Joyworks&Co. Submits Unqualified Audit Report, Committed to Enhancing Corporate Value

KOSDAQ-listed company Joyworks&Co. has dispelled concerns over its financial reliability by receiving an "unqualified" opinion in its external audit.

On March 24, Joyworks&Co. announced that it had received an unqualified opinion from its external auditor regarding last year's annual report. On a consolidated basis, the company's revenue for last year was 46 billion won, with an operating loss of 8.8 billion won. On a separate basis, revenue was 44.4 billion won and operating loss was 7.2 billion won.

The company explained that most of these losses stemmed from one-off factors that did not involve cash outflow. The main reasons were losses related to the Hoka offline business rights and full impairment of its entire stake in subsidiary 3DI. Through conservative accounting treatment, the company preemptively reflected potential losses, stating that this limits further financial and accounting uncertainties.

In the previous month's internal settlement announcement, the company had turned to an operating profit on a separate basis in the fourth quarter for the first time in seven quarters. However, during the external audit, conservative accounting for inventory assets was reflected, resulting in a loss. This was due to additional inventory valuation losses being included in the cost of goods sold as part of the offline retail business restructuring process.

This year, the company plans to normalize its performance by expanding its core furniture business. Leveraging the brand recognition of Lady Gagu, Joyworks&Co. aims to strengthen its lineup of high value-added products and improve its profit structure through simultaneous cost reduction efforts. Additionally, the company has set a goal to actively enhance corporate value by turning its performance around and restoring shareholder trust.

A company representative said, "We have resolved the uncertainties raised in the market regarding the audit report by receiving an unqualified audit opinion," and added, "Through the 'Big Bath' that reflects even potential loss factors, we have also addressed financial and accounting uncertainties."

The representative continued, "With the business structure now reorganized, this year we will focus on profitability-oriented management to further enhance corporate value."

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