Summary of Financial Results for the Second Quarter of Fiscal Year 2017
(Six Months Ended June 30, 2017)[Japanese GAAP]
July 27, 2017
Company name: SENSHUKAI CO.,LTD.
Stock exchange: Tokyo Stock Exchange, First Section
Stock code:
8165
URL: http://www.senshukai.co.jp
Representative:
Mr. Hiroyuki Hoshino, President and Representative Director
Inquiries:
Mr. Takeshi Naito, Director, Executive Officer, in charge of Corporate Planning
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: August 8, 2017
Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting: Yes(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 2nd Quarter of 2017 (January 1, 2017 – June 30, 2017)(1) Consolidated operating results (cumulative)
Net sales
Millions of yen(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating income
Ordinary income
owners of parent%

Millions of yen%

2Q 2017
63,186(4.1)(1,248)
2Q 2016
65,898(3.3)(403)
Note: Comprehensive income (millions of yen)
2Q 2017: (6,213) (- %)-Millions of yen

Net income per share

Diluted net income per share

Yen

Yen

(119.34)
3.11

2.76

2Q 2017
2Q 2016%

Millions of yen

(849)
181
2Q 2016: (4,389) (- %)%(6,208)162-(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

2Q 2017
92,897
46,152
Fiscal Year 2016
101,959
52,572
Reference: Shareholders’ equity (millions of yen) 2Q 2017: 46,093

Net assets per share
%

Yen

49.6
51.5
Fiscal Year 2016: 52,508

885.92
1,009.26

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)
Net sales
Millions of yen(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% Millions of yen% Millions of 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

%

Yen

-

-

(199.89)(10,400)

* 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, (4) Notes to Quarterly Consolidated
Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial
Statements)” on page 9 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)
2Q 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
2Q 2017:201,291 shares

3) Average number of shares outstanding during the period
2Q 2017:52,027,261 shares

2Q 2016:

52,166,226 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 Second 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

3(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 Six-month Period)

6

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

7(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9(Going Concern Assumption)

9(Significant Changes in Shareholders’ Equity)

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

9(Segment and Other Information)

9(Subsequent Events)

10

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

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the cumulative second quarter (January 1 to June 30) of 2017, the Japanese economy recovered slowly with thesupport of higher corporate earnings and an improvement in the employment situation due to the government’s
economic and monetary policies. However, the outlook is unclear because of the instability of exchange rates andstock prices caused by uncertainty about international affairs and other sources of concern. In Japan’s retailindustry, market conditions remain challenging as consumers become increasingly budget-minded. The reason isthat, although the job market is improving, people are buying lower-priced goods because of the sluggish growthin disposable income.
Net sales in the cumulative second quarter decreased 4.1% year-over-year to 63,186 million yen. This was mainly
because sales in the mail-order business have been sluggish since 2016.
There were measures to reduce selling, general and administrative expenses in the core mail-order business, butcost reductions were offset by the decrease in sales. Furthermore, sales of merchandise at reduced prices toeliminate inventories caused the cost to sales ratio to increase. As a result, the operating loss increased from 403
million yen in the same period of 2016 to 1,248 million yen.
There was an ordinary loss of 849 million yen compared with ordinary income of 181 million yen in the same
period of 2016. Loss attributable to owners of parent was 6,208 million yen compared with a profit of 162 million
yen in the same period of 2016. This loss was the result of an impairment loss and the reversal of deferred tax
assets.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, centered on the catalog and the Internet businesses, decreased 6.4%
year-over-year to 52,145 million yen in the cumulative second quarter. There was an operating loss of 1,610
million yen compared with a loss of 280 million yen in the same period of 2016.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, increased 10.1%
year-over-year to 8,201 million yen in the cumulative second quarter. There was an operating income of 131
million yen compared with a loss of 384 million yen in the same period of 2016.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, decreased
1.0% year-over-year to 2,270 million yen in the cumulative second quarter, and operating income decreased
23.1% to 222 million yen.
(Others)
Consolidated sales in other businesses, which provides services business (primarily insurance and credit card
services) and a childcare business, increased 25.2% year-over-year to 569 million yen in the cumulative second
quarter. The operating income was 7 million yen compared with a loss of 37 million yen in the same period of
2016.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Second Quarter of Fiscal Year 2017(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 92,897 million yen at the end of the second quarter of 2017, a decrease of 9,062 million yen fromthe end of 2016.
Current assets decreased 3,648 million yen to 48,969 million yen. The main factors were decreases of 1,779
million yen in accounts receivable-other and 1,640 million yen in merchandise and finished goods. Non-current
assets decreased 5,414 million yen to 43,927 million yen. The factors include decreases of 3,611 million yen inproperty, plant and equipment due to booking of impairment loss, 1,411 million yen in intangible assets, and 391
million yen in investments and other assets.
Current liabilities decreased 2,845 million yen to 26,453 million yen. The main factors were decreases of 1,170
million yen in other and 1,130 million yen in accounts payable-trade. Non-current liabilities increased 202 million
yen to 20,291 million yen. The main factors were increases of 2,053 million yen in long-term loans payable and155 million yen in other, while there was a decrease of 2,000 million yen in bonds with subscription rights toshares.
Net assets decreased 6,420 million yen to 46,152 million yen. The main factor was a decrease of 12,344 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 49.6%.
(Cash flow position)
The balance of cash and cash equivalents at the end of the second quarter of 2017 was 16,743 million yen, an
increase of 143 million yen from the end of 2016.
Operating activities provided net cash of 1,296 million yen (net cash provided of 1,519 million yen in the same
period of 2016). The main cash inflows were impairment loss of 4,442 million yen and a decrease in other current
assets of 2,827 million yen. The main cash outflows include a loss before income taxes of 4,997 million yen and adecrease in other current liabilities of 1,467 million yen.
Investing activities used net cash of 761 million yen (net cash used of 617 million yen in the same period of 2016).
The main cash inflows include proceeds from sales of investment securities of 765 million yen. The main cash
outflows were 674 million yen for other payments, 505 million yen for the purchase of property, plant andequipment, and 456 million yen for the purchase of intangible assets.
Financing activities used net cash of 387 million yen (net cash used of 2,005 million yen in the same period of
2016). The main cash inflows include the proceeds from long-term loans payable of 2,800 million yen. The main
cash outflows were 2,000 million yen for the payment for redemption of bonds with subscription rights of shares,
956 million yen for the repayments of long-term loans payable and 208 million yen for cash dividends paid.
(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 Second Quarter of Fiscal Year 2017

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

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

16,605

16,748Notes and accounts receivable-trade

3,889

4,140

Merchandise and finished goods

20,58018,939Accounts receivable-other

7,818

6,038

Other

3,877

3,239

Allowance for doubtful accounts

(152)

(136)

52,61848,969Buildings and structures, net

16,128

14,640Land

11,310

10,329Other, net

2,112

970

Total property, plant and equipment

29,551

25,940

2,027

1,919

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

Intangible assets
Goodwill
Other

2,120

816

Total intangible assets

4,147

2,736

Investment securities

8,651

8,793

Other

7,256

6,723

Investments and other assets

Allowance for doubtful accounts

(266)

(266)

Total investments and other assets

15,642

15,25049,341

43,927

101,959

92,897

Total non-current assets
Total assets-4-

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

(Millions of yen)
2Q 2017(As of Jun. 30, 2017)

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

10,365

10,112

Accounts payable-trade

5,840

4,709

Short-term loans payable

1,546

1,376

387

247

Income taxes payable
Provision for sales promotion expenses

437

456

Other

10,721

9,551

Total current liabilities

29,29826,453

Bonds with subscription rights to shares

7,000

5,000

Long-term loans payable

9,300

11,353Net defined benefit liability

98

94

Provision for management board incentive plan trust

97

Non-current liabilities

Other

3,680

3,835

Total non-current liabilities

20,08820,291

49,387

46,745

Capital stock

22,30422,304

Capital surplus

23,86023,860Retained earnings

12,385

41

Treasury shares

(151)

(149)

58,39946,056

1,271

1,315

Total liabilities
Net assets
Shareholders’ equity

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

(11)

(145)

(6,983)(1,056)

Foreign currency translation adjustment

(143)

(60)

Remeasurements of defined benefit plans

(23)

(15)

(5,890)37

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

58

52,572

46,152

101,959

92,897SENSHUKAI CO.,LTD. (8165) Financial Results for the Second 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 Six-month Period)

Net sales
Cost of sales

2Q 2016(Jan. 1, 2016 – Jun. 30, 2016)
65,89834,377(Millions of yen)
2Q 2017(Jan. 1, 2017 – Jun. 30, 2017)
63,18634,212Gross profit

31,52028,973

Selling, general and administrative expenses

31,92430,222(403)(1,248)

14
79

12
70

393

249

158
108

145
65

754

543

82
87

77
66

169

143

181

(849)

0
-

290
210

0

500

1
-

6
198
4,442

Total extraordinary losses

1

4,647

Profit (loss) before income taxes

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
Ordinary income (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on reduction of non-current assets
Impairment loss

180

(4,997)

Income taxes

1

1,217

Profit (loss)

179(6,214)

Profit (loss) attributable to non-controlling interests

16

(5)

Profit (loss) attributable to owners of parent

162(6,208)-6-

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

(Quarterly Consolidated Statement of Comprehensive Income)(For the Six-month Period)
2Q 2016(Jan. 1, 2016 – Jun. 30, 2016)(Millions of yen)
2Q 2017(Jan. 1, 2017 – Jun. 30, 2017)

179(6,214)(789)

20(3,506)(273)

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

(66)

(8)

(223)

261

Total other comprehensive income
Comprehensive income(4,568)0(4,389)(6,213)(4,406)(6,208)16(5)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 Second Quarter of Fiscal Year 2017(3) Quarterly Consolidated Statement of Cash Flows(Millions of yen)
2Q 2016
2Q 2017(Jan. 1, 2016 – Jun. 30, 2016) (Jan. 1, 2017 – Jun. 30, 2017)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for sales promotion expenses
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using equity method
Loss (gain) on sales and retirement of non-current assets
Loss on reduction of non-current assets
Loss (gain) on sales of investment securities
Subsidy income
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Extra retirement payments

180
1,602
(22)
(20)
(94)
82
(393)
0
231
(686)
2,539
(268)
(2,519)922(4,997)
1,245
4,442
(15)
19
(83)
77
(249)
6
198
(290)
(210)
(250)
1,621
2,827
(1,224)(1,467)
(53)

1,554

1,597

113
(87)
352
(414)

100
(77)
(323)
-

Net cash provided by (used in) operating activities

1,519

1,296

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from subsidy income
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Proceeds from transfer of business
Other, net(1,352)
962
(411)
100
(89)
(100)
216
56

(505)
(456)
210
(100)
765
(674)

(617)

(761)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Payment for redemption of bonds with subscription rights tosharesRedemption of bonds
Cash dividends paid
Other, net

(30)
100
(1,216)

40
2,800
(956)

-

(2,000)

(450)
(209)
(200)

(208)
(61)

(2,005)(387)

Cash and cash equivalents at beginning of period

14,303

16,600Cash and cash equivalents at end of period

13,127

16,743

Net cash provided by (used in) financing activities(71)

Effect of exchange rate change on cash and cash equivalents(1,175)

Net increase (decrease) in cash and cash equivalents

-8-

(5)
143

SENSHUKAI CO.,LTD. (8165) Financial Results for the Second Quarter of Fiscal Year 2017(4) 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, theCompany 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 2Q 2016 (Jan. 1, 2016 – Jun. 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

55,698

7,451

2,293

65,443454

65,898-65,898

442

-

51

493

0

494

(494)

-

56,141

7,451

2,344

65,936455

66,392(494)

65,898

(280)

(384)

289

(375)

(37)

(413)

10

(403)

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 2Q 2017 (Jan. 1, 2017 – Jun. 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

52,145

8,201

2,270

62,616569

63,186-

63,186

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

475

0

61

537

16

554

(554)

-

52,620

8,202

2,331

63,154586

63,740(554)

63,186

Segment profit (loss)(1,610)131

222(1,256)

7(1,249)0(1,248)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.

-9-SENSHUKAI CO.,LTD. (8165) Financial Results for the Second 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 theplan. This impairment loss was 4,441 million yen in 2Q 2017.
(Subsequent Events)(Transfer of subsidiaries’ shares resulting in change in scope of consolidation)
On July 27, 2017, the Board of Directors of Senshukai Co.,Ltd. approved resolutions to sign an agreement totransfer a part of shares of its subsidiary Belle Maison Logisco Co., Ltd., to Sumisho Global Logistics Co., Ltd.
After the transfer, Senshukai will have a 49% equity interest in Belle Maison Logisco and this consolidated
subsidiary will become an equity method affiliate of Senshukai.
1. Reason for transfer of shares
Senshukai believes that the transfer of Belle Maison Logisco stock to Sumitomo Global Logistics will createa more efficient logistics infrastructure that will make the logistics operations of Belle Maison and the entire
Senshukai Group more competitive. In addition, Senshukai plans to use the transfer of this stock to achieve a
rapid recovery in its performance by concentrating resources on core business operations.
2. Name of transferee
Sumisho Global Logistics Co., Ltd.
3. Schedule
Stock transfer date:

September 1, 2017 (tentative)

4. Outline of the subsidiary
Name:

Belle Maison Logisco Co., Ltd.

Business:

Management, packaging and shipping of apparel, household goods andother merchandise

Relationship with Senshukai:Senshukai outsources the management, packaging and shipping of
merchandise to Belle Maison Logisco

5. Number of shares transferred and change in holdings
Number of shares owned before transfer: 4,000 shares (holding ratio: 100.00%)
Number of shares to be transferred:

2,040 shares (holding ratio: 51.00%)

Number of shares owned after transfer: 1,960 shares (holding ratio: 49.00%)
Note: Amount of shares to be transferred is not disclosed according to the agreement with the transferee.
6. Outlook
This matter will have only a negligible effect on consolidated financial results at this point.

* 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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