TOKYO, May 20, 2025 (GLOBE NEWSWIRE) -- MEDIROM Healthcare Technologies Inc. (Nasdaq CM: MRM), a holistic healthcare company based in Japan (the "Company" or "MEDIROM"), today announced that for the year ended December 31, 2024, the Company had total revenue of $52,736,000, a 22% increase over total revenue of $43,388,000 for the year ended December 31, 2023. (The Company reports its financial results in Japanese yen and figures presented in this press release in US dollars have been translated for convenience at the exchange rate of Yen 157.37 = US$1.00. See "Convenience Translations to US Dollars" below for more information.)
Net income for 2024 was $878,000, or $0.17 per basic share, a 20% improvement compared with net income of $731,000, or $0.15 per basic share, for 2023.
MEDIROM's improvement in revenue in 2024 was primarily driven by a 23% increase in the Company's Relaxation Salon Segment revenue to $47,317,000, compared with $38,507,000 in 2023.
The Company's increase in net income in 2024 was primarily the result of the rise in total revenue, a decrease in cost of revenues as a percentage of total revenues to 72.9% in 2024 compared with 77.0% during 2023, and a decrease in selling, general and administrative expenses as a percentage of total revenues to 27.0% in 2024 compared with 28.7% in 2023.
As of December 31, 2024, MEDIROM had cash and cash equivalents of $2,093,000, compared with $676,000 as of December 31, 2023. The Company's total indebtedness was $11,925,000 and $9,857,000 as of December 31, 2024 and 2023, respectively.
Net cash used in operating activities was $8,462,000 in 2024 compared with $4,014,000 in 2023. Net cash provided in investing activities was $2,296,000 in 2024 while the Company had net cash used in investing activities of $2,088,000 in 2023. Net cash provided by financing activities was $7,583,000 in 2024 compared with $2,931,000 in 2023.
Basic weighted average common shares outstanding were 5,107,404 in 2024 and 4,882,500 in 2023.
"Thus far in 2025, MEDIROM has announced several notable developments," said Chief Executive Officer Koji Eguchi. "In January, the Company's subsidiary, MEDIROM MOTHER Labs Inc., began providing its remote health monitoring system, REMONY, and charging-free smart tracker device, MOTHER Bracelet$(R)$ , to the Electronics Division of TOPPAN Inc. Also in January, all corporate capital registration procedures under Japanese law were completed with respect to the Company's offering of 2,860,000 common shares represented by American Depositary Shares, generating gross proceeds of approximately $5 million."
"In March, Yasuhiro Hayami, Chief Business Officer of MEDIROM Mother Labs Inc., made a second investment in Mother Labs' Series A financing at a pre-money valuation of approximately $60 million. This new investment followed Mr. Hayami's initial investment in a Series A financing in December 2024. Also in March, MEDIROM obtained a new unsecured short-term bank loan in the amount of approximately $2.4 million, which is being used for repayment of indebtedness to MEDIROM Mother Labs and for general working capital, including MOTHER Bracelet development."
Looking forward to the rest of 2025, Mr. Eguchi said that MEDIROM "will continue to strive to improve revenue growth and bottom-line performance for the year." Mr. Eguchi added, "As for near-term goals, we aim to not only to capture a significant share of the existing Japanese market for relaxation salons but also to expand our Digital Preventative Healthcare business lines through a variety of strategic initiatives and to increase the margin in that segment. As part of this, we intend to increase the number of Lav(R) users via the Specific Health Guidance Program promoted by the Ministry of Health, Labor and Welfare of Japan and expand the billing user base for the upgraded Lav(R) application. We also intend to accelerate the production of our MOTHER Bracelet(R) for large orders from corporate clients."
On April 29, 2025, the Company filed its most recent annual report on Form 20-F, which annual report covers the Company's financial results for the 2024 fiscal year and is available on the Securities and Exchange Commission website at www.sec.gov.
Convenience Translations to US Dollars
The Company's financial results presented in this press release in US dollars have been translated for convenience from Japanese yen at the exchange rate of Yen 157.37 = US$1.00, which was the foreign exchange rate on December 31, 2024, as reported by the Board of Governors of the Federal Reserve System in its weekly release on January 6, 2025. These financial results, as reported by the Company in Japanese yen, are included in the tabular data at the end of this press release.
Webcast
MEDIROM will hold a webcast to discuss the Company's financial results for the fiscal year ended December 31, 2024, on Wednesday, May 21 at 8:30 am Eastern time.
To access the webcast, please go to the following URL five to ten minutes prior to its start:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=9rHZ3uFf
To participate in the webcast, please use the following dial-in numbers:
North America (toll free): 1-844-413-3971 International: 1-412-317-5775 Japan (toll-free): 0066-33-1-33094
Conference Replay:
A replay of this call will be available on May 21, 2025 at 11:30 a.m. ET until June 4, 2025, at 11:59 PM ET.
To access the replay, please dial:
US (toll free): 1-877-344-7529 International (toll): 1-412-317-0088 Canada (toll free): 855-669-9658 Replay Access Code: 9951136
To access the replay using an international dial-in number, please select the following link:
https://services.choruscall.com/ccforms/replay.html
About MEDIROM Healthcare Technologies Inc.
MEDIROM, a holistic healthcare company, operates 307 (as of March 31, 2025) relaxation salons across Japan, Re.Ra.Ku(R) being its leading brand, and provides healthcare services. In 2015, MEDIROM entered the health tech business and launched new healthcare programs using an on-demand training app called "Lav(R) ", which is developed by the Company. MEDIROM also entered the device business in 2020 and has developed a smart tracker "MOTHER Bracelet(R) ". In 2023, MEDIROM launched REMONY, a remote monitoring system for corporate clients, and has received orders from a broad range of industries, including nursing care, transportation, construction, and manufacturing, among others. MEDIROM hopes that its diverse health-related product and service offerings will help it collect and manage healthcare data from users and customers and enable it to become a leader in big data in the healthcare industry. For more information, visit https://medirom.co.jp/en.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements for purposes of the safe harbor provisions under the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may include estimates or expectations about the Company's possible or assumed operational results, financial condition, business strategies and plans, market opportunities, competitive position, industry environment, and potential growth opportunities. In some cases, forward-looking statements can be identified by terms such as "may," "will," "should," "design," "target," "aim," "hope," "expect," "could," "intend," "plan," "anticipate," "estimate," "believe," "continue," "predict," "project," "potential," "goal," or other words that convey the uncertainty of future events or outcomes. These statements relate to future events or to the Company's future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance, or achievements to be different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could, and likely will, affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this press release include:
-- the Company's ability to achieve its development goals for its business
and execute and evolve its growth strategies, priorities and initiatives;
-- the Company's ability to sell certain of its owned salons to investors,
and receive management fees from such sold salons, on acceptable terms;
-- changes in Japanese and global economic conditions and financial markets,
including their effects on the Company's expansion in Japan and certain
overseas markets;
-- the Company's ability to achieve and sustain profitability in its Digital
Preventative Healthcare Segment;
-- the fluctuation of foreign exchange rates, which affects the Company's
expenses and liabilities payable in foreign currencies;
-- the Company's ability to hire and train a sufficient number of therapists
and place them at salons in need of additional staffing;
-- changes in demographic, unemployment, economic, regulatory or weather
conditions affecting the Tokyo region of Japan, where the Company's
relaxation salon base is geographically concentrated;
-- the Company's ability to maintain and enhance the value of its brands and
to enforce and maintain its trademarks and protect its other intellectual
property;
-- the financial performance of the Company's franchisees and the Company's
limited control with respect to their operations;
-- the Company's ability to raise additional capital on acceptable terms or
at all;
-- the Company's level of indebtedness and potential restrictions on the
Company under the Company's debt instruments;
-- changes in consumer preferences and the Company's competitive
environment;
-- the Company's ability to respond to natural disasters, such as
earthquakes and tsunamis, and to global pandemics, such as COVID-19; and
-- the regulatory environment in which the Company operates.
More information on these risks and other potential factors that could affect the Company's business, reputation, results of operations, financial condition, and stock price is included in the Company's filings with the SEC, including in the "Risk Factors" and "Operating and Financial Review and Prospects" sections of the Company's most recently filed periodic report on Form 20-F and subsequent filings, which are available on the SEC website at www.sec.gov. The Company assumes no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Contact:
Investor Relations Team
ir@medirom.co.jp
The financial information below should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 20-F for the year ended December 31, 2024 (the "Audited Financial Statements"), which is available on the Securities and Exchange Commission website at www.sec.gov.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 AND 2023
(Yen in thousands, except share data)
December 31,
---------------------------------
2024 2023
--------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents Yen 329,399 Yen 106,347
Time deposits 6,156 26,502
Accounts receivable-trade, net 1,355,489 621,867
Accounts receivable-other, net 646,207 606,074
Inventories 151,637 139,982
Prepaid expenses and other current assets 217,174 257,932
--------- --- ---------
Total current assets 2,706,062 1,758,704
Property and equipment, net 435,659 451,498
Goodwill 389,131 484,564
Other intangible assets, net 1,139,297 920,700
Investments 87,418 81,542
Long-term accounts receivable-other, net 84,338 95,797
Right-of-use asset - operating lease, net 2,073,763 2,089,402
Lease and guarantee deposits 808,550 848,691
Deferred tax assets, net 285,882 101,636
Other assets 80,571 16,655
--------- --- ---------
Total assets Yen 8,090,671 Yen 6,849,189
=== ========= === =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable Yen 1,014,205 Yen 137,697
Accrued expenses 325,544 1,261,909
Short-term borrowings 491,667 400,000
Current portion of long-term borrowings 620,813 100,415
Income tax payable 58,572 14,888
Current portion of contract liability 53,485 109,307
Advances received 409,710 402,742
Current portion of operating lease
liability 792,781 763,422
Other current liabilities 414,704 370,213
--------- --- ---------
Total current liabilities 4,181,481 3,560,593
Borrowings - net of current portion 764,200 1,050,802
Deposit received 236,179 261,922
Contract liability - net of current portion 36,913 71,134
Operating lease liability - net of current
portion 1,287,509 1,334,630
Asset retirement obligation 378,907 344,346
Other liabilities 17,424 9,801
--------- --- ---------
Total liabilities 6,902,613 6,633,228
--------- --- ---------
Redeemable noncontrolling interests 200,160 _
---- --------- --- ---------
COMMITMENTS AND CONTINGENCIES (See
Note 17 to the Audited Financial
Statements)
SHAREHOLDERS' EQUITY:
Common stock, no par value; 19,899,999
shares authorized; 7,994,450 shares issued
and 7,901,950 shares outstanding and
4,975,000 shares issued and 4,882,500
shares outstanding at December 31, 2024
and 2023 352,523 19,900
Class A common stock, no par value; 1 share
authorized; 1 share issued and 1 share
outstanding at December 31, 2024 and 2023 100 100
Treasury stock, at cost- 92,500 common
shares at December 31, 2024 and 2023 (3,000) (3,000)
Additional paid-in capital 354,605 113,602
Retained earnings 229,040 80,277
--------- --- ---------
Total equity attributable to
shareholders of the Company 933,268 210,879
--------- --- ---------
Noncontrolling interests 54,630 5,082
--------- --- ---------
Total equity 987,898 215,961
--------- --- ---------
Total liabilities and
shareholders' equity Yen 8,090,671 Yen 6,849,189
=== ========= === =========
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(Yen in thousands, except share and per share data)
Years Ended December 31,
-------------------------------------------------
2024 2023 2022
------------------------------------ -------------- ----------------
Revenues:
Revenue from
directly-operated
salons Yen 7,352,868 Yen 5,656,519 Yen 5,396,294
Franchise revenue 792,633 971,027 1,163,998
Other revenues 153,633 200,397 393,765
--------- --- --------- --- ---------
Total revenues 8,299,134 6,827,943 6,954,057
--------- --- --------- --- ---------
Cost of revenues and
operating expenses:
Cost of revenue from
directly-operated
salons 5,575,568 4,552,408 4,129,240
Cost of franchise revenue 316,655 523,330 645,733
Cost of other revenues 160,626 183,337 276,627
Selling, general and
administrative expenses 2,241,515 1,960,447 1,805,490
Impairment loss on
long-lived assets 22,872 _ _
---- --------- --- --------- --- ---------
Total cost of revenues
and operating
expenses 8,317,236 7,219,522 6,857,090
--------- --- --------- --- ---------
Operating income (loss) (18,102) (391,579) 96,967
--------- --- --------- --- ---------
Other income
(expense):
Dividend income 2 2 2
Interest income 8 1,111 6,072
Interest expense (49,745) (36,868) (9,800)
Gain from sales of salons 40,631 413,678 _
Subsidies 13,855 21,376 20,625
Foreign currency exchange
gain 18,121 26,825 14,830
Other, net 42,943 (13,923) 51,078
--------- --- --------- --- ---------
Total other income 65,815 412,201 82,807
--------- --- --------- --- ---------
Income before income tax
expense 47,713 20,622 179,774
Income tax (benefit)
expense (90,478) (94,427) 30,809
Net income 138,191 115,049 148,965
--------- --- --------- --- ---------
Less: Net loss attributable
to noncontrolling
interests (10,572) (355) _
--------- --- --------- --- ---------
Net income
attributable to
shareholders of the
Company Yen 148,763 Yen 115,404 Yen 148,965
=== ========= === ========= === =========
Net earnings per
share attributable
to shareholders of
the Company
Basic Yen 29.13 Yen 23.64 Yen 30.54
=== ========= === ========= === =========
Diluted Yen 28.52 Yen 22.34 Yen 27.23
=== ========= === ========= === =========
Weighted average
shares outstanding
Basic 5,107,405 4,882,501 4,877,405
========= === ========= === =========
Diluted 5,851,516 5,166,653 5,470,655
========= === ========= === =========
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(Yen in thousands)
Years Ended December 31,
-----------------------------------------------------
2024 2023 2022
----------------- ---------------- ----------------
Cash flows from
operating
activities:
Net income Yen 138,191 Yen 115,049 Yen 148,965
Adjustments to
reconcile net
income to net cash
used in operating
activities:
Depreciation and
amortization 290,038 252,595 184,056
Gain from sales of
directly-owned salons (1,697,112) (1,244,240) (858,548)
Change in provision for
credit losses 49,780 1,958 (36,355)
Foreign currency
exchange gain (8,969) (17,402) _
(Gains) losses on
disposal of property
and equipment, net,
other intangible
assets, net and
goodwill 7,109 (2,648) 12,908
Impairment loss
on long-lived
assets 22,872 _ _
Deferred income taxes,
net (188,706) (101,636) _
Other non-cash losses
-- net 53,146 45,718 _
Changes in operating
assets and
liabilities:
Accounts
receivable-trade, net 339,120 580,681 (222,384)
Accounts
receivable-other, net (39,159) 43,382 (210,476)
Inventories (10,612) (25,873) (95,406)
Prepaid expenses and
other current assets (2,362) (530) (181,477)
Lease and guarantee
deposits 46,853 46,652 (27,185)
Accounts payable 876,508 (69,884) (23,318)
Accrued expenses (1,048,548) 97,045 517,714
Income tax payable 43,684 (45,006) 19,173
Contract liability (90,042) (64,999) (82,636)
Advances received (27,939) (104,663) (111,109)
Other current liabilities 22,740 (77,447) 254,742
Deposit received (25,743) (42,656) (24,411)
Other assets and other
liabilities -- net (82,530) (17,833) 50,050
----------- --- ----------- --- ---------
Net cash used in
operating activities (1,331,681) (631,737) (685,697)
----------- --- ----------- --- ---------
Cash flows from
investing
activities:
Purchases of time
deposits (5,656) _ _
Proceeds from
maturities of time
deposits 26,004 _ _
Acquisition of
investments _ (3,094) _
Proceeds from sale
of investment
securities 3,558 _ _
Acquisition of property
and equipment (71,408) (135,840) (120,740)
Proceeds from sale of
property and equipment _ _ 40,620
Acquisition of intangible
assets (493,405) (786,178) (45,761)
Proceeds from sale of
salons 908,419 584,768 851,719
Acquisition of businesses
-- net of cash acquired (21,348) _ (148,000)
Payment received
on short-term
loans receivable _ 113 _
Payment received on
long-term accounts
receivable-other, net 15,229 11,655 2,599
----------- --- ----------- --- ---------
Net cash provided (used
in) by investing
activities 361,393 (328,576) 580,437
----------- --- ----------- --- ---------
Cash flows from
financing
activities:
Proceeds from
issuance of common
stock, net of
issuance costs 608,101 _ _
Proceeds from
issuance of
preferred stock 260,280 _ _
Proceeds from short-term
borrowings 710,000 400,000 _
Repayment of short-term
borrowings (588,333) _ (162,252)
Proceeds from long-term
borrowings 300,000 _ 547,619
Repayment of long-term
borrowings (96,708) (99,084) (45,270)
Proceeds from sale
of subsidiary
stock _ 160,290 _
---- ----------- --- ----------- --- ---------
Net cash provided by
financing activities 1,193,340 461,206 340,097
----------- --- ----------- --- ---------
Net increase (decrease)
in cash and cash
equivalents 223,052 (499,107) 234,837
Cash and cash equivalents
at beginning of year 106,347 605,454 370,617
----------- --- ----------- --- ---------
Cash and cash
equivalents at end
of year Yen 329,399 Yen 106,347 Yen 605,454
--- ----------- --- ----------- ---
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