Financial · August 1, 2017

Summary of Financial Results for First Half of Fiscal Year Ending December 31, 2017

Published by KLab

Summary

This financial summary details the consolidated operating performance of KLab Inc. for the first half of the fiscal year ending December 31, 2017. Covering the period from January 1 to June 30, 2017, the findings reveal a significant financial turnaround compared to the same period in 2016. Revenue rose 23.0% to 10.9 billion yen, driven by the stable performance of core titles and the successful June launch of Captain Tsubasa: Tatakae Dream Team. The transition from a net loss of 1.3 billion yen in the previous year to a profit of 1.45 billion yen highlights improved operational efficiency. Operating income reached 1.96 billion yen, a stark contrast to the 51 million yen reported in 2016. This growth was supported by a 6.6% reduction in selling, general, and administrative expenses—primarily through lower advertising and outsourcing costs—and a 175 million yen foreign exchange gain. The company’s financial position remains robust, with total assets increasing to 14.5 billion yen and an equity ratio of 73.3%. Strategic developments noted include the July 2017 acquisition of ABASEA Inc. and its subsidiary Spicemart Inc. for 1 billion yen. This move aims to enhance KLab’s data analysis and consulting capabilities within the competitive mobile gaming markets of Japan and China. Methodologically, the report utilizes Japanese GAAP and introduces a range-based forecasting model for the full fiscal year. Management revised its annual guidance upward, projecting revenue between 22.5 and 25.5 billion yen and ordinary income between 2.4 and 4.2 billion yen, reflecting confidence in current market trends and the success rate of new game titles.

From the report

Summary of Financial Results for First Half of Fiscal Year Ending December 31, 2017 2 (Japanese GAAP) (Consolidated) This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Name of listed company: KLab Inc. Securities code: 3656 Representative: [Name] Tetsuya Sanada [Title] Contact: [Name] Kazuyuki Takata [Title] Scheduled filing date for securities report: Scheduled date for dividends payment: Supplementary information for quarterly results: Information meeting for quarterly financial report: August 8, 2017 Stock exchange listing: Tokyo Stock Exchange First Section URL: http://www.klab.com/jp/ President & CEO Managing Director TEL: +81-3-5771-1100 August 8, 2017 － Yes Yes *Institutional investors and analysts only (Amounts of less than one million yen are rounded off) 1. Consolidated Operating Performance for First Half of FY2017 (January 1, 2017 – June 30, 2017) (1) Consolidated Operating Results (year-to-date) (% represents rate of increase or decrease over same period of previous fiscal year) Revenue Operating income Ordinary income Profit (loss) attributable to owners of parent Million yen % Million yen % Million yen % Million yen % First half of FY2017 10,924 23.0 1,968 － 2,185 － 1,454 － First half of FY2016 8,879 (14.9) 51 (96.7) (746) － (1,342) － Note: Comprehensive income First half of FY2017: 1,498 million yen [―%] First half of FY2016: (1,348) million yen [―%]

rent Million yen % Million yen % Million yen % Million yen % First half of FY2017 10,924 23.0 1,968 － 2,185 － 1,454 － First half of FY2016 8,879 (14.9) 51 (96.7) (746) － (1,342) － Note: Comprehensive income First half of FY2017: 1,498 million yen [―%] First half of FY2016: (1,348) million yen [―%] Net income Diluted net income per share per share Yen Yen First half of FY2017 39.65 38.38 First half of FY2016 (36.75) － Note: Diluted net income per share for the first half of FY2016 is not listed due to the fact that the net income per share is a loss. (2) Consolidated Financial Status Total assets Net assets Equity ratio Million yen Million yen % First half of FY2017 14,533 10,675 73.3 FY2016 12,133 9,130 75.1 Reference: Shareholders’ equity First half of FY2017: 10,655 million yen FY2016: 9,110 million yen 2. Dividends Annual dividends End of Q1 End of Q2 End of Q3 Year End Total Yen Yen Yen Yen Yen FY2016 ― 0.00 ― 0.00 0.00 FY2017 ― 0.00 FY2017 (Forecast) ― 0.00 0.00 Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Operating Performance Forecasts for FY2017 (January 1, 2017 – December 31, 2017) (% represents rate of increase or decrease over same period of previous fiscal year) Revenue Operating income Ordinary income Profit attributable to Net income owners of parent per share Million yen % Million yen % Million yen % Million yen % Yen FY2017 ～25,500 30.1 4,000 213.8 4,200 405.7 2,800 － 76.31～43.60 22,500 ～14.8 ～2,200 ～72.6 ～2,400 ～189.0 ～1,600 Note: Revisions to the most recently disclosed business performance forecast: Yes ■ Explanatory Notes (1) Changes to major subsidiaries during first half of FY2017: None (2) Changes to accounting principles or treatment: Yes Note: Refer to “(1) Adoption of Special Accounting Treatment” in section “2. Summary Information (Notes)” on page 3 of Supporting Information. (3) Changes to accounting policies, estimates, and restatements ① Changes to accounting revision of accounting standards: None ② Changes other than ①: None ③ Changes to accounting estimates: None ④ Restatements: None (4) Number of outstanding shares (common shares) ① Period end outstanding shares First half of 38,017,700 shares FY2016 37,945,500 shares (including treasury shares) FY2017 ② Period end treasury shares First half of 1,255,800 shares FY2016 1,282,900 shares FY2017 ③ Average outstanding shares First half of 36,694,825 shares First half of 36,529,141 shares during the period FY2017 FY2016 ■ Note Regarding Quarterly Review Procedures Quarterly financial results summaries are not subject to quarterly review procedures.

800 shares FY2016 1,282,900 shares FY2017 ③ Average outstanding shares First half of 36,694,825 shares First half of 36,529,141 shares during the period FY2017 FY2016 ■ Note Regarding Quarterly Review Procedures Quarterly financial results summaries are not subject to quarterly review procedures. ■ Note Regarding the Appropriate Usage of Forecasts and Other Special Instructions The forecasts in this report are based on the current data available to the Group and certain reasonable assumptions and may vary according to various factors in the future. For forecasts, refer to “(3) Forecasts and Various Factors in the Future” in section “1. Qualitative Information on Management Performance” on page 3 of Supporting Information.

Supporting Information INDEX 1. Qualitative Information on Management Performance 2 (1) Business Operation 2 (2) Analysis of Financial Status 2 (3) Forecasts and Various Factors in the Future 3 2. Summary Information (Notes) 3 (1) Adoption of Special Accounting Treatment 3 (2) Additional Information 3 3. Consolidated Financial Statements 4 (1) Consolidated Balance Sheets 4 (2) Consolidated Statements of Income and Comprehensive Income 6 (3) Notes Related to Consolidated Financial Statements 8 (Notes related to ongoing concern assumptions) 8 (Notes in case of significant change in shareholders’ equity) 8 (Segment information) 9 (Subsequent significant events) 10 - 1 -

1. Qualitative Information on Management Performance (1) Business Operation For the first half of FY2017, consolidated revenue was 10,924,642 thousand yen, up 23.0% from the same period of the previous fiscal year. The increase over the previous period was due mainly to the fact that revenue for the Company’s current core games performed favorably without declining. Additionally, the release of its new game “Captain Tsubasa ～Tatakae Dream Team～” (Japanese title) on June 13 also contributed to the increase in revenue. As for expenditures, the cost of sales was 7,023,328 thousand yen, up 3.9% from the same period of the previous fiscal year. This change is mainly attributable to increases in royalties and commissions due to the overall increase in revenue. Selling, general and administrative expenses were 1,932,949 thousand yen, down 6.6% from the same period of the previous fiscal year. This is mainly attributable to decreases in advertising expenses and outsourcing expenses. Additionally, 217,968 thousand yen was listed in non-operating income. This is mainly attributable to 175,367 thousand yen in foreign exchange gains generated from fluctuations in the foreign currency exchange market when completing transactions involving foreign currency. As a result, consolidated revenue for the first half of FY2017 was 10,924,642 thousand yen, operating profit was 1,968,364 thousand yen, ordinary profit was 2,185,685 thousand yen, and profit attributable to owners of parent was 1,454,989 thousand yen.

Pages: 13
Words: 3,460
Format: PDF
Type: Financial

Topics

View this document on Game Industry Library.

Related Documents

Financial

Summary of Financial Results for First Half of Fiscal Year Ending December 31, 2016

KLab Inc. reported a significant downturn in financial performance for the first half of the fiscal year ending December 31, 2016, covering the period from January 1 to June 30, 2016. Consolidated revenue fell 14.9% year-over-year to 8.88 billion yen, primarily driven by declining contributions from the title Love Live! School Idol Festival. The company’s profitability metrics showed a sharper decline, with operating income plummeting 96.7% to 51 million yen. The period concluded with an ordinary loss of 746 million yen and a net loss attributable to owners of the parent of 1.34 billion yen, a stark reversal from the 665 million yen profit recorded in the same period of 2015. The financial results were heavily impacted by non-operating and extraordinary items. The company recorded 752 million yen in foreign exchange losses due to the valuation of foreign currency assets. Furthermore, extraordinary losses reached 867 million yen, largely stemming from 757 million yen in impairment losses related to the titles Puzzle Wonderland and Age of Empires: World Domination. Despite these losses, KLab maintained a strong equity ratio of 78.4%, though total assets decreased by 1.82 billion yen compared to the end of the previous fiscal year. Looking forward, the company provided a forecast for the first three quarters of 2016, projecting revenue of 14.88 billion yen and an operating income of 1 billion yen, though it anticipates a net loss of 797 million yen for that period. A full-year forecast was withheld due to the inherent volatility of the mobile gaming industry and the difficulty of predicting hit products. Methodologically, the report follows Japanese GAAP and notes changes in accounting policies regarding business combinations and depreciation methods for certain facilities.

investment japan market-analysis+1

KLabAug 2016

Financial

Summary of Financial Results for First Half of Fiscal Year Ending December 31, 2018

KLab Inc. reported significant growth in its consolidated financial results for the first half of the fiscal year ending December 31, 2018, covering the period from January 1 to June 30, 2018. Revenue reached 15.98 billion yen, a 46.3% increase over the same period in 2017. This growth was primarily driven by the strong performance of the mobile title Captain Tsubasa: Dream Team, which launched in Japan in mid-2017. Operating income rose 31.7% to 2.59 billion yen, while profit attributable to owners of the parent increased 17.8% to 1.71 billion yen. The expansion in revenue was accompanied by a 51.3% rise in cost of sales, totaling 10.62 billion yen, largely due to higher platform commissions and royalties. Selling, general, and administrative expenses also grew by 43.2% to 2.76 billion yen, fueled by increased advertising spend. Despite these costs, the company maintained a strong financial position with an equity ratio of 72.7%, up from 67.4% at the end of 2017. Total assets stood at 18.93 billion yen, with a notable increase in non-current assets driven by software in progress. The geographic focus remains primarily on the Japanese market, though the company operates globally within the mobile gaming segment. Looking ahead, KLab provided a range-based forecast for the full fiscal year 2018, projecting revenue between 30.0 billion and 33.0 billion yen. While revenue is expected to grow year-over-year, the company anticipates a potential decline in annual operating income, forecasted between 2.75 billion and 4.25 billion yen, citing the inherent volatility and impact of new game title success on financial performance. Methodology for these results follows Japanese GAAP, with specific updates to accounting policies regarding stock acquisition rights and tax expense calculations.

investment market-analysis japan+1

KLabAug 2018

Financial

Summary of Financial Results for Fiscal Year Ending December 31, 2017

KLab Inc. achieved record-high financial performance for the fiscal year ending December 31, 2017, marking a significant recovery from the previous year’s losses. Revenue increased by 36.6% to 26.8 billion yen, while operating income experienced a dramatic surge of 283.7%, reaching 4.9 billion yen. This growth was almost entirely concentrated within the Game Business segment, which accounted for 99.3% of total outside sales. The primary drivers of this success were the sustained popularity of established titles such as Love Live! School Idol Festival and Bleach: Brave Souls, alongside the high-performing launch of Captain Tsubasa: Dream Team. The fiscal year concluded with a net income of 3.13 billion yen, a stark contrast to the 845.6 million yen net loss reported in 2016. This turnaround resulted in a net income per share of 84.89 yen and a strengthened net asset position of 12.57 billion yen. Financial reporting for the period included specific accounting treatments for share calculations, where certain subscription rights were excluded from diluted net income per share due to their non-dilutive nature, and shares held in trusts were categorized as treasury shares for income calculation purposes. Looking ahead to the fiscal year ending December 31, 2018, projections indicate continued upward momentum. The company issued a range-based forecast anticipating revenue growth to reach as high as 38.5 billion yen. This outlook reflects a strategic focus on leveraging existing intellectual properties and maintaining the operational efficiency that characterized the 2017 fiscal period. No significant subsequent events were reported following the close of the fiscal year, suggesting a stable transition into the next reporting cycle.

investment market-analysis japan+1

KLabFeb 2018

Financial

Summary of Financial Results for First Half of Fiscal Year Ending December 31, 2015

This financial report details the consolidated operating performance of KLab Inc. for the first half of the fiscal year ending December 31, 2015. Covering the period from January 1 to June 30, 2015, the data reflects a period of significant profitability growth despite a sequential decline in the second quarter. The company reported total revenue of 10.4 billion yen, representing an 8.9% increase over the same period in 2014. More notably, operating income surged by 122.9% to 1.55 billion yen, while ordinary income rose 130.3% to 1.61 billion yen. Net income for the half reached 665 million yen, a 22.9% year-over-year improvement. The primary driver of these results was the game business segment, which accounted for nearly the entirety of the company's revenue. While the half-year figures showed growth, the second quarter specifically saw a 14.9% revenue decline compared to the first quarter of 2015, primarily attributed to decreased sales of the flagship title Love Live! School Idol Festival. Despite this dip, the company maintained a strong financial position with an equity ratio of 74.6% and total net assets of 9.8 billion yen. Expenses were characterized by a decrease in commission fees but an increase in advertising and prototype testing costs. Looking forward, the company provided a forecast for the first three quarters of 2015, projecting revenue of 16.9 billion yen and net income of 1.3 billion yen. However, management declined to provide a full-year forecast, citing the high volatility of the mobile online game industry and the difficulty of predicting hit products. Significant subsequent events noted include a treasury stock purchase to improve capital efficiency and a capital increase of 101 million yen resulting from the exercise of subscription rights by Oak Capital Corporation, intended to fund future game development and global marketing.

investment market-analysis funding+2

KLabAug 2015