Summary of Financial Results for the Second Quarter of Fiscal Year 2010
(Six Months Ended June 30, 2010)[Japanese GAAP]
July 29, 2010
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: August 11, 2010
Scheduled date of payment of dividend: September 1, 2010
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting: Yes

Company name: Senshukai Co., Ltd.

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the 2nd Quarter of 2010 (January 1, 2010 – June 30, 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%

69,62976,308

(8.8)
-

2,057
(474)

-

2,010
1,064

88.8
-

1,451
733

98.0
-

2Q 2010
2Q 2009

Net income per share

Diluted net income per
share

Yen

Yen

33.51
15.69

-

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

Net assets

Millions of yen

Equity ratio

Millions of yen

2Q 2010
86,205
Fiscal Year 2009
91,837
Reference: Shareholders’ equity (million yen)
2Q 2010:

Net assets per share%

39,28237,906

Yen

45.5
41.3
Fiscal Year 2009:

39,256906.39874.8937,892

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

Full Year 2009
Full Year 2010
Full Year 2010 (forecasts)
Note: Revision of dividend forecast during the period: None

Yearend

Total

Yen

Yen

Yen

Yen

6.00
6.00

-

0.00

6.00

-

6.00

12.00

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
Operating income
Ordinary income
Net income
share% Millions of yen% Millions of yen

Full Year 2010
139,400 (5.4)
2,700Note: Revision of consolidated outlook during the period: None

2,750

% Millions of yen

%

Yen

-

-

47.33

2,050

4. Other (Please refer to “2. Other Information” on page 4 of the attached documents for further information)(1) Changes in significant subsidiaries during the period: None
Newly added: -Excluded: -Note: Changes in specified subsidiaries affecting the scope of consolidation during the period(2) Application of simplified accounting methods and special accounting methods: Yes
Note: Application of simplified accounting methods and special accounting methods for presenting quarterly consolidated
financial statements(3) Changes in accounting principles, procedures, presentation methods, etc.
1) Changes caused by revision of accounting standards: None
2) Other changes: None
Note: Changes in accounting principles, procedures, presentation methods, etc. for presenting quarterly consolidated
financial statements described in “Changes in the Significant Accounting Policies for the Preparation of Consolidated
Financial Statements”(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at end of period (including treasury stock)
2Q 2010:47,630,393 sharesFiscal Year 2009:

47,630,393 sharesFiscal Year 2009:

4,319,385 shares

2Q 2009:46,712,132 shares

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

4,320,156 shares

3) Average number of shares outstanding during the period
2Q 2010:43,310,474 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 disclosure of these quarterly financial results materials, 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, “(3) Qualitative Information Regarding Consolidated Outlook.”Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2010

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. Other Information

4(1) Overview of Changes in Significant Subsidiaries

4(2) Overview of Application of Simplified Accounting Methods and Special Accounting Methods

4(3) Overview of Changes in Accounting Principles, Procedures, Presentation Methods, etc.

4

3. Quarterly Consolidated Financial Statements

5(1) Quarterly Consolidated Balance Sheets

5(2) Quarterly Consolidated Statements of Income7(3) Quarterly Consolidated Statements of Cash Flows

8(4) Going Concern Assumption

10(5) Segment Information

10(6) Significant Changes in Shareholders’ Equity

11

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

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Qualitative Information Regarding Consolidated Results of Operations
In the cumulative second quarter (January 1, 2010 to June 30, 2010) of the current fiscal year, export companies
benefiting from the global economic recovery drove a gradual pick up in the Japanese economy, and despite
concerns about the recovery going forward due to the fiscal crisis in Europe, the worst is behind and the economy
will continue to recover. That said, personal consumption remains weak due to severe employment conditions and alack of meaningful improvement in incomes.
In this environment, the Senshukai Group pulls 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 cumulative second quarter declined 8.8% year-over-year to 69,629 million yen. Unit orders in the
catalog business rose slightly year-over-year, but the average order price declined due to efforts to meet growing
consumer preference for low-priced items.
Operating income improved from a 474 million yen loss in the same period of the previous fiscal year to a 2,057
million yen gain in the cumulative second quarter, despite a decline in sales and an increase in the purchasing cost
ratio from an increase in bargain sales and inventory clearance sales, due to a decline in valuation losses frominventory reduction efforts and expense cutting.
Ordinary income increased 88.8% year-over-year to 2,010 million yen. Net income increased 98.0% year-over-year
to 1,451 million yen.
Segment information(Mail-order Business)
Consolidated sales in the mail-order business, which comprises the catalog and the hanpukai businesses, decreased
10.7% year-over-year to 61,052 million yen in the cumulative second quarter due to unfavorable weather andlackluster consumption.
In terms of profits, operating income was 1,975 million yen, compared with an operating loss of 453 million yen in
the same period of the previous fiscal year, due to a decline in the cost-of-sales ratio and a reduction in printing
costs for sales catalogs.
(1) Catalog business
Consolidated sales in the catalog business decreased 10.6% year-over-year to 56,137 million yen in the cumulative
second quarter.
(2) Hanpukai business
Consolidated sales in the hanpukai business declined 12.8% year-over-year to 4,914 million yen in the cumulative
second quarter.
(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 the wedding business. Consolidated sales in this segment increased 8.4% year-over-year to 8,576
million yen in the cumulative second quarter due to an increase in order contracts in the corporates business and anincrease in weddings in the wedding business. Operating income totaled 16 million yen, compared with an operating
loss of 63 million yen in the same period of the previous fiscal year.

-2-Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2010(2) Qualitative Information Regarding Consolidated Financial Position(Balance sheet position)
Assets totaled 86,205 million yen at the end of the second quarter of the current fiscal year, down 5,631 million yen
from the end of the previous fiscal year.
Current assets decreased 4,152 million yen to 37,964 million yen. The main factors were decreases of 1,675 million
yen in merchandise and finished goods, 1,055 million yen in notes and accounts receivable-trade and 1,265 million
yen in other. Noncurrent assets decreased 1,478 million yen to 48,241 million yen, mainly due to an increase of 214
million yen in intangible assets, and decreases of 628 million yen in property, plant and equipment and 1,064
million yen in investments and other assets.
Current liabilities decreased 5,399 million yen to 35,921 million yen. The main factors were decreases of 2,940
million yen in short-term loans payable, 808 million yen in notes and accounts payable-trade, and 1,217 million yen
in other. Noncurrent liabilities decreased 1,608 million yen to 11,001 million yen, mainly due to decreases inlong-term loans payable of 1,241 million yen and bonds payable of 383 million yen.
Net assets increased 1,376 million yen to 39,282 million yen. The main factor was an increase in retained earningsof 1,498 million yen. Consequently, the equity ratio was 45.5%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the second quarter of the current fiscal year was 9,317
million yen, an increase of 522 million yen from the end of the previous fiscal year.
Operating activities provided net cash of 5,673 million yen. The main contributing factors were a 1,796 million yen
decrease in other current assets, income before income taxes and minority interests of 1,714 million yen, a 1,650
million yen decrease in inventories, and depreciation of 1,186 million yen. Negative factor included a 1,366 million
yen decrease in other current liabilities.
Investing activities used net cash of 555 million yen. The main cash inflows were a 400 million yen proceeds fromredemption of investment securities and a 169 million yen proceeds from sales of property, plant and equipment.
The main cash outflows were 629 million yen for the purchase of intangible assets, and 627 million yen for thepurchase of property, plant and equipment.
Financing activities used net cash of 4,566 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 3,000 million
yen, repayment of long-term loans payable of 1,481 million yen, and redemption of bonds of 383 million yen.
(3) Qualitative Information Regarding Consolidated Outlook
Regarding the outlook for the full fiscal year, Senshukai believes it will take time for the Japanese economy torecover due to lingering uncertainty over yen appreciation, the global economy, and financial markets. Senshukai
believes business conditions will remain harsh because of the slow improvement in consumer sentiment due touncertainty over the outlook for employment and incomes.
On July 23, 2010, Senshukai lowered its initial sales forecast (released along with results for Fiscal Year 2009) forthe current fiscal year (January 1, 2010 to December 31, 2010) by 2,900 million yen to 139,400 million yen in lightof second quarter results and recent business trends.
Senshukai lowers its second-half operating income forecast as it expects the cost-of-sales ratio to increase due to anincrease in valuation losses over the first half as it focuses on product supply, and it expects an increase in SG&A
expenses as it implements sales promotion policies to attract new customers towards the new fiscal year. However, it
raises its full-year operating income forecast to 2,700 million yen. It also forecasts ordinary income of 2,750 million
yen and net income of 2,050 million yen for the full fiscal year.

-3-Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2010

2. Other Information(1) Overview of Changes in Significant Subsidiaries
Not applicable.
(2) Overview of Application of Simplified Accounting Methods and Special Accounting Methods(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 second quarter of the current fiscal year was found not to besignificantly different from the ratio at the end of the previous fiscal year.
2) 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.
3) 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) Overview of Changes in Accounting Principles, Procedures, Presentation Methods, etc.
Not applicable.

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

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

2Q 2010(As of Jun. 30, 2010)
AssetsCurrent assets
Cash and deposits

9,297

8,613

Notes and accounts receivable-trade

9,193

10,248

Short-term investment securities

20

182

Merchandise and finished goods

9,292

10,967

Raw materials and supplies

134

112

Accounts receivable-other

6,840

7,568

Other

3,454

4,719

Allowance for doubtful accounts

(268)

(294)

Total current assets

37,964

42,117

Buildings and structures, net

14,374

14,219Land

10,98011,078

Noncurrent assets
Property, plant and equipment

Other, net

2,068

2,753

Total property, plant and equipment

27,42328,052Intangible assets
Goodwill

2,700

2,793

Other

3,063

2,756

Total intangible assets

5,764

5,549

Investment securities

8,402

9,378

Other

6,847

6,950

Allowance for doubtful accounts

(195)

(210)

Investments and other assets

Total investments and other assets
Total noncurrent assets
Total assets-5-

15,053

16,11848,24149,72086,20591,837

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

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

2Q 2010(As of Jun. 30, 2010)
Liabilities
Current liabilities
Notes and accounts payable-trade

6,126

6,934

Short-term loans payable

2,983

5,923

Current portion of bonds

766

766

Accounts payable-factoring

13,264

13,707

Income taxes payable

317

271

Provision for sales promotion expenses

573

526

2,961

3,045

Forward exchange contracts
Other

8,928

10,146

Total current liabilities

35,921

41,321

Bonds payable

3,669

4,052

Long-term loans payable

6,342

7,584

Noncurrent liabilities

Provision for retirement benefits

36

35

Other

952

937

Total noncurrent liabilities

11,001

12,60946,92253,930Capital stock

20,35920,359

Capital surplus

21,03821,038Retained earnings

11,015

9,517

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

Total shareholders’ equity

49,63848,140Total liabilities
Net assets
Shareholders’ equity

Valuation and translation adjustments
Valuation difference on available-for-sale securities(1,092)(1,013)

Deferred gains or losses on hedges(2,036)(2,044)

Revaluation reserve for land

(7,115)(7,067)

Foreign currency translation adjustment

(137)

(122)

Total valuation and translation adjustments(10,382)(10,247)

Minority interests
Total net assets
Total liabilities and net assets

-6-

26

14

39,28237,906

86,20591,837

Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2010(2) Quarterly Consolidated Statements of Income(For the Six-month Period)
2Q 2009(Jan. 1, 2009 – Jun. 30, 2009)(Million yen)
2Q 2010(Jan. 1, 2010 – Jun. 30, 2010)

Net sales

76,30869,629

Cost of sales

40,51035,152Gross profit

35,797

34,476

Selling, general and administrative expenses

36,27232,419Operating income (loss)

(474)

2,057

Interest income

58

41

Dividends income

93

84

Gain on valuation of compound financial instruments

61

-

1,531

26

-

82

Non-operating income

Foreign exchange gains
Co-sponsor fee
OtherTotal non-operating income

173

160

1,917

395

150

147

-

204

Non-operating expenses
Interest expenses
Loss on valuation of compound financial instruments
Equity in losses of affiliates

34-

Bond issuance cost

127

-

Other

65

91

Total non-operating expenses

378

442

1,064

2,010

Gain on sales of noncurrent assets-

13

Reversal of allowance for doubtful accounts

-

28

Other

-

0

Total extraordinary income-

41

Loss on sales and retirement of noncurrent assets

16

7

Loss on valuation of investment securities

43

253

Impairment loss

54

43

Provision of allowance for doubtful accounts-

23

Ordinary income
Extraordinary income

Extraordinary loss

Loss on valuation of golf club membership

-

5

Other

-

2

114

337

Income before income taxes and minority interests

949

1,714

Income taxes

252

251

Minority interests in income (loss)

(35)

12

Net income

733

1,451

Total extraordinary losses-7-Senshukai Co., Ltd. (8165) Financial Report for the Second Quarter of Fiscal Year 2010(3) Quarterly Consolidated Statements of Cash Flows(Million yen)
2Q 2009
2Q 2010(Jan. 1, 2009 – Jun. 30, 2009) (Jan. 1, 2010 – Jun. 30, 2010)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization

949

1,714

1,227

1,186

Impairment loss

54

43

Increase (decrease) in allowance for doubtful accounts

(35)

(40)

Increase (decrease) in allowance for sales promotion expenses
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Equity in (earnings) losses of affiliates

47

47

(151)

(125)

150

147

(1,573)

(50)

34

(12)

Loss (gain) on valuation of compound financial instruments

(61)

204

Bond issuance cost

127-

Loss (gain) on sales and retirement of noncurrent assets

16

(5)

Loss (gain) on sales of investment securities-

2

Loss (gain) on valuation of investment securities

43

253

Loss on valuation of golf club memberships-

5

Decrease (increase) in notes and accounts receivable-trade

(295)

1,006

Decrease (increase) in inventories

1,732

1,650

Decrease (increase) in other current assets

2,370

1,796

Increase (decrease) in notes and accounts payable-trade(1,395)(808)

Increase (decrease) in accrued consumption taxes

3

4(1,129)(1,366)

Other, net

(278)

117

Subtotal

1,837

5,771

180

126

Increase (decrease) in other current liabilities

Interest and dividends income received
Interest expenses paid

(100)

(150)

(3,760)

-

75

(73)

(1,767)

5,673

(925)

(627)

-

169

Purchase of intangible assets

(340)

(629)

Purchase of investment securities

(25)

(20)

Payments for cancelation money on derivative contract
Income taxes paid (refund)Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

Proceeds from sales of investment securities-

4

Proceeds from redemption of investment securities-

400

Proceeds from withdrawal of time deposits

200-

Purchase of investments in subsidiaries

(65)

(0)

-

49

Proceeds from sales of investments in subsidiaries
Other, net
Net cash provided by (used in) investing activities

-8-

69

98

(1,086)(555)

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

(Million yen)
2Q 2009
2Q 2010(Jan. 1, 2009 – Jun. 30, 2009) (Jan. 1, 2010 – Jun. 30, 2010)
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable(8,000)(3,000)

Proceeds from long-term loans payable

7,184

300

Repayment of long-term loans payable(1,130)(1,481)

Proceeds from issuance of bonds

4,872

-

Redemption of bonds

(33)

(383)

Purchase of treasury stock

(0)

(0)

Proceeds from sales of treasury stock0-

Cash dividends paid

(420)

(1)

Net cash provided by (used in) financing activities

2,472(4,566)2(29)

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

(378)

522

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

8,003

9,317

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

(4) Going Concern Assumption
Not applicable.

(5) Segment Information
Business segments
2Q 2009 (Jan. 1, 2009 – Jun. 30, 2009)(Million yen)

Mail-orderbusiness

Other businesses

Elimination or
corporate

Total

Consolidated

Net sales(1) Sales to customers

68,396

7,911

76,308-76,308(2) Inter-segment sales

684

715

1,399

(

1,399)-

69,0808,627

77,708(1,399)

76,308

(453)

(63)

(516)

42

(474)

Total
Operating income (loss)

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
income in the mail-order business decreased by 1,048 million yen in the cumulative second quarter of the fiscal year.
There is no effect on other businesses.
2Q 2010 (Jan. 1, 2010 – Jun. 30, 2010)(Million yen)

Mail-orderbusiness

Other businesses

Elimination or
corporate

Total

Consolidated

Net sales(1) Sales to customers

61,052(2) Inter-segment sales

8,576

69,629-69,629

952

334

1,287

(

1,287)-

Total

62,004

8,911

70,916(

1,287)

69,629Operating income

1,975

16

1,991

65

2,057

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 and services

Geographical segment information
2Q 2009 (Jan. 1, 2009 – Jun. 30, 2009), 2Q 2010 (Jan. 1, 2010 – Jun. 30, 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
2Q 2009 (Jan. 1, 2009 – Jun. 30, 2009), 2Q 2010 (Jan. 1, 2010 – Jun. 30, 2010)
Overseas sales have not been presented because they represented less than 10% of total consolidated sales.

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Senshukai Co., Ltd. (8165) Financial Report for the Second 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 reserve 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.

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