Falcom’s 2017 Q3 Financial Report – Falcom’s Upward Trend for 2017 Continues

On 8/9/2017, Falcom released their earnings report for Quarter 3 (10/1/2016 ~ 6/30/2017) on their IR report page. The actual report can be found listed at the bottom of the article in PDF form. While Q3 is still a relatively quiet period for Falcom, as they are building up for their final release of the financial year in Q4, Q3 still saw several big releases. In Japan, Ys VIII was released for PlayStation 4, and both Trails in the Sky the 3rd for Steam and Tokyo Xanadu for PS Vita were released in the west.

Timeframe: 10/1/2016 ~ 6/30/2017
Percentage represents fluctuations between the quarters over the previous year.
Presented in 1 million yen increments
All conversions are approximates based on $1 = 109.9 yen (current on 8/9/2017)

 

	Total Sales		Operating Profit		Operating Income		Quarter Net Income
2017 Q3 Results	976 ($8.9m)	45.6%	361 ($3.3m)	143.6%	361 ($3.3m)	141.2%	267 ($2.4m)	154.7%
2016 Q3 Results	670 ($6.1m)	? 27.4%	148 ($1.3m)	? 62.9%	149 ($1.4m)	? 64.5%	104 ($0.9m)	? 63.0%

Additional information and number details/explanations can be found below the cut.

(In 1 yen increments)

	Q3 Net Income Per Share	Potential Stock Adjustment On Q3 Net Income Per Share
2017 Q3	25.98	—
2016 Q3	10.20	—

 

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Financial Condition

	Total Assets (1 mil yen)	Net Asset Value (1 mil yen)	Capital-to-Asset Ratio	Net Assets per Share (1 yen)
2017 Period, Q3	4,277	4,035	94.3%	392.56
2016 Period	4,155	3,840	92.4%	373.57

(Reference) Net Worth — 2017 Q3: 4,035 million yen. 2016: 3,840 million yen.

 

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State of Dividends
In 1 yen increments

	Yearly Dividends
	End of Q1	End of Q2	End of Q3	End of Term	Total
2016 Period	—	0.00	—	7.00	7.00
2017 Period	—	0.00	—
2017 Forecast				5.00	5.00

Annotation: No dividend forecast adjustments based on recent announcements.

General dividend breakdown is 5 yen per share, with a commemorative additional 2 yen per share.

 

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EOY Forecast for 2017

Total Sales		Operating Profit		Operating Income		EOY Net Income		Net Profit per Share
1,800m yen	22.9%	750m yen	28.4%	750m yen	28.3%	500m yen	29.2%	48.64 yen

Qualitative Data Regarding the Quarterly Balance Sheet

1. Explanation of Current Business Results

This company works to create game contents and services overflowing with originality and charm, and has drawn in many customers world-wide on many different platforms.

For the manufactured goods branch during the Q3 period, users had a good reaction to the products that were released by the company itself. Games like Ys VIII -Lacrimosa of Dana- on the PlayStation Vita (released in July 2016), and Tokyo Xanadu eX+ on PlayStation 4 (released in September 2016) continued to see sales over the year. Furthermore, in May 2017, Ys VIII -Lacrimosa of Dana- was released to PlayStation 4, as well.

Further more, sales continue with Trails of Cold Steel and Trails of Cold Steel II, which have seen a total of over 1,000,000 copies sold cumulatively. This is leading in to the release of Sen no Kiseki III on the PlayStation 4, which has seen over 60,000,000 units sold worldwide.

With all of this, the sales for manufactured goods for Q3 2017 come out to 333 million yen. (A 54% increase from last year.)

Regarding licensed goods, for portable consoles Ys VIII -Lacrimosa of Dana- was released to the PlayStation Vita in Korea, and Gurumin 3D was released to the 3DS in both English and Japanese. In February 2017, Ys Origin was released in Japanese and other languages. In March 2017, Tokyo Xanadu on the PlayStation Vita and Tokyo Xanadu eX+ on PlayStation 4 were both released in Chinese, with a Korean release following up in April 2017.

In March 2017, Ys VIII -Lacrimosa of Dana- was released in both Chinese and Korean simultaneously with the Japanese release. Additionally, Ys Origin was released in Japanese and other languages to the PlayStation Vita.

To add to this, older Falcom titles are being released in English for PC, as well as continued development for the online Story RPG Akatsuki no Kiseki, and other collaborations, like Hortensia Saga, Seven Knights, Taiko no Tatsujin V Version, Lapinous Chronicle, and other titles.

With all of this, the sales for licensed goods for Q3 2017 come out to 642 million yen. (A 41.4% increase from last year.)

2. Explanation Regarding Financial Condition

(Total Assets)
Total assets at the end of Q3 are primarily affected by accounts receivable having 106 million yen, totaling the assets to 4,227 million yen. (An increase of 2.9% from the previous fiscal year.)

(Debts)
This Q3 term ended with primarily a decrease in accounts payable, totally to 2 million yen, and a decrease in unpaid government taxes coming to 88 million yen. The end total of debts is 242 million yen. (A decrease of 23.2% from the previous fiscal year.)

(Net Worth)
The net worth for Q3 comes from 71 million yen of dividend payments and 267 million yen from a quarterly net income. This totals to 4,035 million yen. (Up 5.1% from the previous fiscal year.)

3. Information Regarding Earnings Forecast and Predictions

There is nothing to announce as there are no expected changes to the earnings forecast released on 11/10/2016.

Detailed Financial Summary

Quarterly Balance Sheet

In thousand yen increments

	Prev. Year (2016)	Current Year (2017) As of 6/30/2017
Property Division
Current Assets
Cash on Hand	3,812,687	3,812,639
Accounts Receivable	137,653	244,312
Manufactured Goods	1,301	1,158
Raw Materials	1,994	1,899
Misc.	42,278	50,396
Current Assets Sum	3,995,916	4,110,405
Fixed Assets
Tangible Fixed Assets	4,564	8,184
Intangible Fixed Assets	3,210	1,717
Assets from Additional Investments	152,185	157,445
Sum of Fixed Assets	159,961	167,358
Total Assets	4,155,877	4,277,763
Debt Division
Current Liabilities
Accounts Payable	22,952	20,462
Unpaid Corporate Taxes	150,838	62,316
Reward Provisions	20,250	6,000
Miscellaneous	121,549	153,547
Sum of Current Liabilities	315,590	242,326
Total Debts	315,590	242,326
Net Worth Division
Shareholder Equity
Capital Stock	164,130	164,130
Capital Surplus	319,363	319,363
Profit Surplus	3,356,910	3,552,061
Treasury Stock	? 117	? 117
Sum of Shareholder Equity	3,840,286	4,035,437
Sum of Net Worth	3,840,286	4,035,437
Liabilities and Net Worth Sum	4,155,877	4,277,763

Quarterly Profit and Loss Statement

In thousand yen increments

	Prev. Q3 (2016) 10/1/2015~6/30/2016	Current Q3 (2017) 10/1/2016~6/30/2017
Sales	670,629	976,722
Cost of Sales	92,804	83,151
Sales Profit	577,825	893,571
Sales Expenses and Admin Costs	429,228	531,628
Operating Profit	141,596	361,942
Earnings Outside of Business
Received Interest	332	18
Received Dividends	572	1,155
Profits Excluded from Unpaid Dividends	702	1,046
Sum of Earnings Outside of Business	1,606	2,220
Expenses Outside of Business
Currency Exchange Losses	378	2,818
Sum of Expenses Outside of Business	378	2,818
Operating Income	149,825	361,344
Quarterly Income Before Taxes	149,825	361,344
Corporation, Municiple, and Other Enterprise Taxes	26,094	99,838
Taxes and Adjustments	18,837	? 5,603
Sum of Corporate Taxes	44,932	94,234
Quarterly Net Profit	104,892	267,110

[ Falcom IR Report Page ]
[ Falcom 2017 Q3 Financial Statement (PDF) ]