Summary of Financial Results for the Fiscal Year 2017 (Ended December 31, 2017)[Japanese GAAP]
February 8, 2018

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange, First Section
Stock code:
8165
URL: http://www.senshukai.co.jp
Representative:
Mr. Hiroyuki Hoshino, President and Representative Director
Inquiries:
Mr. Takeshi Naito, Director, Executive Officer, in charge of Corporate Planning
Tel: +81-6-6881-3220
Scheduled date of annual general meeting of shareholders: March 29, 2018
Scheduled date of payment of dividend: Scheduled date of filing of Annual Security Report: March 30, 2018
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes (for institutional investors and analysts)(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the Fiscal Year 2017 (January 1, 2017 – December 31, 2017)(1) Consolidated operating results(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating profit
Ordinary profit
owners of parent

Net sales

Millions of yen%

Fiscal Year 2017
125,999(2.4)(4,287)(4,206)(11,090)
Fiscal Year 2016
129,074
(3.9)
1,194
1,673
1,420
Note: Comprehensive income (millions of yen) Fiscal Year 2017: (10,797) (-%) Fiscal Year 2016: (579) (-%)

Millions of yen%

Millions of yen-

Net income per
share

Diluted net income
per share

Yen

Yen

%

Millions of yen

Return on equity%

Ordinary income to Operating income
total assets
to net sales%

Fiscal Year 2017
(213.16)
Fiscal Year 2016
27.26
24.16
Reference: Equity in earnings (losses) of affiliates (millions of yen)

(23.6)
2.7
Fiscal Year 2017: 238

%

%

(4.4)
1.6
Fiscal Year 2016: 228

(3.4)
0.9

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

Fiscal Year 2017
90,441
41,548
Fiscal Year 2016
101,959
52,572
Reference: Shareholders’ equity (millions of yen) Fiscal Year 2017: 41,473

Net assets per share
%

Yen

45.9
51.5
Fiscal Year 2016: 52,508

797.13
1,009.26(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,952
3,825

(397)
94

(1,148)(1,580)17,323
16,600Fiscal Year 2017
Fiscal Year 2016

2. Dividends
1Q-endDividend per share
2Q-end 3Q-end Year-end

Yen

Yen

Yen

Total

Total dividends(total)Yen

Millions of yen

Yen

Payout ratio Dividend on equity(consolidated)(consolidated)%%

Fiscal Year 2016
4.00
4.00
8.00
417
29.3
0.8
Fiscal Year 2017
0.00
0.00
0.00
Fiscal Year 2018
0.00
(forecasts)
Notes: 1. The total dividends for Fiscal Year 2016 include a dividend of 1 million yen from the Senshukai stock held by the
executive stock compensation trust.
2. Dividend forecast for the Fiscal Year 2018 has not been determined at this time.

3. Consolidated Outlook for Fiscal Year 2018 (January 1, 2018 – December 31, 2018)(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable to Net income
Operating profit
Ordinary profit
owners of parent
per share

Net sales
Full Year 2018

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

124,000

(1.6)

1,600

-

1,900

-

1,400

-

26.91

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(3) Number of shares outstanding (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
Fiscal Year 2017:52,230,393 sharesFiscal Year 2016:

52,230,393 sharesFiscal Year 2016:

203,527 sharesFiscal Year 2016:

52,096,233 shares

2) Number of treasury shares at the end of the period
Fiscal Year 2017:

201,588 shares

3) Average number of shares outstanding during the period
Fiscal Year 2017:52,028,126 shares

Note: The Senshukai stock held by the trust that is recorded as treasury shares under shareholders’ equity is included in thenumber of treasury shares, and is deducted from the number of shares that is used to calculate the average number ofshares outstanding.

(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for Fiscal Year 2017 (January 1, 2017 – December 31, 2017)(1) Non-consolidated operating results(Percentages represent changes from the same period of the previous fiscal year)
ProfitOperating profit
Ordinary profit

Net sales
Fiscal Year 2017
Fiscal Year 2016

Fiscal Year 2017
Fiscal Year 2016

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

89,145
101,798(12.4)(7.5)(5,952)(95)-(5,565)745-(10,819)
1,052-

Net income per share

Diluted net income per share

Yen

Yen

(207.95)
20.21

17.91

(2) Non-consolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

Fiscal Year 2017
73,86439,318
Fiscal Year 2016
88,88150,313
Reference: Shareholders’ equity (millions of yen) Fiscal Year 2017: 39,318

Equity ratio

Net assets per share
%

53.2
56.6
Fiscal Year 2016: 50,313

Yen

755.70967.07* This financial report is not subject to audit procedures.
* Cautionary statement with respect to forward-looking statements
Cautionary statement with respect to forecasts
The above projections are based on information available at the time of release of this report. Actual results could differ
significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page
4.
How to view supplementary information at the financial results meeting
Senshukai plans to hold a financial results meeting for institutional investors and analysts on February 9, 2018. Materials to be
distributed at the meeting will be disclosed, using the Timely Disclosure network (TDnet), and available on the Senshukai’s
website.

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

2(3) Cash Flows3(4) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years

3(5) Outlook

4(6) Important Information about Going Concern Assumption

4

2. Basic Approach for the Selection of Accounting Standards

4

3. Consolidated Financial Statements and Notes

5(1) Consolidated Balance Sheet

5(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

7

Consolidated Statement of Income

7

Consolidated Statement of Comprehensive Income

8(3) Consolidated Statement of Changes in Equity

9(4) Consolidated Statement of Cash Flows

11(5) Notes to Consolidated Financial Statements

12

Going Concern Assumption

12

Additional Information

12

Segment Information

13

Per Share Information

15

Subsequent Events

15

-1-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

1. Overview of Results of Operations(1) Results of Operations
Overview
In 2017, the Japanese economy recovered slowly due to improvements in corporate capital expenditures andemployment situation that were backed by the government’s economic policies. Although consumer spending also
recovered gradually, consumers in Japan still have a strong desire to hold down their spending. The operating
environment for the Senshukai Group remained tough during 2017 because of the rising cost of raw materials,
higher distribution expenses and other challenges.
Net sales in 2017 decreased 2.4% year-over-year to 125,999 million yen, mainly because of lower sales in the
mail-order business.
Operating loss was 4,287 million yen compared with operating profit of 1,194 million yen in 2016 because of anincrease in merchandise valuation losses associated with the establishment of a more clearly defined policy for
managing inventories. This policy includes the early procurement of merchandise, which is a characteristic of thecatalog retail business, moves to end the business model in which products are sold for a long time, and pricereductions of merchandise currently being sold as needed in order to raise the percentage of inventories sold.
There was an ordinary loss of 4,206 million yen compared with ordinary profit of 1,673 million yen in 2016. Loss
attributable to owners of parent was 11,090 million yen compared with a profit of 1,420 million yen in 2016. This
loss was mainly the result of an impairment loss and special retirement payments for a voluntary retirement
program.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, centered on the catalog and the Internet businesses, decreased 5.0%
year-over-year to 101,279 million yen in 2017. There was an operating loss of 5,707 million yen compared with aloss of 240 million yen in 2016.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 7.8% year-over-year
to 18,132 million yen. Operating profit increased 28.2% year-over-year to 963 million yen.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, increased
5.6% year-over-year to 4,833 million yen, and operating profit decreased 27.3% to 375 million yen.
(Others)
Consolidated sales in other businesses, which consist of services (primarily insurance and credit card services)
and a childcare business, increased 63.5% year-over-year to 1,753 million yen. Operating profit decreased 44.8%
to 80 million yen.
(2) Financial Position
Assets totaled 90,441 million yen at the end of 2017, a decrease of 11,518 million yen from the end of 2016.
Current assets decreased 3,763 million yen to 48,854 million yen. The main factor was a decrease of 4,019 million
yen in merchandise and finished goods. Non-current assets decreased 7,755 million yen to 41,586 million yen.
The factors include decreases of 4,535 million yen in property, plant and equipment due to booking of impairment
loss, 1,439 million yen in intangible assets, and 1,780 million yen in investments and other assets.
Current liabilities increased 767 million yen to 30,066 million yen. The main factor was an increase of 1,683
million yen in accounts payable-other, while there was a decrease of 959 million yen in electronically recorded
obligations-operating. Non-current liabilities decreased 1,262 million yen to 18,826 million yen. The main factor-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

was a decrease of 2,000 million yen in bonds with subscription rights to shares, while there was an increase of
1,312 million yen in long-term loans payable.
Net assets decreased 11,024 million yen to 41,548 million yen. The main factor was a decrease of 17,245 million
yen in retained earnings, while there was an increase of 5,927 million yen in revaluation reserve for land.
Consequently, the equity ratio was 45.9%.
(3) Cash FlowsThe balance of cash and cash equivalents at the end of 2017 was 17,323 million yen, an increase of 723 million
yen from the end of 2016.
Operating activities provided net cash of 1,952 million yen (net cash provided of 3,825 million yen in 2016). The
main cash inflows were impairment loss of 5,473 million yen, a decrease in inventories of 4,454 million yen anddepreciation of 2,196 million yen. The main cash outflows include a loss before income taxes of 10,899 million
yen.
Investing activities used net cash of 397 million yen (net cash provided of 94 million yen in 2016). The main cash
inflows include proceeds from sales of investment securities of 1,754 million yen and proceeds from capital
reduction with compensation of subsidiaries and affiliates of 450 million yen. The main cash outflows were 1,165
million yen for the purchase of property, plant and equipment, 835 million yen for the purchase of shares ofsubsidiaries and 529 million yen for the purchase of intangible assets.
Financing activities used net cash of 1,148 million yen (net cash used of 1,580 million yen in 2016). The main
cash inflows include the proceeds from long-term loans payable of 2,800 million yen. The main cash outflows
were 2,000 million yen for the payment for redemption of bonds with subscription rights of shares and 1,656
million yen for the repayments of long-term loans payable.
Cash flow indicesFiscal Year 2015
Fiscal Year 2016
Fiscal Year 2017
(As of Dec. 31, 2015) (As of Dec. 31, 2016) (As of Dec. 31, 2017)
Equity ratio (%)
51.0
51.5
45.9
Equity ratio based on fair value (%)
39.6
36.1
37.3
Ratio of interest-bearing debt to cash flows (years)
5.9
5.0
9.3
Interest coverage ratio (times)
17.1
23.7
12.6
Notes: 1. Cash flow indices are calculated, using consolidated financial figures, as follows:
The equity ratio is shareholders’ equity divided by total assets.
The equity ratio based on fair value is market capitalization divided by total assets.
The ratio of interest-bearing debt to cash flows is interest-bearing debt divided by the quantity of operating cash flows.
The interest coverage ratio is operating cash flows divided by interest payments.
2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares issued and outstanding at the end of the period, excluding treasury shares.
3. Interest-bearing debt includes short-term loans payable, bonds with subscription rights to shares, long-term loans
payable, and lease obligations shown on the consolidated balance sheet.
4. Operating cash flows and interest payments represent net cash provided by (used in) operating activities andinterest expenses paid, respectively, on the consolidated statement of cash flows.

(4) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years
The Group’s basic policy is to strengthen the business foundation while maintaining stable dividends, taking into
consideration the payout ratio, and ensuring a fair distribution of earnings to shareholders that reflects its businessperformance.
Specifically, the Group’s policy regarding the distribution of earnings to shareholders is to strive continuously fora payout ratio of 30% on a consolidated basis. However, because of a net loss in 2017, we plan to pay no dividendfor 2017. We also plan to pay no interim dividend in 2018 and have not made a decision about the year-end
dividend. Our highest priorities are the implementation of our medium-term management plan and the growth ofshareholders’ equity from the standpoint of the stability and safety of business operations. In addition, operationsin 2018 will be significantly affected by seasonal factors.

-3-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017(5) Outlook
Although Japan’s economy continues to recover, the operating environment is expected to remain challenging in2018 as consumers were increasingly budged-minded. There will be even more activities in 2018 to restore
profitability and build a stronger foundation for business operations. One goal is improving mail-order businessprofitability by downsizing unprofitable product categories. We are also reexamining the procurement strategy,
implementing timely discounts and taking other steps to increase the gross profit margin. In addition, we areworking on lowering catalog and sales promotion expenses and using these expenditures more efficiently. To dothis, we are conducting a complete reexamination of our strategies for distributing catalogs and for price discounts
and points awarded for purchases.
Based on this outlook, our forecast for Fiscal Year 2018 is as follows.
Consolidated(Millions of yen)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Fiscal Year 2018 (forecast)
124,000
1,600
1,900
1,400
Fiscal Year 2017 (results)
125,999(4,287)(4,206)(11,090)
Change (%)(1.6)* The above projections are based on information available at the time of release of this report. Actual results could differ fromprojections due to a variety of factors.

(6) Important Information about Going Concern Assumption
In 2017, the Senshukai Group had an operating loss of 4,287 million yen and a loss attributable to owners ofparent of 11,090 million yen. This performance creates significant doubts about the going concern assumption. To
eliminate these doubts and quickly improve results of operations, Senshukai has implemented a medium-term
management plan for 2018 to 2020, which was announced on October 27, 2017. In addition, there were structuralreforms during 2017 that included a voluntary retirement program and adjusting the size of core subsidiaries inorder to streamline business operations. There will be even more activities in 2018 to restore profitability andbuild a stronger foundation for business operations. One goal is improving mail-order business profitability bydownsizing unprofitable product categories. We are also reexamining the procurement strategy, implementing
timely discounts and taking other steps to increase the gross profit margin. In addition, we are working onlowering catalog and sales promotion expenses and using these expenditures more efficiently. To do this, we areconducting a complete reexamination of our strategies for distributing catalogs and for price discounts and points
awarded for purchases.
There are no significant concerns at this time about cash flows because cash and deposits were 17,328 million yen
at the end of 2017 and working capital is sufficient to support business operations for the time being.
For these reasons, we believe there are no significant uncertainties regarding the going concern assumption.
2. Basic Approach for the Selection of Accounting Standards
The Senshukai Group has a policy of preparing its consolidated financial statements using Japanese GAAP for thetime being to facilitate comparisons with prior-year performance and the performance of other companies in Japan.
We will take suitable actions with regard to the application of the International Financial Reporting Standards(IFRS) by taking into account trends in our industry peers in Japan and associated factors in Japan and othercountries.

-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2017
(As of Dec. 31, 2017)

Fiscal Year 2016
(As of Dec. 31, 2016)
AssetsCurrent assets
Cash and deposits

16,605

17,328Notes and accounts receivable-trade

3,889

5,481

Merchandise and finished goods

20,58016,561

Raw materials and supplies

141

171

Accounts receivable-other

7,818

7,216

Other

3,735

2,242

Allowance for doubtful accounts

(152)

(147)

52,61848,854

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

41,03340,439

Accumulated depreciation(24,904)(26,722)

Buildings and structures, net

16,12813,716

Machinery, equipment and vehicles

8,801

8,522

(8,010)(8,309)

Accumulated depreciation

790

213

Tools, furniture and fixtures

Machinery, equipment and vehicles, net

2,858

2,493

Accumulated depreciation(2,086)(2,188)Tools, furniture and fixtures, net
Land
Leased assets

771

305

11,31010,451

979

741

Accumulated depreciation

(443)

(419)

Leased assets, net

536

321

Construction in progress13

8

29,55125,016

Goodwill

2,027

1,992

Other

2,120

715

Total intangible assets

4,147

2,708

Investment securities

8,651

7,630

Long-term loans receivable

1,202

770

Lease and guarantee deposits

1,826

1,942

Other

4,228

3,784

Allowance for doubtful accounts

(266)

(265)

Total investments and other assets

15,642

13,861

49,341

41,586

101,959

90,441

Total property, plant and equipment
Intangible assets

Investments and other assets

Total non-current assets
Total assets-5-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

(Millions of yen)
Fiscal Year 2017
(As of Dec. 31, 2017)

Fiscal Year 2016
(As of Dec. 31, 2016)
Liabilities
Current liabilities
Electronically recorded obligations-operating

10,365

9,406

Accounts payable-trade

5,840

6,123

Short-term loans payable
Lease obligations

1,546

1,416

122

112

Accounts payable-other

5,383

7,066

Accrued expenses

2,008

1,452

Income taxes payable

387

222

Accrued consumption taxes

534

416

Provision for sales promotion expenses

437

408

Provision for bonuses

-

581

Other

2,672

2,860

Total current liabilities

29,29830,066

Bonds with subscription rights to shares

7,000

5,000

Long-term loans payable
Lease obligations

9,300

10,613

1,140

1,031

Deferred tax liabilities

Non-current liabilities

1,308

943

Deferred tax liabilities for land revaluation

333

202

Net defined benefit liability

98

81

Provision for management board incentive plan trust

9

7

Asset retirement obligations

735

735

Other

162

212

20,08818,82649,38748,892

Capital stock

22,30422,304

Capital surplus

23,86023,860Retained earnings

12,385(4,859)Treasury shares

(151)

(149)

58,39941,155

1,271

1,216

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

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

(11)

219

(6,983)(1,056)

Foreign currency translation adjustment

(143)

(40)

Remeasurements of defined benefit plans

(23)

(19)

(5,890)318

Deferred gains or losses on hedges
Revaluation reserve for land

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

-6-

64

74

52,572

41,548

101,959

90,441SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Freightage and packing expenses
Promotion expenses
Provision for allowance for sales promotion expenses
Provision of allowance for doubtful accounts
Bad debts expenses
Directors’ compensations
Salaries and allowances
Bonuses
Provision for bonuses
Depreciation
Other
Total selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodGain on adjustment of account payable
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Commission fee
Miscellaneous loss
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Other
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on reduction of non-current assets
Impairment loss
Business structure reform expenses
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Fiscal Year 2016
(Jan. 1, 2016 – Dec. 31, 2016)
129,074
67,087
61,986(Millions of yen)
Fiscal Year 2017
(Jan. 1, 2017 – Dec. 31, 2017)
125,999
71,43754,561

6,868
16,795437
100
393
11,014
1,410
3,198
20,57360,791
1,194

6,771
14,149
408
146
18
357
10,531
910
571
2,154
22,83058,848(4,287)

28
103

27
87

228

238

256
200
816

191
175
720

156
57
124
338
1,673

155
316
167
639
(4,206)

34
436
511
983

4
715
210
4
935

31
485
139
42
698
1,957
337
163
501
1,456
36
1,420

55
198
5,473
1,902
0
7,629
(10,899)
175
4
179(11,079)
10(11,090)-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

(Consolidated Statement of Comprehensive Income)Fiscal Year 2016
(Jan. 1, 2016 – Dec. 31, 2016)(Millions of yen)
Fiscal Year 2017
(Jan. 1, 2017 – Dec. 31, 2017)

1,456(11,079)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities

(476)

(66)

(1,159)97

Revaluation reserve for land

18-

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method

(38)

13

(379)

238

(2,036)

282

(579)

(10,797)(616)(10,807)

36

10

Deferred gains or losses on hedges

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-8-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017(3) Consolidated Statement of Changes in Equity
Fiscal Year 2016 (Jan. 1, 2016 – Dec. 31, 2016)(Millions of yen)

Balance at beginning of current
periodChanges of items during period

Capital stock

Capital surplus

22,30423,860

Dividend of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve
for landNet changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current period

Shareholders’ equity
Retained
Treasury sharesearnings
11,009Total shareholders’equity(15)

57,159

(416)

(416)

1,420

1,420

0

(136)

(136)

0

0

372

372

-

0

1,375

(136)

1,239

22,30423,86012,385(151)

58,399(Millions of yen)

Accumulated other comprehensive income
Valuation
Total
NonDeferred
Foreign
Total netdifference on
Revaluation
Remeasurements accumulated
controlling
gains orcurrency
assetsavailable-forotherreserve forof defined benefit
interests
losses ontranslation
sale
land
plans
comprehensive
hedgesadjustment
securities
incomeBalance at
beginning ofcurrent period
Changes of items
during period
Dividend of
surplusProfitattributable toowners of parent
Purchase oftreasury shares
Disposal oftreasury shares
Reversal ofrevaluation
reserve for land
Net changes of
items other thanshareholders’equityTotal changes of
items during
periodBalance at end ofcurrent period

1,756

1,282

(6,629)110(1)(3,481)27

53,705

(416)
1,420
(136)
0
372

(484)

(1,294)

(353)

(254)

(21)

(2,409)36(2,372)(484)(1,294)

(353)

(254)

(21)

(2,409)36(1,133)

1,271

(11)

(6,983)

(143)

(23)

(5,890)64

52,572-9-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

Fiscal Year 2017 (Jan. 1, 2017 – Dec. 31, 2017)(Millions of yen)

Balance at beginning of current
periodChanges of items during period

Capital stock

Capital surplus

22,30423,860Shareholders’ equity
Retained
Treasury sharesearnings

Dividend of surplus
Loss attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve
for land
Change of scope of
consolidation
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current period

12,385

Total shareholders’equity(151)

58,399

(208)

(208)

(11,090)(11,090)

0

(0)

(0)

1

1

(5,927)(5,927)

(20)

(20)

-

0

(17,245)1(17,243)

22,30423,860(4,859)(149)

41,155(Millions of yen)

Accumulated other comprehensive income
Valuation
Total
NonForeign
Deferred
Total net
Revaluationdifference on
Remeasurements accumulated
controllingcurrency
gains orassetsreserve foravailable-forotherof definedinterests
translation
losses onland
sale
benefit plans comprehensive
adjustment
hedgessecurities
incomeBalance at
beginning ofcurrent period
Changes of items
during period
Dividend of
surplus
Loss attributableto owners ofparentPurchase oftreasury shares
Disposal oftreasury shares
Reversal ofrevaluation
reserve for land
Change of scopeof consolidation
Net changes of
items other thanshareholders’equityTotal changes of
items during
periodBalance at end ofcurrent period

1,271

(11)

(6,983)

(143)

(23)

(5,890)64

52,572(208)(11,090)(0)
1(5,927)
(20)

(55)

230

5,927

103

3

6,209

10

6,219

(55)

230

5,927

103

3

6,209

10

(11,024)

1,216

219

(1,056)

(40)

(19)

318

74

41,548- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017(4) Consolidated Statement of Cash Flows(Millions of yen)

Fiscal Year 2016
(Jan. 1, 2016 –Dec. 31, 2016)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for sales promotion expenses
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using equity method
Loss (gain) on sales of investment securities
Loss (gain) on sales and retirement of non-current assets
Loss on reduction of non-current assets
Subsidy income
Payments for business structure reform expenses
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Extra retirement payments
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from subsidy income
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Proceeds from capital reduction with compensation of subsidiaries and affiliates
Payments for sales of shares of subsidiaries resulting in change in scope of
consolidation
Proceeds from transfer of business
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Payment for redemption of bonds with subscription rights to shares
Redemption of bonds
Purchase of treasury shares
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting from change of scope of
consolidation
Cash and cash equivalents at end of period- 11 -

Fiscal Year 2017
(Jan. 1, 2017 –Dec. 31, 2017)

1,957
3,231
139
(70)
34
(131)
156
(228)
(436)
(2)
485
(511)
372
(2,565)
1,220
101
(995)
1,191
3,949
151
(161)
300
(414)
3,825

(10,899)
2,196
5,473
(5)
(29)
581
(114)
155
(238)
(715)
50
198
(210)
1,902
(1,503)
4,454
2,086
(302)
(858)
183
2,403
132
(154)
(428)
1,952

(1,583)
1,021
(613)
257
100
(89)
916
(100)
-

(1,165)
5
(529)
309
(150)
1,754
(835)
450

-

(302)

216
(30)
94

65
(397)

(30)
1,700
(2,117)
(450)
(136)
(418)
(128)
(1,580)(41)
2,297
14,30340
2,800(1,656)(2,000)
(0)
(209)
(122)
(1,148)(39)366
16,600-357

16,60017,323SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Additional Information(Provision for bonuses)
In 2016, bonuses for employees were included in the accrued expenses item of current liabilities. When the 2017consolidated financial statements were prepared, it was difficult to estimate the amount of bonuses to be paid.
Consequently, starting with the 2017 financial statements, expected bonus payments are shown separately as theprovision for bonuses. In the consolidated balance sheet as of the end of 2016, accrued expenses included
confirmed upcoming bonus payments of 590 million yen.

- 12 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

Segment Information
1. Overview of reportable segment
Segments used for financial reporting are Senshukai’s constituent units for which separate financial information
is available and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance.
The Senshukai Group primarily operates the mail-order business, bridal business, and corporates business, andSenshukai and its group companies manage each of these businesses according to these classifications.
Therefore the Group, comprised of these different business segments, has three reportable segments: themail-order business, bridal business, and corporates business.
The mail-order business is engaged in mail-order sales via a variety of media centered on catalogs and theInternet. The bridal business provides mostly house wedding services. The corporates business uses Senshukai’s
infrastructure to provide solutions services and promotional services targeting mail-order companies ande-commerce businesses.
2. Calculation methods for sales, profit or loss, assets, and other items for each reportable segment
The accounting methods for reportable segments are the same as those used for preparing the consolidated
financial statements.
Profits (loss) for reportable segments are generally operating profit (loss) figures.
Inter-segment sales or transfers are based on market prices.
3. Information related to sales and profit or loss, assets, and other items for each reportable segment
Fiscal Year 2016 (Jan. 1, 2016 – Dec. 31, 2016)
Reportable segment(Millions of yen)Amounts shown on
consolidated
Adjustment(Note 2) financial statements(Note 3)Sub-total

Others(Note 1)

Total

4,576

128,001

1,072

129,074-

129,074

0

106

1,094

0

1,095

(1,095)-

16,8184,682

129,096

1,073

130,169(1,095)129,074

(240)

751

517

1,028

146

1,174

20

1,194

83,002

20,145753

103,901

738

104,640(2,680)101,959

Mail-orderbusiness

Bridalbusiness

Corporates
business

106,606

16,818988
107,594

Net sales
Sales to customers
Inter-segment sales
or transfers
Total
Segment profit (loss)
Segment assets
Other items
Depreciation
2,181
1,009
24
3,215
15
3,231
3,231
Amortization of
216
216
216
216
goodwill
Investment inequity-method
865
2,961
3,826
3,826
3,826
affiliates
Increase in property,
plant and equipment
701
883
23
1,607
115
1,723
1,723
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of the services
business, which is primarily the insurance and credit card services, and childcare business.
2. Adjustments are as follows.
(1) The 20 million yen adjustment to segment profit (loss) is an elimination for inter-segment transactions.
(2) The (2,680) million yen adjustment to segment assets is an elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with the operating profit on the consolidated statement of income.

- 13 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

Fiscal Year 2017 (Jan. 1, 2017 – Dec. 31, 2017)(Millions of yen)Amounts shown on
consolidated
Adjustment(Note 2) financial statements(Note 3)

Reportable segment
Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

Total

Sales to customers
Inter-segment sales
or transfers
Total

101,279

18,132

4,833

124,245

1,753

125,999-

125,999

1,016

1

160

1,178

33

1,212

(1,212)-102,295

18,134

4,994

125,424

1,787

127,211(1,212)125,999

Segment profit (loss)(5,707)963

375(4,368)80(4,287)

0(4,287)

Segment assets

68,155

20,220868

89,2442,142

91,386(945)

90,441

Net sales

Other items
Depreciation
1,117
1,025
25
2,168
28
2,196
2,196
Amortization of
216
216
20
236
236
goodwill
Investment inequity-method
547
3,358
3,905
3,905
3,905
affiliates
Increase in property,
plant and equipment
1,063
414
0
1,478
69
1,548
1,548
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of the services
business, which is primarily the insurance and credit card services, and childcare business.
2. Adjustments are as follows.
(1) The 0 million yen adjustment to segment profit (loss) is an elimination for inter-segment transactions.
(2) The (945) million yen adjustment to segment assets is an elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with the operating loss on the consolidated statement of income.

4. Information related to impairment of noncurrent assets for each reportable segment
Fiscal Year 2016 (Jan. 1, 2016 – Dec. 31, 2016)
Mail-orderbusiness
Impairment loss

(Millions of yen)

Bridalbusiness

136

Corporates
business2

Elimination or
corporate

Others---Fiscal Year 2017 (Jan. 1, 2017 – Dec. 31, 2017)
Mail-orderbusiness
Impairment loss

4,877

Total
139

(Millions of yen)

Bridalbusiness

Corporates
business

550

Others-- 14 -

Elimination or
corporate
44

-

Total
5,473

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2017

Per Share Information
Fiscal Year 2016
(Jan. 1, 2016 – Dec. 31, 2016)(Yen)
Fiscal Year 2017
(Jan. 1, 2017 – Dec. 31, 2017)

1,009.26

797.13

Net income (loss) per share

27.26(213.16)

Diluted net income per share

24.16

-

Net assets per share

Notes: 1. Diluted net income per share in Fiscal Year 2017 is not presented since Senshukai has outstanding dilutive securities,
though posted a net loss.
2. Senshukai’s stock held by the executive stock compensation trust is included in treasury shares, which is deducted fromthe number of shares outstanding at the end of the period for the calculation of net assets per share (deduction of 180,000
shares in Fiscal Year 2016 and 177,000 shares in Fiscal Year 2017). In addition, this trust stock is included in treasury
shares, which is deducted from the average number of shares outstanding during the period for the calculation of net
income (loss) per share and diluted net income per share (deduction of 180,000 shares in Fiscal Year 2016 and 178,000
shares in Fiscal Year 2017).
3. Basis for calculation of net income (loss) per share and diluted net income per share is as follows.
(Millions of yen)
Fiscal Year 2016
Fiscal Year 2017
(Jan. 1, 2016 – Dec. 31, 2016)(Jan. 1, 2017 – Dec. 31, 2017)
Net income (loss) per share
Profit (loss) attributable to owners of parent
Amounts unavailable to common shareholders
Profit (loss) attributable to owners of parent related tocommon stock
Average number of shares outstanding during the period(thousand shares)

1,420(11,090)

-

-

1,420

(11,090)

52,09652,028

Diluted net income per share
Adjustment to profit attributable to owners of parent
Increase in number of common stock (thousand shares)[Including: subscription rights to shares (thousand shares)]
Number of residual securities with no dilution excluded
from calculation of diluted net income per share

-

-

6,679

-

[ 6,679]

[ -]

-

-

Subsequent Events
Not applicable.

* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which has
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

- 15 -