Summary of Business Results for the Second Quarter Ended September 30, 2019
[Japan GAAP] (Consolidated)
November 7, 2019
Company
JP-HOLDINGS, INC.
Listed on the TSE 1
Stock Code2749
URL: https://www.jp-holdings.co.jp
Representative
Koichiro Furukawa, President and Representative Director
Contact
Hikaru Kimura, Executive Officer
T E L: +81-52-933-5419
Expected date of filing of quarterly securities report: November 14, 2019
Expected starting date of dividend payment: Preparation of quarterly supplementary financial document: Yes
Quarterly results briefing: Yes (for media members, institutional investors and analysts)（Rounded down to million yen）

１. Consolidated business results for the six months ended September 2019
(April 1, 2019 through September 30, 2019)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen
15,5178.7496Six months ended Sept. 201914,27812.0168
Six months ended Sept. 2018
(Note) Comprehensive income
Six months ended September 2019: 526 million yen (206.9%)
Six months ended September 2018: 171 million yen (-46.8%)
Net income
per share
Yen
5.88
2.75

Six months ended Sept. 2019
Six months ended Sept. 2018%194.9-62.6

Ordinary income
Million yen
744
399%
86.4
-32.7

Net income attributable toowners of parent

Million yen
516
235%
118.9
-32.1

Diluted net income pershare
Yen-(2) Consolidated financial position
Total assets

Net assets

Million yen
25,822As of Sept. 30, 201928,255
As of Mar. 31, 2019
(Reference) Shareholders’ equity:
As of September 30, 2019: 9,233 million yen
As of March 31, 2019: 8,950 million yen

Million yen
9,2338,950

Shareholders’ equity
ratio%
35.8
31.7

2. Dividends
End of 1Q

Annual dividend
End of 3Q
Yen
Yen
0.00
0.00
-

End of 2Q
Yen-Year ended Mar. 31, 2019Year ending Mar. 31, 2020
Year ending Mar. 31, 2020 (forecast)(Notes) Revisions to dividend forecast for the current quarter: None

Year-end

Total

Yen
3.70

Yen
3.70

3.90

3.90

3. Forecast of consolidated business results for the fiscal year ending March 2020
(April 1, 2019 through March 31, 2020)(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen%
Year ending Mar. 31,32,000
9.2
1,811
18.3
2020
(Notes) Revisions to business forecast for the current quarter: None

Ordinary income

Net income attributable toowners of parent

Net income pershareMillion yen%

Million yen%

Yen

2,300

19.8

1,212

13.2

14.08

*Notes(1) Changes in significant subsidiaries during the period: None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements:
None(3) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement: None: None: None: None

(4) Shares outstanding (common stock)①Number of shares outstanding at the end of period (treasury stock included)
As of September 30, 201987,849,400 shares
As of March 31, 201987,849,400 shares②Treasury stock at the end of period
As of September 30, 2019
1,707 shares
As of March 31, 2019297,807 shares③Average number of stock during period (quarterly cumulative period)
Six months ended September 201987,805,393 shares
Six months ended September 201885,749,294 shares(Note) The number of treasury stock deducted for the calculation of the number of treasury stock at the end of period and the average
number of stock during period includes the company's shares held by Trust & Custody Services Bank, Ltd. as trust property of"Stock Benefit Trust (Employee Stock Ownership Plan)".
*Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing
firms.
*Explanation regarding appropriate use of business forecasts and other special instructions∙ Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the Company deems to be reasonable at the time this report was prepared. Actual results may differ significantly
from the forecasts due to various factors. For information regarding the assumptions that form the basis for the business results
forecasts and notes about using business forecasts, please refer to “1. Qualitative Information on Quarterly Financial Results (3)Consolidated Earnings Forecasts” (Page 3).
∙ The company plans to hold results briefing for media members, institutional investors and analysts on November 8, 2019(Friday). After the results briefing, the Company will promptly post presentation materials distributed at the results briefing on theCompany website. Please confirm the results briefing schedule and other information on the Company website.

Table of Contents of the Appendix

1. Qualitative Information on Quarterly Financial Results ........................................................................................................................ 2(1) Results of Operations ..................................................................................................................................................................... 2(2) Financial Position .......................................................................................................................................................................... 3(3) Consolidated Earnings Forecasts ................................................................................................................................................... 3
2. Quarterly Consolidated Financial Statements ........................................................................................................................................ 4(1) Quarterly Consolidated Balance Sheets ......................................................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income ........................................................... 6(3) Notes on Quarterly Consolidated Financial Statements ............................................................................................................... 8(Notes on going concern assumption) ........................................................................................................................................... 8(Notes if there is a significant change in the amount of shareholders' equity) ............................................................................... 81

1. Qualitative Information on Quarterly Financial Results(1) Results of Operations
In the second quarter of the current fiscal year, the Japanese economy continued to recover moderately due to the effects of various
policies amid steady improvement in trends in both employment and personal income. However, the outlook for the Japanese
economy remained uncertain due to the impact of trade frictions between the United States and China on the global economy andconcerns over the consumption slowdown due to the consumption tax hike.
As for the environment surrounding the child-raising service, demand for childcare is increasing in response to women'sadvancement and active participation in society, and the issue of the number of children waiting for admission continues to beserious. From 2018, the government has formulated various measures to improve child care facilities and secure nursery teachers
in order to provide daycare for 320,000 children by the end of March 2021. With the implementation of free child education andchildcare from October 2019, it is anticipated that people looking for entry into childcare facilities will increase, and the Company
believes that the social role played by child-raising service will become more important than ever.
Under these circumstances, the Group is continuing to expand its share of the market in collaboration with local governments
throughout Japan, while working to further improve the quality of childcare services.
In addition, under the "hands-on policy", the Company is collecting issues at each facility and workplace and working on
improvements and reforms to create a comfortable working environment. This has led to an increase in the number of childcare
workers hired and an increase in the retention rate. In addition, as a measure for efficient and effective organizational management,
the Company has introduced a Block System that divide Japan into the 5 operating areas, and have worked to develop new
businesses for further business expansion.
Along with the promotion of various measures, the Group has opened a total of 12 facilities in the second quarter of the current
fiscal year, including 10 nursery schools (9 in Tokyo, 1 in Shiga) and 2 school clubs (2 in Tokyo) as described below, in order torespond to the growing needs of nursery facilities.
As a result, the Group came to have 209 nursery schools, 72 school clubs, 11 children's houses, 4 private school clubs, and 1
kindergarten (overseas facility), making a total of 297 facilities for supporting child-raising at the end of the second quarter of thecurrent fiscal year.
With the establishment of the Wakuwaku Fukuro Hiroba /Akakita Hibari Club No. 2, the Akakita Hibari Club and the Kita City
Fukuro Cultivation Room are operating as the Wakuwaku Fukuro Hiroba /Akakita Hibari Club No. 1 and the Wakuwaku FukuroHiroba/Akakita Hibari Club No. 3, respectively, as of April 1, 2019.
Separate from the new openings, the following changes have been made as of April 1, 2019: Asc Ikegami Nursery School, which
had been running since February 1, 2008 as an existing Tokyo Licensed Nursery School was changed into a licensed nurseryschool; Asc Toyotama 1-chome Nursery School A and B, which had been running since April 1, 2018, as small-scale childcare
facilities, were integrated and changed into a licensed nursery school; and Kawasaki City Miyamaedaira Nursery

School, which

had been running as a public facility under private management since April 1, 2009, was changed to a private facility under
private management and is now run as Asc Miyamaedaira Nursery School.
For the second quarter of the current fiscal year, the Group’s consolidated net sales were 15,517 million yen (up 8.7% year onyear), operating income was 496 million yen (up 194.9%), ordinary income was 744 million yen (up 86.4%), and net income
attributable to owners of parent was 516 million yen (up 118.9%).
The major factors are as follows:
Net sales increased year on year, mainly due to the opening of new facilities, an increase in the number of children accepted atexisting facilities, and an increase in rent subsidies at some existing facilities.
Operating income increased year on year mainly due to an increase in sales resulting from an increase in the number of children
accepted at existing facilities, as well as a reduction in SG&A expenses resulting from a review of various expenses.
In addition, both ordinary income and net income attributable to owners of parent increased year on year thanks to an increase inoperating income and increased subsidies associated with an increase in users of the corporate dormitory.

2(2) Financial Position
As for the financial position at the end of the second quarter of the current fiscal year, the total assets amounted to 25,822 millionyen (down 2,433 million yen from the end of the previous fiscal year).
Current assets totaled 9,511 million yen (down 946 million yen), mainly reflecting decreases of 601 million yen in cash anddeposits, 146 million yen in others, 104 million yen in inventories, and 81 million yen in accounts receivable.
Fixed assets totaled 16,310 million yen (down 1,486 million yen). This was mainly due to an increase of 34 million yen in deferred
tax assets, while there were decreases of 1,389 million yen in construction in progress, 108 million yen in long-term loans
receivable, and 35 million yen in investments and other assets.
Total liabilities amounted to 16,588 (down 2,715 million yen).
Current liabilities totaled 5,273 million yen (down 2,606 million yen), mainly due to an increase of 105 million yen in provision
for bonuses, while there were decreases of 1,500 million yen in short-term loans payable, 513 million yen in current portion of
long-term loans payable, and 227 million yen in income taxes payable.
Fixed liabilities totaled 11,315 million yen (down 108 million yen). This was mainly due to an increase of 47 million yen in net
defined benefit liability, while there was a decrease of 161 million yen in long- term loans payable.
Total net assets as of the end of the second quarter of the current fiscal year totaled 9,233 million yen (up 282 million yen), mainly
due to an increase of 190 million yen in retained earnings, while there was a decrease of 81 million yen in treasury stock.

(3) Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts have not been revised from the announcement on May 9, 2019, but actual results may
be different from the forecast according to the changes in business situations, etc.
If there are any changes, the Company will disclose them properly.

32. [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Thousand yen)Previous Fiscal Year
(March 31, 2019)

Current second quarter(September 30, 2019)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable

6,816,439
71,657

6,214,834
58,462InventoriesAccounts receivable-other

128,900
2,491,947

24,4372,410,521

949,963-449

803,743-488

10,458,459

9,511,512

11,873,447

12,115,732-4,635,599-4,876,384

Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation and impairment
loss
Buildings and structures, net

7,237,848

7,239,348

Machinery, equipment and vehicles

5,637

5,637

Accumulated depreciation-3,209-3,678

Machinery, equipment and vehicles, net

2,427

1,959

Tools, furniture, and fixtures
Accumulated depreciation and impairment
loss
Tools, furniture, and fixtures, net

803,177

877,562-563,703-610,296

239,473

267,266Land

980,894

980,894

Construction in progress

1,437,264

48,200Total tangible fixed assets

9,897,908

8,537,668

Goodwill
Other

227,894
114,985

212,701
113,654

Total intangible fixed assets

342,879

326,356

Investment securities
Long-term loans receivable

548,080
3,419,910

562,082
3,311,152

Guarantee deposits
Deferred tax assets

1,880,239
825,742

1,866,083
860,245891,902-10,027

856,663-9,730Intangible fixed assets

Investments and other assets

Other
Allowance for doubtful accounts
Investments and other assets
Total fixed assets
Total assets

47,555,848

7,446,497

17,796,637

16,310,522

28,255,096

25,822,034

(Thousand yen)Previous Fiscal Year
(March 31, 2019)

Current second quarter(September 30, 2019)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loan payable

197,7421,500,000

153,646-

Current portion of long-term loans payable
Accounts payable-other

2,166,092
1,570,333

1,652,772
1,186,203

Income taxes payable
Accrued consumption taxes

435,953
81,136

208,565
66,260

Provision for bonuses
Asset retirement obligations

411,135
13,500516,758
3,894

Other

1,504,249

1,485,317

Total current liabilities

7,880,143

5,273,418

Fixed liabilities
Long-term loan payable

10,454,371

10,292,985

642,495
317,269

689,540
318,918

Net defined benefit liability
Asset retirement obligations
Other

10,324

14,136

11,424,460

11,315,580

19,304,604

16,588,998

Capital stock
Capital surplus

1,603,955
1,449,544

1,603,955
1,449,544

Retained earnings
Treasury stock

6,184,830-81,685

6,375,800-258

Total shareholders' equity

9,156,643

9,429,041-133,411-137,664-7,165238-9,8103,132

Total fixed liabilities
Total liabilities
Total assets
Shareholders' equity

Accumulated other comprehensive incomeValuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans-65,813-51,663

Total other accumulated comprehensive income-206,151-196,005

Total net assets
Total liabilities and net assets

58,950,492

9,233,035

28,255,096

25,822,034

(2) [Quarterly Consolidated Statements of Income and Statements of Comprehensive Income][Quarterly Consolidated Statement of Income][Second Quarter of FY3/20]

Net sales
Cost of sales

Previous Second Quarter(Apr. 1, 2018)- September 30, 2018)
14,278,070
12,720,275(Thousand yen)
Current Second Quarter(Apr. 1, 2019)- September 30, 2019)15,517,301
13,668,091

Gross profit

1,557,794

1,849,209

Selling, general and administrative expenses

1,389,535

1,353,036

Operating income

168,259

496,173

Non-operating income
Interest income

53,76750,492

198,978
32,804

224,254
5,467

Subsidy income
Guarantee commission received
Other

10,995

11,469Total non-operating income

296,545

291,683

26,50934,75829,269
1,289

Other

4,254

12,938

Total non-operating expenses

65,52243,497399,283

744,359

Non-operating expenses
Interest expenses
Demobilization costs

Ordinary income
Extraordinary loss
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss (on facilities)
Total extraordinary loss

77-270
-

1,215
3,894

347

5,109

Income before income taxes and others

398,935

739,250

Corporate, inhabitant and enterprise taxes

211,116

262,123

Income taxes-deferred-47,892-38,879

Total income tax

163,224

223,243

Net income

235,711516,006

Net loss attributable to non-controlling interests
Net income attributable to owners of parent

6-64

-

235,775

516,006

[Quarterly Consolidated Statement of Comprehensive Income][Second Quarter of FY3/20]
Previous Second Quarter(Apr. 1, 2018- September 30, 2018)
235,711(Thousand yen)
Current Second Quarter(Apr. 1, 2019
- September 30, 2019)
516,006

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges-74,116
4,232-4,252-2,645

Foreign currency translation adjustment
Remeasurements of defined benefit plans-4,1489,780

2,893
14,149Total other comprehensive income-64,250

10,145

171,460

526,151

171,524

526,151-64-

Net income
Other comprehensive income

Comprehensive income
BreakdownComprehensive income attributable to owners of parent
Comprehensive income attributable to owners of noncontrolling7

Notes on Quarterly Consolidated Financial Statements(Notes on going concern assumptions)
Second quarter of FY3/20 (April 1, 2019 – June 30, 2019)
None(Notes on significant changes in shareholders' equity)
Second quarter of FY3/20 (April 1, 2019 – June 30, 2019)None8