Summary of Financial Results for the Third Quarter of Fiscal Year 2016
(Nine Months Ended September 30, 2016)[Japanese GAAP]
October 28, 2016

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,
General Manager of the Corporate Development Division
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: November 11, 2016
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 2016 (January 1, 2016 – September 30, 2016)(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%

93,057(3.3)(838)
3Q 2016
3Q 2015
96,191(5.8)(2,621)
Note: Comprehensive income (millions of yen)
3Q 2016: (4,164) (- %)Net income per share
3Q 2016
3Q 2015-

Millions of yen%

Millions of yen(185)(1,337)
3Q 2015: (2,201) (- %)%144(1,516)-

Diluted net income per share

Yen

Yen

2.78
(31.53)

2.46-(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

3Q 2016
100,218
Fiscal Year 2015
105,352
Reference: Shareholders’ equity (millions of yen) 3Q 2016: 48,938

48,98753,705

Net assets per share
%

Yen

48.8
51.0
Fiscal Year 2015: 53,678

940.63
1,028.17

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

Yen

Year-end

Total

Yen

Yen

Yen

-

4.00

8.00

4.00

8.00

Fiscal Year 2015
4.00
Fiscal Year 2016
4.00
Fiscal Year 2016 (forecasts)
Note: Revision to the most recently announced dividend forecast: None

3. Consolidated Outlook for Fiscal Year 2016 (January 1, 2016 – December 31, 2016)(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%

Millions of yen

Full Year 2016
133,700 (0.5)
1,300Note: Revision to the most recently announced consolidated outlook: None

1,750

%

Millions of yen

%

Yen

-

750

-

14.40

* 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), (2) Application of Special Accounting Methods
for Presenting Quarterly Consolidated Financial Statements” on page 3 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: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None
Note: Please refer to “2. Matters Related to Summary Information (Notes), (3) Changes in Accounting Policies andAccounting-based Estimates, and Restatements” on page 3 for further information.

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
3Q 2016:

52,230,393 sharesFiscal Year 2015:

52,230,393 sharesFiscal Year 2015:

23,256 shares

2) Number of treasury shares at the end of the period
3Q 2016:

203,399 shares

3) Average number of shares outstanding during the period
3Q 2016:

52,119,496 shares

3Q 2015:

48,099,833 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 at the end of 3Q (third quarter) 2016, and is deducted from the number of shares that isused to calculate the average number of shares outstanding during 3Q (cumulative third quarter) 2016.

* Disclosure regarding the implementation of quarterly review proceduresThis quarterly financial report is not subject to quarterly review procedures based on the Financial Instruments and ExchangeAct. 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 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 2016

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

2(2) Explanation of Financial Position

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

3

2. Matters Related to Summary Information (Notes)

3(1) Changes in Significant Subsidiaries during the Period

3(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements

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

3

3. Quarterly Consolidated Financial Statements

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income7

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

7

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)8(3) Notes to Quarterly Consolidated Financial Statements

9(Going Concern Assumption)

9(Significant Changes in Shareholders’ Equity)

9(Segment and Other Information)

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the cumulative third quarter (January 1, 2016 to September 30, 2016) of the current fiscal year, the Japanese
economy followed a moderate improvement trend in corporate earnings and the employment situation. However,
the economic outlook remains uncertain because of a possible economic slowdown in China and other emerging
countries and concerns over the global economy due to the effects of Brexit. Regarding the retailing industry,
consumers remained budget-minded and price conscious, taking a defensive stance toward spending. As a result,personal consumption on the whole was sluggish and lacked strength.
The Senshukai Group is currently in the third year of the medium- to long-term management plan “Innovate for
Smiles 2018” that covers the five-year period ending in 2018. All group companies are focusing their energy onachieving the goals of this plan.
Net sales in the cumulative third quarter decreased 3.3% year-over-year to 93,057 million yen. This was mainly
because of sluggish sales of apparel and fashion accessories which account for relatively large percentages of total
sales in our mainstay mail-order business.
Operating loss was 838 million yen compared with a loss of 2,621 million yen in the same period of the previous
fiscal year. Improvement in the gross profit margin and the reduction in selling, general and administrative
expenses fell short of offsetting the impact on earnings caused by lower sales. Ordinary loss was 185 million yen
compared with a loss of 1,337 million yen in the same period of the previous fiscal year. The increase was mainly
due to the share of profit of Watabe Wedding Corporation, which was included as an affiliate accounted for using
the equity method from the previous fiscal year. Profit attributable to owners of parent was 144 million yen
compared with a loss of 1,516 million yen in the same period of the previous fiscal year.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, centered on the catalog and the Internet businesses, decreased 5.7%
year-over-year to 77,582 million yen in the cumulative third quarter. There was an operating loss of 913 million
yen compared with a loss of 2,873 million yen in the same period of the previous fiscal year.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 10.1%
year-over-year to 11,250 million yen in the cumulative third quarter. There was an operating loss of 361 million
yen compared with operating loss of 38 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, increased
11.8% year-over-year to 3,479 million yen, and operating income increased 50.5% to 395 million yen.
(Others)
Consolidated sales in other businesses, which provides services business (primarily insurance and credit card
services) and childcare business, increased 27.0% year-over-year to 745 million yen, and operating income
increased 41.6% to 30 million yen.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 100,218 million yen at the end of the third quarter of the current fiscal year, a decrease of 5,133
million yen from the end of the previous fiscal year.
Current assets decreased 2,433 million yen to 49,513 million yen. The main factors were decreases of 3,908
million yen in cash and deposits and 2,914 million yen in accounts receivable-other, while there was an increaseof 4,294 million yen in merchandise and finished goods. Non-current assets decreased 2,699 million yen to 50,705
million yen. The factors were decreases of 1,336 million yen in property, plant and equipment, 743 million yen in
intangible assets and 619 million yen in investments and other assets.
Current liabilities decreased 1,325 million yen to 30,084 million yen. The main factors were decreases of 2,279
million yen in electronically recorded obligations-operating, 455 million yen in other, and 450 million yen incurrent portion of bonds, while there was an increase of 2,124 million yen in accounts payable-trade. Non-current
liabilities increased 910 million yen to 21,146 million yen. The main factors were increases of 619 million yen inother and 285 million yen in long-term loans payable.
Net assets decreased 4,718 million yen to 48,987 million yen. The main factors were decreases of 3,720 million
yen in deferred gains or losses on hedges, 353 million yen in revaluation reserve for land, and 341 million yen invaluation difference on available-for-sale securities. Consequently, the equity ratio was 48.8%.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
Senshukai currently maintains its consolidated outlook for the current fiscal year (January 1, 2016 to December
31, 2016) that was revised and released on July 22, 2016.
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 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, theCompany uses legally stipulated effective tax rates to calculate tax expenses for cases in which using estimatedtax rates gives a noticeably irrational result.
(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements(Application of the Accounting Standard for Business Combinations, etc.)
The Company has applied the “Accounting Standard for Business Combinations” (Accounting Standards Board ofJapan (ASBJ) Statement No. 21, September 13, 2013), “Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, September 13, 2013), “Accounting Standard for Business Divestitures”(ASBJ Statement No. 7, September 13, 2013), etc. from the first quarter. Accordingly, difference arising fromchanges in the Company’s ownership interests in subsidiaries in cases where control is retained is recognized incapital surplus, and acquisition-related costs in connection with business combinations are recognized as expenses
in the fiscal year in which they arise. Regarding business combinations that take place on or after the beginning of
the first quarter, the Company has revised the method to reflect reviewed allocation of the acquisition costs arisingfrom determination of the provisional accounting treatment on the quarterly consolidated financial statements towhich the date of the business combination belongs. In addition, the presentation of net income and other items
has been revised, and the minority interests item has been renamed non-controlling interests. For consistency with-3-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

these changes, the consolidated financial statements for the cumulative third quarter of the previous fiscal year
and the previous fiscal year have been revised.
The Company has adopted these accounting standards, etc. from the beginning of the first quarter, in accordancewith the transitional accounting treatments set forth in Article 58-2 (4) of the Accounting Standard for Business
Combinations, Article 44-5 (4) of the Accounting Standard for Consolidated Financial Statements, and Article
57-4 (4) of the Accounting Standard for Business Divestitures.
The application of these standards has no effect on earnings.
(Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016)
Following the change in the Corporation Tax Act, the Company has applied the “Practical Solution on a Change inDepreciation Method due to Tax Reform 2016” (ASBJ Practical Issues Task Force (PITF) No. 32, June 17, 2016)
from the second quarter of the current fiscal year, and changed the depreciation method for equipment attached tobuildings and structures acquired on or after April 1, 2016, from the declining-balance method to the straight-line
method.
The effect of this change on earnings is insignificant.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2015
(As of Dec. 31, 2015)

3Q 2016(As of Sep. 30, 2016)

AssetsCurrent assets
Cash and deposits

14,303

10,394

Notes and accounts receivable-trade

4,046

4,402

Merchandise and finished goods

18,02522,320Accounts receivable-other

9,781

6,867

Other

6,013

5,736

Allowance for doubtful accounts

(222)

(207)

51,94749,513

Buildings and structures, net

16,052

16,771Land

12,091

11,427

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

Other, net

3,826

2,434

Total property, plant and equipment

31,97030,633

Intangible assets
Goodwill

2,243

2,081

Other

2,853

2,271

Total intangible assets

5,097

4,353

Investment securities

9,877

9,260

Other

6,726

6,723

Allowance for doubtful accounts

(265)

(265)

Total investments and other assets

16,337

15,718Investments and other assets

Total non-current assets
Total assets-5-53,40450,705

105,352

100,218

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

(Millions of yen)
3Q 2016(As of Sep. 30, 2016)

Fiscal Year 2015
(As of Dec. 31, 2015)
Liabilities
Current liabilities
Electronically recorded obligations-operating

11,084

8,805

Accounts payable-trade

5,346

7,471

Short-term loans payable

2,111

1,817

Current portion of bonds

450-

Income taxes payable

121

176

Provision for sales promotion expenses

402

377

Other

11,892

11,436

Total current liabilities

31,41030,084

Bonds with subscription rights to shares

7,000

7,000

Long-term loans payable

9,181

9,467

Net defined benefit liability

93

98

Non-current liabilities

Other

3,961

4,581

Total non-current liabilities

20,23621,146

51,647

51,231

Capital stock

22,30422,304

Capital surplus

23,86023,860Retained earnings

11,009

11,109

(15)

(151)

57,15957,123

1,756

1,415

Deferred gains or losses on hedges

1,282(2,438)

Revaluation reserve for land

(6,629)(6,983)Foreign currency translation adjustment

110

(155)

Remeasurements of defined benefit plans

(1)

(23)

(3,481)(8,185)

Total liabilities
Net assets
Shareholders’ equity

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

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

-6-

27

49

53,70548,987

105,352

100,218

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Statement of Income)(For the Nine-month Period)
3Q 2015(Jan. 1, 2015 – Sep. 30, 2015)(Millions of yen)
3Q 2016(Jan. 1, 2016 – Sep. 30, 2016)

Net sales

96,191

93,057

Cost of sales

51,605

48,688Gross profit

44,58644,369Selling, general and administrative expenses

47,20745,208Operating loss

(2,621)(838)

Interest income

79

21

Dividend income
Share of profit of entities accounted for using equity
methodGain on adjustment of account payable

76

79

1,211

427

208

237

229

205

1,805

970

Non-operating income

Other
Total non-operating income
Non-operating expenses
Interest expenses

143

118

Other

377

199

Total non-operating expenses

521

318

(1,337)(185)

Ordinary loss
Extraordinary income
Gain on sales of non-current assets

170Gain on sales of investment securities

23

392

Subsidy income

150-

Total extraordinary income

190

393

Loss on sales and retirement of non-current assets

29

29

Loss on reduction of non-current assets

148-

Impairment loss

126-

Extraordinary losses

Total extraordinary losses

304

29

Profit (loss) before income taxes(1,451)

178

Income taxes

84

11

Profit (loss)(1,535)

166

(19)

21

(1,516)

144

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016

(Quarterly Consolidated Statement of Comprehensive Income)(For the Nine-month Period)
3Q 2015(Jan. 1, 2015 – Sep. 30, 2015)
Profit (loss)(Millions of yen)
3Q 2016(Jan. 1, 2016 – Sep. 30, 2016)(1,535)

166

482

(328)

(1,187)(3,569)Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land

53

18

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

(12)

(74)

(1)

(377)

Total other comprehensive income
Comprehensive income(665)(4,330)(2,201)(4,164)(2,181)(4,186)(19)

21

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

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2016(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Significant Changes in Shareholders’ Equity)
Not applicable.
(Segment and Other Information)
I 3Q 2015 (Jan. 1, 2015 – Sep. 30, 2015)
1. Information related to sales and profit or loss for each reportable segment(Millions of yen)

Reportable segment
Corporates
Sub-total
business

Others(Note 1)

Total

Amounts shown onquarterly
Adjustment
consolidated(Note 2)statement of income(Note 3)Mail-orderbusiness

Bridalbusiness

82,274

10,2193,111

95,605586

96,191-

96,191

615

-

111

727

0

728

(728)

-

82,88910,2193,223

96,332587

96,920(728)

96,191

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

Segment profit (loss)(2,873)(38)
262(2,649)21(2,627)
6(2,621)
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist mainly of
the services business primarily offering insurance and credit card services, and childcare business.
2. The 6 million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the quarterly consolidated statementof income.

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
II 3Q 2016 (Jan. 1, 2016 – Sep. 30, 2016)
1. Information related to sales and profit or loss for each reportable segment(Millions of yen)

Reportable segment

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

Corporates
Sub-total
business

Others(Note 1)

Total

Amounts shown onquarterly
Adjustment
consolidated(Note 2)statement of income(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)

93,05730
Segment profit (loss)
(913)
(361)
395
(879)
(849)
10
(838)
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist mainly of
the services business primarily offering insurance and credit card services, and childcare business.
2. The 10 million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the quarterly consolidated statementof income.

2. Information related to impairment of non-current 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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