026 | 81,391 |
Income before income taxes | 3,824,735 | 4,906,967 |
Income taxes- current | 1,222,145 | 1,534,266 |
Income taxes- deferred | -2,209 | 27,675 |
Income tax in total | 1,219,936 | 1,561,941 |
Net income | 2,604,799 | 3,345,026 |
(Break Down) | ||
Net income attributable to owners of the parent | 2,604,799 | 3,345,026 |
Net income attributable to non-controlling interests | - | - |
Other comprehensive income | ||
Valuation difference on available-for-sale securities | -17,657 | 27,555 |
Foreign currency translation adjustment | 338 | - |
Other comprehensive income in total | -17,318 | 27,555 |
Comprehensive income | 2,587,481 | 3,372,581 |
(Break Down) | ||
Comprehensive income attributable to | ||
Comprehensive income attributable to owners of the parent | 2,587,481 | 3,372,581 |
Comprehensive income attributable to non-controlling interests | - | - |
- 6 -
(3) Consolidated Statements of Changes in Net Assets
Fiscal Year ended December 31, 2018 (Jan. 1 to Dec. 31, 2018)
(Thousand Yen) | ||||||
Shareholders' equity | ||||||
Capital stock | Capital surplus | Retained | Treasury | Shareholders' | ||
earnings | stock | equity in total | ||||
Balance at the beginning of year | 1,728,266 | 1,123,448 | 4,510,892 | -555,407 | 6,807,199 | |
Changes of items during the period | ||||||
Cash dividends | -451,082 | -451,082 | ||||
Net income attributable to owners of | 2,604,799 | 2,604,799 | ||||
the parent | ||||||
Acquisition of treasury stock | -215 | -215 | ||||
Disposition of treasury stock | 33,836 | 21,967 | 55,803 | |||
Net changes of items other than | ||||||
shareholders' equity | ||||||
Total changes of items during the period | - | 33,836 | 2,153,716 | 21,751 | 2,209,304 | |
Balance at the end of year | 1,728,266 | 1,157,284 | 6,664,609 | -533,656 | 9,016,504 | |
Accumulated other comprehensive income | Subscription | |||||
Valuation difference | Foreign currency | Accumulated other | Net assets in | |||
rights to | ||||||
on available-for-sale | translation | comprehensive | total | |||
shares | ||||||
securities | adjustment | income in total | ||||
Balance at the beginning of year | 138,599 | -338 | 138,260 | 22,739 | 6,968,199 | |
Changes of items during the period | ||||||
Cash dividends | -451,082 | |||||
Net income attributable to owners of | 2,604,799 | |||||
the parent | ||||||
Acquisition of treasury stock | -215 | |||||
Disposition of treasury stock | -14,133 | 41,670 | ||||
Net changes of items other than | -17,657 | 338 | -17,318 | -157 | -17,475 | |
shareholders' equity | ||||||
Total changes of items during the period | -17,657 | 338 | -17,318 | -14,290 | 2,177,695 | |
Balance at the end of year | 120,941 | - | 120,941 | 8,448 | 9,145,895 | |
Fiscal Year ended December 31, 2019 (Jan. 1 to Dec. 31, 2019)
(Thousand Yen) | ||||||
Shareholders' equity | ||||||
Capital stock | Capital surplus | Retained | Treasury | Shareholders' | ||
earnings | stock | equity in total | ||||
Balance at the beginning of year | 1,728,266 | 1,157,284 | 6,664,609 | -533,656 | 9,016,504 | |
Changes of items during the period | ||||||
Cash dividends | -1,033,333 | -1,033,333 | ||||
Net income attributable to owners of | 3,345,026 | 3,345,026 | ||||
the parent | ||||||
Acquisition of treasury stock | -168 | -168 | ||||
Disposition of treasury stock | 5,637 | 3,662 | 9,300 | |||
Net changes of items other than | ||||||
shareholders' equity | ||||||
Total changes of items during the period | - | 5,637 | 2,311,692 | 3,494 | 2,320,825 | |
Balance at the end of year | 1,728,266 | 1,162,922 | 8,976,301 | -530,161 | 11,337,329 | |
Accumulated other comprehensive | ||||||
income | Subscription | Net assets in | ||||
Valuation difference | Accumulated other | |||||
rights to shares | total | |||||
on available-for-sale | comprehensive | |||||
securities | income in total | |||||
Balance at the beginning of year | 120,941 | 120,941 | 8,448 | 9,145,895 | ||
Changes of items during the period | ||||||
Cash dividends | -1,033,333 | |||||
Net income attributable to owners of | 3,345,026 | |||||
the parent | ||||||
Acquisition of treasury stock | -168 | |||||
Disposition of treasury stock | -2,355 | 6,945 | ||||
Net changes of items other than | 27,555 | 27,555 | - | 27,555 | ||
shareholders' equity | ||||||
Total changes of items during the period | 27,555 | 27,555 | -2,355 | 2,346,025 | ||
Balance at the end of year | 148,497 | 148,497 | 6,093 | 11,491,920 |
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(4) Consolidated Statement of Cash Flow
(Thousand Yen) | |||
Year ended | Year ended | ||
December 31, 2018 | December 31, 2019 | ||
(Jan. 1 to Dec. 31, 2018) | (Jan. 1 to Dec. 31, 2019) | ||
Operating cash flows | |||
Income before income taxes | 3,824,735 | 4,906,967 | |
Depreciation and Amortization | 239,721 | 298,783 | |
Amortization of goodwill | 112,347 | 175,966 | |
Increase (decrease) in allowance for doubtful accounts | 11,727 | -4,063 | |
Dividend received | -1,665 | - | |
Interest income received | -91 | -144 | |
Interest expenses | - | 389 | |
Foreign exchange losses (gains) | 964 | 177 | |
Equity in losses (earnings) of an affiliate | 31,699 | - | |
Operating losses (gains) on investment in partnership | -51,988 | -12,389 | |
Losses (gains) on sales of investment securities | -45,398 | - | |
Losses (gains) on sales of shares of an affiliate | -12,743 | - | |
Impairment losses | 26,522 | 38,432 | |
Decrease (increase) in note and accounts receivable- trade | -930,100 | -367,774 | |
Increase (decrease) in accounts payable- trade | 653,736 | -28,979 | |
Decrease (increase) in accounts receivable- other | -40,683 | -73,711 | |
Increase (decrease) in accounts payable-other | 74,951 | 245,672 | |
Increase (decrease) in guaranteed deposit received | -68,177 | - | |
Others, net | -113,523 | 234,793 | |
Subtotal | 3,712,035 | 5,414,118 | |
Interest and dividends income received | 3,847 | 144 | |
Interest expense paid | - | -389 | |
Income taxes paid | -959,244 | -1,372,646 | |
Operating cash flows | 2,756,637 | 4,041,227 | |
Investing cash flows | |||
Purchase of property, plant and equipment | -43,887 | -77,452 | |
Purchase of intangible assets | -248,034 | -424,608 | |
Purchase of investment securities | -50,082 | -33,090 | |
Proceeds from sales of investment securities | 161,615 | - | |
Proceeds from sales of shares of an affiliate | 675,324 | - | |
Proceeds from distribution of investment in partnership | 131,919 | 41,011 | |
Proceeds from collection in guarantee deposits | 300 | - | |
Payment of acquisition of subsidiaries' share resulting in change in | - | -2,640,918 | |
scope of consolidation | |||
Investing cash flows | 627,155 | -3,135,057 | |
Financing cash flows | |||
Proceeds from disposal of treasury stock | 41,670 | 6,945 | |
Purchase of treasury stock | -215 | -168 | |
Cash dividends paid | -449,078 | -1,027,558 | |
Others | - | -353 | |
Financing cash flows | -407,624 | -1,021,135 | |
Effect of exchange rate change on cash and cash equivalents | -625 | -177 | |
Net increase (decrease) in cash and cash equivalents | 2,975,543 | -115,142 | |
Beginning balance of cash and cash equivalents | 5,002,511 | 7,978,055 | |
Ending balance of cash and cash equivalents | 7,978,055 | 7,862,912 |
- 8 -
(Significant Items Regarding Preparation of Consolidated Financial Statements) | |
1. Scope of consolidation | |
(1) Number of consolidated subsidiaries: | 2 |
Name of consolidated subsidiaries: | Dynatech inc. |
DIGIMIHO Co., Ltd. | |
For the consolidated fiscal year under review, the Company acquired 100% shares of Dynatech inc. and its scope is | |
included in the consolidated fiscal year. | |
(2) Names of non-consolidated subsidiaries | |
Number of non-consolidated subsidiaries: | 1 |
Name of non-consolidated subsidiaries: | HOTEL CONCIERGE Inc. |
(Reason of excluding from scope of consolidation)
Total assets, revenues, net income (amount proportional to the percentage of its equity) and retained earnings (amount proportional to the percentage of its equity) of non-consolidated subsidiary has no significant effect on consolidated financial statement.
2. Application of the equity method | |
(1) Number of affiliated companies accounted for under the equity method: | Not applicable. |
- Non-consolidatedsubsidiaries not accounted for under the equity method: HOTEL CONCIERGE Inc. (Reason of excluding from scope of equity method)
Net income (amount proportional to the percentage of its equity) and retained earnings (amount proportional to the percentage of its equity) of non-consolidated subsidiaries has no significant effect on consolidated financial statement in total even it is excluded.
3. Fiscal year, etc. for consolidated subsidiaries
Fiscal year-end of Dynatech inc. is March 31. Consolidated financial statement are prepared based on provisional closing executed as of consolidated closing date, December 31, 2019. The fiscal year-end of consolidated subsidiary other than Dynatech inc. coincides with the consolidated closing date.
4. Accounting policies
-
Valuation basis or method of significant asset Investment securities
Other investment securities With observable market price
Apply market method based on market price as of the last day of fiscal consolidated year Without observable market price
The investment in limited partnership and investment in that kind of investment are valued by the equity percentage of partnership of the latest financial statement of the investment.-
Depreciation method of significant depreciable assets
A. Property, plant and equipment (except leased assets)
Computed by the declining balance-method. Buildings and accompanying facilities that were acquired on April 1, 2016 or later are computed by the straight-line method.
Major useful lives are as follows.
Tools, instruments and fixtures: 4 - 20 years
Buildings and accompanying facilities: 10 - 15 years
-
Intangible assets (except leased assets) Computed by the straight-line method.
Amortization of software for internal use is determined over the estimated useful life (within 5 years). - Leased assets
Applies the straight-line method using the lease term as the useful life and a residual value of zero.
(3) Accounting standard for significant reserves
- Allowance for doubtful accounts
Allowance for doubtful accounts is provided at possible losses from uncollectable receivables based on the actual rate of losses from bad debts for ordinary receivables, and on estimated recoverability for specific doubtful receivables.
B. Provision for bonuses
Provision for bonuses is accounted only the amount which should be included in this consolidated fiscal year out of total bonuses expected.
(4) Standard for translation of significant foreign currency assets and liabilities
Foreign currency receivables and payables are translated into Japanese yen using the spot rate on the date of the consolidated balance sheet. The differences arising from the translation are stated as income/loss.
(5) Definition of cash and cash equivalents in the Consolidated Statement of Cash Flow
Cash and cash equivalents shown in the Consolidated Statement of Cash Flow refers to cash on hand, bank deposits that can be withdrawn whenever necessary, and short-term investments that may be easily converted to cash and carry a minimal risk of fluctuation in value, with maturities of no more than three months from acquisition date.
- Amortization method of goodwill and its period Computed by the straight-line method with 5 years.
- Other significant items regarding preparation of consolidated financial statements Accounting procedure for consumption taxes
Consumption taxes and local consumption taxes are accounted by the tax-exclusion method. - 9 -
(Segment Information)
a. Segment Information
1. Overview of reporting segments
The reporting segments of the Company are components of the Company for which separate financial information is available. These segments are periodically evaluated by the Board of Directors for the purpose of determining the allocation of the Company's managerial resources and evaluating its business performance.
The Company plans comprehensive strategy and develops business activities based on service provided. Accordingly, the Company composes business segments with a service unit and regards Marketing Solution Business and EC Solution Business as reporting segments.
Marketing Solution Business provides solutions of customer attraction to general commerce providers' EC site. Main service is "Affiliate Marketing", pay-per-performance advertising.
EC Solution Business provides solutions of sales promotion on general commerce providers' EC site. Main services are "STORE's R∞", CRM tool for stores in online shopping mall operated by Yahoo Japan Corporation, and "Storematch", pay-per-click advertising.
Also, Dynatech inc., who develops and provides information system for accommodation facilities, has become a 100% consolidated subsidiary of the Company on September 27, 2019. The deemed acquisition date is September 30, 2019 and its profit and loss statement is consolidated from the fourth quarter of consolidated fiscal year.
2. Methods of calculating revenues, profit/loss, assets, liabilities and other items by reporting segment
The accounting methods applied to reporting segments are the same as those described in "Significant Items Regarding Preparation of Consolidated Financial Statements."
The profit of the reporting segments is based on operating income.
Inter-segment revenue is based on actual market value.
3. Information on the amount of sales, profit/loss, assets, liabilities and other items by reporting segment For the fiscal year ended Dec. 31 of 2018 (Jan. 1 to Dec. 31, 2018)
(Thousand yen) | |||||||||||
Reporting segment | Adjustment | Amount on | |||||||||
Marketing | EC Solution | consolidated financial | |||||||||
Total | (Note 1) | ||||||||||
Solution Business | Business | statements (Note 2) | |||||||||
Revenue | |||||||||||
Revenue to clients | 15,374,544 | 5,390,431 | 20,764,976 | - | 20,764,976 | ||||||
Inter-segment revenue | - | - | - | - | - | ||||||
Total revenue | 15,374,544 | 5,390,431 | 20,764,976 | - | 20,764,976 | ||||||
Segment operating income/loss | 2,666,767 | 2,423,623 | 5,090,391 | -1,334,791 | 3,755,600 | ||||||
Segment assets | 3,987,006 | 1,481,593 | 5,468,599 | 9,237,903 | 14,706,503 | ||||||
Other items | |||||||||||
Depreciation and amortization | 86,243 | 95,000 | 181,244 | 58,476 | 239,721 | ||||||
Amortization of Goodwill | - | 112,347 | 112,347 | - | 112,347 | ||||||
Increase in property, plant and | 308,529 | 151,641 | 460,171 | 51,773 | 511,945 | ||||||
equipment and intangible assets |
(Note) 1. Adjustments are as follows.
- The adjustment to segment operating income of JPY -1,334,791 thousand is corporate expenses not allocated to any reporting segment.
- The adjustment to segment assets of JPY 9,237,903 thousand is corporate assets not allocated to any reporting segment.
- The adjustment to depreciation and amortization of JPY 58,476 thousand is corporate expenses not attributable to any reporting segment.
- The adjustment to increase in property, plant and equipment and intangible assets of JPY 51,773 thousand is increase in corporate assets not attributable to any reporting segment.
2. Segment operating income/loss is adjusted to operating income in the consolidated financial statement.
- 10 -
For the fiscal year ended Dec. 31 of 2019 (Jan. 1 to Dec. 31, 2019)
(Thousand yen) | ||||||||||
Reporting segment | Adjustment | Amount on | ||||||||
Marketing | EC Solution | consolidated financial | ||||||||
Total | (Note 1) | |||||||||
Solution Business | Business | statements (Note 2) | ||||||||
Revenue | ||||||||||
Revenue to clients | 17,040,314 | 8,654,286 | 25,694,601 | - | 25,694,601 | |||||
Inter-segment revenue | - | - | - | - | - | |||||
Total revenue | 17,040,314 | 8,654,286 | 25,694,601 | - | 25,694,601 | |||||
Segment operating income/loss | 2,884,503 | 3,395,969 | 6,280,472 | -1,313,528 | 4,966,944 | |||||
Segment assets | 3,914,994 | 5,524,300 | 9,439,295 | 8,572,277 | 18,011,572 | |||||
Other items | ||||||||||
Depreciation and amortization | 85,340 | 131,978 | 217,318 | 81,465 | 298,783 | |||||
Amortization of Goodwill | - | 175,966 | 175,966 | - | 175,966 | |||||
Increase in property, plant and | 314,024 | 3,166,355 | 3,480,379 | 84,460 | 3,564,840 | |||||
equipment and intangible assets |
(Note) 1. Adjustments are as follows.
- The adjustment to segment operating income of JPY -1,313,528 thousand is corporate expenses not allocated to any reporting segment.
- The adjustment to segment assets of JPY 8,572,277 thousand is corporate assets not allocated to any reporting segment.
- The adjustment to depreciation and amortization of JPY 81,465 thousand is corporate expenses not attributable to any reporting segment.
- The adjustment to increase in property, plant and equipment and intangible assets of JPY 84,460 thousand is increase in corporate assets not attributable to any reporting segment.
- Segment operating income/loss is adjusted to operating income in the consolidated financial statement.
- Dynatech inc. has become a 100% consolidated subsidiary of ValueCommerce on September 27, 2019 and included in EC Solution Business. The deemed acquisition date is September 30, 2019 and its profit and loss is consolidated from the fourth quarter of consolidated fiscal year.
-
Related information
For the fiscal year ended Dec. 31 of 2018 (Jan. 1 to Dec. 31, 2018)
1. Information by product and service
Information is omitted as similar information is disclosed in segment information.
2. Information by region
(1) Sales
Information is omitted as sales to external customer in Japan exceed 90% of sales stated in the consolidated statement of income and comprehensive income.
(2) Property, plant and equipment
Information is omitted as the amount of property, plant and equipment in Japan exceed 90% of the amount of property, plant and equipment stated in the consolidated balance sheet.
3. Information of major customers
(Thousand yen) | ||
Name of customer | Sales | Relevant segment |
Yahoo Japan Corporation | 3,247,875 | Marketing Solution Business, EC Solution Business |
CyberAgent, Inc. | 2,257,321 | Marketing Solution Business |
For the year ended Dec. 31 of FY 2019 (Jan. 1 to Dec. 31, 2019) 1. Information by product and service
Information is omitted as similar information is disclosed in segment information.
2. Information by region
- Sales
Information is omitted as sales to external customer in Japan exceed 90% of sales stated in the consolidated statement of income and comprehensive income.
(2) Property, plant and equipment
Information is omitted as the amount of property, plant and equipment in Japan exceed 90% of the amount of property, plant and equipment stated in the consolidated balance sheet.
3. Information of major customers
(Thousand yen) | ||
Name of customer | Sales | Relevant segment |
Yahoo Japan Corporation | 4,121,048 | Marketing Solution Business, EC Solution Business |
GMO Commerce, Inc. | 3,308,818 | EC Solution Business |
- 11 -
c. Information regarding impairment loss of noncurrent assets by reporting segment For the fiscal year ended December 31, 2018 (Jan. 1 to Dec. 31, 2018)
(Thousand yen) | ||||
Marketing Solution | EC Solution Business | Adjustment | Total | |
Business | ||||
Impairment loss | 14,107 | 12,415 | - | 26,522 |
For the fiscal year ended December 31, 2019 (Jan. 1 to Dec. 31, 2019)
(Thousand yen) | |||||
Marketing Solution | EC Solution Business | Adjustment | Total | ||
Business | |||||
Impairment loss | 27,445 | 10,986 | - | 38,432 | |
d. Information regarding amortization of goodwill and unamortized balance by reporting segment | |||||
For the fiscal year ended December 31, 2018 (Jan. 1 to Dec. 31, 2018) | |||||
(Thousand yen) | |||||
Marketing Solution | EC Solution Business | Adjustment | Total | ||
Business | |||||
Amortization | - | 112,347 | - | 112,347 | |
Unamortized balance | - | 224,695 | - | 224,695 |
For the fiscal year ended December 31, 2019 (Jan. 1 to Dec. 31, 2019)
(Thousand yen) | ||||
Marketing Solution | EC Solution Business | Adjustment | Total | |
Business | ||||
Amortization | - | 175,966 | - | 175,966 |
Unamortized balance | - | 1,321,103 | - | 1,321,103 |
e. Information regarding gain on negative goodwill by reporting segment For the fiscal year ended December 31, 2018 (Jan. 1 to Dec. 31, 2018)
Not applicable.
For the fiscal year ended December 31, 2019 (Jan. 1 to Dec. 31, 2019)
Not applicable.
(Per Share Information)
Year ended December 31, 2018 | Year ended December 31, 2019 | ||||
(Jan. 1 to Dec. 31, 2018) | (Jan. 1 to Dec. 31, 2019) | ||||
Book-value per share | JPY | 283.02 | Book-value per share | JPY | 355.60 |
Earnings per share | JPY | 80.78 | Earnings per share | JPY | 103.57 |
Diluted earnings per share | JPY | 80.62 | Diluted earnings per share | JPY | 103.47 |
(Note) The calculation basis for earnings per share and diluted earnings per share is as follows.
Year ended December 31, | Year ended December 31, | ||
2018 | 2019 | ||
(Jan. 1 to Dec. 31, 2018) | (Jan. 1 to Dec. 31, 2019) | ||
Earnings per share | |||
Net income attributable to owners of the parent | thousand yen | 2,604,799 | 3,345,026 |
Amount not attributed to common shareholders | thousand yen | - | - |
Net income attributable to owners of the parent | thousand yen | 2,604,799 | 3,345,026 |
relating to common stock | |||
Average number of shares during the year | shares | 32,244,336 | 32,296,168 |
Diluted earnings per share | |||
Adjustment to Net income attributable to owners | thousand yen | - | - |
of the parent | |||
Number of increase in common shares | shares | 66,102 | 33,107 |
(of which, subscription rights to shares, etc.) | (66,102) | (33,107) | |
Description of the possible diluted shares not | ― | ― | |
included in the calculation of earnings per share | |||
diluted due to their non-dilutive effect |
- 12 -
(Significant subsequent events)
The Company announces that it has resolved to take over all shares of yet to be established B-SLASH Corporation from Yahoo Japan Corporation. B-SLASH will be a new company which Yahoo Japan's fully owned subsidiary Commerce21 Corporation plans to establish by implementing an incorporation type company split of its apps market business, with Commerce21 delivering all shares of B- SLASH it acquires as consideration of that split, to Yahoo Japan as dividends of surplus. Yahoo Japan will then turn these shares over to the Company. The Company acquired 100% shares of B-SLASH and consolidated it on January 24, 2020.
1.Overview of Business Merger | ||
(1) | Names and business scope of acquired company | |
Names of acquired enterprise | B-SLASH Corporation | |
Business scope | Apps Market Business (APM Business) for stores on Yahoo!Shopping | |
(2) | Main reason of business merger |
The Company believes that closely linking B-SLASH, a company skilled at developing Yahoo! Shopping services for stores, and the Company will raise the Company's corporate value.
(3) Date of business merger
January 1, 2020 (Deemed acquisition date)
January 24, 2020 (Transfer of shares)
(4) Business merger form
Acquisition of shares in consideration of cash
- Names after business merger B-SLASH Corporation
- Voting rights ownership percentage 100%
- Main basis to be decided the acquired company
The Company acquired 100% voting rights by acquisition of shares in consideration of cash.
2. Acquisition cost and its detail | |||
Consideration of acquisition | Cash | 800,000 thousand yen | |
Acquisition cost | 800,000 thousand yen |
3. Amount of goodwill, reason, amortization method and its period
-
Amount of goodwill 480,507 thousand yen
Amount of goodwill is temporarily calculated as distribution of acquisition costs have not completed. - Reason
Generated from excess earning of future expectation according to business development.
(3) Amortization method and its period
Computed by the straight-line method with 5 years.
4. Details of assets and liabilities as of date of business merger
Current assets | 363,535 | thousand yen |
Noncurrent assets | 64,470 | thousand yen |
Total assets | 428,006 | thousand yen |
Current liabilities | 108,514 | thousand yen |
Noncurrent liabilities | - | thousand yen |
Liabilities in total | 108,514 | thousand yen |
- 13 -
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ValueCommerce Co. Ltd. published this content on 29 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 January 2020 10:59:03 UTC