Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019 [Japanese GAAP](Consolidated)
November 9, 2018
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, 2018 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, 2019
(April 1 – September 30, 2018)(1) Consolidated operating results (cumulative)(Percentages represent year-on-year changes.)
Net sales(Millions yen)

Operating profit(Millions yen)%

(Millions yen)%

Q2 FY ending March 2019
202,146
7.8
6,265
3.8
6,603
Q2 FY ended March 2018
187,456
(0.0)
6,036
6.6
6,309
Note: Comprehensive income: Q2 FY ending March 2019: ¥ 5,044million (14.5%)
Q2 FY ended March 2018: ¥4,406 million (35.1%)
Diluted net income
Net income per shareper share

4.7
7.5

3,994
3,625

10.2
14.9

Q2 FY ending March 2019
Q2 FY ended March 2018%

(Millions yen)

Profit attributable toowners of parent

Ordinary profit
%

(Yen)

(Yen)

79.64
71.65

–
–

(2) Consolidated financial condition
Total assets

Net assets(Millions yen)

Equity capital ratio(Millions yen)%

Q2 FY ending March 2019257,539
101,11238.3
FY ended March 2018
285,181
102,354
35.0
Reference: Equity: Q2 FY ending March 2019: ¥98,678 million; FY ended March 2018: ¥99,880 million

2. Dividends
End Q1(Yen)

End Q2

Annual dividends
End Q3Year-end

(Yen)

(Yen)

FY ended March 2018–
0.00–
FY ending March 2019–
0.00
FY ending March 2019–
(forecast)
Notes: Revisions made in most recently announced dividend forecasts: None

Total

(Yen)

(Yen)

64.00

64.00

64.00

64.00

3. Forecast of consolidated financial results for fiscal year ending March 31, 2019
(April 1, 2018 – March 31, 2019)(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
440,000
3.4
17,500(4.2)
17,800(6.0)
10,5001.4
209.90Note: 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 20192018
(including treasury stock)
Q2 FY ending
FY ended March(ii) Number of treasury stock at the end of
969,889 shares
March 20192018
the period(iii) Average number of shares during theQ2 FY ending
Q2 FY ended
50,159,194 shares
March 2019
March 2018
period (quarterly cumulative total)

None
None
None
None
None
None
None

50,834,700 shares

235,568 shares

50,599,132 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 average number of shares during the period, on which calculations of net income per share in theforecast of consolidated financial results for the fiscal year ending March 31, 2019, are based, reflects theeffects of purchase of treasury stock under a resolution passed by the board of directors in its meeting
held on May 11, 2018.
• 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 “Informationon consolidated financial forecasts and other forward-looking statements” on page 3 of the attachedmaterials.

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019 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) ...............................................................................................11(Notes on marked changes to shareholders' equity) ................................................................................11(Segment information, etc.) ....................................................................................................................11(Additional information) .........................................................................................................................11

1

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019

1. Qualitative information on quarterly results(1) Description of business results
Buoyed by continuing improvements in employment and income in the backdrop of positive corporate earnings, theJapanese economy maintained a course of gentle recovery during the consolidated cumulative second quarter.
Nevertheless, due to uncertainties in the world economy, including rate increases by the United States Federal Reserve,
exchange imbalances, and intensifying trade friction between the US and China, the global economic outlook remains
uncertain.
Within the healthcare industry in which the Group operates, simultaneous revisions to medical service and long-term carefees were enforced in April, leading to significant drops in amounts refunded for medical materials and in drug prices. In
addition, a Community Medical Service Plan establishing future medical care systems for 2025 was formulated in all
prefectures by March this year, signaling progress toward establishing a system for the seamless provision of community
medical care, nursing care, and welfare, including the development of comprehensive community healthcare systems.
Overall, despite harsh conditions for the Dispensing Pharmacy business associated with revised dispensing fees, the Group
proceeded largely in accordance with plans: the Group moved forward the recording of several large-scale projects in the
Total Pack Produce business and made steady improvements in numbers of occupants in the Life Care business.
During this cumulative consolidated second quarter, the various factors noted above resulted in net sales of 202,146
million yen (up 7.8% YoY), operating profit of 6,265 million yen (up 3.8% YoY), ordinary profit of 6,603 million yen (up4.7% YoY), and profit attributable to owners of the parent of 3,994 million yen (up 10.2% 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. These projects were moved forward from plans at the start of the fiscal year.
However, manufacturers companies performed poorly compared to the previous year.
As a result, this segment recorded net sales of 37,736 million yen (up 19.3% YoY) and segment profit (operating
profit) of 2,667 million yen (up 0.2% YoY).
(ii) Medical Supply business
Driven by various factors, including steady progress on the startup of new SPD facilities in the preceding fiscal year,
the Medical Supply business recorded performance largely in accordance with plans.
As a result, this segment recorded net sales of 137,553 million yen (up 6.0% YoY) and segment profit (operating
profit) of 1,713 million yen (up 8.5% YoY).
(iii) Life Care business
The Life Care business demonstrated strong performance, including business efficiency improvements and anincrease in numbers of occupants from the start of the period, due to various factors, including a measure to promote
occupancy based on a campaign featuring a popular cartoon character. This performance was despite the revisions tolong-term care fees.
As a result, this segment recorded net sales of 11,876million yen (up 6.3% YoY) and segment profit (operating profit)of 860 million yen (up 111.8% YoY).
(iv) Dispensing Pharmacy businessIn the Dispensing Pharmacy business, despite plans to open new stores and continuing efforts to improve businessefficiency, performance fell due to revisions to dispensing fees.
As a result, this segment recorded net sales of 12,350million yen (down 1.8% YoY) and segment profit (operating
profit) of 953 million yen (down 29.2% YoY).
(v) Other
Results for other sectors such as veterinary hospital and sales of physical and chemical apparatus were largely asplanned. Results from the security support company remained strong from last year.
As a result, this segment recorded net sales of 2,628 million yen (up 13.2% YoY) and segment profit (operating
profit) of 252 million yen (up 76.2% YoY).

2

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019(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 257,539 million yen, down
27,642 million yen from the end of the previous consolidated fiscal year. The primary reasons for this decline
included decreases of 25,441 million yen in notes and accounts receivable – trade, 4,394 million yen in cash anddeposits and 1,546 million yen in land, despite increases of 6,317 million yen in investment securities, and 1,651
million yen in merchandise and finished goods.
Liabilities stood at 156,427 million yen, down 26,399 million yen from the end of the previous consolidated fiscal
year. The primary reasons for this decline included decreases of 20,976 million yen in notes and accounts payable trade and 3,355 million yen in electronically recorded obligations – operating, while long-term loans increased by
4,350 million yen.
Net assets were 101,112 million yen, down 1,242 million yen from the end of the previous consolidated fiscal year.
The primary reasons for this decline included a decrease of 3,238 million yen in retained earnings due to payment ofdividends and 2,999 million yen in acquisition of treasury stock. Retained earnings from profit attributable to ownersof parent increased by 3,994 million yen and the valuation difference on available-for-sale securities resulted in an
increase of 937 million yen.
Due to these factors, the equity capital ratio at the end of the consolidated second quarter under review stood at
38.3% (up 3.3 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
2,841 million yen (down 7,177 million yen from the same period in the previous consolidated fiscal year). Factors
contributing to this figure included a decrease of 26,329 million yen in notes and accounts receivable – trade and therecording of 6,655 million yen in profit before taxes. Notes and accounts payable – trade decreased by 24,331 million
yen. We paid 5,045 million yen in income taxes.
Net cash used in investing activities totaled 4,146 million yen (down 1,874 million yen from the same period in theprevious consolidated fiscal year). Major contributing factors included expenditures of 4,934 million yen on thepurchase of investment securities and 558 million yen on the purchase of property, plant, and equipment. Other
factors included the recording of 1,611 million yen in the sale of property, plant, and equipment.
Net cash used in financing activities totaled 3,201 million yen (up 2,135 million yen from the same period in theprevious consolidated fiscal year). This resulted mainly from factors such as payment of 3,238 million yen in
dividends and expenditures of 2,999 million yen on acquisition of treasury stock and expenditures of 2,379 million
yen on repayments of long-term loans and net decrease by 1,400 million yen in short-term loans, while proceeds fromlong-term loans totaled 7,000 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 54,332 million yen, down 4,455 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 11, 2018.

3

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019

2. Quarterly consolidated financial statements and notes thereto(1) Quarterly consolidated balance sheet(Unit: Millions yen)
September 30, 2018

March 31, 2018
AssetsCurrent assets
Cash and deposits

59,64455,249Notes and accounts receivable - trade

99,09073,649

Electronically recorded monetary claims - operating

3,427

2,539

Lease investment assets

3,873

3,770

Merchandise and finished goods

13,076

14,728Work in process

1,269

2,024

605

829

10,547

7,953

(86)

ሺ103)

191,448

160,640

Buildings and structures, net

19,647

19,249Land

15,556

14,010Construction in progress

4,428

4,622

Real estate for rent, net

13,395

13,359Other, net

2,743

2,628

Total property, plant, and equipment

55,77053,87010,6509,936

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

Intangible assets
Goodwill
Other

1,129

1,078

Total intangible assets

11,78011,015

7,862

14,180Investments and other assets
Investment securities
Long-term loans receivable

9,870

9,697

Other

10,984

10,663

Allowance for doubtful accounts(2,536)

ሺ2,529)Total investments and other assets

26,18132,01293,73296,898285,181257,539

Total non-current assets
Total assets

4SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019

(Unit: Millions yen)
September 30, 2018

March 31, 2018
Liabilities
Current liabilities
Notes and accounts payable - trade

88,71667,740Electronically recorded obligations - operating

21,786

18,430

Short-term loans

2,970

1,570

Income taxes payable

4,745

2,248

Provision for bonuses

1,966

1,949

Other

17,74014,791

Total current liabilities

137,925

106,730

Long-term loans

36,765

41,116

Net defined benefit liability

2,706

2,766

Asset retirement obligations

619

624

Non-current liabilities

Other

4,809

5,189

Total non-current liabilities

44,90049,696

182,826

156,427

15,553

15,553

Total liabilities
Net assets
Shareholders' equity
Common stock
Capital surplus

23,94823,948Retained earnings

58,374

59,130Treasury stock(448)

ሺ3,447)

Total shareholders' equity

97,42895,184

2,596

3,534

Accumulated other comprehensive income
Valuation differences on available-for-sale securities
Foreign currency translation adjustments

(92)

ሺ1)

Remeasurements of defined benefit plans

(52)

ሺ39)

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

2,451

3,493

2,474

2,433

102,354

101,112285,181257,539SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019(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, 2017
187,456(Unit: Millions yen)Six months ended
September 30, 2018
202,146

Cost of sales

167,116

181,617Gross profit

20,34020,528

Sales, general, and administrative expenses

14,303

14,263Operating profit

6,036

6,265

Interest income

163

140

Dividend income

86

95

Amortization of negative goodwill
Share of profit of entities accounted for using equity
methodReversal of allowance for doubtful accounts

116

116

–

21

1

5

Other

167

142

Total non-operating profit

535

522

Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses

123

129

1

–

17

2

Other

119

52

Net sales

Non-operating profit

Non-operating expenses

Total non-operating expenses

261

184

6,309

6,603

Gains on sales of non-current assets

2

58

Other

0

–

Total extraordinary profit

2

58

Losses on sales of non-current assets

30

Losses on retirements of non-current assets

100Losses on valuation of investment securities

27

5

Total ordinary profit
Extraordinary profit

Extraordinary losses

Other

4

–

Total extraordinary losses

46

6

Total profit before income taxes

6,265

6,655

Income taxes - current

2,372

2,399

Income taxes - deferred

208

329

Total income taxes

2,580

2,728

Profit

3,684

3,926

59

(68)

3,625

3,994

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, 2019

Quarterly consolidated statement of comprehensive income
Consolidated cumulative second quarter
Six months ended
September 30, 2017
3,684

Profit(Unit: Millions yen)Six months ended
September 30, 2018
3,926

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

740

937

Foreign currency translation adjustments

(21)

167

Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income

2

12

721

1,117

4,406

5,044

4,353

5,036

52

7

(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, 2019(3) Quarterly consolidated statement of cash flows(Unit: Millions yen)Six months ended
September 30, 2018

Six months ended
September 30, 2017
Cash flows from operating activities
Profit before income taxes

6,265

6,655

Depreciation and amortization

1,215

1,254

Amortization of goodwill

846

829

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

(116)

(116)

1

(21)

(46)

(17)

Increase (decrease) in allowance for doubtful accounts(2)9Increase (decrease) in net defined benefit liability

52

82Interest and dividend income

(249)

(236)

Interest expenses(Increase) decrease in notes and accounts receivable –trade(Increase) decrease in inventories

123

129

26,634

26,329(2,443)(2,631)

Increase (decrease) in notes and accounts payable – trade(18,814)(24,331)(Increase) decrease in lease investment assets

91

103

Other-net

685

(259)

Subtotal

14,244

7,778Interest and dividend income received

246

238

Interest expenses paid

(122)

(130)

Income taxes paid

(4,348)(5,045)

Net cash provided by operating activities

10,019

2,841

(136)

(121)

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

178

106

Purchase of property, plant, and equipment(4,651)(558)

Proceeds from sales of property, plant, and equipment

3

1,611

Purchase of intangible assets

(75)

(140)

Payments of short-term loans receivable

(22)

(267)

Collection of short-term loans receivable

20–

Payments of long-term loans receivable(2)–

Collection of long-term loans receivable

177

155

Purchase of investment securities
Proceeds from sales and redemption of investment
securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other-net(5)(4,934)101–(1,609)–(0)

3(6,020)(4,146)

Net cash used in investing activities

8

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Second Quarter of Fiscal Year Ending March 31, 2019

(Unit: Millions yen)Six months ended
September 30, 2018

Six months ended
September 30, 2017
Cash flows from financing activities
Increase (decrease) in short-term loans-net(400)(1,400)

Proceeds from long-term loans payable

7,300

7,000

Repayments of long-term loans payable(4,755)(2,379)Purchase of treasury stock
Cash dividends paid–

(2,999)(3,035)(3,238)Cash dividends paid to non-controlling interests

(46)

(48)

Repayments of lease obligations

(123)

(130)

Other-net

(4)

(4)

(1,066)(3,201)(3)

50

Net increase (decrease) in cash and cash equivalents

2,928(4,455)

Cash and cash equivalents at the beginning of the period

48,66158,787

Cash and cash equivalents at the end of the period

51,59054,332

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, 2019(4) Notes on quarterly consolidated financial statements(Notes on the going concern assumption)
Not applicable(Notes on marked changes to shareholders' equity)
Under a resolution passed by the board of directors in its meeting held on May 11, 2018, the Company purchased
734,300 shares of treasury stock. As a result, treasury stock increased by 2,999 million yen during the six months
ended September 30, 2018 to 3,447 million yen as of the end of the quarter.

(Segment information, etc.)[Segment information]
I
1

Six months ended September 30, 2017(April 1 – September 30, 2017)
Net sales and income (loss) by reportable segment(Unit: Millions yen)
Reportable segment
Total Pack
Producebusiness

MedicalSupplybusiness

Life Carebusiness

Dispensing
Pharmacybusiness

Subtotal

Other*1

Total

Amountrecorded inquarterly
Reconciliation
consolidated*2
incomestatement*3

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

31,629129,756

11,168

12,579185,134

2,322

187,456-

187,456

720

532

91

1,192

2,537

42

2,579

(2,579)-32,349130,289

11,26013,772

187,671

2,364

190,036(2,579)187,456

2,662
1,578
406
1,346
5,994
143
6,137
(101)
6,036
Segment profit
Notes:
1. The “Other” category includes businesses that are not included in reportable segments, including the veterinary hospitalbusiness, sales of physical and chemical apparatus business, and the security business.
2. Reconciliation items for segment profit of ¥(101) million include intersegment elimination of ¥(4) million and corporate
expenses not allocated to the reportable segments of ¥(101) 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, 2019

II

Six months ended September 30, 2018 (April 1 – September 30, 2018)1

Net sales and income (loss) by reportable segment(Unit: Millions yen)
Reportable segment
Total Pack
Producebusiness

MedicalSupplybusiness

Life Carebusiness

Dispensing
Pharmacybusiness

Subtotal

Other*1

Total

Amountrecorded in
Reconciliation
quarterly*2
consolidated
incomestatement*3

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

－

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

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.
(Additional information)
Starting from the first quarter of current fiscal year, the Company began applying ASBJ Statement No. 28 (Partial
Amendments to Accounting Standard for Tax Effect Accounting), issued on February 16, 2018. For this reason, deferred tax
assets are presented under Investments and Other Assets, while deferred tax liabilities are presented under Non-current
Liabilities.

11