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Summary of Financial Results for Third Quarter of Fiscal Year Ending December 31, 2016

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KLab Inc. reported a sharp decline in consolidated operating performance for the third quarter of fiscal year 2016 (January 1 – September 30, 2016). Revenue fell 11.9 % to ¥14.59 billion, largely due to lower sales of the “Love Live! School Idol Festival” title. Operating income dropped 54.6 % to ¥1.03 billion, and ordinary profit contracted 94.2 % to ¥123.6 million, resulting in a net loss attributable to owners of ¥801 million for the quarter. The company’s total assets decreased by ¥571 million to ¥12.06 billion, while liabilities rose by ¥144 million, leaving net assets at ¥9.15 billion and an equity ratio of 75.4 %. No dividends were declared for FY2016, and the forecasted annual net income for FY2016 is a loss of ¥655 million. The financial statements reflect the adoption of revised Japanese accounting standards for business combinations, consolidated financial statements, and business divestitures effective from the first quarter of FY2016. Depreciation methods were also updated in line with 2016 tax law changes, but these adjustments had no material impact on the quarterly results. The company’s operating expenses were largely driven by increased advertising spend, while cost of sales decreased modestly. Overall, the report highlights a challenging quarter marked by significant revenue erosion and profitability losses, with management projecting continued negative performance for the remainder of FY2016.

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Summary of Financial Results for Third Quarter of Fiscal Year Ending December 31, 2016

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