Summary of Financial Results for the Second Quarter of Fiscal Year 2012
(Six Months Ended June 30, 2012)[Japanese GAAP]
July 26, 2012
Company name: Senshukai Co., Ltd.
Stock exchanges: Tokyo and Osaka, First Sections
Stock code:
8165
URL: http://www.senshukai.co.jp
Representative:
Mr. Michio Tanabe, President and Representative Director
Inquiries:
Mr. Takeshi Naito, Executive Officer, General Manager of the Corporate Development Division
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: August 10, 2012
Scheduled date of payment of dividend: August 31, 2012
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting: Yes(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the 2nd Quarter of 2012 (January 1, 2012 – June 30, 2012)(1) Consolidated operating results (cumulative)
Net sales
Million yen

2Q 201274,031
2Q 201169,542
Note: Comprehensive income (million yen)

(Percentages represent changes from the same period of the previous fiscal year)
Operating income
Ordinary income
Net income%

Net income per share
2Q 2012
2Q 2011

Million yen

6.5
(0.1)
2Q 2012:%

Million yen

762 (68.2)
2,398
16.6
1,474 (down 45.7%)%

Million yen

1,180 (55.2)
2,631
30.9
2Q 2011: 2,717 (- %)

%

914
2,166

(57.8)
49.3

Diluted net income per
share

Yen

Yen

21.12
50.01

-

(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Million yen

2Q 201285,630Fiscal Year 2011
90,441
Reference: Shareholders’ equity (million yen) 2Q 2012:

42,61541,44442,615

Net assets per share
%

Yen

49.8
45.8
Fiscal Year 2011: 41,444

983.99956.94

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Yen

Fiscal Year 2011
7.00
Fiscal Year 2012
10.00
Fiscal Year 2012 (forecasts)
Note: Revision to the most recently announced dividend forecast: None

Year-end

Total

Yen

Yen

Yen

-

7.00

14.00

-

10.00

20.00

3. Consolidated Outlook for Fiscal Year 2012 (January 1, 2012 – December 31, 2012)(Percentages represent changes from the same period of the previous fiscal year)
Net income
Operating income
Ordinary income
Net income
per share

Net sales

Million yen%

Million yen%

Yen

Full Year 2012
147,500
7.5
3,300
6.2
3,500
Note: Revision to the most recently announced consolidated outlook: None

Million yen%

Million yen

%

8.2

2,850

80.0

65.81

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to “2. Matters Related to Summary Information (Notes)” on page 4 for further information.

(3) 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

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at end of period (including treasury stock)
2Q 2012:47,630,393 sharesFiscal Year 2011:

47,630,393 sharesFiscal Year 2011:

4,321,035 shares

2Q 2011:43,309,572 shares

2) Number of shares of treasury stock at end of period
2Q 2012:4,321,217 shares

3) Average number of shares outstanding during the period
2Q 2012:43,309,253 shares* Disclosure regarding the implementation of quarterly review procedures
These quarterly financial results materials are not subject to quarterly review procedures based on the Financial Instruments
and Exchange Act. Thus, at the time of its disclosure, the quarterly financial statement review procedures based on the
Financial Instruments and Exchange Act have not been completed.
* Cautionary statement with respect to forward-looking statements
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 topage 3, “Qualitative Information Regarding Consolidated Outlook.”Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Qualitative Information Regarding Consolidated Results of Operations

2(2) Qualitative Information Regarding Consolidated Financial Position

3(3) Qualitative Information Regarding Consolidated Outlook

3

2. Matters Related to Summary Information (Notes)

4(1) Changes in Significant Subsidiaries during the Period

4(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements

4(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements

4

3. Quarterly Consolidated Financial Statements

5(1) Quarterly Consolidated Balance Sheets

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income

7

Quarterly Consolidated Statements of Income(For the Six-month Period)

7

Quarterly Consolidated Statements of Comprehensive Income(For the Six-month Period)8(3) Quarterly Consolidated Statements of Cash Flows

9(4) Going Concern Assumption

10(5) Significant Changes in Shareholders’ Equity

10(6) Segment and Other Information

10

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Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Qualitative Information Regarding Consolidated Results of Operations
In the cumulative second quarter (January 1, 2012 to June 30, 2012) of the current fiscal year, the Japanese economy
gradually recovered supported by reconstruction demand in the aftermath of the Great East Japan Earthquake.
However, the outlook for the domestic economy and personal consumption remained uncertain due to the yen’s
protracted appreciation in the wake of European debt crisis, and the stock market’s weakness.
In this environment, the Senshukai Group pulled together to achieve the second fiscal year targets of its
medium-term management plan which concludes in Fiscal Year 2013.
Net sales in the cumulative second quarter rose 6.5% year-over-year to 74,031 million yen.
As for profits, operating income declined 68.2% year-over-year to 762 million yen due to a decline in the grossprofit margin in the mail-order business and an increase in selling, general, and administrative expenses.
Ordinary income declined 55.2% year-over-year to 1,180 million yen despite foreign exchange gains. Net income
decreased 57.8% year-over-year to 914 million yen.

Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, comprising the catalog and the hanpukai businesses, increased 6.1%
year-over-year to 66,640 million yen in the cumulative second quarter. Although sales in the hanpukai businessdeclined, sales in the catalog business steadily increased.
The gross profit margin deteriorated due to an increase in sales of Internet-only products which tend to have a highcost of sales, and an increase in bargain sales and inventory clearance sales. Also, selling, general and administrative
expenses rose due to an increase in distribution-related costs from an increase in the number of deliveries, anincrease in catalog costs from the issue of new catalogs, and an increase in depreciation related to new
systems-related investment. As a result, operating income declined 81.3% year-over-year to 408 million yen.
1) Catalog business
Consolidated sales in the catalog business rose 7.3% year-over-year to 62,102 million yen in the cumulative
second quarter.
2) Hanpukai business
Consolidated sales in the hanpukai business decreased 8.3% year-over-year to 4,538 million yen in the cumulative
second quarter.
(Bridal Business)
Consolidated sales in the bridal business, centered on the subsidiary Dears Brain Inc. which operates the housewedding business, rose 31.4% year-over-year to 4,738 million yen in the cumulative second quarter due to the dropout of the impact from the earthquake, and a contribution from the opening of “CANOVIANO Fukuoka.” Operating
income totaled 239 million yen compared with loss of 0 million yen in the same period of the previous fiscal year.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, decreased
18.4% year-over-year to 1,881 million yen in the cumulative second quarter due to the end of a contract with amajor outsourcing client until last year. Operating income declined 34.2% year-over-year to 177 million yen.

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Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

(Others)
Consolidated sales in other businesses, which consist of the services business (primarily travel and credit card
services) and the pet business (pet goods sales through retail stores), decreased 6.5% year-over-year to 771 million
yen in the cumulative second quarter. Operating loss totaled 63 million yen, compared with loss of 52 million yen in
the same period of the previous fiscal year.
(2) Qualitative Information Regarding Consolidated Financial Position(Balance sheet position)
Assets totaled 85,630 million yen at the end of the second quarter of the current fiscal year, down 4,810 million yen
from the end of the previous fiscal year.
Current assets decreased 5,771 million yen to 38,710 million yen. The main factors were decreases of 3,541 million
yen in cash and deposits, and 1,144 million yen in merchandise and finished goods. Noncurrent assets increased 961
million yen to 46,920 million yen, mainly due to decreases of 352 million yen in intangible assets and 377 million
yen in investments and other assets, and an increase of 1,691 million yen in property, plant and equipment.
Current liabilities decreased 6,056 million yen to 35,187 million yen. The main factors were decreases of 2,458
million yen in short-term loans payable, 2,219 million yen in notes and accounts payable-trade, and 2,110 million
yen in other. Noncurrent liabilities increased 75 million yen to 7,828 million yen. The main factors were decreasesof 350 million yen in bonds payable and 302 million yen in long-term loans payable, and an increase of 781 million
yen in other.
Net assets increased 1,171 million yen to 42,615 million yen. The main factors were increases of 611 million yen inretained earnings, 436 million yen in deferred gains or losses on hedges, and 110 million yen in valuation difference
on available-for-sale securities. Consequently, the equity ratio was 49.8%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the second quarter of the current fiscal year was 3,958
million yen, a decrease of 3,541 million yen from the end of the previous fiscal year.
Operating activities provided net cash of 1,597 million yen (year-over-year increase in income of 1,024 million yen).
The main cash inflows were income before income taxes and minority interests of 1,109 million yen, depreciation
and amortization of 1,409 million yen, a decrease in inventories of 1,152 million yen and a decrease in other current
assets of 1,118 million yen. The main cash outflows were a decrease in notes and accounts payable-trade of 2,219
million yen, and a decrease in other current liabilities of 923 million yen.
Investing activities used net cash of 1,813 million yen (year-over-year increase in outlays of 759 million yen). The
main cash outflow was 1,595 million yen for the purchase of property, plant and equipment.
Financing activities used net cash of 3,513 million yen (year-over-year increase in outlays of 1,532 million yen).
The main cash outflows include a decrease in short-term loans payable of 2,500 million yen, the repayment oflong-term loans payable of 711 million yen, and the redemption of bonds of 386 million yen.

(3) Qualitative Information Regarding Consolidated Outlook
Senshukai expects the business environment to remain harsh throughout the fiscal year due to consumers’ growing
thriftiness and preference for lower prices in a deflationary environment.
Senshukai has not changed the consolidated outlook for the current fiscal year (January 1, 2012 to December 31,2012) that was revised and released on July 20, 2012. It also maintains its non-consolidated outlook.

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Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

2. Matters Related to Summary Information (Notes)(1) Changes in Significant Subsidiaries during the Period
Not applicable.
(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements(Calculation of tax expense)
The tax expenses are calculated by first estimating the effective tax rate after the application of tax effect accounting
with respect to income before income taxes and minority interests during the fiscal year in which the quarter underreview falls, and multiplying that rate by the income before income taxes and minority interests for the quarter
under review. However, the Company uses legally stipulated effective tax rates to calculate tax expenses for cases inwhich using estimated tax rates gives a noticeably irrational result.
(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements
Not applicable.
(Additional information)
Application of Accounting Standard for Accounting Changes and Error Corrections
The Company has adopted the “Accounting Standard for Accounting Changes and Error Corrections” (AccountingStandards Board of Japan (ASBJ) Statement No. 24, December 4, 2009)” and the “Guidance on AccountingStandard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24, December 4, 2009) for
accounting method revisions and for corrections to past errors from the beginning of the first quarter of the current
fiscal year.

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3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Million yen)
2Q 2012(As of Jun. 30, 2012)

Fiscal Year 2011
(As of Dec. 31, 2011)
AssetsCurrent assets
Cash and deposits

7,500

3,958

Notes and accounts receivable-trade

6,589

6,646

Short-term investment securities

31

6

Merchandise and finished goods

17,022

15,878Raw materials and supplies

118

111

Accounts receivable-other

8,802

8,381

Other

4,696

3,981

Allowance for doubtful accounts

(278)

(255)

Total current assets

44,482

38,710

Buildings and structures, net

13,513

13,632

Land

10,88011,944

Noncurrent assets
Property, plant and equipment

Other, net

2,056

2,564

Total property, plant and equipment

26,44928,140Goodwill

2,429

2,353

Other

4,506

4,229

Total intangible assets

6,935

6,583

Investment securities

5,996

5,972

Other

6,921

6,541

Allowance for doubtful accounts

(343)

(317)

Total investments and other assets

12,574

12,19645,95946,92090,441

85,630Intangible assets

Investments and other assets

Total noncurrent assets
Total assets-5-Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

(Million yen)
2Q 2012(As of Jun. 30, 2012)

Fiscal Year 2011
(As of Dec. 31, 2011)
Liabilities
Current liabilities
Notes and accounts payable-trade

9,282

7,063

Short-term loans payable

3,843

1,384

Current portion of bonds

736

700

Accounts payable-factoring

13,71015,214

Income taxes payable

146

266

Provision for directors’ bonuses

31-

Provision for sales promotion expenses

613

564

Forward exchange contracts

1,941

1,164

Other

10,9398,829

Total current liabilities

41,24435,187

Bonds payable

2,550

2,200

Long-term loans payableNoncurrent liabilities
3,971

3,669

Provision for retirement benefits

31

32

Asset retirement obligations

364

309

Other

834

1,616

7,753

7,828

48,99743,015

Capital stock

20,35920,359

Capital surplus

21,03821,038Retained earnings

12,28812,899Treasury stock(2,775)(2,775)

Total shareholders’ equity

50,91051,521

Valuation difference on available-for-sale securities(1,008)(898)

Deferred gains or losses on hedges(1,237)(801)

Revaluation reserve for land

(7,041)(7,041)

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

-6-

(177)

(164)

(9,465)(8,906)41,44442,61590,441

85,630Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(For the Six-month Period)
2Q 2011(Jan. 1, 2011 – Jun. 30, 2011)(Million yen)
2Q 2012(Jan. 1, 2012 – Jun. 30, 2012)

Net sales

69,542

74,031

Cost of sales

35,73938,999Gross profit

33,80335,031

Selling, general and administrative expenses

31,40434,269Operating income

2,398

762

Interest income

24

25

Dividends income

8482

Foreign exchange gains

240

232

Other

183

285

Total non-operating income

532

626

118

121

Loss on valuation of compound financial instruments

8-

Relief aid expenses

97

-

Other

75

87

Non-operating income

Non-operating expenses
Interest expenses

Total non-operating expenses
Ordinary income

300

208

2,631

1,180

Extraordinary income
Gain on sales of noncurrent assets

11Gain on sales of investment securities

139

22

Total extraordinary income

140

23

Loss on sales and retirement of noncurrent assets

40

94

Provision of allowance for doubtful accounts

181-

Extraordinary loss

Loss on valuation of golf club membership
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Loss on disaster

0

-

111

-

49

-

Special retirement expenses

122

-

Other

16

-

Total extraordinary losses

522

94

2,249

1,109

83

195

Income before minority interests

2,166

914

Net income

2,166

914

Income before income taxes and minority interests
Income taxes-7-

Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

Quarterly Consolidated Statements of Comprehensive Income(For the Six-month Period)
2Q 2011(Jan. 1, 2011 – Jun. 30, 2011)(Million yen)
2Q 2012(Jan. 1, 2012 – Jun. 30, 2012)

2,166

914

Valuation difference on available-for-sale securities

(189)

110

Deferred gains or losses on hedges

736

436

4

10

(0)

2

550

559

2,717

1,474

2,717

1,474

-

-

Income before minority interests
Other comprehensive income

Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests-8-Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012(3) Quarterly Consolidated Statements of Cash Flows(Million yen)
2Q 2011
2Q 2012(Jan. 1, 2011 – Jun. 30, 2011) (Jan. 1, 2012 – Jun. 30, 2012)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests

2,249

1,109

Depreciation and amortization

1,145

1,409

Increase (decrease) in allowance for doubtful accounts

176

(49)

Increase (decrease) in allowance for sales promotion expenses

33

(49)

(108)

(107)

118

121

(430)

(333)

Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales and retirement of noncurrent assets

39

92

(138)

(22)

0

-

111

-

(390)

(56)

Decrease (increase) in inventories

(501)

1,152

Decrease (increase) in other current assets

1,058

1,118

Increase (decrease) in notes and accounts payable-trade(1,523)(2,219)

Increase (decrease) in other current liabilities(1,079)(923)

Loss (gain) on sales of investment securities
Loss on valuation of golf club memberships
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Decrease (increase) in notes and accounts receivable-trade

Other, net

126

430

Subtotal

885

1,672

Interest and dividends income received

108

107

Interest expenses paid

(122)

(126)

Income taxes (paid) refund

(298)

(55)

Net cash provided by (used in) operating activities

572

1,597

(339)

(1,595)(1,122)

(452)

(20)

(20)

Proceeds from sales of investment securities

617

141

Other, net

(189)

112

(1,054)(1,813)-(2,500)Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

300

450

Repayment of long-term loans payable(1,523)(711)

Redemption of bonds

(383)

(386)

Cash dividends paid

(345)

(303)

Other, net

(29)

(62)

(1,981)(3,513)

4

6

Net increase (decrease) in cash and cash equivalents(2,458)(3,722)

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from merger withunconsolidated subsidiaries

10,855

7,500

-

181

Cash and cash equivalents at end of period

8,397

3,958

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents-9-Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2012

(4) Going Concern Assumption
Not applicable.
(5) Significant Changes in Shareholders’ Equity
Not applicable.
(6) Segment and Other Information
I 2Q 2011 (Jan. 1, 2011 – Jun. 30, 2011)
1. Information related to sales and profit or loss for each reportable segment(Million yen)

Reportable segment
Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

Total

62,805

3,607

2,305

68,718824

69,542

Amounts shown onquarterly
Adjustment
consolidated(Note 2)statements of income(Note 3)

Net sales
Sales to customers-

69,542

Inter-segment sales

525

-

151

676

44

720

(

720)

-

Total

63,330

3,607

2,457

69,395868

70,263(

720)

69,542

Segment profit (loss)

2,177

(0)

270

2,447

(52)

2,395

3

2,398

Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business primarily offering travel and credit card services, and the pet business distributing pet goods sales
through retail stores.
2. The 3 million yen adjustment to segment profit comprises elimination for inter-segment transactions.
3. Segment profit is adjusted to be consistent with operating income shown on the quarterly consolidated statements ofincome.

2. Information related to impairment of noncurrent assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
II 2Q 2012 (Jan. 1, 2012 – Jun. 30, 2012)
1. Information related to sales and profit or loss for each reportable segment(Million yen)

Reportable segment
Mail-orderbusiness

Bridalbusiness

Corporates
business

Sub-total

Others(Note 1)

Total

66,640

4,738

1,881

73,259771

74,031

Amounts shown onquarterly
Adjustment
consolidated(Note 2)statements of income(Note 3)

Net sales
Sales to customers-

74,031

Inter-segment sales

295

-

31

326

43

370

(

370)

-

Total

66,935

4,738

1,912

73,586815

74,401(

370)

74,031

Segment profit (loss)

408

239

177

825

(63)

762

0

762

Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business primarily offering travel and credit card services, and the pet business distributing pet goods sales
through retail stores.
2. The 0 million yen adjustment to segment profit comprises elimination for inter-segment transactions.
3. Segment profit is adjusted to be consistent with operating income shown on the quarterly consolidated statements ofincome.

2. Information related to impairment of noncurrent assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
* 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.

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