Summary of Financial Results for the First Quarter of Fiscal Year 2010
(Three Months Ended March 31, 2010)
April 30, 2010
Company name: Senshukai Co., Ltd.
Stock Exchanges: Tokyo and Osaka, First Sections
Stock Code:8165
URL: http://www.senshukai.co.jp
Representative:
Mr. Yasuhiro Yukimachi, President and Representative Director
Inquiries:
Mr. Michio Tanabe, Senior Managing Director
Tel: +81-6-6881-3100
Scheduled date of filing of Quarterly Report: May 14, 2010
Scheduled date of payment of dividend: (All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the 1st Quarter of 2010 (January 1, 2010 – March 31, 2010)(1) Consolidated operating results (cumulative)(Percentages represent changes from the same period of the previous fiscal year)
Operating income
Ordinary income
Net income

Net sales
Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

32,16435,617

(9.7)
-

529
(1,960)

-

1,063
(526)

-

1,077
(761)

-

1Q 2010
1Q 2009

Net income per share

Diluted net income per
share

Yen

Yen

24.88
(16.30)-

1Q 2010
1Q 2009(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

1Q 201089,946
Fiscal Year 2009
91,837
Reference: Shareholders’ equity (million yen)
1Q 2010:

Net assets per share%

39,85237,906

Yen

44.3
41.3
Fiscal Year 2009:

39,842919.92874.8937,892

2. Dividends
1Q-endFull Year 2009
Full Year 2010
Full Year 2010 (forecasts)

Dividend per share
3Q-end2Q-endYearend

Total

Yen

Yen

Yen

Yen

Yen

-

6.00

-

0.00

6.00

6.00

-

6.00

12.00

Note: Revision of dividend forecast during the period: None

3. Consolidated Outlook for Fiscal Year 2010 (January 1, 2010 – December 31, 2010)
Net sales
Millions of yen(Percentages represent changes from the same period of the previous fiscal year)
Net income per
Ordinary income
Net income
Operating income
share% Millions of yen% Millions of yen

2Q 2010 (cumulative)
71,500 (6.3)
750Full Year 2010
142,300 (3.4)
2,100Note: Revision of consolidated outlook during the period: None

-1-

950
2,050

% Millions of yen

%

Yen

-

-

16.85
38.10

730
1,650

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

4. Other(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Application of simplified accounting methods and special accounting methods in the preparation of quarterly
consolidated financial statements: Yes
Note: Please refer to “Qualitative Information and Financial Statements, 4. Others” on page 5 for further information.

(3) Changes in accounting principles, procedures and presentation methods for preparation of quarterly consolidated
financial statements
1) Changes caused by revision of accounting standards: None
2) Other changes: None

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at end of period (including treasury stock)
1Q 2010:47,630,393 sharesFiscal Year 2009:

47,630,393 sharesFiscal Year 2009:

4,319,385 shares

1Q 2009:46,712,357 shares

2) Number of treasury stock at end of period
1Q 2010:

4,319,980 shares

3) Average number of shares outstanding during the period
1Q 2010:43,310,631 shares*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 page4, “Qualitative Information and Financial Statements, 3. Qualitative Information Regarding Consolidated Outlook.”-2-

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

Qualitative Information and Financial Statements
1. Qualitative Information Regarding Consolidated Results of Operations
In the first quarter (January 1, 2010 to March 31, 2010) of the current fiscal year, the Japanese economy showedsigns of a gradual pick up due to a recovery in exports and other factors, but corporate profits continued to fall
sharply, and personal consumption remained weak due to the harsh environment for jobs and income. The businessenvironment for the retail industry was also harsh because sluggish sales became a problem for all retail sub-sectors
as deepening deflation lowered sales prices and prompted retailers to launch bargain sales of seasonal products
earlier than normal. We believe conditions will remain harsh due to the weak self-sustaining recovery of personal
consumption.
In this environment, the Senshukai Group will pull together to achieve the targets of its medium-term management
plan which concludes in Fiscal Year 2010, the current fiscal year.
Net sales in the first quarter of the fiscal year declined 9.7% year-over-year to 32,164 million yen.
Despite the decline in sales, operating income improved to a 529 million yen gain in the first quarter of the current
fiscal year, compared with an operating loss of 1,960 million yen in the same period of the previous fiscal year, due
to a decline in the cost-of-sales ratio and reductions in selling, general and administrative expenses.
Ordinary income totaled 1,063 million yen, compared with an ordinary loss of 526 million yen in the same period of
the previous fiscal year, due to foreign exchange gains, gain on valuation of compound financial instruments andother factors. Net income totaled 1,077 million yen, compared with a net loss of 761 million yen in the same periodof the previous fiscal year.
Segment information(Mail-order Business)
Consolidated sales in the mail-order business, which comprises the catalog and the hanpukai businesses, decreased
12.1% year-over-year to 28,311 million yen in the first quarter due to lackluster consumption.
In terms of profits, the Group booked operating income of 657 million yen, compared with an operating loss of
1,679 million yen in the same period of the previous fiscal year, as a decline in loss on valuation of inventories
lowered the cost-of-sales ratio.
(1) Catalog business
Consolidated sales in the catalog business decreased 11.9% year-over-year to 25,940 million yen.
(2) Hanpukai business
Consolidated sales in the hanpukai business declined 14.3% year-over-year to 2,370 million yen.
(Other Businesses)
The “other businesses” segment consists of the services business which primarily offers travel and credit card
services, the storefront business, the pet business, the corporates business which provides products and services tocorporations, and wedding business. Consolidated sales in this segment increased 13.3% year-over-year to 3,853
million yen. Operating loss declined 148 million yen to 134 million yen.

-3-

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

2. Qualitative Information Regarding Consolidated Financial Position(Balance sheet position)
Assets totaled 89,946 million yen at the end of the first quarter of the current fiscal year, down 1,891 million yen
from the end of the previous fiscal year.
Current assets decreased 2,009 million yen to 40,107 million yen. The main factors were an increase of 249 million
yen in merchandise and finished goods, and decreases of 2,041 million yen in accounts receivable-other and 337
million yen in cash and deposits. Noncurrent assets increased 117 million yen to 49,838 million yen, mainly due to adecrease of 246 million yen in property, plant and equipment, and increases of 52 million yen in intangible assets
and 311 million yen in investments and other assets.
Current liabilities decreased 3,275 million yen to 38,045 million yen. The main factors were decreases of 990
million yen in accounts payable-factoring, 908 million yen in forward exchange contracts, and 440 million yen in
short-term loans payable. Noncurrent liabilities decreased 561 million yen to 12,047 million yen, mainly due todecreases in bonds payable of 350 million yen and long-term loans payable of 193 million yen.
Net assets increased 1,945 million yen to 39,852 million yen. The main factors were increases in retained earningsof 1,124 million yen, deferred gains or losses on hedges of 527 million yen and valuation difference on
available-for-sale securities of 343 million yen. Consequently, the equity ratio was 44.3%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the first quarter of the current fiscal year was 8,296 million
yen, a decrease of 499 million yen from the end of the previous fiscal year.
Operating activities provided net cash of 992 million yen. The main contributing factors were a 1,862 million yen
decrease in other current assets and income before income taxes and minority interests of 1,090 million yen.
Negative factors included a 1,146 million yen decrease in other current liabilities.
Investing activities used net cash of 500 million yen. The main cash inflow was a 200 million yen proceeds fromredemption of investment securities. The main cash outflows were 542 million yen for purchase of property, plantand equipment and 234 million yen for purchase of intangible assets.
Financing activities used net cash of 984 million yen. The main cash inflow was a 300 million yen proceeds fromlong-term loans payable, while cash outflows include a net decrease in short-term loans payable of 500 million yen,
repayment of long-term loans payable of 433 million yen, and redemption of bonds of 350 million yen.

3. Qualitative Information Regarding Consolidated Outlook
Senshukai believes harsh business conditions will continue throughout the current fiscal year due to the uncertain
outlook for the domestic economy including concerns of weak personal consumption and unfavorable weather.
Operating income increased in the first quarter due to a decline in loss on valuation of inventories, but in light of
uncertain economic trends including weak personal consumption and unfavorable weather, Senshukai maintains theinitial consolidated forecasts for the current fiscal year (January 1, 2010 to December 31, 2010) that it released
along with its announcement of Fiscal Year 2009 results.
It also maintains its non-consolidated outlook.

-4-Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

4. Others(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation)
Not applicable.
(2) Application of simplified accounting methods and special accounting methods in the preparation of quarterly
consolidated financial statements(Simplified accounting methods)
1) Method for estimating the uncollectible amount of general reserve
The uncollectible amount of general reserve was estimated using the historical default rates at the end of theprevious fiscal year as the ratio at the end of the first quarter of the current fiscal year was found not to besignificantly different from the ratio at the end of the previous fiscal year.
2) Valuation of inventories
For inventories at the end of the first quarter of the current fiscal year, a valuation was determined by using areasonable method based on actual inventories at the end of the previous fiscal year. No physical inventory count
was performed.
3) Calculation of depreciation expense for noncurrent assets
For assets subject to the declining-balance method, depreciation expense for the period is calculated pro rata fromthe full-year amount of depreciation expense for the fiscal year.
4) Judgments about the recoverability of deferred tax assets
Judgments about the recoverability of deferred tax assets are made based on the earnings forecast at the end of theprevious fiscal year and tax planning with regard to items where there have been no significant changes in theoperating environment or in the occurrence of temporary differences following the end of the previous fiscal year.
(Special accounting methods in the preparation of quarterly financial statements)
The tax expenses were calculated by first estimating the effective tax rate after the application of tax effectaccounting with respect to income before income taxes and minority interests during the fiscal year, and multiplyingthat rate by the quarterly income before income taxes and minority interests. However, the Company uses legally
stipulated effective tax rates to calculate tax expenses for cases in which using estimated tax rates gives a noticeably
irrational result. Income taxes-deferred were included and displayed with income taxes.
(3) Changes in accounting principles, procedures and presentation methods for preparation of quarterly consolidated
financial statements
Not applicable.

-5-

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

5. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Million yen)
Fiscal Year 2009 Summary(As of Dec. 31, 2009)

1Q 2010(As of Mar. 31, 2010)
AssetsCurrent assets
Cash and deposits

8,275

8,613

Notes and accounts receivable-trade

10,224

10,248

Short-term investment securities

20

182

Merchandise and finished goods

11,216

10,967

Raw materials and supplies

117

112

Accounts receivable-other

5,527

7,568

Other

4,987

4,719

Allowance for doubtful accounts

(262)

(294)

Total current assets

40,107

42,117

Buildings and structures, net

14,68914,219Land

10,98011,078

Noncurrent assets
Property, plant and equipment

Other, net

2,136

2,753

Total property, plant and equipment

27,80628,052

Goodwill

2,746

2,793

Other

2,855

2,756

Total intangible assets

5,602

5,549

Investment securities

9,672

9,378

Other

6,939

6,950

Allowance for doubtful accounts

(182)

(210)

Total investments and other assets

16,42916,11849,83849,72089,946

91,837

Intangible assets

Investments and other assets

Total noncurrent assets
Total assets-6-Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

(Million yen)
Fiscal Year 2009 Summary(As of Dec. 31, 2009)

1Q 2010(As of Mar. 31, 2010)
Liabilities
Current liabilities
Notes and accounts payable-trade

6,696

6,934

Short-term loans payable

5,483

5,923

Current portion of bonds

766

766

Accounts payable-factoring

12,716

13,707

Income taxes payable

105

271

Provision for sales promotion expenses

541

526

2,136

3,045

Other

9,600

10,146

Total current liabilities

38,04541,321

Bonds payable

3,702

4,052

Long-term loans payable

7,390

7,584

Forward exchange contracts

Noncurrent liabilities

Provision for retirement benefits

38

35

Other

916

937

Total noncurrent liabilities

12,047

12,60950,09353,930Capital stock

20,35920,359

Capital surplus

21,03821,038Retained earnings

10,641

9,517

Treasury stock(2,775)(2,774)

Total shareholders’ equity

49,264

48,140Total liabilities
Net assets
Shareholders’ equity

Valuation and translation adjustments
Valuation difference on available-for-sale securities(669)(1,013)

Deferred gains or losses on hedges(1,517)(2,044)

Revaluation reserve for land

(7,115)(7,067)

Foreign currency translation adjustment

(121)

(122)

Total valuation and translation adjustments(9,422)(10,247)

Minority interests
Total net assets
Total liabilities and net assets

-7-

10

14

39,85237,90689,946

91,837

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010(2) Quarterly Consolidated Statements of Income(For the Three-month Period)
1Q 2009(Jan. 1, 2009 – Mar. 31, 2009)(Million yen)
1Q 2010(Jan. 1, 2010 – Mar. 31, 2010)

Net sales

35,61732,164

Cost of sales

19,80916,059Gross profit

15,807

16,104

Selling, general and administrative expenses

17,767

15,575

Operating income (loss)(1,960)529

Interest income

30

19Dividends income

11Gain on valuation of compound financial instruments-

101

Non-operating income

Foreign exchange gains

1,733

356

55

157

1,820

636

Interest expenses

63

75

Loss on valuation of compound financial instruments

137-

Equity in losses of affiliates

17-

Bond issuance cost

127

-

Other

41

26

Total non-operating expenses

387

102

(526)

1,063

Gain on sales of noncurrent assets-

12

Reversal of allowance for doubtful accounts

-

28

Other

-

0

Total extraordinary income

-

41

Other
Total non-operating income
Non-operating expenses

Ordinary income (loss)
Extraordinary income

Extraordinary loss
Loss on sales and retirement of noncurrent assets

6

7Loss on valuation of investment securities

331-

Loss on valuation of golf club membership

-

4

Other

-

2

337

13

Income (loss) before income taxes and minority interests

(863)

1,090

Income taxes

(55)

17

Minority interests in loss

(47)

(4)

Net income (loss)

(761)

1,077

Total extraordinary losses-8-Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010(3) Quarterly Consolidated Statements of Cash Flows(Million yen)
1Q 2010
1Q 2009(Jan. 1, 2009 – Mar. 31, 2009) (Jan. 1, 2010 – Mar. 31, 2010)
Net cash provided by (used in) operating activities
Income (loss) before income taxes and minority interests

(863)

1,090

Depreciation and amortization

597

585

Increase (decrease) in allowance for doubtful accounts

(11)

(60)

Increase (decrease) in allowance for sales promotion expenses

27

15Interest and dividends income

(32)

(21)

Interest expenses

6375(1,802)

(366)

17

(10)

Loss (gain) on valuation of compound financial instruments

137

(101)

Bond issuance cost

127

-

6

(5)

-

2

331

-

Foreign exchange losses (gains)
Equity in (earnings) losses of affiliates

Loss (gain) on sales and retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss on valuation of golf club memberships
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets

-

4

(820)

23

195

(254)

1,301

1,862

Increase (decrease) in notes and accounts payable-trade

285

(238)

Increase (decrease) in accrued consumption taxes

(160)

(141)

Increase (decrease) in other current liabilities(879)(1,146)

Other, net

(340)

37

Subtotal(1,820)1,349Interest and dividends income received

62

23Interest expenses paid

(43)

(100)

Payments for cancelation money on derivative contract
Income taxes paid
Net cash provided by (used in) operating activities(3,760)

-

(236)

(279)

(5,798)

992

(313)

(542)

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment-

125

Purchase of intangible assets

(163)

(234)

Purchase of investment securities

(25)

(20)

-

4

Proceeds from sales of investment securities
Proceeds from redemption of investment securities-

200

Purchase of investments in subsidiaries

(65)

(0)

Other, net

23

(32)

(544)

(500)

Net cash provided by (used in) investing activities-9-Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

(Million yen)
1Q 2009
1Q 2010(Jan. 1, 2009 – Mar. 31, 2009) (Jan. 1, 2010 – Mar. 31, 2010)
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable(8,000)(500)

Proceeds from long-term loans payable

7,184

300

Repayment of long-term loans payable

(97)

(433)

Proceeds from issuance of bonds

4,872

-

-

(350)

Purchase of treasury stock

(0)

(0)

Proceeds from sales of treasury stock0-

Redemption of bonds

Cash dividends paid

(393)

(0)

Net cash provided by (used in) financing activities

3,565

(984)

7

(6)

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents(2,769)(499)

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated
subsidiary

8,186

8,795

195

-

Cash and cash equivalents at end of period

5,612

8,296

- 10 -

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010

(4) Going Concern Assumption
Not applicable.

(4) Segment Information
Business segments
1Q 2009 (Jan. 1, 2009 – Mar. 31, 2009)(Million yen)
Mail-orderbusiness

Other businesses

Elimination or
corporate

Total

Consolidated

Net sales(1) Sales to customers

32,2153,401

35,617-35,617(2) Inter-segment sales

293

389

683

(

683)

-

Total

32,5093,791

36,300(683)

35,617

Operating loss

(1,679)(282)(1,962)

2(1,960)Notes: 1. The classification of business segments is based on categories adopted for internal management purposes.
2. Principal activities of each business segment(1) Mail-order business: Catalog and hanpukai businesses(2) Other businesses:

Product sales, services, and transportation

3. Change in accounting policy“Accounting Standards for Measurement of Inventories” (Accounting Standards Board of Japan (ASBJ) Statement No.
9) has been adopted with effect from the first quarter of the current fiscal year. As an effect of this change, operating
loss in the mail-order business increased by 960 million yen. There is no effect on other businesses.
1Q 2010 (Jan. 1, 2010 – Mar. 31, 2010)(Million yen)
Mail-orderbusiness

Other businesses

Elimination or
corporate

Total

Consolidated

Net sales(1) Sales to customers

28,311

3,853

32,164(2) Inter-segment sales

395

244

639

28,706

4,097

32,804

Total-

32,164

(

639)

-

(

639)

32,164

Operating income (loss)
657
(134)
523
5
Notes: 1. The classification of business segments is based on categories adopted for internal management purposes.

529

2. Principal activities of each business segment(1) Mail-order business: Catalog and hanpukai businesses(2) Other businesses:

Product sales, services, and transportation

Geographical segment information
1Q 2009 (Jan. 1, 2009 – Mar. 31, 2009), 1Q 2010 (Jan. 1, 2010 – Mar. 31, 2010)
Geographic segment information has not been presented because the Company and its consolidated subsidiaries have conducted
over 90% of their total net sales in Japan.

Overseas sales
1Q 2009 (Jan. 1, 2009 – Mar. 31, 2009), 1Q 2010 (Jan. 1, 2010 – Mar. 31, 2010)
Overseas sales have not been presented because they represented less than 10% of total consolidated sales.

- 11 -

Senshukai Co., Ltd. (8165) Financial Report for the First Quarter of Fiscal Year 2010(6) Significant Changes in Shareholders’ Equity
Senshukai reduced the amount of legal capital surplus and transferred this to its capital surplus in line with aresolution adopted at its annual general meeting of shareholders held on March 30, 2010.
(1) Purpose of reducing legal capital surplus
For the purpose of ensuring flexibility and mobility of its future capital policy, Senshukai reduced the amount oflegal capital surplus and transferred the same amount to other capital surplus in line with Article 448, Clause 1 of
the Company Act.
i) Amount of decline in reserves
Legal capital surplus: 7,000,000,000 yen of 19,864,139,367 yenii) Increase in surplus item and amount
Other capital surplus: 7,000,000,000 yen(2) Treatment of surplus
For the purpose of covering for the loss in retained earnings brought forward and to ensure flexibility and mobilityof the capital policy, Senshukai reduced the entire amount of general reserves and transferred the same amount toretained earnings brought forward in line with Article 452 of the Company Act.
i) Decline in surplus item and amount
General reserve: 13,600,000,000 yenii) Increase in surplus item and amount
Retained earnings brought forward: 13,600,000,000 yen* 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.

- 12 -