March 15, 2021
Consolidated Financial Results
for the Fiscal Year Ended January 31, 2021
(Japanese Accounting Standards)
Name of Listed Company: | Poletowin Pitcrew Holdings, Inc. | |
Listing: | First Section of Tokyo Stock Exchange | |
Stock code: | 3657 | |
URL: | https://www.poletowin-pitcrew-holdings.co.jp | |
Representative: | Teppei Tachibana, President & CEO | |
Contact Person: | Joji Yamauchi, Director & CFO | |
Tel: +81-3-5909-7911 | ||
Scheduled date of General Shareholders' Meeting: April 22, 2021 | ||
Scheduled date to file Securities Report: | April 23, 2021 | |
Scheduled date to commence dividend payments: | April 23, 2021 | |
Supplementary explanatory materials prepared: | Yes | |
Explanatory meeting: | No (For analysts and institutional investors) |
(Millions of yen with fractional amounts discarded, unless otherwise noted.)
1. Consolidated financial results for the fiscal year ended January 31, 2021 (from February 1, 2020, to January 31, 2021)
(1) Consolidated operating results | (Percentages indicate year-on-year changes.) | |||||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | |||||||||||
owners of parent | ||||||||||||||
Fiscal year ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | ||||||
January 31, 2021 | 26,729 | 2.3 | 3,217 | (8.9) | 3,595 | 3.5 | 2,119 | 18.6 | ||||||
January 31, 2020 | 26,120 | 9.9 | 3,531 | 11.7 | 3,473 | 12.7 | 1,787 | (2.8) | ||||||
(Note) Comprehensive | income | |||||||||||||
For the year ended January 31, 2021: ¥1,803 million (-7.5%) | ||||||||||||||
For the year ended January 31, 2020: ¥1,948 million (18.3%) | ||||||||||||||
Net profit | Diluted net | Return on | Ordinary profit | Operating | ||||||||||
per share | profit per share | equity (ROE) | /total assets | profit ratio | ||||||||||
Fiscal year ended | Yen | Yen | % | % | % | |||||||||
January 31, 2021 | 55.99 | 55.96 | 14.2 | 18.8 | 12.0 | |||||||||
January 31, 2020 | 47.24 | 47.20 | 13.3 | 20.9 | 13.5 | |||||||||
(Reference) Equity in | earnings of affiliates | |||||||||||||
For the year ended January 31, 2021: ¥ - million | ||||||||||||||
For the year ended January 31, 2020: ¥ -24 million | ||||||||||||||
(2) Consolidated financial position | ||||||||||||||
Total assets | Net assets | Equity ratio | Net assets per share | |||||||||||
As of | Millions of yen | Millions of yen | % | Yen | ||||||||||
January 31, 2021 | 20,389 | 15,675 | 76.9 | 413.64 | ||||||||||
January 31, 2020 | 17,763 | 14,320 | 80.1 | 376.01 |
(Reference) Equity
As of January 31, 2021: ¥15,671 million
As of January 31, 2020: ¥14,230 million
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(3) Consolidated cash flows
Cash flows from | Cash flows from | Cash flows from | Cash and cash equivalents | |
operating activities | investing activities | financing activities | at end of year | |
Fiscal year ended | Millions of yen | Millions of yen | Millions of yen | Millions of yen |
January 31, 2021 | 2,040 | (963) | (468) | 11,158 |
January 31, 2020 | 2,402 | (850) | (416) | 10,514 |
2. Cash dividends
Cash dividends per share | Total amount | Payout ratio | Dividends on | |||||
of dividends | net assets | |||||||
First | Second | Third | Fiscal | Annual | (consolidated) | |||
(annual) | (consolidated) | |||||||
quarter | quarter | quarter | year-end | |||||
Yen | Yen | Yen | Yen | Yen | Millions of yen | % | % | |
Fiscal year ended | - | 0.00 | - | 12.00 | 12.00 | 454 | 25.4 | 3.4 |
January 31, 2020 | ||||||||
Fiscal year ended | - | 0.00 | - | 13.00 | 13.00 | 492 | 23.2 | 3.3 |
January 31, 2021 | ||||||||
Fiscal year ending | - | 0.00 | - | 14.00 | 14.00 | 25.2 | ||
January 31, 2022 | ||||||||
(Forecasts) | ||||||||
3. Consolidated financial forecasts for the fiscal year ending January 31, 2022 (from February 1, 2021, to January 31, 2022)
Net sales | Operating | Ordinary | Profit attributable to | Net profit | |||||||
profit | profit | owners of parent | per share | ||||||||
Millions | % | Millions | % | Millions | % | Millions | % | Yen | |||
of yen | of yen | of yen | of yen | ||||||||
Six months ending | 14,426 | 16.4 | 1,388 | 8.8 | 1,359 | (7.8) | 791 | (12.5) | 20.74 | ||
July 31, 2021 | |||||||||||
Fiscal year ending | 30,077 | 12.5 | 3,452 | 7.3 | 3,392 | (5.7) | 2,123 | 0.2 | 55.66 | ||
January 31, 2022 | |||||||||||
* Notes:
(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a
change in the scope of consolidation) | : No |
(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions | |
a. Changes in accounting standards due to revisions to accounting standards and other guidelines | : No |
b. Changes in accounting policies due to reasons other than a. above | : No |
c. Changes in accounting estimates | : No |
d. Restatement of revisions | : No |
- Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury shares)
As of January 31, 2021 | : 38,156,000 shares |
As of January 31, 2020 | : 38,120,800 shares |
b. Number of shares of treasury stock at the end of the period | |
As of January 31, 2021 | : 269,734 shares |
As of January 31, 2020 | : 272,934 shares |
c. Average number of shares | |
For the year ended January 31, 2021 | : 37,865,200 shares |
For the year ended January 31, 2020 | : 37,847,211 shares |
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(Reference) Summary of non-consolidated operating results Non-consolidated financial results for the fiscal year ended January 31, 2021 (from February 1, 2020, to January 31, 2021)
(1) Non-consolidated operating results
Net sales | Operating profit | Ordinary profit | Net profit | |||||||
Fiscal year ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | ||
January 31, 2021 | 1,563 | 29.8 | 872 | 65.7 | 422 | (1.5) | 78 | (73.6) | ||
January 31, 2020 | 1,204 | 14.7 | 526 | 8.3 | 428 | 151.1 | 298 | 291.7 |
Net profit per share | Diluted net profit | |
per share | ||
Fiscal year ended | Yen | Yen |
January 31, 2021 | 2.08 | 2.08 |
January 31, 2020 | 7.88 | 7.88 |
(2) Non-consolidated financial position
Total assets | Net assets | Equity ratio | Net assets per share | |
As of | Millions of yen | Millions of yen | % | Yen |
January 31, 2021 | 5,664 | 5,609 | 99.0 | 148.07 |
January 31, 2020 | 6,039 | 5,980 | 99.0 | 158.00 |
(Reference) Equity |
As of January 31, 2021: ¥5,609 million
As of January 31, 2020: ¥5,980 million
- Financial statements are not subject to audit
-
Proper use of earnings forecasts, and other special matters
(Disclaimer to forward-looking statements)
The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements do not guarantee that the Company will achieve its earnings forecasts. In addition, actual business and other results may differ substantially due to various factors. For details on the conditions assumed and the cautionary notes and items in the financial forecasts, please refer to "Earnings forecasts for the fiscal year ending January 31, 2022," under "Overview of Operating Results" in this report.
(How to obtain Supplementary Information to the Financial Results and details of the earnings results briefing) The Company discloses the Supplementary Information to the Financial Results on the TDnet on the same day. Along with the earnings presentation materials, streaming video of content are scheduled to be promptly posted on the Company's website.
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1. Overview of Operating Results
(1) Analysis of Operating Results
During the consolidated fiscal year under review, conditions for the Japanese economy are expected to continue to pick up as various policies are effective, overseas economics are recovering and preventive measures are taken against COVID-19. However, both domestic and overseas impact of COVID-19 and financial & capital market warrant close attention.
Under these economic conditions, Poletowin Pitcrew Holdings Group's core Testing/Verification & Evaluation Business saw order expansion for testing in multiple languages, localization, audio recording and customer support. This is because the related market for this segment is home game software and social games market and recently global deployment is the main trend. Also, in order to prevent spread of COVID-19, the number of people staying at home increased thus resulting in expansion of game market. With the Japanese government promoting the GIGA School Project, demands for support services related to ICT environment preparation is increasing.
For Internet Supporting Business, as the Japanese government is promoting cashless economy, the demands for anti-infringement monitoring for QR code mobile payment, identification verification, detection of anti-money laundering and spoofing related services increased. Likewise Testing/Verification & Evaluation Business as the number of people staying at home increased, E-commerce expanded thus resulting in pushing up demand for monitoring check of regulation violation for exhibited merchandise, the review of Internet advertising based on the Pharmaceuticals and Medical Devices Act, the Act against Unjustifiable Premiums and Misleading Representations, and end-user inquiries.
The Group provides checking, testing, monitoring and inspection services that requires human input on a contractual basis to corporate clients. The demand for such outsourcing services has been growing as client's business has diversified and have expanded overseas. Another reason behind this is that business processes have become more advanced and sophisticated. As new services are created in the market, both Testing/Verification
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Evaluation Business and Internet Supporting Business, are seeing new business opportunities. During the consolidated fiscal year under review, the Group operated joint ventures for game development, management, publishing etc., and formed capital and business alliance with ViSUALIZE Co. Ltd in February, in order to receive profit distribution. Pole To Win Co., Ltd. absorbed and merged with its wholly owned subsidiary Pole To Win Networks Co., Ltd. in February, in order to aggregate and consolidate domestic Testing/Verification & Evaluation Business and improve service for clients. In October, QBIST Inc. made colorful Inc. its subsidiary in order to expand graphic creation business. In February, PTW International Holdings Limited newly established PTW Japan Co., Ltd. in order to specially support domestic clients wanting to globally expand their business. In October, PTW America, Inc. established 1518 Studios, Inc. in order to expand graphic creation business. Further to this objective, all business of 5518 Studios, Inc. including 2D/3D art, animation, virtual reality and programming services were transferred to 1518 Studios, Inc. In August, PITCREW CO., LTD. absorbed and merged with its wholly owned subsidiary PITCREW COREOPS CO., LTD.in order to aggregate and consolidate the internet support business and improve service ability for client companies. Collaboration has stepped up between eighteen delivery centers in ten countries The Group promoted to globally provide a one-stop,full-service platform in areas such as defect detection (finding bugs), localization, audio recording, game development & marketing support, internet monitoring, and customer support.
As a result of these factors, consolidated net sales for the year were ¥26,729,396 thousand (up 2.3%). Operating profit was ¥3,217,679 thousand (down 8.9%). Ordinary profit was ¥3,595,725 thousand (up 3.5%) and Profit attributable to owners of parent was ¥2,119,993 thousand (up 18.6%).
Results by segment were as follows.
Testing/Verification & Evaluation Business
By promoting collaboration between domestic and overseas group companies the group strived to support global deployment for domestic and foreign game makers, and promoted orders for outsourcing services such as defect detection, localization customer support (overseas) and voice recording, etc. for game software developers. In game market, business with overseas local companies increased and in non-game market orders for third- party verification services increased. Due to COVID-19, some customer company's business was suspended or pushed back. Pole To Win Co., Ltd. received orders to create ICT environment at schools for the GIGA School Project. Specifically, preparing kitting service for tablets. CREST Inc. launched a game, "ARIA CHRONICLE" on Steam in October which achieved over 10,000 downloads within 2 days of launch. CREST Inc. also launched "Hexagon Dungeon-The Arcana's Stone" for Android in October, and for iOS in December. During the first quarter of the consolidated fiscal year under review, PTW Japan Co., Ltd. (On February 3rd, 2020, PTW Japan Co., Ltd. was newly established by incorporation-type split with Pole To Win Co., Ltd., a consolidated subsidiary of the Group, as the splitting company.) and ENTALIZE CO., LTD. changed the fiscal year to December 31st, thus for both companies the
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consolidated financial statements reflects the eleven months of February to December. As a result, Testing/Verification & Evaluation Business sales increased by 1.3% year on year, to ¥20,129,809 thousand but with upfront investment to CREST Inc., operating profit decreased by 17.7%, to ¥2,647,865 thousand.
Internet Supporting Business
In the Internet Supporting Business, the Group increased orders for monitoring fraud for FinTech related services such as QR code settlement and virtual currency. Services related to identity verification, detection of anti- money laundering and spoofing also increased orders. Also, as people who stayed at home increased and usage of E-commerce sites also increased, thus resulting in pushing up demand for monitoring exhibited merchandise for regulation violation, outsourcing services such as customer support (domestic) services for end-users by phone call, e-mail, chat and chatbot for E-commerce sites. Collaborating sales activities with Testing/Verification
- Evaluation Business enhanced business in customer support in game market. PITCREW CO., LTD. received orders to create ICT environment at schools for the GIGA School Project. Specifically, to provide services related to design ICT environment. As a result, Internet Supporting Business sales increased by 6.6%, to ¥6,441,040 thousand. Operating profit increased by 108.9%, to ¥611,603 thousand.
Others
Palabra Inc. provide services to produce barrier-free subtitles audio guides for television program and movies to prepare for the advent of barrier-free motion pictures. Due to COVID-19, new production of movies was retained and orders saw decrease. However, Palabra Inc. received the "2020 Barrier-Free/ Universal Design Initiation Award" from the Minister of State for Special Missions in December for their outstanding cultural activities contributing to provide barrier-free for people with vison and hearing impairment. IMAid Inc. provides support services such as visa obtainment, school enrollment and daily life procedures for foreign personnel working in medical institutes. The sales resulted in a decrease of 21.7% to ¥158,546 thousand and operating loss of ¥139,666 thousand, down from operating loss of ¥105,857 thousand a year earlier.
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Analysis of Financial Position
Assets
Current assets increased ¥2,397,220 thousand or 16.3% from the previous fiscal year, to ¥17,102,548 thousand. This was mainly attributable to a ¥644,377 thousand increase in cash and deposits, a ¥834,851 thousand increase in notes and accounts receivable-trade and, ¥854,929thousand increase in other current assets (mainly advance payments).
Non-current assets increased to ¥3,286,776 thousand, ¥228,257 thousand or 7.5% higher than the previous fiscal year. Key factors were decrease of ¥213,855 thousand in goodwill, but a ¥72,895 thousand increase in software, a ¥200,142 thousand increase in other of intangible assets (copyrights, etc.), and a ¥176,811 thousand increase in leasehold and guarantee deposits. As a result, total assets increased 2,625,477 thousand or 14.8% year on year, to ¥20,389,325 thousand.
Liabilities
Current liabilities stood at ¥4,454,007 thousand at January 31, 2021, ¥1,307,105 thousand or 41.5% higher than the previous fiscal year. The prime factors in this change were increase of ¥342,344 thousand in accounts payable-other, ¥582,657 thousand in income tax payable and ¥302,837 thousand in other current liabilities (mainly advance received).
Non-current liabilities decreased ¥36,087 thousand or 12.2%, to ¥260,228 thousand. This was mainly due to increase of ¥20,269 thousand in retirement benefit liability but offset decrease of ¥61,115 thousand in deferred tax liabilities. As a result, total liabilities increased ¥1,271,018 thousand or 36.9% year on year, to ¥4,714,236 thousand.
Net assets
Net assets increased ¥1,354,459 thousand or 9.5%, to ¥15,675,089 thousand. This was mainly due to increase of ¥1,665,818 thousand in retained earnings for profit attributable to owners of parent but offset by decrease of ¥115,496 thousand in valuation difference on available-for-sale securities and ¥ 115,543 thousand in foreign currency translation adjustment.
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(3) Cash flows
Cash and cash equivalents (hereinafter referred to as "cash") as of January 31, 2021, were ¥11,158,548 thousand, up ¥644,377 thousand from the previous fiscal year.
Cash flows for each activity and the reasons behind them are as follows.
Cash flows from operating activities
Operating activities provided net cash of ¥2,040,365 thousand compared to ¥2,402,118 thousand provided in the previous fiscal year. The main contributors were +¥3,463,284 thousand in profit before income taxes, +¥361,896 thousand in depreciation, +¥132,440 thousand in impairment loss, +¥273,956thousand in amortization of goodwill, - ¥124,595 thousand in surrender value of insurance policies, -¥910,097 thousand increase of trade receivables, +¥414,065 thousand increase of accounts payable-other,+¥114,885 thousand increase in accrued consumption taxes, -¥139,420 thousand decrease in deposits received, -¥939,430 thousand in income taxes paid.
Cash flows from investing activities
Investing activities used net cash of - ¥963,219 thousand compared to - ¥850,131 thousand used in the previous fiscal year. The main uses were, -¥261,583 thousand in purchase of property, plant and equipment, -¥343,190 thousand in purchase of intangible assets, -¥182,172 thousand in purchase of investment securities, -¥153,262 thousand in purchase of shares of subsidiaries resulting in change in scope of consolidation, - ¥234,337 thousand in payments of leasehold and guarantee deposits.
Cash flows from financing activities
Financing activities used net cash of - ¥468,688 thousand from ¥416,247 thousand used in the previous fiscal year. The main factor in this change was - ¥454,174 thousand in cash dividends paid.
(4) Earnings forecasts for the fiscal year ending January 31, 2022
Some of the client's business was suspended or pushed back during the second quarter of the consolidated fiscal year under review due to Covid 19 and orders saw decrease. However, from the third quarter of the consolidated fiscal year under review and onward, orders are recovering. For overseas subsidiaries, due to lockdown etc., working at the office has become difficult and more than 80% of staff are still working from home.
In accordance with globalization of game market, the Group engaged in expanding market shares in business process outsourcing services, aiming it to become the Group's core business. As a result, during this consolidated fiscal year under review, the Group's overseas companies acquired over 100 new logos. Cross- sell between the domestic group company's testing/verification & evaluation business and customer support business also increased. The Group is also trying to build new business model such as game development and selling by CREST Inc. For non-game market, the Group promoted orders related to third-party verification and also tried to build new business models by utilizing existing service know-how. As a result, xTech segment related third-party verification orders increased. For the internet supporting business, orders for anti-fraud related services increased such as QR code mobile payment and various point-reward services.
For corporate structure, the Group implemented unified group management with the holdings company posted as the foremost component to improve management efficiency and synergistic effects. During this consolidated fiscal year under review, one subsidiary was dissolved and two subsidiaries were absorbed and merged, for the objective of integrating services and simplifying the structure.
During the first quarter of the fiscal year 2022, the Group's headquarters was relocated to expand floor space. The administration and sales division of the Group's main business subsidiaries, Pole To Win Co., Ltd., and PITCREW CO., LTD. were integrated in order to enhance efficiency of administrative resources while at the same time strengthen collaboration and cross-selling among the subsidiaries.
In April 2022, QBIST Inc. and CREST Inc. will move and integrate offices in order to enhance synergy in media content related business. The Group will continue to acquire talent in order to strengthen the business and enhance integration of similar businesses and subsidiaries within the Group. Also, the Group will form capital, business alliance and M&A that has potential to generate synergistic effects.
It has been over a year since the world has been impacted by COVID-19. Life styles have changed and digitalization of consumption is accelerating. Shopping is being done thru online e-commerce and we spend our leisure time by enjoying movies and music thru distribution services.
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Segment projections for the year ending January 31, 2022, are as follows.
Testing/Verification & Evaluation Business
In the game market, globalization is progressing and the game market itself expanded as the number of people staying at home increased due to COVID-19. The Group will aim to expand shares in outsourcing of detection (finding bugs) services by strengthening collaboration among domestic & overseas subsidiaries and reinforcing sales strength. For non-game market, the Group will aim to receive bulk orders related to third-party verification such as AI, MaaS, xTech and also acquire talent. QBIST Inc., colorful Inc. and CREST Inc. will enhance media/content related business, such as development, distribution and promotion of game and animation to become the next business pillar.
Internet Supporting Business
With Covid-19, people's ways of life have changed and non-face-to-face service such as E-commerce and non- contact service such as cashless payment is increasing. As a result, demand for e-commerce related services, such as monitoring exhibited merchandise for regulation violation, internet advertisement review, identity verification and service related to cashless payment such as detecting spoofing has increased. The Group will continue to promote these fraud prevention services. For game market, in order to improve market share in customer support, the group will promote one-stop orders for the Groups main businesses, such as detection (finding bugs) and localization services in the Testing/Verification & Evaluation Business and customer support in Internet Supporting Business.
Others
Palabra Inc. provides services to produce barrier-free subtitles audio guides for movies etc, to prepare for the advent of barrier-free motion pictures and SDGs. To provide these services, Palabra Inc. develops and operates UDCast service. IMAid Inc. provides support services such as visa obtainment, school enrollment and daily life procedures for foreign personnel working in medical institutes.
As a result of these factors, for the year ending January 31, 2022, the Group projects consolidated net sales of ¥30,077 million (up 12.5%), operating profit of ¥3,452 million (up 7.3%), ordinary profit of ¥3,392 million (down 5.7%), and profit attributable to owners of parent of ¥2,123 million (up 0.2%).
The earnings forecasts are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements do not guarantee that the Company will achieve its earnings forecasts. In addition, actual business and other results may differ substantially due to various factors.
2. Basic Policy on Selection of Accounting Standards
Considering the comparability of consolidated statements across periods and among companies, the Group has a policy of preparing its consolidated financial statements in accordance with Japanese Accounting Standards for the time being.
Regarding the application of International Financial Reporting Standards, the Group is to respond appropriately, taking into account circumstances in Japan and abroad.
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3. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Thousands of yen) | ||||
As of January 31, 2020 | As of January 31, 2021 | |||
Assets | ||||
Current assets | ||||
Cash and deposits | 10,514,170 | 11,158,548 | ||
Notes and accounts receivable - trade | 3,669,689 | 4,504,541 | ||
Merchandise and finished goods | 8,009 | 861 | ||
Work in process | 63,797 | 172,920 | ||
Other | 453,236 | 1,308,165 | ||
Allowance for doubtful accounts | (3,575) | (42,488) | ||
Total current assets | 14,705,328 | 17,102,548 | ||
Non-current assets | ||||
Property, plant and equipment | ||||
Buildings and structures | 878,691 | 893,190 | ||
Accumulated depreciation | (479,298) | (544,376) | ||
Buildings and structures, net | 399,393 | 348,814 | ||
Machinery, equipment and vehicles | 23,065 | 23,081 | ||
Accumulated depreciation | (14,180) | (15,860) | ||
Machinery, equipment and vehicles, net | 8,884 | 7,221 | ||
Tools, furniture and fixtures | 1,470,181 | 1,616,860 | ||
Accumulated depreciation | (1,159,574) | (1,294,048) | ||
Tools, furniture and fixtures, net | 310,606 | 322,812 | ||
Other | - | 15,306 | ||
Total property, plant and equipment | 718,885 | 694,154 | ||
Intangible assets | ||||
Goodwill | 725,510 | 511,654 | ||
Software | 153,066 | 225,961 | ||
Other intangible assets | 27,229 | - | ||
Other | 2,395 | 202,538 | ||
Total intangible assets | 908,202 | 940,155 | ||
Investments and other assets | ||||
Investment securities | 587,131 | 654,071 | ||
Leasehold and guarantee deposits | 575,098 | 751,910 | ||
Deferred tax assets | 170,172 | 195,008 | ||
Other | 175,423 | 128,470 | ||
Allowance for doubtful accounts | (76,394) | (76,994) | ||
Total investments and other assets | 1,431,432 | 1,652,466 | ||
Total non-current assets | 3,058,519 | 3,286,776 | ||
Total assets | 17,763,847 | 20,389,325 |
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(Thousands of yen) | ||||
As of January 31, 2020 | As of January 31, 2021 | |||
Liabilities | ||||
Current liabilities | ||||
Short-term borrowings | 10,299 | 4,540 | ||
Current portion of long-term borrowings | 6,536 | 7,620 | ||
Accounts payable - other | 1,725,334 | 2,067,679 | ||
Accrued expenses | 158,241 | 216,301 | ||
Income taxes payable | 387,666 | 970,324 | ||
Provision for bonuses | 30,458 | 56,339 | ||
Other | 828,363 | 1,131,201 | ||
Total current liabilities | 3,146,901 | 4,454,007 | ||
Non-current liabilities | ||||
Long-term borrowings | 41,924 | 34,365 | ||
Retirement benefit liability | 76,303 | 96,572 | ||
Deferred tax liabilities | 93,066 | 31,950 | ||
Other | 85,022 | 97,340 | ||
Total non-current liabilities | 296,316 | 260,228 | ||
Total liabilities | 3,443,217 | 4,714,236 | ||
Net assets | ||||
Shareholders' equity | ||||
Share capital | 1,237,674 | 1,239,064 | ||
Capital surplus | 2,377,916 | 2,379,899 | ||
Retained earnings | 10,706,356 | 12,372,175 | ||
Treasury shares | (169,686) | (167,696) | ||
Total shareholders' equity | 14,152,260 | 15,823,442 | ||
Accumulated other comprehensive income | ||||
Valuation difference on available-for-sale securities | 163,869 | 48,373 | ||
Foreign currency translation adjustment | (85,133) | (200,676) | ||
Total accumulated other comprehensive income | 78,735 | (152,303) | ||
Non-controlling interests | 89,633 | 3,950 | ||
Total net assets | 14,320,629 | 15,675,089 | ||
Total liabilities and net assets | 17,763,847 | 20,389,325 |
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- Consolidated Statement of Income and Consolidated Statement of Comprehensive Income Consolidated Statements of Income
(Thousands of yen) | ||||
Fiscal year ended | Fiscal year ended | |||
January 31, 2020 | January 31, 2021 | |||
Net sales | 26,120,452 | 26,729,396 | ||
Cost of sales | 18,127,068 | 18,721,803 | ||
Gross profit | 7,993,384 | 8,007,593 | ||
Selling, general and administrative expenses | 4,462,172 | 4,789,914 | ||
Operating profit | 3,531,211 | 3,217,679 | ||
Non-operating income | ||||
Interest income | 2,179 | 3,335 | ||
Dividend income | 785 | 745 | ||
Foreign exchange gains | - | 64,718 | ||
Surrender value of insurance policies | 14,540 | 124,595 | ||
Subsidy income | 17,887 | 151,418 | ||
Gain on adjustment of account payable | 6,334 | 8,645 | ||
Other | 19,426 | 32,370 | ||
Total non-operating income | 61,153 | 385,829 | ||
Non-operating expenses | ||||
Interest expenses | - | 2,748 | ||
Foreign exchange losses | 82,674 | - | ||
Share of loss of entities accounted for using equity method | 24,784 | - | ||
Other | 11,067 | 5,034 | ||
Total non-operating expenses | 118,526 | 7,783 | ||
Ordinary profit | 3,473,838 | 3,595,725 | ||
Extraordinary losses | ||||
Loss on valuation of investment securities | 100,000 | - | ||
Impairment loss | - | 132,440 | ||
Retirement benefits for directors (and other officers) | 515,525 | - | ||
Loss on step acquisitions | 53,850 | - | ||
Other | 5,774 | - | ||
Total extraordinary losses | 675,150 | 132,440 | ||
Profit before income taxes | 2,798,687 | 3,463,284 | ||
Income taxes - current | 969,287 | 1,455,126 | ||
Income taxes - deferred | 41,613 | (26,125) | ||
Total income taxes | 1,010,901 | 1,429,000 | ||
Profit | 1,787,786 | 2,034,283 | ||
Loss attributable to non-controlling interests | - | (85,709) | ||
Profit attributable to owners of parent | 1,787,786 | 2,119,993 |
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Consolidated Statement of Comprehensive Income
(Thousands of yen) | ||||
Fiscal year ended | Fiscal year ended | |||
January 31, 2020 | January 31, 2021 | |||
Profit | 1,787,786 | 2,034,283 | ||
Other comprehensive income | ||||
Valuation difference on available-for-sale securities | 151,091 | (115,496) | ||
Foreign currency translation adjustment | 10,022 | (115,517) | ||
Total other comprehensive income | 161,113 | (231,013) | ||
Comprehensive income | 1,948,899 | 1,803,270 | ||
Comprehensive income attributable to | ||||
Comprehensive income attributable to owners of parent | 1,948,899 | 1,888,953 | ||
Comprehensive income attributable to non-controlling interests | - | (85,682) |
- 11 -
- Consolidated Statements of Changes in Net Assets Fiscal 2020 (From February 1, 2019, to January 31, 2020)
(Thousands of yen) | |||||
Shareholders' equity | |||||
Total | |||||
Share capital | Capital surplus | Retained earnings | Treasury shares | shareholders' | |
equity | |||||
Balance at beginning of period | 1,237,642 | 2,377,651 | 9,334,880 | (170,059) | 12,780,115 |
Changes of item during period | |||||
Issuance of new shares | 31 | 31 | 63 | ||
Dividends of surplus | (416,311) | (416,311) | |||
Profit attributable to owners of parent | 1,787,786 | 1,787,786 | |||
Disposal of treasury shares | 232 | 373 | 606 | ||
Net changes in items other than shareholders' | |||||
equity | |||||
Total changes of items during period | 31 | 264 | 1,371,475 | 373 | 1,372,144 |
Balance at end of period | 1,237,674 | 2,377,916 | 10,706,356 | (169,686) | 14,152,260 |
Accumulated other comprehensive income | |||||
Valuation | Foreign | Total | Non-controlling | ||
accumulated | Total net assets | ||||
difference on | currency | interests | |||
other | |||||
available-for- | translation | ||||
comprehensive | |||||
sale securities | adjustment | ||||
income | |||||
Balance at beginning of period | 12,778 | (95,155) | (82,377) | - | 12,697,738 |
Changes of item during period | |||||
Issuance of new shares | 63 | ||||
Dividends of surplus | (416,311) | ||||
Profit attributable to owners of parent | 1,787,786 | ||||
Disposal of treasury shares | 606 | ||||
Net changes in items other than shareholders' | 151,091 | 10,022 | 161,113 | 89,633 | 250,746 |
equity | |||||
Total changes of items during period | 151,091 | 10,022 | 161,113 | 89,633 | 1,622,891 |
Balance at end of period | 163,869 | (85,133) | 78,735 | 89,633 | 14,320,629 |
- 12 -
Fiscal 2021 (From February 1, 2020, to January 31, 2021)
(Thousands of yen) | |||||
Shareholders' equity | |||||
Total | |||||
Share capital | Capital surplus | Retained earnings | Treasury shares | shareholders' | |
equity | |||||
Balance at beginning of period | 1,237,674 | 2,377,916 | 10,706,356 | (169,686) | 14,152,260 |
Changes of item during period | |||||
Issuance of new shares | 1,390 | 1,390 | 2,780 | ||
Dividends of surplus | (454,174) | (454,174) | |||
Profit attributable to owners of parent | 2,119,993 | 2,119,993 | |||
Disposal of treasury shares | 592 | 1,989 | 2,582 | ||
Net changes in items other than shareholders' | |||||
equity | |||||
Total changes of item during period | 1,390 | 1,983 | 1,665,818 | 1,989 | 1,671,182 |
Balance at end of period | 1,239,064 | 2,379,899 | 12,372,175 | (167,696) | 15,823,442 |
Accumulated other comprehensive income | |||||
Valuation | Foreign | Total | Non-controlling | ||
accumulated | Total net assets | ||||
difference on | currency | interests | |||
other | |||||
available-for- | translation | ||||
comprehensive | |||||
sale securities | adjustment | ||||
income | |||||
Balance at beginning of period | 163,869 | (85,133) | 78,735 | 89,633 | 14,320,629 |
Changes of item during period | |||||
Issuance of new shares | 2,780 | ||||
Dividends of surplus | (454,174) | ||||
Profit attributable to owners of parent | 2,119,993 | ||||
Disposal of treasury shares | 2,582 | ||||
Net changes in items other than shareholders' | (115,496) | (115,543) | (231,039) | (85,682) | (316,722) |
equity | |||||
Total changes of item during period | (115,496) | (115,543) | (231,039) | (85,682) | 1,354,459 |
Balance at end of period | 48,373 | (200,676) | (152,303) | 3,950 | 15,675,089 |
- 13 -
(4) Consolidated Statements of Cash Flows
(Thousands of yen) | |||
Fiscal year ended | Fiscal year ended | ||
January 31, 2020 | January 31, 2021 | ||
Cash flows from operating activities | |||
Profit before income taxes | 2,798,687 | 3,463,284 | |
Depreciation | 346,512 | 361,896 | |
Impairment loss | - | 132,440 | |
Amortization of goodwill | 261,585 | 273,956 | |
Increase (decrease) in allowance for doubtful accounts | (10,745) | 39,526 | |
Increase (decrease) in provision for bonuses | (5,657) | 27,095 | |
Increase (decrease) in retirement benefit liability | 6,732 | 20,269 | |
Interest and dividend income | (2,965) | (4,081) | |
Surrender value of insurance policies | - | (124,595) | |
Subsidy income | - | (151,418) | |
Interest expenses | - | 2,748 | |
Foreign exchange losses (gains) | 31,751 | (5,920) | |
Share of loss (profit) of entities accounted for using equity method | 24,784 | - | |
Loss (gain) on valuation of investment securities | 100,000 | - | |
Retirement benefits for directors (and other officers) | 515,525 | - | |
Loss (gain) on step acquisitions | 53,850 | - | |
Decrease (increase) in trade receivables | (673,099) | (910,097) | |
Increase (decrease) in accounts payable - other | 299,976 | 414,065 | |
Increase (decrease) in accrued expenses | (36,158) | 53,547 | |
Increase (decrease) in accrued consumption taxes | 90,891 | 114,885 | |
Increase (decrease) in deposits received | 220,328 | (139,420) | |
Other, net | (143,051) | (740,985) | |
Subtotal | 3,878,947 | 2,827,199 | |
Interest and dividends received | 3,144 | 3,791 | |
Proceeds from subsidy income | - | 151,418 | |
Interest paid | - | (2,613) | |
Payments of retirement benefits for directors (and other officers) | (515,525) | - | |
Income taxes paid | (964,448) | (939,430) | |
Net cash provided by (used in) operating activities | 2,402,118 | 2,040,365 |
- 14 -
(Thousands of yen) | ||||
Fiscal year ended | Fiscal year ended | |||
January 31, 2020 | January 31, 2021 | |||
Cash flows from investing activities | ||||
Purchase of property, plant and equipment | (313,448) | (261,583) | ||
Proceeds from sales of property, plant and equipment | 1,843 | - | ||
Purchase of intangible assets | (76,693) | (343,190) | ||
Purchase of investment securities | (304,126) | (182,172) | ||
Purchase of shares of subsidiaries resulting in change in scope of consolidation | (3,207) | (153,262) | ||
Purchase of shares of subsidiaries and associates | (99,864) | (64,999) | ||
Loan advances | (51,883) | (7,828) | ||
Collection of loans receivable | 55,903 | 11,315 | ||
Payments of leasehold and guarantee deposits | (83,256) | (234,337) | ||
Proceeds from refund of leasehold and guarantee deposits | 24,601 | 34,856 | ||
Other, net | - | 237,982 | ||
Net cash provided by (used in) investing activities | (850,131) | (963,219) | ||
Cash flows from financing activities | ||||
Net increase (decrease) in short-term borrowings | - | (10,759) | ||
Repayments of long-term borrowings | - | (6,536) | ||
Proceeds from issuance of shares | 63 | 2,780 | ||
Dividends paid | (416,311) | (454,174) | ||
Net cash provided by (used in) financing activities | (416,247) | (468,688) | ||
Effect of exchange rate change on cash and cash equivalents | 32,465 | 35,920 | ||
Net increase (decrease) in cash and cash equivalents | 1,168,205 | 644,377 | ||
Cash and cash equivalents at beginning of period | 9,345,965 | 10,514,170 | ||
Cash and cash equivalents at end of period | 10,514,170 | 11,158,548 |
- 15 -
- Notes to Consolidated Financial Statements
(Notes on Going Concern Assumption) Not applicable
Segment Information and others(Segment Information)
1. Overview of reporting segments
The Company's reporting segments are the compositional units of the Company for which separate financial information is available. They are periodically examined by the Board of Directors for the purpose of deciding on allocation of management resources and evaluating business results.
The Company consists of two main businesses: A Testing/Verification & Evaluation Business that carries out defect detection (finding bugs) in support of improvement in product quality of software and hardware, and an Internet Supporting Business that detects illegal or harmful information in Web content, and improper use of the Web, in order to support sound Internet growth.
As a result, the Company is composed of two reporting segments with separate organizations and service characteristics: The Testing/Verification & Evaluation Business, and the Internet Supporting Business.
In the Testing/Verification & Evaluation Business, the Company provides defect detecting (finding bugs), verification and evaluation, and translation services. In Internet Supporting Business, the Company provides Internet monitoring and Customer Support services.
2. Calculation methods for net sales, income and loss, assets and liabilities and other items by reporting segment
The accounting methods used for the reported business segments are almost the same as that stated in"
Significant Items Regarding the Preparation of Consolidated Financial Statements".
Segment income (loss) for reporting segments represents operating income (loss). Intersegment sales and transactions are based on prevailing market prices.
- 16 -
3. Net sales, income (loss), assets and other items by reporting segment
Fiscal year ended January 31, 2020 (From February 1, 2019, to January 31, 2020)
(Thousands of yen) | |||||||
Reportable segments | Per | ||||||
Reconciliati | |||||||
Testing/Veri | Internet | Other *1 | consolidated | ||||
fication and | Reportable | Total | on items | ||||
financial | |||||||
Evaluation | Suppporting | segments | *2, 3, 4 | ||||
Business | statements*5 | ||||||
Business | |||||||
Sales | |||||||
Revenues from | |||||||
external | 19,874,824 | 6,043,025 | 25,917,850 | 202,602 | 26,120,452 | - | 26,120,452 |
customers | |||||||
Transactions | |||||||
with other | 4,908 | 134,585 | 139,493 | 154 | 139,647 | (139,647) | - |
segments | |||||||
Net sales | 19,879,733 | 6,177,610 | 26,057,343 | 202,756 | 26,260,099 | (139,647) | 26,120,452 |
Operating profit | 3,216,249 | 292,806 | 3,509,056 | (105,857) | 3,403,199 | 128,012 | 3,531,211 |
(loss) | |||||||
Assets | 13,512,448 | 2,109,556 | 15,622,005 | 282,418 | 15,904,423 | 1,859,423 | 17,763,847 |
Other items | |||||||
Depreciation | 299,268 | 38,675 | 337,944 | 491 | 338,435 | 8,076 | 346,512 |
Increase in | |||||||
property, plant | |||||||
and equipment | 313,658 | 41,124 | 354,782 | 58,092 | 412,875 | 2,463 | 415,338 |
and intangible | |||||||
assets |
*Notes: 1. Others covers operations not included in reporting segments, and mainly encompasses the publishing, media businesses and medical related businesses.
- Adjustment for segment income of ¥128,012 thousand comprises elimination of intersegment transactions of ¥797,507 thousand and unallocated corporate expenses of - ¥669,495 thousand. Unallocated corporate expenses are mainly general administrative expenses.
- Adjustment for segment assets of ¥1,859,423 thousand comprises elimination of intersegment transactions of - ¥32,074 thousand and unallocated corporate assets of ¥1,891,498 thousand. Major components of the unallocated corporate assets are surplus operating funds (cash and deposits), long-term investment funds (investment securities) and assets pertaining to administrative divisions.
- Adjustment for depreciation and amortization of ¥8,076 thousand is unallocated and part of corporate depreciation and amortization.
- Segment income (loss) is adjusted against the operating profit recorded in the consolidated income statement.
- 17 -
Fiscal year ended January 31, 2021 (From February 1, 2020, to January 31, 2021)
(Thousands of yen) | |||||||
Reportable segments | Per | ||||||
Reconciliati | |||||||
Testing/Veri | Internet | Other *1 | consolidated | ||||
fication and | Reportable | Total | on items | ||||
financial | |||||||
Evaluation | Suppporting | segments | *2, 3, 4 | ||||
Business | statements*5 | ||||||
Business | |||||||
Sales | |||||||
Revenues from | |||||||
external | 20,129,809 | 6,441,040 | 26,570,850 | 158,546 | 26,729,396 | - | 26,729,396 |
customers | |||||||
Transactions | |||||||
with other | 2,577 | 184,181 | 186,758 | - | 186,758 | (186,758) | - |
segments | |||||||
Net sales | 20,132,386 | 6,625,222 | 26,757,609 | 158,546 | 26,916,155 | (186,758) | 26,729,396 |
Operating profit | 2,647,865 | 611,603 | 3,259,468 | (139,666) | 3,119,802 | 97,876 | 3,217,679 |
(loss) | |||||||
Assets | 15,948,012 | 2,451,731 | 18,399,743 | 450,322 | 18,850,066 | 1,539,259 | 20,389,325 |
Other items | |||||||
Depreciation | 288,306 | 45,746 | 334,052 | 12,470 | 346,522 | 15,373 | 361,896 |
Increase in | |||||||
property, plant | |||||||
and equipment | 344,137 | 10,794 | 354,931 | 214,433 | 569,364 | 15,507 | 584,872 |
and intangible | |||||||
assets |
*Notes: 1. Others covers operations not included in reporting segments, and mainly encompasses the publishing, media businesses and medical related businesses.
2. Adjustment for segment income of ¥97,876 thousand comprises elimination of intersegment transactions of ¥785,225 thousand and unallocated corporate expenses of - ¥687,348 thousand.
Unallocated corporate expenses are mainly general administrative expenses.
3.Adjustment for segment assets of ¥1,539,259 thousand comprises elimination of intersegment transactions of - ¥16,818 thousand and unallocated corporate assets of ¥1,556,078 thousand. Major components of the unallocated corporate assets are surplus operating funds (cash and deposits), long-term investment funds (investment securities) and assets pertaining to administrative divisions.
- Adjustment for depreciation and amortization of ¥15,373 thousand is unallocated and part of corporate depreciation and amortization.
- Segment income (loss) is adjusted against the operating profit recorded in the consolidated income statement.
- 18 -
(Related information)
Fiscal year ended January 31, 2020 (From February 1, 2019, to January 31, 2020) 1. Product and services-specific information
Not presented, as information similar to segment information is already presented.
2. Geographical information
(1) Net Sales
(Thousands of yen) | |||||
Japan | Asia | North America | Europe | Total | |
19,473,501 | 459,836 | 3,565,842 | 2,621,272 | 26,120,452 | |
Note: Sales are categorized by country or region based on customer locations.
(2) Property, plant and equipment
(Thousands of yen) | ||||
Japan | Asia | North America | Europe | Total |
345,410 | 150,932 | 139,788 | 82,753 | 718,885 |
3. Key customer information
Not presented, as no customer accounts for more than 10% of sales in Consolidation Income Statements.
Fiscal year ended January 31, 2021 (From February 1, 2020, to January 31, 2021) 1. Product- and services-specific information
Not presented, as information similar to segment information is already presented.
2. Geographical information
- Net Sales
(Thousands of yen) | ||||
Japan | Asia | North America | Europe | Total |
19,502,003 | 750,345 | 4,212,781 | 2,264,265 | 26,729,396 |
Note: Sales are categorized by country or region based on customer locations.
(2) Property, plant and equipment
(Thousands of yen) | ||||
Japan | Asia | North America | Europe | Total |
339,822 | 142,638 | 104,421 | 107,272 | 694,154 |
3. Key customer information
Not presented, as no customer accounts for more than 10% of sales in Consolidation Income Statements.
- 19 -
(Information about impairment losses on property, plant and equipment by reporting segment)
Fiscal year ended January 31, 2020 (From February 1, 2019, to January 31, 2020) Not applicable.
Fiscal year ended January 31, 2021 (From February 1, 2020, to January 31, 2021)
(Thousands of yen) | |||||
Testing/ | Internet | ||||
Verification & | Corporate and | ||||
Supporting | Others | Total | |||
Evaluation | Eliminations | ||||
Business | |||||
Business | |||||
Impairment | 132,440 | - | - | 132,440 | |
losses | |||||
(Information about amortization of goodwill and amortized balance by reporting segment)
Fiscal year ended January 31, 2020 (From February 1, 2019, to January 31, 2020)
(Thousands of yen) | |||||
Testing/ | Internet | ||||
Verification & | Corporate and | ||||
Supporting | Others | Total | |||
Evaluation | Eliminations | ||||
Business | |||||
Business | |||||
Amortization | 230,789 | 30,795 | - | - | 261,585 |
of goodwill | |||||
Amortized | 630,557 | 94,953 | - | - | 725,510 |
balance | |||||
Fiscal year ended January 31, 2021 (From February 1, 2020, to January 31, 2021)
(Thousands of yen) | |||||
Testing/ | Internet | ||||
Verification & | Corporate and | ||||
Supporting | Others | Total | |||
Evaluation | Eliminations | ||||
Business | |||||
Business | |||||
Amortization | 243,160 | 30,795 | - | - | 273,956 |
of goodwill | |||||
Amortized | 447,497 | 64,157 | - | - | 511,654 |
balance | |||||
Note: During the consolidated fiscal year under review, for the segment Testing/Verification & Evaluation Business recorded 132,440 thousand yen in impairment loss.
(Information about negative goodwill gains by reporting segment)
Fiscal year ended January 31, 2020 (From February 1, 2019, to January 31, 2020) Not applicable
Fiscal year ended January 31, 2021 (From February 1, 2020, to January 31, 2021) Not applicable
- 20 -
Per share information
Fiscal year ended | Fiscal year ended | |
January 31, 2020 | January 31, 2021 | |
Net assets per share | ¥376.01 | ¥413.64 |
Net profit per share | ¥47.24 | ¥55.99 |
Diluted net profit per share | ¥47.20 | ¥55.96 |
Note: The basis for calculating net profit per share and diluted net profit per share is as follows.
Fiscal year ended | Fiscal year ended | ||
January 31, 2020 | January 31, 2021 | ||
Net profit per share | |||
Profit attributable to owners of parent | 1,787,786 | 2,119,993 | |
(thousands of yen) | |||
Amount not attributable to common | - | - | |
stockholders (thousands of yen) | |||
Profit attributable to owners of parent per | 1,787,786 | 2,119,993 | |
share of common stock (thousands of yen) | |||
Average number of shares of common stock | 37,847,211 | 37,865,200 | |
outstanding during period | |||
Diluted net profit per share | |||
Adjustment for profit attributable to owners | - | - | |
of parent (thousands of yen) | |||
Increase in number of shares of common | 32,980 | 18,393 | |
stock | |||
(Subscription rights to shares) | (32,980) | (18,393) | |
Because there was no dilutive effect, net | - | ||
profit per share was not included in the | |||
calculation of diluted net profit per share | |||
Significant Subsequent Events | |||
Not applicable |
- 21 -
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Poletowin Pitcrew Holdings Inc. published this content on 13 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 April 2021 07:32:01 UTC.