Treasure Factory : Consolidated Financial Results for the Fiscal Year Ended February 28, 2022 (Japanese Accounting Standards)

Consolidated Financial Results for the Fiscal Year Ended February 28, 2022

(Japanese Accounting Standards)

Company name	Treasure Factory Co., Ltd.
Securities code	3093
Representative	President & CEO, Eigo Nosaka
Contact	Director & Manager-Corporate Planning, Eiji Kobayashi
Telephone	[phone]

April 13, 2022

Listings: Tokyo Stock Exchange

URL:https://www.treasurefactory.co.jp/

Annual General Meeting of Shareholders:	May 25, 2022
Commencement of dividend payments:	May 26, 2022
Submission of the annual securities report:	May 25, 2022
Supplementary documents:	Yes
Financial results briefing:	Yes (for institutional investors and analysts)
(Amounts in millions of yen rounded down to the nearest million yen)

1. Results for the fiscal year ended February 28, 2022 (March 1, 2021 to February 28, 2022)

(1) Operating results

(Percentage figures represent year-on-year changes)

Year ended Feb. 28, 2022 Year ended Feb. 28, 2021

Net salesmillion yen 23,313 18,735

(Note) Comprehensive income:

% 24.4 (2.0)

Year ended Feb. 28, 2022

Year ended Feb. 28, 2021

Operating profitmillion yen 995 106

Ordinary profit

% 831.3 (88.6)

million yen 1,054 174

Profit attributable to owners of parent

% 502.6 (82.4)

million yen 703 (134)

% － －

702 million yen (-%) (136) million yen (-%)

Profit per share	Diluted profit per share	Return on equity	Return on assets	Return on sales
Year ended Feb. 28, 2022 Year ended Feb. 28, 2021	yen 62.78 (11.94)	yen － －	% 15.6 (3.0)	% 9.5 1.8	% 4.3 0.6

(Reference) Share of loss (profit) of entities accounted for using equity method:

Year ended Feb. 28, 2022: - million yen Year ended Feb. 28, 2021: - million yen

(2) Financial position

Total assets	Net assets	Equity capital ratio	Net assets per share
Year ended Feb. 28, 2022 Year ended Feb. 28, 2021	million yen 11,809 10,417	million yen 4,895 4,311	% 40.0 41.1	yen 424.66 382.08

(Reference) Equity capital:

Year ended Feb. 28, 2022

Year ended Feb. 28, 2021

(3) Consolidated cash flows

4,719 million yen 4,284 million yen

Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents at end of period
Year ended Feb. 28, 2022 Year ended Feb. 28, 2021	million yen 870 482	million yen (732) (586)	million yen 274 422	million yen 2,353 1,937

2. Dividends

Dividend per share	Total dividends (Total)	Dividend payout ratio (Consolidated)	Dividend on equity (Consolidated)
End of 1st quarter	End of 2nd quarter	End of 3rd quarter	Fiscal year end	Total
Year ended Feb. 28, 2021 Year ended Feb. 28, 2022	yen － －	yen 2.00 8.00	yen － －	yen 8.00 9.00	yen 10.00 17.00	million yen 113 189	% － 27.1	% 2.5 4.2
Year ending Feb. 28, 2023 (forecast)	－	10.00	－	10.00	20.00	30.0

(Note) The dividend per share at the end of the fiscal year ended February 28, 2022 was changed from 8 yen to 9 yen. Please see

"Notice on Dividend Forecast for Fiscal Year Ending February 28, 2022 (Year End Dividend)" published today (April 13, 2022) for details.

3. Results forecast for the fiscal year ending February 28, 2023 (March 1, 2022 to February 28, 2023)

(Percentage figures represent year-on-year changes)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent	Profit per share
First two quarters Full year	million yen 11,841 25,398	% 10.3 8.9	million yen 247 1,098	% 59.1 10.3	million yen 257 1,112	% 41.8 5.5	million yen 161 742	% 256.3 5.5	yen 14.49 66.76

* Notes

(1) Changes in important subsidiaries during the period (changes in specified subsidiaries that caused changes in the scope of consolidation): Yes

Number of new companies (their names): 1 (Trefac Technologies Co., Ltd.) Number of excluded companies (their names): 1 (Digital Quest Co., Ltd.)

(2) Changes to accounting policies, changes of accounting estimates, and revisions and restatements

• [1] Changes in accounting policies in accordance with changes in accounting principles: None

• [2] Changes in accounting policies other than [1] above: None

• [3] Changes in accounting estimates: None

• [4] Revisions and restatements: None

(3) Number of shares issued and outstanding (common stock)

• [1] Number of shares issued at period-end

  (including treasury shares)

• [2] Treasury shares at period-end

• [3] Average number of shares issued during the period

As of Feb. 28, 2022 11,598,800 shares	As of Feb. 28, 2021 11,598,800 shares
As of Feb. 28, 2022 484,431 shares	As of Feb. 28, 2021 386,131 shares
As of Feb. 28, 2022 11,205,128 shares	As of Feb. 28, 2021 11,304,944 shares

(Reference) Overview of individual results

1. Individual results for the fiscal year ended February 28, 2022 (March 1, 2021 to February 28, 2022)

(1) Individual operating results

(Percentage figures represent year-on-year changes)

Net sales	Operating profit	Ordinary profit	Net profit
Year ended Feb. 28, 2022 Year ended Feb. 28, 2021	million yen 18,026 15,640	% 15.3 (1.0)	million yen 756 360	% 109.8 (60.5)	million yen 828 360	% 129.8 (60.9)	million yen 405 96	% 320.0 (80.8)

Profit per share	Diluted profit per share
Year ended Feb. 28, 2022 Year ended Feb. 28, 2021	yen 36.15 8.53	yen － －

(2) Individual financial position

Total assets	Net assets	Equity capital ratio	Net assets per share
Year ended Feb. 28, 2022 Year ended Feb. 28, 2021	million yen 9,920 8,686	million yen 4,656 4,360	% 45.3 50.2	yen 404.32 388.89

(Reference) Shareholders' equity: Year ended Feb. 28, 2022: 4,493 million yen

Year ended Feb. 28, 2021: 4,360 million yen

* These financial results are outside the scope of audit procedures conducted by a certified public accountant or audit corporation.

* Explanation of the proper use of financial results forecast and other notes

Information relating to forecasts stated in this document was based on information available at the time of publication of the document. Actual results may differ materially from the forecasts due to a range of factors. For further information about the results forecast, please refer to "1. Overview of Operating Results, (4) Outlook" on Page 5 of the attached materials.

.

• ○ Table of Contents (Attachments)

  1. Overview of Operating Results ……………………………………………………………………………………………… 5

  (1) Overview of the Operating Results for the Fiscal Year under Review ………………………………………………… 5

  (2) Overview of the Financial Position for the Fiscal Year under Review ………………………………………………… 8

  (3) Overview of the Cash Flows for the Fiscal Year under Review ………………………………………………………… 8

  (4) Outlook …………………………………………………………………………………………………………………… 9

  2. Basis for the Selection of the Accounting Principles ………………………………………………………………………… 10

  3. Consolidated Financial Statements and Main Notes ………………………………………………………………………… 11

  (1) Consolidated Balance Sheet ……………………………………………………………………………………………… 11

  (2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income …………………………… 13

Consolidated Statement of Income ………………………………………………………………………………… 13

Consolidated Statement of Comprehensive Income ………………………………………………………………… 14

(3) Statement of Changes in Equity ………………………………………………………………………………………… 15

(4) Consolidated Statement of Cash Flows ………………………………………………………………………………… 17

(5) Notes on the Consolidated Financial Statements ………………………………………………………………………… 19

(Notes on the Going Concern Assumption) …………………………………………………………………………… 19

(…Re…la…ted…to…B…us…in…ess…C…om…bi…na…tio…n) …………………………………………… ……………………………………… 19

(Segment Information, etc.) …………………………………………………………………………………………… 20

(Per Share Information) ………………………………………………………………………………………………… 25

(Material Post-Balance Sheet Events) ………………………………………………………………………………… 26

1. Overview of Operating Results

(1) Overview of the Operating Results for the Fiscal Year under Review

During the consolidated fiscal year under review, cases of COVID-19 surged in Japan, when the Delta variant raged over the period from late July and the Omicron variant from January. Yet, as more and more people were vaccinated against COVID-19, restrictions on Japan's economic activities were gradually eased and overall consumption has been picking up.

In these circumstances, demand for purchases by neighborhood reuse stores steadily grew owing to the increased awareness of the importance of reuse as society worked toward the Sustainable Development Goals (SDGs). In regard to sales, there remained considerable needs of consumers to buy daily necessities at bargain prices.

During the fourth quarter, the Treasure Factory Group enjoyed steady business that continued from the third quarter. We achieved an operating profit of ¥414,917 thousand over the months from December to February, which was a record figure for our operating profit earned in the fourth quarter of a cumulative accounting period. On a non-consolidated basis, we opened 17 directly-managed stores during the year, which was a record number, and existing stores also enjoyed steady sales throughout the year. In regard to Group companies, from January 2021, sales of PickUP JAPAN were included in our financial results. In addition, Kindal, which engages in the reuse business, enjoyed increased e-commerce sales that led to a dramatic recovery in sales and profits. On the other hand, selling, general and administrative expenses for new stores increased ¥479,667 thousand year on year as non-consolidated store openings went well, whereas the percentage of selling, general and administrative expenses dropped to 56.8 percent.

Consequently, the results of operations for the consolidated fiscal year under review show net sales of ¥23,313,103 thousand (up 24.4 percent year on year), operating profit of ¥995,329 thousand (up 831.3 percent year on year), ordinary profit of ¥1,054,109 thousand (up 502.6 percent year on year), and net profit of ¥703,470 thousand attributable to owners of the parent (the previous year saw net loss of ¥134,966 thousand attributable to owners of the parent). These results mean that we achieved record profits earned since the switch to consolidated financial settlement.

In terms of profit margins, the gross profit ratio was 61.0 percent (up 0.4 points year on year), selling, general and administrative expenses ratio 56.8 percent (down 3.3 points year on year), operating profit ratio 4.3 percent (up 3.7 points year on year), and ordinary profit ratio 4.5 percent (up 3.6 points year on year).

The results of operations sorted by segment are as stated below.

(Reuse Business)

Consolidated sales increased 24.4 percent year on year, non-consolidated sales increased 15.3 percent year on year, and non-consolidated sales at existing stores increased 7.8 percent year on year. In terms of sales by category, apparel sales, which were greatly affected by the pandemic during the previous year, made a recovery and increased 24.7 percent year on year, and sales of household items increased 14.5 percent year on year. As for electric appliances, sales dropped after the dramatic increase driven by special cash payments provided for residents in Japan during the second quarter of the last year. In addition, the sales of air conditioners and other summer appliances remained below our projection due to lower-than-normal temperatures in August. As a result, sales of electric appliances increased only 3.3 percent year on year. Sales of fashion items and hobby-related items showed significant increases of 46.8 percent and 34.8 percent year on year, respectively, as PickUP JAPAN's sales were included in the results. As for e-commerce sales, we expanded offerings on our e-commerce site to meet the demand for shopping from home, thereby increasing consolidated e-commerce sales by 34.6 percent year on year.

Consolidated purchases of merchandise for the fiscal year under review increased 32.8 percent year on year partly because PickUP JAPAN's purchases were included. Non-consolidated purchases also grew by 20.4 percent. As for non-consolidated purchases by channel, in-store purchases showed a steady increase of 23.9 percent year on year. Home-visit purchases dramatically increased by 34.0 percent year on year, and home-delivery purchases continued favorably and increased 23.4 percent year on year.

During the consolidated fiscal year under review, we opened 7 general reuse stores, 8 fashion reuse stores, and 2 brand-name item reuse stores, the non-consolidated total being 17 stores. In terms of new stores by region, we opened 10 in Kanto, 3 in Kansai, 3 in Chubu, and 1 in Kyushu, maintaining good balance of geographic locations. The numbers of stores at the end of the consolidated fiscal year under review are as follows: 149 directly-managed stores and 4 franchise stores, the non-consolidated total being 153; and 220 stores in total across the Group.

These results added up to net sales of ¥22,690,117 thousand (up 24.2 percent year on year) and the segment's profit of ¥2,476,108 thousand (up 77.7 percent year on year).

(Other)

Cariru, our rental business, successfully captured demand as people attended more weddings after the state of emergency and other related restrictions were lifted, and sales of the rental business increased 195.8 percent year on year.