Summary of Financial Statements
for Third Quarter of Fiscal Year Ending March 31, 2018 [Japanese GAAP](Consolidated)

February 6, 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: February 9, 2018 Scheduled start date of dividend payments: –Supplementary briefing materials on results: None
Briefing on quarterly results:
None(All figures are rounded down to the nearest million yen.)

1. Consolidated financial results for the third quarter of the fiscal year ending March 31, 2018 (April
1 – December 31, 2017)(1) Consolidated operating results (cumulative)
Net sales(Millions yen)

(Percentages represent year-on-year changes.)

Operating profit%(Millions yen)%

(Millions yen)

Q3 FY ending March 2018
301,012
6.0
11,55426.5
12,023Q3 FY ended March 2017
283,978
34.7
9,133
14.8
9,622
Note: Comprehensive income: Q3 FY ending March 2018: ¥8,166 million (37.5%);
Q3 FY ended March 2017: ¥5,940 million (33.1%)
Diluted net income
Net income per shareper share(Yen)

Q3 FY ending March 2018
Q3 FY ended March 2017

Profit attributable toowners of parent

Ordinary profit
%

25.0
13.9

(Millions yen)

7,003
5,249

%

33.4
17.6

(Yen)

138.42103.99––(2) Consolidated financial condition

Total assets

Net assets(Millions yen)

Equity capital ratio(Millions yen)%

Q3 FY ending March 2018267,609
98,71636.0
FY ended March 2017
263,540
93,632
34.7
Reference: Equity: Q3 FY ending March 2018: ¥96,456 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
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 andQ3 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 Q3 FY ending
235,568 shares
March 20182017
the period(iii) Average number of shares during theQ3 FY ending
Q3 FY ended
50,599,132 shares
March 2018
March 2017
period (quarterly cumulative total)

None
None
None
None
None
None

50,834,700 shares

235,568 shares

50,479,732 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 Third 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)

Notes on quarterly consolidated financial statements .............................................................................. 8(Notes on the going concern assumption) ................................................................................................ 8(Notes on marked changes to shareholders' equity) ................................................................................. 8(Segment information, etc.) ..................................................................................................................... 8

1

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

1. Qualitative information on quarterly results(1) Description of business results
During this consolidated cumulative third quarter, amid global economic recovery, the Japanese economy itself
maintained a course of gentle recovery trend, buoyed by various factors, including rising capital investment backed byfavorable corporate earnings and falling unemployment.
In the healthcare industry in which the Group operates, the need remained for continued investments and reforms based on
medium- to long-term perspectives in light of various factors. These include reforms in the social infrastructure in
response to low birth rates and an aging population, particularly in urban areas; adoption of advanced medicine; and theconcurrent revision of remuneration and nursing care compensation scheduled to take effect next fiscal year.
Amid these economic conditions, in the Total Pack Produce business, the Group proceeded according to plans on several
large-scale projects. Sales from the manufacture of rehabilitation equipment were strong. Additionally, the Life Carebusiness and the Dispensing Pharmacy business recorded steady business performance.
During this cumulative consolidated third quarter, the various factors noted above resulted in net sales of 301,012 million
yen (up 6.0% YoY), operating profit of 11,554 million yen (up 26.5% YoY), ordinary profit of 12,023 million yen (up25.0% YoY), and profit attributable to owners of the parent of 7,003 million yen (up 33.4% YoY).
Business results by segment are summarized below.
(i) Total Pack Produce businessDespite recording costs related to the launching of an overseas subsidiary and a heavy ion radiotherapy facility, theTotal Pack Produce business made progress according to plans on several large-scale projects. Additionally, sales
from the manufacture of rehabilitation equipment were strong.
As a result, this segment recorded net sales of 61,219 million yen (up 10.6% YoY) and segment profit (operating
profit) of 6,000 million yen (up 15.9% 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 200,175 million yen (up 4.4% YoY) and segment profit (operating
profit) of 2,701 million yen (up 50.9% YoY).
(iii) Life Care business
Various factors boosted earnings in the Life Care business, including continuing improvements in occupancy rates
and improvements involving operational streamlining.
As a result, this segment recorded net sales of 16,894 million yen (up 6.7% YoY) and segment profit (operating
profit) of 698 million yen (up 45.5% 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 19,188 million yen (up 6.2% YoY) and segment profit (operating
profit) of 2,122 million yen (up 23.6% 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 3,533 million yen (up 17.1% YoY) and segment profit (operating
profit) of 192 million yen (up 67.5% YoY).

2

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

(2) Analysis of Financial Position
Assets at the end of the consolidated cumulative third quarter under review stood at 267,609 million yen, up 4,069 million
yen from the end of the previous consolidated fiscal year. The primary reasons for this rise included increases of 4,278
million yen in the construction in progress account, 3,809 million yen in merchandise and finished goods, 2,118 million
yen in cash and deposits, and 1,324 million yen in electronically recorded monetary claims – operating. Notes andaccounts receivable – trade fell by 10,580 million yen.
Liabilities stood at 168,892 million yen, down 1,015 million yen from the end of the previous consolidated fiscal year.
Primary reasons for this decline included a decrease of 5,966 million yen in notes and accounts payable – trade, while
there were increases of 3,769 million yen in electronically recorded obligations – operating and 1,771 million yen in
long-term loans payable.
Net assets were 98,716 million yen, up 5,084 million yen from the end of the previous consolidated fiscal year. Primaryreasons for this increase included increases of 7,003 million yen in retained earnings from profit attributable to owners ofparent and 1,105 million yen in valuation difference on available-for-sale securities. Dividends paid reduced retained
earnings by 3,035 million yen.
Due to these factors, the equity capital ratio at the end of the consolidated third quarter under review stood at 36.0% (up1.3 percentage points 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 Third 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 third quarter
under review(December 31, 2017)

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

49,44451,562

Notes and accounts receivable - trade95,65785,076

Electronically recorded monetary claims - operating

1,920

3,245

Lease investment assets

4,057

3,921

Merchandise and finished goods

11,66915,479Semi-finished goods

1,328

2,000

840

953

Other

9,590

11,447

Allowance for doubtful accounts

−78

−74

174,430

173,611

Buildings and structures (net)14,972

14,713Land

15,222

15,557

Construction in progress

5,716

9,994

Real estate for rent (net)

14,186

13,943

Other (net)

3,385

3,197

Total property, plant, and equipment

53,48357,406

Goodwill

10,912

10,907

Other

1,296

1,117

Total intangible assets

12,20812,024

10,172

9,973

Raw materials and supplies

Total current assets
Non-current assets
Property, plant, and equipment

Intangible assets

Investments and other assets
Long-term loans receivable
Other

15,793

17,180Total allowance for doubtful accounts−2,563−2,587

Total investments and other assets

23,402

24,56689,093

93,998

Share issuance cost16–

Deferred assets

16–

263,540

267,609

Total non-current assets
Deferred assets

Total assets

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

(Unit: Millions yen)
Consolidated third quarter
under review(December 31, 2017)

Previous consolidated
fiscal year
(March 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable - trade86,30780,340Electronically recorded obligations - operating

16,192

19,962

Short-term loans payable

2,020

3,260

Income taxes payable

4,120

1,393

Provision for bonuses

1,905

900

Other

15,831

17,114

Total current liabilities

126,377

122,969

Long-term loans payable

36,14637,918Net defined benefit liability

2,548

2,649

Non-current liabilities

Asset retirement obligations
Other
Total non-current liabilities

362

373

4,472

4,982

43,53045,923

169,908

168,892

Capital stock

15,553

15,553

Capital surplus

23,71623,716

Retained earnings

51,05955,027

Treasury shares

−448

−448

Total shareholders' equity

89,881

93,849

1,459

2,565

Foreign currency translation adjustment

47

41

Remeasurements of defined benefit plans−3

1

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

1,503

2,607

Non-controlling interests

Total accumulated other comprehensive income

2,247

2,259

Total net assets

93,632

98,716

263,540

267,609

Total liabilities and net assets

5

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements
for Third 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 third quarter(Unit: Millions yen)Previous consolidated
Consolidated cumulative third
cumulative third quarter
quarter under review(April 1 – December 31, 2016) (April 1 – December 31, 2017)
283,978
301,012Net sales
Cost of sales

253,576

267,985

Gross profit

30,402

33,026

Sales, general, and administrative expenses

21,26821,472

Operating profit

9,133

11,554

Interest income

247

236

Dividend income

105

124

Amortization of negative goodwill

180

174

–

39

Non-operating profit

Share of profit of entities accounted for using equity method
Reversal of allowance for doubtful accounts

85

8

Other

331

256

Total non-operating profit

948

840

Interest expenses

222

189

Equity in loss of affiliates

11–

Foreign exchange losses

44

9

Other

181

172

Non-operating expenses

459

371

9,622

12,023Gain on sales of property, plant, and equipment

84Gain on sales of investment securities

88–

Gain on transfer of business–

20

Reversal of long-term accounts payable - other20–

Non-operating expenses

Total ordinary profit
Extraordinary profit

Other
Total extraordinary profit

0

0

116

25

Extraordinary losses
Loss on sales of property, plant, and equipment

105

3

Impairment loss–

48

Loss on retirement of property, plant, and equipment

79

28

Loss on valuation of investment securities

37

113

Loss on withdrawal from employees' pension fund

208–

Amortization of goodwill

71

–

Other

8

3

Total extraordinary losses

510

197

Total income before income taxes

9,228

11,852

Income taxes - current

3,267

3,957

Income taxes - deferred

620

792

Total income taxes

3,888

4,749

Profit

5,340

7,102

Profit attributable to noncontrolling interests
Profit attributable to owners of parent
6

91

98

5,249

7,003

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

Quarterly consolidated statement of comprehensive income
Consolidated cumulative third quarter(Unit: Millions yen)Previous consolidated
Consolidated cumulative third
cumulative third quarter
quarter under review(April 1 – December 31, 2016) (April 1 – December 31, 2017)
5,340
7,102

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

599

1,105

Translation adjustments

−2

−46

Remeasurements of defined benefit plans

3

4

Other comprehensive income
Comprehensive income

600

1,064

5,940

8,166

5,848

8,108

92

58

(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 Third Quarter of Fiscal Year Ending March 31, 2018

(3) 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 Previous consolidated cumulative third quarter (April 1 – December 31, 2016)1

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

Amountrecorded onquarterly
consolidated
incomestatement*3

283,978–

283,978

29

5,072−5,072–

3,047

289,051−5,072283,978

Total packproducebusiness

Medicalsupplybusiness

Life carebusiness

Dispensing
pharmacybusiness

Subtotal

55,364

191,695

15,82918,071

280,960

3,017

2,360

1,283

20

1,379

5,043

57,724

192,978

15,85019,450286,004

Other*1

Total

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

5,175
1,790
480
1,716
9,163
115
9,278
−145
9,133
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 security business.
2. The figure of −145 million yen in adjustments to segment profit includes −15 million yen in cancellation of intersegment
transactions and −132 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 third quarter under review, Konishi Kyowa Holding Corporation was acquired and added
to the scope of consolidation.
As a result, assets in the medical supply 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 third quarter under review, Konishi Kyowa Holding Corporation was acquired and added
to the scope of consolidation.
As a result, goodwill in the medical supply business segment increased by ¥1,066 million during the consolidated cumulative
third quarter under review.
(Important gains on bargain purchases)
Not applicable8

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

II
1

Consolidated cumulative third quarter under review (April 1 – December 31, 2017)

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

Amountrecorded onquarterly
consolidated
incomestatement*3

301,012−301,01275

4,332−4,332−

3,609

305,344−4,332301,012

Total packproducebusiness

Medicalsupplybusiness

Life carebusiness

Dispensing
pharmacybusiness

Subtotal

61,219200,175

16,894

19,188297,478

3,533

1,091

859

447

1,858

4,256

62,311

201,035

17,341

21,046

301,735

Other*1

Total

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

6,000
2,701
698
2,122
11,523
192
11,716−161
11,554
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 −161 million yen in adjustments to segment profit includes −5 million yen for the cancellation ofintersegment transactions, −107 million yen for companywide costs not allocated among reporting segments, and −47
million yen for unrealized income. These companywide costs consist mainly of parent company operating expenses andsales, 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 third quarter under review.

9