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HAPPINET CORPORATION: Lack of Hit Products Causes Weak Earnings During FY3/13, Estimates Call for Sales and Profits to Rise During FY3/14

HAPPINET CORPORATION: Lack of Hit Products Causes Weak Earnings During FY3/13, Estimates Call for Sales and Profits to Rise During FY3/14

TOKYO--(BUSINESS WIRE)-- HAPPINET CORPORATION (TOKYO:7552), one of Japan's leading distributors of toys, video and music software, video games, and amusement products, recorded declines in both sales and profits due to a lack of hit products and weakness in the overall packaged toy arising from competition from social games. As a result, sales, and operating, ordinary and net incomes declined by 10.7%, 38.8%, 38.8% and 18.2% year-over-year to JPY176.7, JPY2.9, JPY3.0, and JPY2.0 billion respectively during fiscal year March 2013. Declines in sales and profits were recorded across all business segments for the above mentioned reasons, but the Toy Business demonstrated the smallest margin of decline of 3.4% year-over-year to JPY74.6 billion due in part to favorable trends in Bandai character products such as "Kamen Rider Wizard." The largest sales decline of 19.6% year-over-year was recorded in Visual and Music Business to JPY44.8 billion due to weakness in the packaged market arising from the popularization of online distribution.

HAPPINET CORPORATION (7552)   FY3/12   FY3/13   yy chg   FY3/14E   yy chg
Sales 198,021 176,757 -10.7% 180,000 1.8%
Operating Income 4,855 2,973 -38.8% 3,400 14.4%
Margin 2.5% 1.7% na 1.9% na
Ordinary Income 5,032 3,081 -38.8% 3,500 13.6%
Net Income 2,458 2,011 -18.2% 2,000 -0.5%
Earnings Per Share 109.73 89.75 na 89.06 na
Dividend Per Share   *27.50   22.50   na   22.50   na

(Units: Million Yen / EPS and Dividend in Yen, adjusted for stock split / E = estimates)
* Dividend per share in FY3/12 includes a commemorative dividend of JPY5.00 per share.

At the end of the current term, total consolidated assets declined by JPY1.3 from the previous term end to JPY53.0 billion due in part to JPY282 and JPY730 million declines in tangible and intangible fixed assets. Total consolidated liabilities also fell by JPY2.8 to JPY29.7 billion due primarily to a JPY2.7 billion decline in current liabilities. At the same time net assets grew by JPY1.4 to JPY23.2 billion on the back of a JPY1.3 billion increase in retained earnings.

Despite anticipation of difficult operating conditions to persist during fiscal year March 2014, HAPPINET expects efforts to expand its share of the market and cultivate new businesses to allow sales and operating income to rise by 1.8% and 14.4% year-over-year to JPY180.0 and JPY3.4 billion respectively. Dividends are expected to remain in line with the current term at JPY22.5 per share during FY3/14.

HAPPINET CORPORATION was originally founded in 1969 and is now one of the Japan's leading distributors of toys, video and music software, video games, and amusement products. The current name HAPPINET was assumed in 1991 when it underwent a merger with two other Bandai wholesalers with the goal of implementing strategies to cope with changing distribution systems to match changes in the market.

Kaoru Hosaka for information regarding HAPPINET CORPORATION
Investment Bridge Co., Ltd.
+81-3-5842-5765 (Japanese correspondence only) (English and Japanese correspondence)

KEYWORDS:   United Kingdom  Europe  Asia Pacific  Ireland  Japan


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