Business results for the third quarter of the year ending March 31, 2022
Operating results
Net sales |
Operating income |
Ordinary income |
Net income attributable to equities of parent |
|||||
---|---|---|---|---|---|---|---|---|
Million yen | % | Million yen | % | Million yen | % | Million yen | % | |
Third quarter, year ending March 31, 2022 |
19,058 | 5.9 | 1,515 | 153.3 | 1,583 | 90.4 | 1,272 | 145.0 |
Third quarter, year ending March 31, 2021 |
17,990 | -33.6 | 598 | -67.0 | 831 | -58.1 | 519 | -59.3 |
(Note) Comprehensive income
Third quarter of the year ended March 31, 2022: ¥1,271 million (138.4%)
Third quarter of the year ended March 31, 2021: ¥533 million (-58.4%)
Net income per share | Diluted net income per share | |
---|---|---|
Yen | Yen | |
Third quarter, year ending March 31, 2022 |
86.08 | – |
Third quarter, year ending March 31, 2021 |
35.14 | – |
(Note1) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the first quarter of the fiscal year ending March 31, 2022. Figures for the third quarter of the fiscal year ending March 31, 2022 are figures after the accounting standards, etc. have been applied.
(Note2) We changed the results presentation method from the first quarter of the current fiscal year, so net sales and operating income for consolidated operating results (cumulative) are recorded as figures after recombination reflecting the display method and the rate of change in the same quarter of the previous year.
Financial position
Total assets | Net assets | Shareholders’ equity ratio | |
---|---|---|---|
Million yen | Million yen | % | |
Third quarter, year ending March 31, 2022 |
40,468 | 31,186 | 77.1 |
Year ended March 31, 2021 | 41,084 | 30,662 | 74.6 |
(Reference) Shareholders’ equity
Third quarter of the year ended March 31, 2022: ¥31,186 million
Year ended March 31, 2021: ¥30,662 million
Dividends
Annual dividends(Yen) | |||||
---|---|---|---|---|---|
First quarter-end |
Second quarter-end |
Third quarter-end |
Year-end | Annual | |
Year ended March 31, 2021 | – | 10.00 | – | 30.00 | 40.00 |
Year ended March 31, 2022 | – | 25.00 | – | ||
Year ended March 31, 2022 (Forecast) |
30.00 | 55.00 |
Forecast earnings for the year ending March 31, 2022
Net sales | Operating income |
Ordinary income |
Net income attributable to owners of parent |
Net income per share |
|||||
---|---|---|---|---|---|---|---|---|---|
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |
Entire – year | 26,000 | 11.4 | 850 | 40.0 | 1,000 | 1.3 | 650 | 6.1 | 43.97 |
Qualitative Information Regarding the Consolidated Results
1. Analytical Review of Operating Results
During the first three quarters of the current consolidated fiscal year (April 1, 2021 to December 31, 2021), restrictions were imposed repeatedly on economic activities in Japan by declarations of a state of emergency due to the spread of COVID-19 infections and the frequent issue of priority measures to prevent the spread of infections. However, new infections decreased with the increase in the rate of COVID-19 vaccinations and improvements in economic activity were apparent. On the other hand, there are concerns about infections spreading again due to new variants, and the impacts of production stoppages due to semiconductor shortages, delivery delays and soaring procurement prices, and the future remains uncertain.
In the pachinko industry that our group is involved in, pachinko parlors are continuing to operate while taking thorough measures against infections, and the state of operation of all pachinko machines (compared with the same period of the previous year) averaged 99% during the period from October to December. With regard to the state of operation of pachinko machines by type, hit models supported highly by fans have been introduced to the market continuously, and the average for the period from October to December trended steadily at 103%. As for pachislot machines, deliveries of Unit 6.2, which is equipped with new game features, increased, but conditions remain difficult, with the average for the period from October to December at 94% (comparison using the company’s “DK-SIS” data).
Next, the replacement of old rule machines with new rule machines, with a deadline for installation of the end of January 2022, has advanced steadily for pachinko machines at 88% at the end of December 2021, up 8% from the end of September, but progress for pachislot machines, whose operation has grown slowly, has been sluggish at 71%, up 13% from the end of September, but still 17% less than pachinko machines (in-house estimates).
The trend for large capital investment such as the opening of new pachinko parlors and large-scale remodeling work to be restrained continued, but small-scale remodeling work combined with the replacement of old rule machines with new rule machines tended to increase. As for future trends in the industry, the return of fans is expected, centered on pachinko machines, which are in steady operation, but the future is uncertain due to concerns about the recurring spread of COVID-19 infections, an increase in the number of pachinko parlor closures, and delays in the supply of pachinko machines and equipment due to semiconductor shortages.
In this market environment, in information systems business we strengthened proposals for use of “X (Kai)” AI hall computers and promoted system upgrades for the replacement of existing hall computers. In information disclosure terminals for fans, we added a function for communicating countdown data until the start of “play time” to players in an easy-to-understand way and made efforts to expand sales. In pachinko parlor management support services (stock-type business), we promoted the spread of “Market-SIS,” a business area analysis service that provides information on the state of customer attraction in the surrounding area, and released “ClarisLink,” a cloud-type chain store management system, and a “Smart Entry System,” a web entry lottery service that realized game machine reservations for the first time in the industry, as new services.
In control systems business, we worked on cost reductions by strengthening development management and improving operational efficiency through a major reorganization implemented at the start of the term, and also promoted proposal activities aimed at game machine manufacturers to win new contracts. Further, in addition to existing pachinko machines, we manufactured two pachislot machine models in order to expand our business areas.
As a result, cumulative results in the third quarter of the current consolidated fiscal year showed sales of ¥19.058 billion (5.9% up YoY), an operating profit of ¥1,515 million (153.3% up YoY), an ordinary profit of ¥1,583 million (90.4% up YoY) and a quarterly net profit attributable to parent company shareholders of ¥1,272 million (145.0% up YoY).
It should be noted that we have changed the results presentation method from the first quarter of the current consolidated fiscal year so comparisons with the same quarter of the previous fiscal year have been made using the figures in the quarterly consolidated financial statements for the third quarter of the previous fiscal year after the rearrangement.
Business results by segment
Information System Segment
During the first three quarters of the current consolidated fiscal year, pachinko parlor management companies prioritized the replacement of old rule machines with new rule machines, with a deadline for installation of the end of January 2022. In addition, there were also moves to investigate trends in “smart game machines” that are scheduled to enter the market from June this year. In this market environment, with regard to “sales of products for pachinko parlors,” sales of “REVOLA,” an information disclosure terminal for fans, and “BiGMO PREMIUM” trended above last term in association with an increase in small-scale remodeling work changing part of pachinko parlors from pachislot machines to pachinko machines, but product supply could not keep up with customer demand due to the shortage of semiconductors and we had to adjust the number of units sold.
As a result, in this business field we recorded sales of ¥14.727 billion (7.1% up YoY) and a segment profit of ¥2.151 billion (26.6% up YoY).
Control System Segment
While the games machine market turned gradually towards recovery during the first three quarters of the current consolidated fiscal year, sales of “display and control units for games machine manufacturers” for pachinko machines trended well. In addition, sales were above the same period of the previous year as we started contract manufacturing of pachislot machines as an expansion of our business areas, but “parts and other” sales were below the same period of the previous year.
As a result, in this business field we recorded sales of ¥4.341 billion (2.4% up YoY) and segment profit of ¥484 million (compared with a segment loss of ¥1 million in the same period of the previous year).
(Note) Intersegment transactions are included in the amounts for the segment business performance.
2. Analytical Review of Financial Position
Total assets at the end of the third quarter of the current consolidated fiscal year decreased by ¥616 million from the end of the previous consolidated fiscal year to ¥40.468 billion because of decreases in goods and products due to the impact on purchasing plans of factors including the prolongation of the impact of COVID-19 infections and the shortage of semiconductors, and decreases in tangible and intangible fixed assets due to factors including the recording of depreciation expenses.
Liabilities at the end of the third quarter of the current consolidated fiscal year were ¥9.281 billion, ¥1.140 billion lower than at the end of the previous consolidated fiscal year due to the repayment of short-term borrowings and other factors.
Despite dividend payments, etc., our net assets at the end of the third quarter of the current consolidated fiscal year were ¥31.186 billion, ¥524 million higher than at the end of the previous consolidated fiscal year due to the recording of a quarterly net profit attributable to parent company shareholders. Shareholders’ equity ratio was 77.1% (2.5 points up from the end of the previous consolidated fiscal year).
3. Explanation of Earnings Forecast such as Consolidated Business Results Forecast
Results for the period to the end of the third quarter of the current consolidated fiscal year trended above the consolidated results forecasts for the full-term for all profits due to business improvements including a review of work-styles and greater efficiency, but we are leaving the consolidated results forecast for the full term ending March 2022 announced on May 13, 2021 as it is due to uncertainties such as the resurgence of COVID-19 infections due to new variants, product shortages due to the semiconductor shortage and soaring procurement prices. We will promptly disclose any revisions that need to be made to the consolidated results forecasts in future.
In addition, there have been no material changes to the content disclosed in the latest securities report (submitted on June 30, 2021) concerning risks that may have an impact on results.