Summary of Financial Results for the Third Quarter of Fiscal Year 2017
(Nine Months Ended September 30, 2017)[Japanese GAAP]
October 27, 2017

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange, First Section
8165
URL: http://www.senshukai.co.jp
Mr. Hiroyuki Hoshino, President and Representative Director
Mr. Takeshi Naito, Director, Executive Officer, in charge of Corporate Planning
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: November 13, 2017
Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting: None
Stock code:
Representative:
Inquiries:(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 3rd Quarter of 2017 (January 1, 2017 – September 30, 2017)(1) Consolidated operating results (cumulative)(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating income
Ordinary income
owners of parent

Net sales
Millions of yen%

Millions of yen%

3Q 2017
90,330(2.9)(2,777)
93,057(3.3)(838)
3Q 2016
Note: Comprehensive income (millions of yen)
3Q 2017: (7,771) (- %)Millions of yen

Net income per share

Diluted net income per share

Yen

Yen

(149.66)
2.78

2.46

3Q 2017
3Q 2016%

Millions of yen(2,254)(185)
3Q 2016: (4,164) (- %)%(7,786)144-(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

3Q 2017
91,59944,594
Fiscal Year 2016
101,959
52,572
Reference: Shareholders’ equity (millions of yen) 3Q 2017: 44,531

Net assets per share
%

Yen

48.6
51.5
Fiscal Year 2016: 52,508

855.901,009.26

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

Yen

Fiscal Year 2016
4.00
Fiscal Year 2017
0.00
Fiscal Year 2017 (forecasts)
Note: Revision to the most recently announced dividend forecast: None

Year-end

Total

Yen

Yen

Yen

-

4.00

8.00

0.00

0.00

3. Consolidated Outlook for Fiscal Year 2017 (January 1, 2017 – December 31, 2017)(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable to Net income
Operating income
Ordinary income
owners of parent
per share

Net sales% Millions of yen%

Millions of yen%

Yen

Full Year 2017
126,900 (6.0)(3,800)(3,600)Note: Revision to the most recently announced consolidated outlook: None

Millions of yen%

Millions of yen-(10,400)-(199.89)

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to “2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated
Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial
Statements)” on page 8 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 the end of the period (including treasury shares)
3Q 2017:

52,230,393 sharesFiscal Year 2016:

52,230,393 sharesFiscal Year 2016:

203,527 shares

2) Number of treasury shares at the end of the period
3Q 2017:201,397 shares

3) Average number of shares outstanding during the period
3Q 2017:52,027,864 shares

3Q 2016:

52,119,496 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.
* This quarterly financial report is not subject to quarterly review procedures.
* 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 to page3, “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts
and Other Forward-looking Statements.”

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

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

2(2) Explanation of Financial Position

2(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income6

Quarterly Consolidated Statement of Income(For the Nine-month Period)

6

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)7(3) Notes to Quarterly Consolidated Financial Statements

8(Going Concern Assumption)

8(Significant Changes in Shareholders’ Equity)

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

8(Segment and Other Information)

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the cumulative third quarter (January 1 to September 30) of 2017, the Japanese economy continued to recoverslowly due to improvements in employment situation and personal income, although consumer spending was
sluggish. In Japan’s retail industry, market conditions remain challenging because of the uncertainty about theoutlook for consumer spending and heated competition in many business categories to sell products to consumers.
Net sales in the cumulative third quarter decreased 2.9% year-over-year to 90,330 million yen. The main reason
was lower sales in the mail-order business resulting from a review of the timing of new catalogs and the numberof catalogs distributed.
Operating loss was 2,777 million yen compared with a loss of 838 million yen in the same period of 2016 becauseof an increase in the cost to sales ratio caused by discount sales and higher valuation losses on goods. There wasan ordinary loss of 2,254 million yen compared with ordinary loss of 185 million yen in the same period of 2016.
Loss attributable to owners of parent was 7,786 million yen compared with a profit of 144 million yen in the same
period of 2016. This loss was mainly the result of an impairment loss.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, centered on the catalog and the Internet businesses, decreased 5.6%
year-over-year to 73,249 million yen. There was an operating loss of 3,318 million yen compared with a loss of
913 million yen in the same period of 2016.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 10.0%
year-over-year to 12,374 million yen. There was an operating income of 223 million yen compared with a loss of
361 million yen in the same period of 2016.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, increased
3.6% year-over-year to 3,605 million yen, and operating income decreased 23.1% to 303 million yen.
(Others)
Consolidated sales in other businesses, which consist of services (primarily insurance and credit card services)
and a childcare business, increased 47.7% year-over-year to 1,100 million yen. Operating income decreased
58.6% to 12 million yen.
(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 91,599 million yen at the end of the third quarter of 2017, a decrease of 10,360 million yen fromthe end of 2016.
Current assets decreased 4,605 million yen to 48,012 million yen. The main factors were decreases of 3,876
million yen in cash and deposits and 1,482 million yen in accounts receivable-other, while there was an increaseof 968 million yen in notes and accounts receivable-trade. Non-current assets decreased 5,754 million yen to
43,587 million yen. The factors include decreases of 3,596 million yen in property, plant and equipment due tobooking of impairment loss, 1,328 million yen in intangible assets, and 828 million yen in investments and otherassets.
Current liabilities decreased 2,035 million yen to 27,262 million yen. The main factors were decreases of 3,248
million yen in electronically recorded obligations-operating and 258 million yen in income taxes payable, while-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

there was an increase of 1,867 million yen in accounts payable-trade. Non-current liabilities decreased 346
million yen to 19,742 million yen. The main factor was a decrease of 2,000 million yen in bonds with subscription
rights to shares, while there was an increase of 1,660 million yen in long-term loans payable.
Net assets decreased 7,978 million yen to 44,594 million yen. The main factor was a decrease of 13,921 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 48.6%.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
Senshukai currently maintains its consolidated forecasts for 2017 that was released on July 21, 2017.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
3Q 2017(As of Sep. 30, 2017)

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

16,605

12,728Notes and accounts receivable-trade

3,889

4,858

Merchandise and finished goods

20,58020,971

Accounts receivable-other

7,818

6,335

Other

3,877

3,262

Allowance for doubtful accounts

(152)

(145)

52,61848,012

Buildings and structures, net

16,128

14,542

Land

11,31010,451Other, net

2,112

961

Total property, plant and equipment

29,551

25,954

2,027

2,056

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

Intangible assets
Goodwill
Other

2,120

762

Total intangible assets

4,147

2,819

Investment securities

8,651

8,185

Other

7,256

6,894

Investments and other assets

Allowance for doubtful accounts

(266)

(266)

Total investments and other assets

15,642

14,81349,341

43,587

101,959

91,599Total non-current assets
Total assets-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

(Millions of yen)
3Q 2017(As of Sep. 30, 2017)

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

10,365

7,116

Accounts payable-trade

5,840

7,708

Short-term loans payable

1,546

1,290

387

129

Income taxes payable
Provision for sales promotion expenses

437

431

Other

10,721

10,586

Total current liabilities

29,29827,262

Bonds with subscription rights to shares

7,000

5,000

Long-term loans payable

9,300

10,960Net defined benefit liability

98

96

Provision for management board incentive plan trust

97

Non-current liabilities

Other

3,680

3,677

Total non-current liabilities

20,08819,742

49,38747,005

Capital stock

22,30422,304

Capital surplus

23,86023,860Retained earnings

12,385(1,536)

Treasury shares

(151)

(149)

58,39944,479

1,271

1,120

Total liabilities
Net assets
Shareholders’ equity

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

(11)

63

(6,983)(1,056)

Foreign currency translation adjustment

(143)

(55)

Remeasurements of defined benefit plans

(23)

(19)

(5,890)52

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

-5-

64

62

52,572

44,594

101,959

91,599SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Statement of Income)(For the Nine-month Period)

Net sales
Cost of sales

3Q 2016(Jan. 1, 2016 – Sep. 30, 2016)
93,057
48,688(Millions of yen)
3Q 2017(Jan. 1, 2017 – Sep. 30, 2017)90,33049,717Gross profit

44,36940,613

Selling, general and administrative expenses

45,20843,391(838)(2,777)

21
79

20
70

427

346

237
205

179
131

970

748

118
199

116
108

318

224

Ordinary loss

(185)

(2,254)Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income

0
392
-

3
607
210

393

820

29
-

7
198
4,698
170

Operating loss
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodGain on adjustment of account payable
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses

Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on reduction of non-current assets
Impairment loss
Other
Total extraordinary losses

29

5,075

Profit (loss) before income taxes

178(6,508)

Income taxes

11

1,278

Profit (loss)

166(7,787)

Profit (loss) attributable to non-controlling interests

21

(1)

Profit (loss) attributable to owners of parent

144(7,786)-6-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

(Quarterly Consolidated Statement of Comprehensive Income)(For the Nine-month Period)
3Q 2016(Jan. 1, 2016 – Sep. 30, 2016)(Millions of yen)
3Q 2017(Jan. 1, 2017 – Sep. 30, 2017)

166(7,787)

(328)

(174)

(3,569)(61)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

18-

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

(74)

7

(377)

245

Total other comprehensive income
Comprehensive income(4,330)16(4,164)(7,771)(4,186)(7,770)21(1)Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Significant Changes in Shareholders’ Equity)
Not applicable.
(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)(Calculation of tax expense)
The tax expenses are calculated by first reasonably estimating the effective tax rate after the application of tax
effect accounting with respect to profit before income taxes for the fiscal year in which the quarter under review
falls, and multiplying that rate by the profit before income taxes for the quarter under review. However,Senshukai uses legally stipulated effective tax rates to calculate tax expenses for cases in which using estimatedtax rates gives a noticeably irrational result.
(Segment and Other Information)
I 3Q 2016 (Jan. 1, 2016 – Sep. 30, 2016)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment

Net sales
Sales to customers
Inter-segment sales
or transfers
Total
Segment profit (loss)

Corporates
Sub-total
business

Others(Note 1)

Total

(Millions of yen)Amounts shown on
Adjustment quarterly consolidated
statement of income(Note 2)
(Note 3)Mail-orderbusiness

Bridalbusiness

77,582

11,2503,479

92,312745

93,057-

93,057

683

-

82

765

0

766

(766)

-

78,265

11,2503,561

93,078745

93,824(766)

93,057

(913)

(361)

395

(879)

30

(849)

10

(838)

Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business, which is primarily the insurance and credit card services, and childcare business.
2. The 10 million yen adjustment to segment profit (loss) is an elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with the operating loss on the quarterly consolidated statement ofincome.

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
II 3Q 2017 (Jan. 1, 2017 – Sep. 30, 2017)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment
Corporates
Sub-total
business

Others(Note 1)

Total

(Millions of yen)Amounts shown on
Adjustment quarterly consolidated(Note 2)statement of income(Note 3)Mail-orderbusiness

Bridalbusiness

73,24912,374

3,605

89,2291,100

90,330-90,330Net sales
Sales to customers
Inter-segment sales
or transfers
Total

722

1

106

829

16

846

(846)

-

73,972

12,375

3,712

90,0591,117

91,177(846)

90,330

Segment profit (loss)(3,318)223

303(2,790)12(2,778)0(2,777)

Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of theservices business, which is primarily the insurance and credit card services, and childcare business.
2. The 0 million yen adjustment to segment profit (loss) is an elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with the operating loss on the quarterly consolidated statement ofincome.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2017

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment(Significant impairment losses related to non-current assets)
In the mail-order business, an asset impairment loss was recorded to write down the book value of some assets
to the amount that can be recovered in order because the performance of this segment has been well below theinitial plan. This impairment loss was 4,695 million yen in 3Q 2017.

* 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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