Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018 [Japanese GAAP](Consolidated)
November 10, 2017
Name of listed company:

SHIP HEALTHCARE HOLDINGS, INC.
Shares listed on: Tokyo Stock Exchange
Code:
3360
URL
http://www.shiphd.co.jp/
Representative:(Title) Chairman and CEO(Name) Kunihisa Furukawa
Contact:(Title) Managing Director(Name) Hiroshi YokoyamaTel.: +81-6-6369-0130
Scheduled date for filing quarterly report: November 13, 2017 Scheduled start date of dividend payments: –Supplementary briefing materials on results: Yes
Briefing on quarterly results:
Yes (for institutional investors and analysts)(All figures are rounded down to the nearest million yen.)

1. Consolidated financial results for the second quarter of the fiscal year ending March 31, 2018 (April
1 – September 30, 2017)(1) Consolidated operating results (cumulative)
Net sales(Percentages represent year-on-year changes.)

Operating profit(Millions yen)%

(Millions yen)%

Q2 FY ending March 2018
187,456
-0.0
6,036
6.6
6,309
7.5
Q2 FY ended March 2017
187,550
40.3
5,661
15.4
5,869
10.3
Note: Comprehensive income: Q2 FY ending March 2018: ¥4,406 million (35.1%); Q2 FY ended
March 2017: ¥3,260 million (29.0%)
Diluted net income
Net income per shareper share

3,625
3,155

14.9
16.4

Q2 FY ending March 2018
Q2 FY ended March 2017%

(Millions yen)

Profit attributable toowners of parent

Ordinary profit
%

(Yen)

(Yen)

71.65
62.57

–
–

(Millions yen)

(2) Consolidated financial condition
Total assets

Net assets(Millions yen)

Equity capital ratio(Millions yen)%

Q2 FY ending March 2018247,759
94,95637.4
FY ended March 2017
263,540
93,632
34.7
Reference: Equity: Q2 FY ending March 2018: ¥92,702 million; FY ended March 2017: ¥91,384 million

2. Dividends
End Q1(Yen)

End Q2

Annual dividends
End Q3Year-end

(Yen)

(Yen)

(Yen)

Total
(Yen)

FY ended March 2017
–
0.00
–
60.00
60.00
FY ending March 2018–
0.00
FY ending March 2018
0.00
–
61.00
61.00
(forecast)
Notes: Revisions made in most recently announced dividend forecasts: None
Breakdown of year-end dividends paid in FY ended March 2017: ordinary dividends: ¥56.00; commemorative
dividends: ¥4.00

3. Forecast of consolidated financial results for fiscal year ending March 31, 2018 (April 1, 2017 – March
31, 2018)(Percentages represent changes from previous year.)
Profit attributable
Net income
Net sales
Operating profit
Ordinary profit
to owners ofper share
parent(Millions yen)
(Yen)
% (Millions yen)
% (Millions yen)
% (Millions yen)%
Full-year
425,000
4.0
16,9005.3
17,1003.8
10,0006.3
197.63
Note: Revisions made in most recently announced forecasts of business performance: None

Notes(1) Changes made in significant subsidiaries during consolidated cumulative quarter under review:(2) Special account processing applied in preparation of quarterly consolidated financial statements:(3) Changes made in accounting policies, accounting estimates, and/or restatements:(i) Changes in accounting policies associated with changes in accounting standards, etc.:(ii) Any changes in accounting policies other than those under (i) above:(iii) Changes in accounting estimates:(iv) Restatements:(4) Number of shares issued and outstanding (common shares)(i) Number of shares issued andQ2 FY ending
FY ended March
50,834,700 shares
outstanding at the end of the period
March 20182017
(including treasury shares)
FY ended March(ii) Number of treasury shares at the end of Q2 FY ending
235,568 shares
March 20182017
the period(iii) Average number of shares during theQ2 FY ending
Q2 FY ended
50,599,132 shares
March 2018
March 2017
period (quarterly cumulative total)

None
None
None
None
None
None
None

50,834,700 shares

235,568 shares

50,428,560 shares* This quarterly summary of financial results is not subject to quarterly review.
* Information on appropriate use of financial forecasts and other special notes:
The forecasts of financial results and other forward-looking statements provided herein are based on
information available to the Company and assumptions considered reasonable at the time this document
was prepared. They are not guarantees that the Company will achieve such forecasts. Actual results may
differ significantly from the forecasts for various reasons. For the assumptions on which financial forecasts
are based, notes on using financial forecasts, and other information, please refer to “Information on
Consolidated Financial Forecasts and Other Forward-looking Statements” on page 3 of the Attached
Materials.

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

 Index of attached materials

1.

2.

Qualitative information on quarterly results ..................................................................................................... 2(1)

Description of business results ................................................................................................................ 2(2)

Analysis of Financial Position ................................................................................................................. 3(3)

Information on consolidated financial forecasts and other forward-looking statements .......................... 3

Quarterly consolidated financial statements and notes thereto ......................................................................... 4(1)

Quarterly consolidated balance sheet ....................................................................................................... 4(2)

Quarterly consolidated statement of income and quarterly consolidated statement ofcomprehensive income ............................................................................................................................ 6(3)

Quarterly consolidated statement of cash flows ....................................................................................... 8(4)

Notes on quarterly consolidated financial statements ............................................................................ 10(Notes on the going concern assumption) .............................................................................................. 10(Notes on marked changes to shareholders' equity) ............................................................................... 10(Segment information, etc.) ................................................................................................................... 101

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

1. Qualitative information on quarterly results(1) Description of business results
During this consolidated cumulative second quarter, the Japanese economy continued to trend toward recovery, backed byvarious factors, including rising capital investment and falling unemployment amid a global economic recovery.
In the healthcare industry in which the Group operates, the need has emerged for investments and reforms based on a
medium- to long-term perspective in light of various factors. These factors include rising medical costs, low birth rates,
and an aging population; changes in the nature and proportion of illnesses; adoption of advanced medicine; and theconcurrent revision of remuneration and nursing care compensation scheduled to take effect next year.
Amid these economic conditions, in the Total Pack Produce business, the Group recorded several large-scale projects,
weighted toward the second half of the fiscal year, the timetable for which has been moved forward. Sales from the
manufacture of rehabilitation equipment have been strong. Additionally, the Group achieved both stronger revenue andstronger income thanks to steady business performance in the Life Care business and Dispensing Pharmacy business.
During this cumulative consolidated second quarter, the various factors noted above resulted in net sales of 187,456
million yen (down 0.0% YoY), operating profit of 6,036 million yen (up 6.6% YoY), ordinary profit of 6,309 million yen(up 7.5% YoY), and profit attributable to owners of the parent of 3,625 million yen (up 14.9% YoY).
Business results by segment are summarized below.
(i) Total Pack Produce business
The Total Pack Produce business recorded the completion of several hospital projects, which had been weighted
toward the second half of the fiscal year overall. These projects were moved forward from plans at the start of the
fiscal year. Additionally, sales from the manufacture of rehabilitation equipment were strong.
As a result, this segment recorded net sales of 31,629 million yen (down 13.3% YoY) and segment profit (operating
profit) of 2,662 million yen (down 19.5% YoY).
(ii) Medical Supply business
Driven by various factors, both revenue and income grew in the Medical Supply business. These factors included theelimination of the effects of advisory costs associated with large-scale M&A activities recorded in the preceding
fiscal year and improvements in the operation of SPD facilities, for which awarded contracts had concentrated in theprevious year.
As a result, this segment recorded net sales of 129,756 million yen (up 2.2% YoY) and segment profit (operating
profit) of 1,578 million yen (up 49.2% YoY).
(iii) Life Care business
Various factors boosted earnings in the Life Care business, including continuing improvements in occupancy rates
and improvements in the performance of loss-generating facilities.
As a result, this segment recorded net sales of 11,168 million yen (up 6.4% YoY) and segment profit (operating
profit) of 406 million yen (up 24.4% YoY).
(iv) Dispensing Pharmacy business
Efforts such as mergers and acquisitions (M&A) and new-store openings bore fruit in the dispensing pharmacy
business, resulting in positive business performance.
As a result, this segment recorded net sales of 12,579 million yen (up 6.1% YoY) and segment profit (operating
profit) of 1,346 million yen (up 28.9% YoY).
(v) Other businesses
Results for other sectors such as veterinary hospital and sales of physical and chemical apparatus were largely asplanned. Results from the security company added to the Group last year also contributed to business performancestarting from the start of this period.
As a result, this segment recorded net sales of 2,322 million yen (up 35.7% YoY) and segment profit (operating
profit) of 143 million yen (up 174.6% YoY).

2

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

(2) Analysis of Financial Position(i) Assets, liabilities, and net assets
Assets at the end of the consolidated cumulative second quarter under review stood at 247,759 million yen, down
15,781 million yen from the end of the previous consolidated fiscal year. The primary reasons for this decline
included increases of 3,846 million yen in the construction in progress account, 2,966 million yen in cash anddeposits, and 1,882 million yen in merchandise and finished goods. Notes and accounts receivable – trade decreased
by 26,599 million yen.
Liabilities stood at 152,803 million yen, down 17,104 million yen from the end of the previous consolidated fiscal
year. Primary reasons for this decline included increases of 2,031 million yen in long-term loans payable and 1,070
million yen in electronically recorded obligations as well as declines of 19,657 million yen and 1,915 million yen,respectively, in notes and accounts payable - trade and income taxes payable.
Net assets were 94,956 million yen, up 1,323 million yen from the end of the previous consolidated fiscal year.
Primary reasons for this increase included increases of 740 million yen in valuation difference on available-for-salesecurities and 3,625 million yen in retained earnings from profit attributable to owners of parent. Payment ofdividends reduced retained earnings by 3,035 million yen.
Due to these factors, the equity capital ratio at the end of the consolidated second quarter under review stood at
37.4% (up 2.7 percentage points from the end of the previous consolidated fiscal year).
(ii) Cash flow
Cash flow from operating activities during the consolidated cumulative second quarter under review stood at acumulative total of 10,019 million yen (up 3,101 million yen from the same period in the previous consolidated fiscal
year). Factors contributing to this figure included a decrease of 26,634 million yen in notes and accounts receivable –trade and the recording of 6,265 million yen in profit before taxes. Notes and accounts payable – trade decreased by
18,814 million yen. We paid 4,348 million yen in income taxes.
Cash flow used in investing activities stood at 6,020 million yen (up 1,587 million yen from the same period in theprevious consolidated fiscal year). Major contributing factors included expenditures of 4,651 million yen on thepurchase of property, plant, and equipment and 1,609 million yen on the purchase of shares of subsidiaries resulting
in change in scope of consolidation. Other factors included the recording of 178 million yen in proceeds fromwithdrawal of time deposits and 177 million yen in the collection of long-term loans receivable.
Cash flow used in financing activities totaled 1,066 million yen (up 5,139 million yen from the same period in theprevious consolidated fiscal year). This resulted mainly from factors such as payment of 3,035 million yen in
dividends and expenditures of 4,755 million yen on repayments of long-term loans payable, while proceeds fromlong-term loans payable totaled 7,300 million yen.
As the result of the above factors, the balance of cash and cash equivalents at the end of the consolidated cumulative
second quarter under review stood at 51,590 million yen, up 2,928 million yen from the end of the previous
consolidated fiscal year.

(3) Information on consolidated financial forecasts and other forward-looking statements
In general, business performance matched financial forecasts made at the start of the period. The consolidated financial
forecasts for the full fiscal year remain unchanged from the forecasts announced on May 12, 2017.

3

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

2. Quarterly consolidated financial statements and notes thereto(1) Quarterly consolidated balance sheet(Unit: Millions yen)
Consolidated second quarter
under review(September 30, 2017)

Previous consolidated
fiscal year
(March 31, 2017)
AssetsCurrent assets
Cash and deposits

49,44452,410Notes and accounts receivable - trade95,657

69,058

Electronically recorded monetary claims - operating

1,920

2,658

Lease investment assets

4,057

3,966

Merchandise and finished goods

11,66913,551Semi-finished goods

1,328

1,992

840

880

9,590

9,727

-78

-72

174,430

154,174

Buildings and structures (net)14,972

14,724Land

15,222

15,446

Construction in progress

5,716

9,562

Real estate for rent (net)

14,186

14,055

Other (net)

3,385

3,288

Total property, plant, and equipment

53,48357,077

Goodwill

10,912

11,159

Other

1,296

1,172

Total intangible assets

12,20812,331Long-term loans receivable

10,172

10,059Other

15,793

16,716

Total allowance for doubtful accounts-2,563-2,600Total investments and other assets

23,402

24,17589,09393,584

Share issuance cost16

0Deferred assets

16

0

263,540

247,759

Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment

Intangible assets

Investments and other assets

Total non-current assets
Deferred assets

Total assets

4SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

(Unit: Millions yen)
Consolidated second quarter
under review(September 30, 2017)

Previous consolidated
fiscal year
(March 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable - trade86,30766,649

Electronically recorded obligations - operating

16,192

17,262

Short-term loans payable

2,020

1,620

Income taxes payable

4,120

2,205

Provision for bonuses

1,905

1,884

Other

15,831

17,108

Total current liabilities

126,377

106,730

Long-term loans payable

36,14638,177

Net defined benefit liability

2,548

2,617

Non-current liabilities

Asset retirement obligations
Other
Total non-current liabilities

362

367

4,472

4,909

43,53046,072

169,908

152,803

Capital stock

15,553

15,553

Capital surplus

23,71623,716

Retained earnings

51,05951,649Treasury shares

-448

-448

89,881

90,470

1,459

2,199

Foreign currency translation adjustment

47

32

Remeasurements of defined benefit plans-3-0

Total liabilities
Net assets
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

1,503

2,231

Non-controlling interests

Total accumulated other comprehensive income

2,247

2,253

Total net assets

93,632

94,956

263,540

247,759

Total liabilities and net assets

5

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

(2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive
incomeQuarterly consolidated statement of income
Consolidated cumulative second quarter(Unit: Millions yen)Previous consolidated
Consolidated cumulative
cumulative second quartersecond quarter under review(April 1 – September 30, 2016) (April 1 – September 30, 2017)
187,550
187,456

Net sales
Cost of sales

167,470

167,116Gross profit

20,07920,340

Sales, general, and administrative expenses

14,417

14,303Operating profit

5,661

6,036

166

163

Non-operating profit
Interest income
Dividend income

73

86

Amortization of negative goodwill

120

116

Reversal of allowance for doubtful accounts

42

1

Other

222

167

Total non-operating profit

624

535

Non-operating expenses
Interest expenses

156

123

Equity in loss of affiliates

71

Foreign exchange losses

115

17

Other

136

119

Non-operating expenses

416

261

5,869

6,309

Gain on sales of property, plant, and equipment–

2

Gain on sales of investment securities

88

–

Other

0

0

Total extraordinary profit

88

2

Loss on sales of property, plant, and equipment–

3

Loss on retirement of property, plant, and equipment

49

10

Loss on valuation of investment securities

32

27

Loss on withdrawal from employees' pension fund

208

–

8

4

Total ordinary profit
Extraordinary profit

Extraordinary losses

Other
Total extraordinary losses

298

46

Total income before income taxes

5,659

6,265

Income taxes - current

2,498

2,372

Income taxes - deferred

-63

208

Total income taxes

2,435

2,580

Profit

3,224

3,684

Profit attributable to noncontrolling interests
Profit attributable to owners of parent

6

69

59

3,155

3,625

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

Quarterly consolidated statement of comprehensive income
Consolidated cumulative second quarter(Unit: Millions yen)Previous consolidated
Consolidated cumulative
cumulative second quartersecond quarter under review(April 1 – September 30, 2016) (April 1 – September 30, 2017)
3,224
3,684

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

85

740

Translation adjustments

-49

-21

Remeasurements of defined benefit plans-02

Other comprehensive income
Comprehensive income

35

721

3,260

4,406

3,191

4,353

69

52

(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to noncontrolling interests

7

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018(3) Quarterly consolidated statement of cash flows(Unit: Millions yen)Previous consolidated
Consolidated cumulative
cumulative second quartersecond quarter under review(April 1 – September 30, 2016) (April 1 – September 30, 2017)
Cash flows from operating activities
Income before income taxes

5,659

6,265

Depreciation and amortization

1,268

1,215

Amortization of goodwill

1,039

846

Amortization of negative goodwill

-120

-116

Equity in (earnings) loss of affiliates

7

1

Increase (decrease) in provision for bonuses

141

-46

Increase (decrease) in allowance for doubtful accounts

-43

-2

Increase (decrease) in net defined benefit liability

44

52Interest and dividend income

-240

-249

Interest expenses
Decrease (increase) in notes and accounts receivable –trade
Decrease (increase) in inventories

156

123

27,224

26,634-434-2,443

Increase (decrease) in notes and accounts payable – trade-24,382-18,814

Net decrease (increase) in lease investment assets

17

91

Other

256

685

Subtotal

10,595

14,244236

246

Interest and dividend income received
Interest expenses paid

-154

-122

Income taxes paid

-3,759-4,348Cash flows from operating activities

6,917

10,019-121-136

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

126

178

Purchase of property, plant, and equipment-3,231-4,6515

3

Purchase of intangible assets

-273

-75

Payments of short-term loans receivable

-16

-22

Collection of short-term loans receivable

16

20

Payments of long-term loans receivable-0-2Collection of long-term loans receivable

187

177

Purchase of investment securities
Proceeds from sales and redemption of investment
securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other

-4

-5

231

101

-1,587-1,609Proceeds from sales of property, plant, and equipment

Cash flows from investing activities

8

235

-0

-4,433-6,020SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

(Unit: Millions yen)Previous consolidated
Consolidated cumulative
cumulative second quartersecond quarter under review(April 1 – September 30, 2016) (April 1 – September 30, 2017)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

8,805

-400

Proceeds from long-term loans payable

1,700

7,300

Repayments of long-term loans payable-3,543-4,755

Redemption of bonds-15–

Cash dividends paid

-2,717-3,035

Dividends paid to noncontrolling interests

-40

-46

Repayments of lease obligations

-108

-123

-6

-4

4,073

-1,066Other
Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents

-103

-3

Net increase (decrease) in cash and cash equivalents

6,454

2,928

Cash and cash equivalents at the beginning of the period

35,51848,661

Cash and cash equivalents at the end of the period

41,97351,5909SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018(4) Notes on quarterly consolidated financial statements(Notes on the going concern assumption)
Not applicable(Notes on marked changes to shareholders' equity)
Not applicable(Segment information, etc.)[Segment information]
I
1

Previous consolidated cumulative second quarter (April 1 – September 30, 2016)
Net sales and income (loss) by reporting segment(Unit: Millions yen)
Adjustments*2

Amountrecorded onquarterly
consolidated
incomestatement*3

Reporting segment
Total packproducebusiness

Medicalsupplybusiness

Life carebusiness

Dispensing
pharmacybusiness

Subtotal

Other*1

Total

Net sales(1) Sales to outside
customers(2) Intersegment
sales or transfers
Subtotal

36,490126,992

10,497

11,858

185,838

1,711

187,550-

187,550

1,228

966

14

915

3,125

13

3,139

-3,139-37,719127,959

10,511

12,773

188,964

1,725

190,689-3,139187,550

3,305
1,058
326
1,044
5,734
52
5,786
-124
5,661
Segment profit
Notes:
1. The “Other” category includes businesses not included in reporting business segments, such as the veterinary hospitalbusiness and sales of physical and chemical apparatus.
2. The figure of −¥124 million yen in adjustments to segment profit includes −¥11 million yen in cancellation of intersegment
transactions and −¥115 million yen in companywide costs not allocated among reporting segments. These companywide
costs consist mainly of parent company operating expenses and sales, general, and administrative expenses not attributable
to individual reporting segments.
3. Segment profit is adjusted against the operating profit reported on the quarterly consolidated statement of income.

2

Information on assets of individual reporting segments
During the consolidated cumulative second quarter under review, Konishi Kyowa Holding Corporation was acquired andadded to the scope of consolidation.
As a result, assets in the medical supplies business segment increased by ¥42,607 million from the end of the previous
consolidated fiscal year.

3

Information on impairment losses on fixed assets or goodwill(Important impairment losses on fixed assets)
Not applicable(Important changes in amounts of goodwill)
During the consolidated cumulative second quarter under review, Konishi Kyowa Holding Corporation was acquired andadded to the scope of consolidation.
As a result, goodwill in the medical supply business segment increased by ¥1,066 million during the consolidated cumulative
second quarter under review.
(Important gains on bargain purchases)
Not applicable10

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2018

II
1

Consolidated cumulative second quarter under review (April 1 – September 30, 2017)

Net sales and income (loss) by reporting segment(Unit: Millions yen)
Adjustments*2

Amountrecorded onquarterly
consolidated
incomestatement*3

187,456-

187,456

42

2,579-2,579-2,364

190,036-2,579187,456

Reporting segment
Total packproducebusiness

Medicalsupplybusiness

Life carebusiness

Dispensing
pharmacybusiness

Subtotal

31,629129,756

11,168

12,579185,134

2,322

720

532

91

1,192

2,537

32,349130,289

11,26013,772

187,671

Other*1

Total

Net sales(1) Sales to outside
customers(2) Intersegment
sales or transfers
Subtotal

2,662
1,578
406
1,346
5,994
143
6,137
-101
6,036
Segment profit
Notes:
1. The “Other” category includes businesses not included in reporting business segments, such as the veterinary hospitalbusiness, sales of physical and chemical apparatus, and the security business.
2. The figure of −¥101 million yen in adjustments to segment profit includes −¥4 million yen in cancellation of intersegment
transactions and −¥101 million yen in companywide costs not allocated among reporting segments. These companywide
costs consist mainly of parent company operating expenses and sales, general, and administrative expenses not attributable
to individual reporting segments.
3. Segment profit is adjusted against the operating profit reported on the quarterly consolidated statement of income.

2

Information on impairment losses on fixed assets or goodwill
No important impairment losses on fixed assets, important changes in amounts of goodwill, or important gains on bargain
purchases were recognized during the consolidated cumulative first quarter under review.

11