Financial

Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2020

Published by KLab

Summary

KLab Inc. reported consolidated financial results for the first half of fiscal year 2019 (January 1–June 30, 2019) under Japanese GAAP. Revenue fell 7.3 % to ¥14,812 million compared with the same period in FY2018, driven by a decline in the Love Live! School Idol Festival franchise offsetting gains from Magatsu Wahrheit. Operating income dropped 49.7 % to ¥1,305 million, and ordinary income fell 53.6 % to ¥1,204 million, resulting in a profit attributable to owners of parent of ¥799 million—53.4 % lower than the prior year’s ¥1,713 million. Net income declined from ¥1,714 million to ¥795 million, and comprehensive income fell 44.9 % to ¥932 million from ¥1,691 million. Total assets increased by ¥3.19 billion to ¥22.44 billion, largely due to higher accounts receivable and software assets, while total liabilities rose by ¥948 million to ¥5.73 billion, driven mainly by increased long‑term debt. Net assets grew to ¥16.71 billion, reflecting a rise in non‑controlling equity from a newly consolidated subsidiary. The company maintained an equity ratio of 69.4 % versus 75.1 % in FY2018, and disclosed no dividend for the period. Forecasts for FY2019 were revised upward on revenue only, with operating income projected between ¥450 million and ¥1,000 million. No significant accounting changes or restatements were noted. The report covers the Japanese market, focusing on game development and related services for FY2019’s first half.

From the report

(Japanese GAAP) (Consolidated) evail 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. August 8, 2019 Name of listed company: KLab Inc. Stock exchange listing: Tokyo Stock Exchange First Section Securities code: 3656 URL: http://www.klab.com/jp/ Representative: [Name] Hidekatsu Morita [Title] Representative Director, President and CEO Contact: [Name] Kazuyuki Takata [Title] Senior Managing Director TEL: +81-3 -5771-1100 Scheduled filing date for securities report: August 8, 2019 Scheduled date for dividends payment: － Supplementary information for quarterly results: Yes Information meeting for quarterly financial report: Yes *Institutional investors and analysts only (Amounts of less than one million yen are rounded down unless otherwise stated.) 1. Consolidated Operating Performance for First Half of FY2019 (January 1, 2019 – June 30, 2019) (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 attributable to owners of parent Million yen % Million yen % Million yen % Million yen % First half of FY2019 14,812 -7.3 1,304 -49.7 1,204 -53.6 799 -53.4 First half of FY2018 15,986 46.3 2,593 31.7 2,593 18.7 1,713 17.8 Note: Comprehensive income First half of FY2019: 931 million yen [-44.9%] First half of FY2018: 1,690 million yen [12.9%] Net income Diluted net income per share per share Yen Yen First half of FY2019 21.35 20.97 First half of FY2018 46.02 44.16

FY2018 15,986 46.3 2,593 31.7 2,593 18.7 1,713 17.8 Note: Comprehensive income First half of FY2019: 931 million yen [-44.9%] First half of FY2018: 1,690 million yen [12.9%] Net income Diluted net income per share per share Yen Yen First half of FY2019 21.35 20.97 First half of FY2018 46.02 44.16 (2) Consolidated Financial Status Total assets Net assets Equity ratio Million yen Million yen % First half of FY2019 22,440 16,713 69.4 FY2018 19,245 14,466 75.1 Reference: Shareholders’ equity First half of FY2019: 15,579 million yen FY2018: 14,450 million yen 2. Dividends Annual dividends End of Q1 End of Q2 End of Q3 Year End Total Yen Yen Yen Yen Yen FY2018 ― 0.00 ― 0.00 0.00 FY2019 ― 0.00 FY2019 (Forecast) ― 0.00 0.00 Note: Revisions to the most recently announced dividend forecast: None

(% represents rate of increase or decrease over 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 Fiscal Year ～3137,000,000 13. 2 4,500 (9.9) 4,500 (10.0) 3,100 20.6 82. 55 ～(5.1) ～1,000 ～(80.0) ～1,000 ～(80.0) ～700 ～(72.8) ～18.64 Note: Revisions to the most recently disclosed business performance forecast: Yes ■ Explanatory Notes (1) Changes to major subsidiaries during the first half of FY2019: None (2) Changes to accounting principles or treatment: Yes Note: Refer to “2. Consolidated Financial Statements and Related Notes” in section “(3) Notes Related to Consolidated Financial Statements (Adoption of special accounting treatment)” on page 7 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 37,750,200 shares FY2018 37, 696, 200 shares (including treasury shares) FY2019 ② Period end treasury shares First half of 198,100 shares FY2018 390, 500 shares FY2019 ③ Average outstanding shares First half of 37,428,385 shares First half of 37,239,236 shares during the period FY2019 FY2018 ■ Note Regarding Quarterly Review Procedures Quarterly financial results summaries are not subject to quarterly review procedures.

,100 shares FY2018 390, 500 shares FY2019 ③ Average outstanding shares First half of 37,428,385 shares First half of 37,239,236 shares during the period FY2019 FY2018 ■ 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 2 of Supporting Information.

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 2 2. Consolidated Financial Statements and Related Notes 4 (1) Consolidated Balance Sheets 4 (2) Consolidated Statements of Income and Comprehensive Income 5 (3) Notes Related to Consolidated Financial Statements 7 (Notes related to ongoing concern assumptions) 7 (Notes in case of significant change in shareholders’ equity) 7 (Adoption of special accounting treatment) 7 (Segment information) 8 (Additional information) 8

For the first half of FY2019, consolidated revenue was 14,812,287 thousand yen, down 7.3％ from the same quarter of the previous fiscal year. Magatsu Wahrheit released on April 23, 2019 contributed 69 days to revenue, but the decrease in revenue for Love Live! School Idol Festival resulted in an overall decrease in revenue. As for expenditures, the cost of sales was 10,933,355 thousand yen, up 2.9% from the same quarter of the previous fiscal year. Commissions decreased as a result of declining revenue, but the depreciation commencing for Magatsu Wahrheit along with other game development and operation involving labor and outsourcing costs were the main factors leading to an increase in the cost of goods sold. Selling, general and administrative expenses were 2,574,390 thousand yen, down 7.0% from the same quarter of the previous fiscal year. This is mainly attributable to decreased advertising expenses. As a result, consolidated revenue for the first half of FY2019 was 14,812,287 thousand yen (down 7.3% from the same quarter of the previous fiscal year), operating profit was 1,304,540 thousand yen (down 49.7% from the same quarter of the previous fiscal year), ordinary income was 1,204,390 thousand yen (down 53.6% from the same quarter of the previous fiscal year), and profit attributable to owners of parent was 799,155 thousand yen (down 53.4% from the same quarter of the previous fiscal year). (2) Analysis of Financial Status Assets Total assets at the end of the first half of FY2019 were 22,440,132 thousand yen, up 3,194,928 thousand yen compared to the end of the previous fiscal year.

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Words: 2,643
Format: PDF
Type: Financial

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