Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 [J - GAAP]
May 12, 2023
Name of listed company: ARTNATURE INC . Listed on: Tokyo Stock Exchange
Securities code : 7823 URL: http s ://www.artnature.co.jp/english/index.html
Representative: Yoshikata Igarashi, Chairman and President
Contact: Hiroaki Inoue, General Manager, Finance & Accounting Division Senior
Corporate Officer TEL: + 81 - 3 - 3379 - 3334
Scheduled date of the ordinary general meeting of shareholders: June 22, 2023
Scheduled date of the start of dividends distribution: June 2 3 , 202 3
Scheduled date of the filing of the financial report: June 23, 2023
Supplementary documents for this summary of financial statements: No ne
Financial results explanatory meeting: Yes ( for institutional investors and analysts )
(Figures shown are rounded down to the nearest million yen.)
1. Consolidated results for the fiscal year ended March 31, 2023 (April 1, 2022 – March 31, 2023)
( 1) Consolidated operating results (Percentage figures show change from the previous year.)
Net s ales Operating i ncome Ordinary i ncome
Net income attributable to
owners of the parent
company
Millions of yen % Millions of yen % Millions of yen % Millions of yen %
Year ended March 31, 2023 43,209 6.9 3,573 18.3 3,534 16.3 1,874 55.7
Year ended March 31, 2022 40,437 12.7 3,020 56.3 3,038 51.5 1,204 43.3
Note: Comprehensive income: Year ended March 31, 2023: ¥ 1,949 million (54.8 %) Year ended March 31, 2022: ¥ 1,259 million (28.5 %)
Net i ncome per s hare Diluted net income
per share
Return on shareholders’
equity
Ordinary income to
total assets
Operating income to
net sales
Yen Yen % % %
Year ended March 31, 202 3 58.00 57.29 7.5 7.5 8.3
Year ended March 31, 2022 37.51 37.09 4.9 6.6 7.5
( Reference) Equity in earnings of affiliates: Year ended March 31, 2023: ¥ ‒ million Year ended March 31, 202 2 : ¥ ‒ million
( 2) Consolidated financial position
Total a ssets Net a ssets Shareholders ’ e quity r atio Net a ssets per s hare
Millions of yen Millions of yen % Yen
As of March 31, 2023 47,956 25,927 53.5 790.26
As of March 31, 2022 46,510 24,596 52.4 758.47
( Reference) Equity capital: As of March 31, 202 3 : ¥ 25,662 million As of March 31, 2022: ¥ 24,367 million
( 3) Consolidated cash flows
Cash f lows from o perating
a ctivities
Cash f lows from i nvesting
a ctivities
Cash f lows from f inancing
a ctivities
Cash and c ash e quivalents
at e nd of y ear
Millions of yen Millions of yen Millions of yen Millions of yen
Year ended March 31, 2023 2,927 (1,417) (924) 20,082
Year ended March 31, 2022 2,505 (1,183) (924) 19,452
2. Dividends
Dividend s per s hare
Total d ividends
( annual)
Dividend
p ayout r atio
( consolidated)
Dividends on
n et a ssets
( consolidated)
First
q uarter -
end
Second
q uarter -
end
Third
q uarter -
end
Year - end Annual
Yen Yen Yen Yen Yen Millions of yen % %
Year ended March 31, 2022 ‒ 14.00 ‒ 14.00 28.00 899 74.7 3 .6
Year ended March 31, 2023 ‒ 14.00 ‒ 14.00 28.00 908 48.3 3 .6
Year ending March 31, 2024
(forecast) ‒ 14.00 ‒ 14.00 28.00 42.5
3. Consolidated financial forecast for the fiscal year ending March 31, 2024 (April 1, 2023 – March 31, 2024)
(Percentage figures show changes from the previous year.)
Net s ales Operating i ncome Ordinary i ncome
Net income attributable
to owners of the parent
company
Net i ncome per
s hare
Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen
Full y ear 44,763 3.6 3,743 4.8 3,821 8.1 2,140 14.2 65.92
Notes:
(1) Significant changes to subsidiaries during the term (Transfers of specific subsidiaries with changes in the scope of consolid ation): None
( 2 ) Changes in accounting policies, accounting estimates and restatement of revisions
1) Changes in accounting polici es due to revision of accounting standards, etc.: Yes
2) Changes in accounting policies other than 1): None
3) Changes in accounting estimates: None
4) Restatement of revisions: None
Note: More information is pr ovided on page 14 of the supplementary mater ials, “4. Consolidated financial statements and related notes, (5)
Notes on consolidated financial statements (Changes in accounting policies).”
(3) Number of outstanding shares (common stock):
1) Number of shares issued and
outstanding (including treasur y
shares)
As of March 31, 202 3 34,393,200 shares As of March 31, 202 2 34,393,200 shares
2) Number of treasury shares As of March 31, 202 3 1,919,239 shares As of March 31, 202 2 2,266,339 shares
3) Average number of shares issued
and outstanding in each period Year ended March 31, 202 3 32,321,935 shares Year ended March 31, 202 2 32,110,073 shares
* This kessan tanshin document is outside the scope of the audit procedures conducted by certified public accountants
or the independent auditor.
* Explanation of the appropriate use of financial results forecasts; other important items
(Cautionary statement regarding forward-looking statements, etc.)
Forward-looking statements in this document, including forecasts, are based on information available at the time of disclosure and on
certain assumptions deemed reasonable by the Company. Actual results may differ materially from forward-looking statements due to a
number of factors. For more information about these assumptions and other conditions that form the basis of these forecasts, please see
page 3 of the supplementary materials, “1. Analysis of operating results, etc., (4) Business forecasts.”
1
Contents
1. Analysis of operating results, etc . ................................ ................................ ................................ ................................ ............ 2
(1) Analysis of operating results ................................ ................................ ................................ ................................ ............... 2
(2) Analysis of financial position ................................ ................................ ................................ ................................ .............. 2
(3) Analysis of cash fl ows ................................ ................................ ................................ ................................ ........................ 2
(4) Business for ecasts ................................ ................................ ................................ ................................ ............................... 3
(5) Basic policy for the distribution of profits and dividends for fiscal 202 3 and fiscal 202 4 ................................ .................. 3
2. Management policies ................................ ................................ ................................ ................................ ................................ 4
(1) Basic management policy ................................ ................................ ................................ ................................ ................... 4
(2) Management indicators and targets ................................ ................................ ................................ ................................ ..... 4
(3) Medium - and long - term management strategy ................................ ................................ ................................ ................... 4
(4) Issues to be resolved ................................ ................................ ................................ ................................ ........................... 4
3. Basic position on the selection of accounting s tandards ................................ ................................ ................................ ........ 5
4. Consolidated financial statements and relat ed notes ................................ ................................ ................................ ............. 6
(1) Consolidated balance sheet ................................ ................................ ................................ ................................ ................. 6
(2) Consolidated statements of income and comprehensive income ................................ ................................ ........................ 8
(Consolidated statements of i ncome) ................................ ................................ ................................ ................................ .. 8
(Consolidated statements of comprehensive income) ................................ ................................ ................................ ......... 9
(3) Consolidated statements of changes in n et assets ................................ ................................ ................................ ............. 1 0
(4) Consolidated statements of ca sh flows ................................ ................................ ................................ .............................. 1 2
(5) Notes on consolidated financial statements ................................ ................................ ................................ ...................... 1 4
( Notes on the going concern assumption ) ................................ ................................ ................................ ......................... 1 4
( Changes in accounting policies ) ................................ ................................ ................................ ................................ ...... 1 4
( Segment information, etc. ) ................................ ................................ ................................ ................................ ............... 1 4
( Per share information ) ................................ ................................ ................................ ................................ ..................... 1 6
( Significant subsequent events ) ................................ ................................ ................................ ................................ ......... 1 6
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
2
1. Analysis of operating results, etc.
( 1) Analysis of operating results
In fiscal 2023, which ended March 31, 2023, although there were signs of a recovery in consumer spending due to the easing
of restraints on a range of activities that had been enforced because of the spread of COVID - 19, the situation surrounding the
Japanese economy remained uncertain because of upward press ure on prices chiefly due to the surge in crude oil and raw
material prices, which was attributable to the prolonged war in Ukraine, and changes in exchange rates affecting consumer
spending.
Against this backdrop, ARTNATURE INC. and its consolidated subsi diaries (the ARTNATURE Group) saw the
ARTNATURE Challenge Plan, the medium - term management plan, mark its final year. Under the plan, we have been
implementing six priority challenge initiatives, as we did in the previous year: (1) grow the Group’s earning s, (2) develop new
business fields, (3) reinforce recruitment, (4) cultivate human resources, (5) encourage dialogue with capital markets, and ( 6)
drive business innovation, with the aim of strengthening the ARTNATURE Group’s position in existing businesse s and further
expanding new businesses to build the foundations for a new ARTNATURE capable of opening up the next phase in the
Group’s history. At the same time, we have continued to take comprehensive measures to prevent COVID - 19 infections in our
busine ss activities.
As a result, consolidated net sales in fiscal 2023 increased 6.9% year on year to ¥43,209 million. In terms of profits, opera ting
income stood at ¥3,573 million (increasing 18.3 % year on year), and ordinary income came to ¥3,534 million (inc reasing
16.3 % year on year) due to an increase in net sales. Net income attributable to owners of the parent company was ¥1,874
million (increasing 55.7 % year on year).
Men’s business
Sales in the men’s business increased 2.5% year on year, to ¥23,237 million, as a result of the sale of new products and the
promotion of customer retention programs, among other initiatives.
Ladies’ business
Sales in the ladies ’ business climbed 10.5% year on year, to ¥13,023 million, mainly reflecting strong sales of new products
and an increase in the number of exhibition and trial fitting events held as well as that of products sold.
Ladies’ ready - made wigs business
Sales in the ladies’ ready - made wigs business rose 16.5% year on year, to ¥5,172 million, chiefly reflect ing an increase in
the number of products sold due to a rise in the number of customers visiting retail facilities in which the Company’s stores
are located.
( 2) Analysis of financial position
( Assets )
As of the fiscal year - end, total assets were ¥47,956 million, an increase of ¥1,445 million compared with the end of the
previous fiscal year. Current assets increased ¥1,288 million, mainly due to increases in cash and deposits and merchandise
and finished goods, and non - current assets increased ¥156 millio n, primarily reflecting an increase in investments and other
assets.
(Liabilities )
As of the fiscal year - end, liabilities totaled ¥22,028 million, an increase of ¥114 million compared with the end of the
previous fiscal year. This largely reflected an incr ease of ¥311 million in current liabilities mainly due to increases in contract
liabilities and the provision of bonuses, partly offset by a decrease of ¥196 million in non - current liabilities due to a decline
in other non - current assets and other factors.
( Net a ssets )
As of the fiscal year - end, net assets were ¥25,927 million, an increase of ¥1,331 million compared with the end of the
previous fiscal year. This largely reflected an increase in retained earnings.
(3) Analysis of cash flows
As of the fiscal year - end, cash and cash equivalents (cash) totaled ¥20,082 million, an increase of ¥629 million compared
with the end of the previous fiscal year. The Company’s cash flow position and factors behind the changes in cash flows
were as follows:
( Cash flows f rom operating activities )
Operating activities provided net cash of ¥2,927 million, compared with ¥2,505 million in the previous fiscal year. This
mainly reflected income before income taxes of ¥3,173 million, depreciation of ¥902 million, impairment loss of ¥360
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
3
million, an increase in the provision for bonuses of ¥199 million, an increase in net defined benefit liability of ¥132 milli on,
versus income taxes paid of ¥1,464 million, an increase in inventories of ¥493 million, and a decrease in advances rece ived
of ¥317 million.
( Cash flows from investing activities )
Investing activities used net cash of ¥1,417 million, compared with ¥1,183 million in the previous fiscal year. This mainly
reflected purchase of property, plant and equipment of ¥1,000 million, purchase of intangible assets of ¥217 million, and
payments of leasehold and guarantee deposits of ¥125 million.
( Cash flows from financing activities )
Financing activities used net cash of ¥924 million, compared with ¥924 million in the previous fiscal ye ar. This mainly
reflected cash dividends paid of ¥903 million.
The Group’s cash flow - related indicators are as follows:
Year ended March 31 , 201 9 20 20 20 2 1 2022 2023
Equity ratio (%) 57.4 58.3 55.8 52.4 53.5
Market value - based equity ratio (%) 48.0 48.2 50.4 49.7 53.1
Cash flows to interest - bearing debt (%) 9.0 ‒ ‒ ‒ ‒
Interest coverage ratio (times) 1,161.7 1,980.5 492.6 ‒ ‒
Notes: The above indicators are calculated as follows:
Equity ratio: Equity capital / total assets
Market value - based equity ratio : Market capitalization / total assets
Cash flow to interest - bearing debt: Interest - bearing debt / cash flow from operating activities
Interest coverage ratio: Cash flows from operating activities / interest payments
* All indicators are calculated u sing consolidated financial data.
* Market capitalization is calculated by multiplying the number of shares outstanding at the fiscal year end (excluding treasur y
shares) by the closing share price at the fiscal year end.
* Cash flow is “Cash flows from operating activities” shown on the consolidated statements of cash flows.
* Interest - bearing debt is all liabilities on which interest is paid shown under liabilities on the consolidated balance sheet.
Interest payments are “Interest paid” shown on the co nsolidated statement of cash flows.
( 4 ) Business forecasts
In fiscal 2024, which ends March 31, 2024, the Group’s operating environment is likely to remain challenging, due mainly
to intensifying competition from companies in the same sector and from new market entrants from peripheral and other
sectors.
Against this backdrop, the Group has formulated a new medium - term management plan, the ARTNATURE Advance Plan,
and began to implement it in fiscal 2024. In the course of the three years of the plan, we wil l solidify our top - rated brand
status in the hair industry, enhance the Group’s business field to include new businesses associated with beauty and health
care, and move forward to the next stage as we seek to create a new ARTNATURE capable of opening up t he next phase in
the Group’s history.
For fiscal 2024, we forecast consolidated net sales of ¥44,763 million, up 3.6% year on year, operating income of ¥3,743
million, up 4.8%, ordinary income of ¥3,821 million, up 8.1%, and net income attributable to owne rs of the parent company
of ¥2,140 million, up 14.2%.
( 5 ) Basic policy for the distribution of profits and dividends for fiscal 202 3 and fiscal 202 4
ARTNATURE Group believes that returning profits to shareholders is one of the most important management issues. The
Company’s basic policy is to pay stable dividends to shareholders while ensuring it retains sufficient internal reserves to
reinforce the Gr oup’s management base and financial position and to invest in the future expansion of business.
In line with this policy, the Company will pay a full - year dividend of ¥28 per share for fiscal 2023, comprised of an interim
dividend of ¥14 per share and a y ear - end dividend of ¥14 per share.
For fiscal 2024, the Company plans to pay a full - year dividend of ¥28 per share, comprised of an interim dividend of ¥14
per share and a year - end dividend of ¥14 per share.
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
4
2 . Management policies
( 1) Basic management po licy
As a comprehensive hair consultancy business, ARTNATURE strives to aid all of our customers and address their concerns
about their hair by providing them with the highest - quality products and services that are tailored to their needs. Our
management p hilosophy is to foster a culture of hair that satisfies customers.
To ensure the realization of this philosophy, the Group is reinforcing its product development capabilities, upgrading its
manufacturing framework, and improving its sales service system i n areas such as counseling, customer support and styling
skills, while also striving to operate its business in a way that earns the trust of shareholders, investors and all other
stakeholders by strengthening its compliance system and actively disclosing information about the Group.
( 2) Management indicators and targets
The Group is working to expand its comprehensive hair consultancy business and boost profitability and capital efficiency
by increasing sales and promoting efficient management, and focuses on three key performance indicators: sales, ordinary
margin (ratio of ordinary income to net sales) and return on equity (ROE).
Our goal is to increase sales steadily by steadily upgrading our sales structure. We also aim to steadily increase the o rdinary
margin by overhauling our earnings structure to create an efficient and effective framework for earnings. Regarding ROE,
we will make efficient use of the capital entrusted to us by shareholders with the goal of improving corporate value.
( 3) Medi um - and long - term management strategy
Based on the above management indicators and targets, the Group has formulated the ARTNATURE Advance Plan, its
medium - term management plan that began to be implemented in fiscal 2024. In the course of the three years o f the plan,
we will solidify our top - rated brand status in the hair industry, enhance the Group’s business field to include new businesses
associated with beauty and health care, and move ahead to the next stage as we seek to create a new ARTNATURE capable
of opening up the next phase in the Group’s history, thereby achieving consolidated net sales of ¥44,763 million, the ratio
of ordinary income to net sales of 8.5% and ROE of 8.3% for the fiscal year ending March 31, 2024.
( 4) Issues to be resolved
In the domestic hair products and services market, the ARTNATURE Group’s main business field, we forecast rising
demand due to trends such as the aging of the population, delayed retirement, growth in the number of women in the
workplace and rising interest i n anti - aging treatments. However, we anticipate intensifying competition from companies in
the same sector and from companies in peripheral sectors. In this environment, we plan to work on the following key issues
to generate stable growth and boost corpor ate value.
First, we will increase the number of customers in domestic and overseas markets. We will generate new demand by
developing and regularly launching the highest - quality products and services in line with customer needs, and by devising
advertisin g campaigns that resonate more closely with customers. In both the men’s category and the ladies’ category, our
goal is to generate stable growth by focusing on improving customer satisfaction to increase the number of true
ARTNATURE fans, while also imple menting a range of initiatives to strengthen customer retention. In the ladies’ ready -
made wigs business, we seek to further increase earnings by strengthening collaboration with the custom - made wig business.
In hair care product sales, we also plan to inc rease earnings by broadening the lineup with new products and widening the
choice that we provide, and by expanding sales channels, such as increasing the number of e - commerce sites that sell our
products. In overseas markets, we will work to expand our bu siness by increasing brand awareness and implementing sales
initiatives tailored to local markets in China, Singapore, Thailand and Malaysia to capture potential demand.
Second, we will target business opportunities in new fields outside the Group’s existi ng businesses. We will continue to
take the necessary measures to make sure that the affordable wig business, pharmaceutical sales business and medical
support business are on a steady path of growth, while also developing and enhancing businesses in new f ields related to
beauty and health care mainly by seeking M&A opportunities in Japan and overseas and launching new businesses, with a
view to driving the Group’s continued growth.
Third, from a human resources perspective, we will maintain and increase th e number of highly capable employees. We
have developed a range of initiatives to increase the motivation of all our employees and ensure they reach their maximum
potential. We are implementing diversity management, including acquiring Kurumin Mark certifi cation as a company
supporting childcare under the Act on Advancement of Measures to Support Raising Next - Generation Children. Also, amid
the current focus on workstyle reforms, we emphasize work - life balance through initiatives such as eliminating long
ov ertime hours and providing support that enables employees to balance work with family commitments, while also actively
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
5
promoting health management. We plan to introduce more initiatives to foster a shared sense of unity with our employees
and create more r ewarding workplaces.
Fourth, we are working to enhance our ability to meet the diverse needs of our customers and strengthen the planning and
management capabilities of our head office departments. As of March 31, 2023, 1,830 employees, or roughly 80% of t he
Company’s permanent employees, were qualified barbers or hairdressers. We aim to improve the basic capabilities of these
employees – their technical skills, customer service skills and product proposal capabilities – to better address customer
needs and cultivate human resources who empathize with and earn the trust of customers. It is our goal to cultivate a
workforce of employees working in non - sales divisions that are capable of formulating a wide range of business plans and
managing the Group compani es. To develop experts in these fields, we will establish training programs and create a
framework that supports employees in their own education and improvement efforts.
Fifth, our goal is to maintain and expand the value of the ARTNATURE Group over the m edium - and long - term. The Group
has been pursuing initiatives for sustainability. From a sales system perspective, we will improve labor productivity such
as sales per employee through a range of means, such as improving operating efficiency through invest ments in systems.
Similarly, from a production system perspective, we will bolster production stability through the decentralization of
production bases and the stockpiling of raw materials, among other means. From a management perspective, we will
improve the efficiency of administrative operations mainly through the renewal of systems and various internal programs.
In addition, we will implement sustainability items (each item related to climate change, respect for human rights and human
capital included in the corporate governance code, while also developing successors for key posts in headquarter
departments.
3 . Basic position on the selection of accounting standards
The Group uses Japanese accounting standards, as many of its shareholders, creditors, b usiness partners and other
stakeholders are based in Japan, and there is limited need for the Group to procure funds from overseas.
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
6
4 . Consolidated financial statements and related notes
( 1) Consolidated balance sheets
( Millions of yen)
As of March 31,
2022
As of March 31,
2023
Assets
Current assets
Cash and deposits 19,546 20,180
Accounts receivable – trade 3,066 3,044
Securities 23 25
Merchandise and finished goods 3,050 3,379
Work in process 182 203
Raw materials and supplies 1,195 1,364
Others 964 1,116
Allowance for doubtful accounts (5) (4)
Total current assets 28,021 29,310
Non-current assets
Property, plant and equipment
Buildings and structures 13,604 13,859
Accumulated depreciation (8,825) (9,183)
Buildings and structures, net 4,779 4,675
Machinery equipment and vehicle 186 210
Accumulated depreciation (126) (151)
Machinery equipment and vehicle, net 60 58
Land 3,491 3,495
Construction in progress 7 ‒
Others 3,183 3,535
Accumulated depreciation (2,827) (2,969)
Others, net 356 566
Total property, plant and equipment 8,694 8,795
Intangible assets
Goodwill 233 54
Others 441 504
Total intangible assets 674 558
Investments and other assets
Investment securities 2,099 2,023
Deferred tax assets 3,944 4,150
Lease and guarantee deposits 2,551 2,545
Others 917 1,119
Allowance for doubtful accounts (393) (547)
Total investments and other assets 9,119 9,291
Total non - current assets 18,488 18,645
Total assets 46,510 47,956
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
7
( Millions of yen )
As of March 31,
2022
As of March 31,
2023
Liabilities
Current liabilities
Accounts payable – trade 320 318
Accounts payable – other 2,288 2,205
Income taxes payable 929 995
Contract liabilities 1,378 1,635
Refund liabilities 475 474
Advances received 6,502 6,184
Provision for bonuses 1,053 1,252
Provision for directors’ bonuses 145 145
Provision for product warranties 36 43
Others 1,108 1,292
Total current liabilities 14,237 14,548
Non-current liabilities
Net defined benefit liability 4,170 4,165
Asset retirement obligations 1,547 1,545
Others 1,959 1,769
Total non - current liabilities 7,676 7,480
Total liabilities 21,914 22,028
Net assets
Shareholders’ equity
Capital stock 3,667 3,667
Capital surplus 3,557 3,613
Retained earnings 18,307 19,278
Treasury shares (1,272) (1,077)
Total shareholders’ equity 24,260 25,481
Accumulated other comprehensive income
Valuation difference on available - for - sale securities 62 10
Foreign currency translation adjustment 14 46
Remeasurements of defined benefit plans 29 124
Total accumulated other comprehensive income 106 181
Subscription rights to shares 217 251
Non - controlling interests 12 12
Total net assets 24,596 25,927
Total liabilities and net assets 46,510 47,956
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
8
( 2) Consolidated statements of income and comprehensive income
( Consolidated statements of income )
( Millions of yen )
Year ended
March 31, 2022
Year ended
March 31, 2023
Net sales 40,437 43,209
Cost of sales 12,698 14,053
Gross profit 27,739 29,156
Selling, general and administrative expenses 24,719 25,582
Operating income 3,020 3,573
Non - operating income
Interest income 46 53
Foreign exchange gains 83 62
Others 89 44
Total non - operating income 219 160
Non - operating expenses
Provision of allowance for doubtful accounts 157 154
Guarantee commission 27 23
Others 16 21
Total non - operating expenses 201 199
Ordinary income 3,038 3,534
Extraordinary income
Gain on sales of non - current assets 0 0
Total extraordinary income 0 0
Extraordinary losses
Loss on retirement of non - current assets 0 0
Impairment loss 545 360
Loss on valuation of investment securities 171 –
Total extraordinary losses 716 360
Income before income taxes 2,322 3,173
Income taxes – current 1,312 1,525
Income taxes – deferred (197) (228)
Total income taxes 1,114 1,296
Net income 1,207 1,877
Net income attributable to non - controlling interests 3 2
Net income attributable to owners of the parent company 1,204 1,874
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
9
( Consolidated statements of comprehensive income )
( Millions of yen )
Year ended
March 31, 2022
Year ended
March 31, 2023
Net income 1,207 1,877
Other comprehensive income
Valuation difference on available - for - sale securities (33) (52)
Foreign currency translation adjustments 20 29
Remeasurements of defined benefit plans 65 95
Total other comprehensive income 51 72
Comprehensive income 1,259 1,949
(Comprehensive income attributable to)
Owners of the parent company 1,255 1,949
Non - controlling interests 3 0
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
10
( 3) Consolidated statements of changes in net assets
Year ended March 31, 2022
( Millions of yen )
Shareholders’ equity
Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’
equity
Balance at the beginning of the
period 3,667 3,558 19,075 ( 1,289 ) 25,011
Cumulative effects of changes in
accounting policies ( 1,072 ) (1,072 )
Restated balance 3,667 3,558 18,002 (1,289 ) 23,938
Change of items during the period
Dividends from surplus (898 ) (898 )
Net income attributable to
owners of the parent company 1,204 1,204
Disposal of treasury shares (0 ) 17 16
Net changes of items other than
shareholders’ equity
Total change of items during the
period – (0 ) 305 17 321
Balance at the end of the period 3,667 3,557 18,307 (1,272 ) 24,260
Accumulated other comprehensive income
Subscription
rights to
shares
Non -
controlling
interests
Total net
assets
Valuation
difference on
available - for -
sale securities
Foreign
currency
translation
adjustment
Remeasurements
of defined
benefit plans
Total
accumulated
other
comprehensive
income
Balance at the beginning of the
period 96 (5 ) (35 ) 55 180 8 25,255
Cumulative effects of changes in
accounting policies (1,072 )
Restated balance 96 (5 ) (35 ) 55 180 8 24,182
Change of items during the period
Dividends from surplus ( 898 )
Net income attributable to
owners of the parent company 1,204
Disposal of treasury shares 16
Net changes of items other than
shareholders’ equity (33 ) 20 65 51 37 3 92
Total change of items during the
period (33 ) 20 65 51 37 3 414
Balance at the end of the period 62 14 29 106 217 12 24,596
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
11
Year ended March 31, 2023
( Millions of yen )
Shareholders’ equity
Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’
equity
Balance at the beginning of the
period 3,667 3,557 18,307 (1,272) 24,260
Change of items during the period
Dividends from surplus (903) (903)
Net income attributable to
owners of the parent company 1,874 1,874
Disposal of treasury shares 55 194 250
Net changes of items other than
shareholders’ equity
Total change of items during the
period – 55 970 194 1,221
Balance at the end of the period 3,667 3,613 19,278 (1,077) 25,481
Accumulated other comprehensive income
Subscription
rights to
shares
Non -
controlling
interests
Total net
assets
Valuation
difference on
available - for -
sale securities
Foreign
currency
translation
adjustment
Remeasurements
of defined
benefit plans
Total
accumulated
other
comprehensive
income
Balance at the beginning of the
period 62 14 29 106 217 12 24,596
Change of items during the period
Dividends from surplus (903)
Net income attributable to
owners of the parent company 1,874
Disposal of treasury shares 250
Net changes of items other than
shareholders’ equity (52) 31 95 74 34 0 109
Total change of items during the
period (52) 31 95 74 34 0 1,331
Balance at the end of the period 10 46 124 181 251 12 25,927
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
12
( 4) Consolidated statements of cash flows
(Millions of yen)
Year ended
March 31, 2022
Year ended
March 31, 2023
Cash flows from operating activities
Income before income taxes 2,322 3,173
Depreciation 911 902
Impairment loss 545 360
Amortization of goodwill 172 93
Increase (decrease) in allowance for doubtful accounts 157 153
Increase (decrease) in provision for bonuses 57 199
Increase (decrease) in provision for directors’ bonuses 15 –
Increase (decrease) in provision for product warranties 4 6
Increase (decrease) in provision for point card certificates (107) –
Increase (decrease) in net defined benefit liability 185 132
Interest income (46) (53)
Loss on retirement of non - current assets 0 0
Loss (gain) on sales of non - current assets ( 0 ) ( 0 )
Decrease (increase) in notes and accounts receivable – trade (147) 28
Decrease (increase) in inventories (754) (493)
Increase (decrease) in notes and accounts payable – trade (9) (4)
Loss (gain) on valuation of investment securities 171 –
Increase (decrease) in advances received 37 (317)
Others 357 154
Subtotal 3,871 4,336
Interest income received 48 54
Income taxes paid (1,433) (1,464)
Income taxes refund 0 –
Subsidies received 19 1
Net cash provided by (used in) operating activities 2,505 2,927
Cash flows from investing activities
Payments into time deposits (116) (126)
Proceeds from withdrawal of time deposits 115 125
Purchase of property, plant and equipment (787) (1,000)
Proceeds from sales of property, plant and equipment 0 0
Purchase of intangible assets (96) (217)
Long - term loan advances (150) (100)
Collection of long - term loans receivable 0 0
Payments for lease and guarantee deposits (170) (125)
Proceeds from collection of lease and guarantee deposits 70 131
Others (50) (107)
Net cash provided by (used in) investing activities (1,183) (1,417)
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
13
( Millions of yen )
Year ended
March 31, 2022
Year ended
March 31, 2023
Cash flows from financing activities
Repayments of lease obligations (26) (20)
Cash dividends paid (898) (903)
Net cash provided by (used in) financing activities (924) (924)
Effect of exchange rate change on cash and cash equivalents 70 43
Net increase (decrease) in cash and cash equivalents 468 629
Cash and cash equivalents at beginning of period 18,984 19,452
Cash and cash equivalents at end of period 19,452 20,082
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
14
( 5) Notes on consolidated financial statements
( Notes on the going concern assumption )
There is no related information.
(Changes in accounting policies)
The Company decided to start applying the Implementation Guidance on Accounting Standard for Fair Value Measurement
(ASBJ Guidance No. 31, June 17, 2021; hereinafter the "Fair Value Measurement Impleme ntation Guidance") at the
beginning of the fiscal year, while also implementing the new accounting policy stipulated in the Fair Value Measurement
Implementation Guidance according to the provisional treatment provided for in Paragraph 27 - 2 of the Fair Val ue
Measurement Implementation Guidance into the future. This application has no impact on the financial statements.
( Segment information , etc.)
Segment information
1. Overview of reportable segments
The Group’s reportable segments are the components of the Group for which separate financial information is available.
These segments are regularly reviewed to enable the Company’s Board of Directors to decide how to allocate resources and
assess operating performance.
The Group develops business strategies and conducts business activities related to hair products and services for general
customers based on the gender of the customer.
Consequently, the Group has classified its operations into three reportable segments: the men’s business, the ladies’ business
and the ladies’ ready-made wigs business. In the men’s business, the Company supplies male customers with custom-made
wigs and other products and services. In the ladies’ business, the Company supplies female customers with custom-made
wigs and other products and services. In the ladies’ ready-made wigs business, the Company supplies female customers
with ready-made wigs and other products and services.
2. Method used to calculate sales, income (loss), assets, liabilities and other items by reportable segment
Accounting policies for the reportable segments are the same as those described in “Basic important matters for preparing
the consolidated financial statements.”
Intersegment sales are based on prices determined through negotiations.
3. Information regarding sales, income (loss), assets, liabilities and other items by reportable segment
Year ended March 31, 2022
( Millions of yen )
Reportable segment
Others
Note 1 Total Adjustment
Note 2
Carried on
consolidated
financial
statements
Note 3
Men’s
business
Ladies’
business
Ladies’
ready - made
wigs
business
Total
Net sales
Sales to
external
customers
22,660 11,786 4,441 38,888 1,548 40,437 – 40,437
Intersegment
sales and
transfers
– – – – 2,230 2,230 (2,230 ) –
Total 22,660 11,786 4,441 38,888 3,779 42,667 (2,230 ) 40,437
Segment income 14,775 8,106 3,645 26,527 1,331 27,858 (119 ) 27,739
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
15
Year ended March 31, 2023
( Millions of yen )
Reportable segment
Others
Note 1 Total Adjustment
Note 2
Carried on
consolidated
financial
statements
Note 3
Men ’ s
business
Ladies ’
business
Ladies ’
ready - made
wigs
business
Total
Net sales
Sales to
external
customers
23,237 13,023 5,172 41,433 1,775 43,209 – 43,209
Intersegment
sales and
transfers
– – – – 2,419 2,419 (2,419) –
Total 23,237 13,023 5,172 41,433 4,195 45,628 (2,419) 43,209
Segment income 14,888 8,803 4,150 27,842 1,443 29,286 (130) 29,156
Note s : 1. Others is not a reportable segment and mainly includes manufacturing subsidiaries.
2. Details of adjustments are as follows:
Segment income
( Millions of yen )
Year ended March 31, 2022 Year ended March 31, 202 3
Intersegment eliminations* (119) (130)
Total (119) (130)
* Intersegment eliminations are the elimination of inventory asset adjustments related to intersegment transactions, etc.
3. Segment income has been adjusted to reconcile with the gross profits in the consolidated financial statements.
4. Assets and liabilities have not been shown, as they are not allocated to each segment.
5. Ad justments to reconcile total segment income for reportable segments with operating income in the consolidated financial
statements
( Millions of yen )
Year ended March 31, 202 2 Year ended March 31, 202 3
Total for reportable segments 26,527 27,842
Others Note 1 1,331 1,443
Total 27,858 29,286
Adjustment Note 2 (119 ) (130 )
Gross profit in consolidated financial statements 27,739 29,156
Selling, general and administrative expenses 24,719 25,582
Operating income in consolidated financial statements 3,020 3,573
ARTNATURE INC. (7823) Financial Results for the Fiscal Year Ended March 31, 2023
16
( Per share information )
(Yen)
Year ended March 31, 202 2 Year ended March 31, 202 3
Net assets per share 758.47 Net assets per share 790.26
Net income per share 37.51 Net income per share 58.00
Diluted net income per share 37.09 Diluted net income per share 57.29
Note: The basis for calculating net income per share and diluted net income per share is as follows:
Year ended March 31, 202 2 Year ended March 31, 202 3
Net income per share
Net income attributable to owners of the parent company
(millions of yen) 1,204 1,874
Amounts not attributable to owners of common stock
(millions of yen) – –
Net income attributable to owners of the parent company
associated with common stock
(millions of yen)
1,204 1,874
Average number of shares of common stock during fiscal year
(thousands of share) 32,110 32,321
Diluted net income per share
Adjustment to net income attributable to owners of the parent
company (millions of yen) – –
Increase in number of shares of common stock (thousands of
share) 356 402
[of which, subscription rights to shares] [ 356 ] [ 402 ]
Summary of residual shares not included in calculations of
diluted net income per share due to no dilutive effect – –
Note: Treasury shares, which are excluded from the number of shares issued and outstanding at the end of the fiscal year for the purposes
of calculating “Net assets per share,” include shares of the Company held by Custody Bank of Japan, Ltd. (trust account E) (5 15,400
shares as of March 31, 2022, 317,200 shares as of March 31, 2023). In addition, treasury shares, which are excluded from the
average number of shares during the fiscal year for the purposes of calculating “Net income per share” and “Diluted net incom e per
share,” include shares of the Company held by C ustody Bank of Japan, Ltd. (trust account E) (522,898 shares during fiscal year
ended March 31, 2022, 443,809 shares during fiscal year ended March 31, 2023).
(Significant subsequent events )
There is no related information.