Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020 [Japanese GAAP](Consolidated)
November 8, 2019
Name of listed company:

SHIP HEALTHCARE HOLDINGS, INC.
Shares listed on: Tokyo Stock Exchange
Code:
3360
URL
https://www.shiphd.co.jp/
Representative:(Title) Chairman and CEO(Name) Kunihisa Furukawa
Contact:(Title) Executive Director(Name) Hiroshi YokoyamaTel.: +81-6-6369-0130
Scheduled date for filing quarterly report: November 13, 2019 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, 2020
(April 1 – September 30, 2019)(1) Consolidated operating results (cumulative)
Net sales(Percentages represent year-on-year changes.)
Profit attributable toOrdinary profit
owners of parent

Operating profit(Millions yen)%

(Millions yen)%

Q2 FY ending March 2020
242,232
19.8
10,08160.9
Q2 FY ended March 2019
202,146
7.8
6,265
3.8
Note: Comprehensive income: Q2 FY ending March 2020: ¥ 7,106million (40.9%)
Q2 FY ended March 2019: ¥5,044 million (14.5%)
Diluted net income per
Net income per share
share
Q2 FY ending March 2020
Q2 FY ended March 2019

(Yen)

(Yen)

140.54
79.64

127.65–(Millions yen)%

(Millions yen)%

10,999
6,603

66.6
4.7

6,693
3,994

67.6
10.2

(2) Consolidated financial condition
Total assets

Net assets(Millions yen)

Equity capital ratio(Millions yen)%

Q2 FY ending March 2020
304,572
102,101
32.6
FY ended March 2019299,21297,734
31.9
Reference: Equity: Q2 FY ending March 2020: ¥99,174 million; FY ended March 2019: ¥95,420 million

2. Dividends
End Q1(Yen)

End Q2(Yen)

Annual dividends
End Q3Year-end

Total

(Yen)

(Yen)

(Yen)

FY ended March 2019–
0.00–
FY ending March 2020–
0.00
FY ending March 2020–
(forecast)
Notes: Revisions made in most recently announced dividend forecasts: None

70.00

70.00

75.00

75.00

3. Forecast of consolidated financial results for fiscal year ending March 31, 2020
(April 1, 2019 – March 31, 2020)(Percentages represent changes from previous year.)
Profit attributable to Net income per
Net sales
Operating profit
Ordinary profit
owners of parent
share(Millions yen)
(Yen)
% (Millions yen)
% (Millions yen)
% (Millions yen)%
Full-year
466,000
4.9
18,5003.1
19,3004.1
11,8005.0
247.74
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 and outstanding
Q2 FY endingat the end of the period (including treasury March 2020
stock)(ii) Number of treasury stock at the end of the Q2 FY ending
March 2020
period(iii) Average number of shares during theQ2 FY ending
March 2020
period (quarterly cumulative total)

None
None
None
None
None
None
None

50,834,700 shares

FY ended March
2019

50,834,700 shares

3,204,627 shares

FY ended March
2019

3,204,535 shares

47,630,121 shares

Q2 FY ended
March 201950,159,194 shares* This quarterly summary of financial results is not subject to quarterly review by a Certified Public Accountant or an
audit firm.
* 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 theforecasts 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 forwardlooking 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, 2020

 Index of attached materials

1.

2.

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

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

Analysis of Financial Position ................................................................................................................. 2(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, 2020

1. Qualitative information on quarterly results(1) Description of business results
The Japanese economy maintained strong earnings by steady growth in employment and personal income during theconsolidated cumulative second quarter. Nevertheless, due to uncertainties in the world economy, including influence toconsumer spending by increase of consumption tax, and intensifying trade friction between the US and China, the global
economic outlook remains uncertain.
Within the healthcare industry in which the Group operates, reform of healthcare system is continuing against thebackground of increasing medical fee due to advancement of medical care and declining birthrate and aging society,which require a wide-ranging collaboration and efficient business structure over medium to long term in medical
institutions and industry.
Under such economic condition, the Group recorded some projects ahead of schedule in the Total Pack Produce business,and there was a last-minute demand before the consumption tax increase in the Total Pack Produce business and Medical
Supply business. In addition, as a result of opening new stores and continuing efforts to improve business efficiency in
Dispensing Pharmacy business, the Group achieved results that exceeded the initial forecast.
During this cumulative consolidated second quarter, the various factors noted above resulted in net sales of 242,232
million yen (up 19.8% YoY), operating profit of 10,081 million yen (up 60.9% YoY), ordinary profit of 10,999 million
yen (up 66.6% YoY), and profit attributable to owners of the parent of 6,693 million yen (up 67.6% YoY).
Business results by segment are summarized below.
(i) Total Pack Produce business
The Total Pack Produce business, some large-scale projects exceeded the plan during the first two quarters, inaddition, there was a last-minute demand before the consumption tax increase in other projects and replacement ofequipment.
As a result, this segment recorded net sales of 53,857 million yen (up 42.7% YoY) and segment profit (operating
profit) of 5,406 million yen (up102.7% YoY).
(ii) Medical Supply business
The Medical Supply business recorded steady growth due to collaboration with the Total Pack Produce business,
contract for new SPD facilities and efficiency in operating SPD facilities. In addition, there was an advance purchasedemand for consumables before the consumption tax increase.
As a result, this segment recorded net sales of 160,607 million yen (up 16.8% YoY) and segment profit (operating
profit) of 2,455 million yen (up 43.3% YoY).
(iii) Life Care businessContinuing with last fiscal year, the Life Care business recorded steady growth by making efforts to integrate national
wide management and occupancy promotion measures, etc.
As a result, this segment recorded net sales of 11,860 million yen (down 0.1% YoY) and segment profit (operating
profit) of 892 million yen (up 3.7% YoY).
(iv) Dispensing Pharmacy business
Dispensing Pharmacy business performed steadily due to opening new stores and management efficiency
improvement such as joint purchasing.
As a result, this segment recorded net sales of 13,380 million yen (up 8.3% YoY) and segment profit (operating
profit) of 1,280 million yen (up 34.4% YoY)(v) Other
Results for other sectors such as veterinary hospital and the security support company remained as planned.
As a result, this segment recorded net sales of 2,526 million yen (down 3.9% YoY) and segment profit (operating
profit) of 194 million yen (down 23.1% YoY).

2

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

(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 304,572 million yen, an
increase of 5,360 million yen from the end of the previous consolidated fiscal year. The primary reasons for thisincrease included increases of 8,374 million yen in cash and deposits, and 1,819 million yen in investment securities,
despite decreases of 3,836 million yen in notes and accounts receivable – trade, and 1,596 million yen in long-termloans receivable.
Liabilities stood at 202,471 million yen, an increase of 993 million yen from the end of the previous consolidated
fiscal year. The primary reasons for this increase included increases of 6,503 million yen in notes and accounts
payable - trade, despite decreases of 3,102 million yen in electronically recorded obligations – operating, and 1,461
million yen in long-term loans payable.
Net assets stood at 102,101 million yen, an increase of 4,366 million yen from the end of the previous consolidated
fiscal year. The primary reasons for this increase included increases of 6,693 million yen in retained earnings fromprofit attributable to owners of parent and 612 million yen in non-controlling interests ,despite decreases of 3,334
million yen in retained earnings due to payment of dividends.
Due to these factors, the equity capital ratio at the end of the consolidated second quarter under review stood at
32.6% (up 0.7 percentage points from the end of the previous consolidated fiscal year).
(ii) Cash flow
Net cash provided by operating activities during the consolidated cumulative second quarter under review totaled
16,730 million yen (up 13,889 million yen from the same period in the previous consolidated fiscal year). Factors
contributing to this figure included payment of 4,362 million yen as income taxes and decrease of 4,434 million yen
in notes and accounts receivable – trade, and increase of 3,165 million in notes and accounts payable – trade. Other
factors included 10,997 million yen in profit before income taxes.
Net cash used in investing activities totaled 2,962 million yen (down 1,183 million yen from the same period in theprevious consolidated fiscal year). Major contributing factors included 1,629 million yen in collection of long-termloans receivable, and 2,309 million yen in purchase of property, plant and equipment. Other factors included 1,087
million yen in purchase of investment securities.
Net cash used in financing activities totaled 5,335 million yen (up 2,133 million yen from the same period in theprevious consolidated fiscal year). This resulted mainly from factors such as 800 million yen in proceeds from longterm loans payable, payment of 3,334 million yen in dividends and expenditures of 3,058 million yen in repayment oflong-term loans payable.
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 79,894 million yen, up 8,399 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 10, 2019.

3

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

2. Quarterly consolidated financial statements and notes thereto(1) Quarterly consolidated balance sheet(Unit: Millions yen)
September 30, 2019

March 31, 2019
AssetsCurrent assets
Cash and deposits

72,39380,768Notes and accounts receivable - trade

97,975

94,138

Electronically recorded monetary claims - operating

3,232

3,080

Lease investment assets

3,801

3,592

Merchandise and finished goods

14,034

13,965Work in process

1,471

1,540

648

786

8,109

7,807

(95)

(74)

201,571

205,604

Buildings and structures, net

18,907

18,599Land

14,451

14,549Real estate for rent, net

13,20912,881Other, net

8,084

9,329

Total property, plant, and equipment

54,65255,360

9,304

9,283

1,0291,029

1,0381,038

10,333

10,321

14,683

16,503

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

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

9,531

7,935

Other

11,062

10,584

Allowance for doubtful accounts(2,624)(1,738)

Total investments and other assets

32,65433,285

Total non-current assets
Total assets

4

97,64098,967299,212304,572

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

(Unit: Millions yen)
September 30, 2019

March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade85,371

91,875

Electronically recorded obligations - operating

20,772

17,670

Short-term loans

1,030

760

Income taxes payable

4,139

3,764

Provision for bonuses

2,032

1,968

Other

14,83014,352

Total current liabilities

128,176

130,391

Bonds with share acquisition rights

25,11625,104Long-term loans payable

39,70038,238Net defined benefit liability

2,811

2,804

Non-current liabilities

Asset retirement obligations
Other
Total non-current liabilities

628

603

5,043

5,328

73,30072,079201,477

202,471

Capital stock

15,553

15,553

Capital surplus

23,921

23,895

Total liabilities
Net assets
Shareholders' equity

Retained earnings

66,372

69,732

Treasury stock(13,447)(13,448)

Total shareholders' equity

92,39995,731

3,079

3,571

(84)

(159)

Accumulated other comprehensive income
Valuation differences on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

26

30

3,021

3,442

Non-controlling interests

2,314

2,926

Total net assets

97,734102,101

299,212304,572

Total liabilities and net assets

5

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

(2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive
incomeQuarterly consolidated statement of income
Consolidated cumulative second quarter
Six months ended
September 30, 2018
202,146(Unit: Millions yen)Six months ended
September 30, 2019242,232

Cost of sales

181,617

217,564

Gross profit

20,52824,667

Sales, general, and administrative expenses

14,263

14,586

Operating profit

6,265

10,081

Interest income

140

203

Dividend income

95

193

Amortization of negative goodwill
Share of profit of entities accounted for using equity
methodForeign exchange gains

116

116

21

22

Net sales

Non-operating profit

Reversal of allowance for doubtful accounts

–

6

5

360

Other

142

166

Total non-operating profit

522

1,068

129

126

Non-operating expenses
Interest expenses
Foreign exchange losses

2

–

Other

52

25

Total non-operating expenses

184

151

6,603

10,999Gains on sales of non-current assets

58

1

Total extraordinary profit

58

1

Losses on sales of non-current assets

02

Losses on valuation of investment securities

5

0

Other

0

0

Ordinary profit
Extraordinary profit

Extraordinary losses

63Profit before income taxes

Total extraordinary losses

6,655

10,997

Income taxes - current

2,399

3,945

Income taxes - deferred

329

317

Total income taxes

2,728

4,262

Profit

3,926

6,734

(68)

40

3,994

6,693

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

6

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

Quarterly consolidated statement of comprehensive income
Consolidated cumulative second quarter
Six months ended
September 30, 2018
3,926

Profit(Unit: Millions yen)Six months ended
September 30, 2019
6,734

Other comprehensive income
Valuation differences on available-for-sale securities

937

492

Foreign currency translation adjustments

167

(125)

Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income

12

4

1,117

371

5,044

7,106

5,036

7,115

7

(8)

(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

7

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

(3) Quarterly consolidated statement of cash flows(Unit: Millions yen)Six months ended
September 30, 2019

Six months ended
September 30, 2018
Cash flows from operating activities
Profit before income taxes

6,655

10,997

Depreciation and amortization

1,254

1,505

Amortization of goodwill

829

843

Amortization of negative goodwill
Share of loss (profit) of entities accounted for using equity
methodIncrease (decrease) in provision for bonuses

(116)

(116)

(21)

(22)

(17)

(71)

Increase (decrease) in allowance for doubtful accounts

9

(533)

Increase (decrease) in net defined benefit liability

82

10Interest and dividend income

(236)

(397)

Interest expenses

129

126

Decrease (increase) in notes and accounts receivable – trade26,3294,434

Decrease (increase) in inventories(2,631)

20

Increase (decrease) in notes and accounts payable – trade(24,331)

3,165

Decrease (increase) in lease investment assets

103

209

Other

(259)

647

Subtotal

7,778

20,818Interest and dividend income received

238

401

Interest expenses paid

(130)

(126)

Income taxes paid

(5,045)(4,362)

Net cash provided by operating activities

2,841

16,730

(121)

(121)

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

106

111

Purchase of property, plant, and equipment(558)(2,309)Proceeds from sales of property, plant, and equipment

1,611

156

Purchase of intangible assets

(140)

(198)

Payments of short-term loans receivable

(267)

(505)

Collection of long-term loans receivable

155

1,629

Purchase of investment securities
Proceeds from shares of subsidiaries resulting in change inscope of consolidation
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other(4,934)(1,087)

–

117

–

(750)

3

(4)

Net cash used in investing activities(4,146)(2,962)

8

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

(Unit: Millions yen)Six months ended
September 30, 2019

Six months ended
September 30, 2018
Cash flows from financing activities
Increase (decrease) in short-term loans-net(1,400)

Proceeds from long-term loans payable

7,000

800

Repayments of long-term loans payable(2,379)(3,058)Purchase of treasury stock(2,999)(0)Cash dividends paid

(3,238)(3,334)

Cash dividends paid to non-controlling interests

(270)

(48)

(90)

–

731

(130)

(113)

(4)

–

(3,201)(5,335)50(32)

Net increase (decrease) in cash and cash equivalents(4,455)

8,399

Cash and cash equivalents at the beginning of the period

58,78771,494

Cash and cash equivalents at the end of the period

54,332

79,894

Proceeds from issuance to non-controlling shareholders
Repayments of lease obligations
Other
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents

9SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

(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

Six months ended September 30, 2018(April 1 – September 30, 2018)
Net sales and profit (loss) by reportable segment(Unit: Millions yen)
Reconciliation*2

Amountrecorded inquarterly
consolidated
incomestatement*3

Reportable segment
Total Pack
Producebusiness

MedicalSupplybusiness

Life Carebusiness

Dispensing
Pharmacybusiness

Subtotal

Other*1

Total

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

37,736

137,553

11,876

12,350199,5172,628

202,146－

202,146

944

599

92

911

2,548

118

2,667

(2,667)－

38,681138,153

11,96913,261

202,066

2,747

204,813(2,667)202,146

2,667
1,713
860
953
6,195
252
6,447
(182)
6,265
Segment profit
Notes:
1. The “Other” category includes businesses that are not included in reportable segments, including the veterinary clinic
business, sales of physical and chemical apparatus business, and the security business.
2. Reconciliation items for segment profit of ¥(182) million include intersegment elimination of ¥(41) million and corporate
expenses not allocated to the reportable segments of ¥(142) million. Corporate expenses consist primarily of operating
expenses of the Company’s head office and selling, general, and administrative expenses that are not attributable to any
reportable segments.
3. Segment profit is reconciled to the operating profit reported in the quarterly consolidated statement of income.

2

Information about loss on impairment of non-current assets and goodwill
No significant impairment losses on non-current assets, significant changes in amounts of goodwill, or significant gains on
bargain purchases were recognized during the six months ended second quarter-end.

10

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2020

II

Six months ended September 30, 2019 (April 1 – September 30, 2019)1

Net sales and profit (loss) by reportable segment(Unit: Millions yen)
Reconciliation*2

Amountrecorded inquarterly
consolidated
incomestatement*3

Reportable segment
Total Pack
Producebusiness

MedicalSupplybusiness

Life Carebusiness

Dispensing
Pharmacybusiness

Subtotal

Other*1

Total

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

53,857

160,607

11,86013,380239,705

2,526

242,232－

242,232

1,180

559

109

1,149

2,999

158

3,157

(3,157)－55,038161,166

11,97014,529242,704

2,685

245,390(3,157)242,232

5,406
2,455
892
1,280
10,035
194
10,229(147)
10,081
Segment profit
Notes:
1. The “Other” category includes businesses that are not included in reportable segments, including the veterinary clinic
business, sales of physical and chemical apparatus business, and the security business.
2. Reconciliation items for segment profit of ¥(147) million include intersegment elimination of ¥(41) million and corporate
expenses not allocated to the reportable segments of ¥(105) million. Corporate expenses consist primarily of operating
expenses of the Company’s head office and selling, general, and administrative expenses that are not attributable to any
reportable segments.
3. Segment profit is reconciled to the operating profit reported in the quarterly consolidated statement of income.

2

Information about loss on impairment of non-current assets and goodwill
No significant impairment losses on non-current assets, significant changes in amounts of goodwill, or significant gains on
bargain purchases were recognized during the six months ended second quarter-end.

11