Disclaimer: This is a Japanese-English translation of the summary of financial statements of the Company produced for your convenience.
Since no auditor audited this report, officially only the Japanese version is assumed to be the summary of financial statements of the Company.
This summary does not constitute any guarantee and will not compensate any losses and/or damage stemming from actions taken based on thesestatements. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct.

Consolidated Financial Report
For the Third Quarter of Fiscal 2019 Ending March 31, 2019 (Japanese GAAP)
Company Name:Grandy House Corporation
Stock Exchange Listing:
Securities Code:
8999
URL:
Representative:
Yasuro Hayashi, President
Inquiries:
Nobuyasu Takeuchi, Director & Administration Manager
Scheduled date of quarterly securities report filing:
February 7, 2019
Scheduled date of dividend payment commencement:―
Preparation of quarterly supplementary explanatory materials:
None
Quarterly results briefing held:
None

February 4, 2019
Tokyo Stock Exchange
http://www.grandy.co.jp
TEL: +81-28-650-7777(Figures are rounded down to the nearest million yen unless otherwise stated.)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2019
(April 1, 2018 to December 31, 2018)(1) Consolidated Operating Results
Net Sales(Percentage figures show the year-on-year increase (decrease).)Net Income Attributable
Operating Income
Ordinary Income
to Owners of the Parent
Company(¥ million)%(¥ million)%(¥ million)%(¥ million)%

32,758

(0.2)

2,273

22.4

2,384

23.3

1,434

11.8

32,839

(2.4)

1,856

(16.9)

1,933(16.4)

1,283

(9.3)

Nine months ended
December 31, 2018
Nine months ended
December 31, 2017
Note: Comprehensive income

Nine months ended December 31, 2018: ¥1,393 million (7.7%)
Nine months ended December 31, 2017: ¥1,294 million (-11.0%)
Net Income per ShareNet Income per Share(Diluted)(¥)(¥)

Nine months ended
December 31, 2018
Nine months ended
December 31, 2017

49.73

49.03

44.58

44.02

Total Assets(¥ million)
46,28047,281Net Assets(¥ million)
20,48819,556(2) Consolidated Financial Position

December 31, 2018
March 31, 2018
Reference: Shareholders' equity

December 31, 2018:
March 31, 2018:¥20,294 million¥19,362 million

1Q-End2Q-EndShareholders' Equity Ratio
%
43.9
41.0

Net Assets per Share(¥)
703.75671.43

2. Dividends

(¥)
—
—

Fiscal 2018
Fiscal 2019
Fiscal 2019 (Forecast)

Annual Dividend per Shares
3Q-End
(¥)
(¥)
0.00
—
0.00
—

Period-End

Total

(¥)
16.00

(¥)
16.00

16.00

16.00

Note: Revisions to the most recently announced forecast of cash dividends in the current quarter: None

3. Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2018 to March 31, 2019)

Net Sales

Full Fiscal Year(¥ million)
48,000%
7.3(Percentage figures show the year-on-year increase (decrease) for each corresponding period.)
Net Income
Attributable toOperating Income
Ordinary Income
Net Income per ShareOwners of the Parent
Company(¥ million)%(¥ million)%(¥ million)
%
(¥)
2,900
7.6
3,000
7.3
1,680
(8.1)
58.26

Note: Revisions to the most recently announced financial forecasts in the current quarter: None* Explanatory Notes(1) Changes of important subsidiaries during the period(changes in specified subsidiaries resulting in a change in the scope of consolidation): None
Newly included: —Excluded: —(2) Adoption of specific methods for preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and restatements
1) Changes in accounting policies in connection with revision to accounting standards, etc.:
2) Changes in accounting policies other than 1):
3) Changes in accounting estimates:
4) Restatements:(4) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding
December 31,
as of the period-end (including treasury shares) 2018
December 31,
2) Number of treasury shares
3) Average number of shares issued andoutstanding for the period

2018
Nine months
ended December
31, 2018

None
None
None
None

30,823,200 shares

March 31, 201830,823,200 shares

1,985,245 shares

March 31, 2018

1,985,245 shares

28,837,955 shares

Nine months
ended December
31, 2017

28,781,511 shares*This consolidated quarterly financial report is not subject to auditing by a certified public accountant or an audit firm.

*

Explanation concerning the appropriate use of forecasts and other special instructions
Results forecasts and other forward-looking statements contained in this report are based on certain assumptions deemed to bereasonable by the Company in light of information available to the Company's management as of the publication date. Actual
results may differ materially from forecasts due to a variety of factors. Therefore, the Company does not guarantee theaccuracy of forecasts and other forward-looking statements and its ability to achieve stated targets.

Attachment Materials: Table of Contents
1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS.................................................................. 2(1) Explanation regarding Operating Results ........................................................................................................... 2(2) Explanation regarding Financial Position .......................................................................................................... 3(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts ....................................... 3
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES................................................. 4(1) Quarterly Consolidated Balance Sheets ............................................................................................................. 4(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income......... 6(Quarterly Consolidated Statements of Income)(Consolidated cumulative third quarter) ......................................................................................................6(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third quarter) ......................................................................................................7(3) Notes to Quarterly Consolidated Financial Statements ...................................................................................... 8(Notes on Going Concern Assumptions)............................................................................................................8(Notes on Significant Changes in the Amount of Shareholders' Equity) ...........................................................8(Supplemental Information) ...............................................................................................................................8(Segment and Other Information) ......................................................................................................................8―1―

1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS(1) Explanation regarding Operating Results
During the nine months ended December 31, 2018, the Japanese economy was considered to be on amoderate recovery trend despite the negative growth recorded in the period from July to September of theprevious fiscal year.
In the housing sector, new housing starts have grown steadily due to the interest rate on housing loans
continuing to remain at low levels, as well as the continuation of various support measures to promote homeacquisition and an improvement in employment and income conditions, but competition between businesses has
intensified.
Under these circumstances, the Grandy House Group continued to strive to expand and reinforce businessunder the basic policy in its second medium-term business plan (from the fiscal year ending March 2019 to thefiscal year ending March 2021) of "continuous growth through reinforcing the core operation (new homes)" and"expansion of business through enhancing the stock business."
With regard to new home sales, one of our core operations, we endeavored to boost sales of strategic large
housing lots, strengthen the sales structure of the northern area of Tochigi Prefecture, reinforce our productappeal, and improve profits through cost reduction and other measures while opening a new base and purchasing
housing lots for expanding into Saitama Prefecture among others. In existing home sales, we continued the effort
from the previous fiscal year to build up product inventory toward expanding home sales.
Through initiatives such as these, orders received for both new and existing homes for the third quarter of
Fiscal 2019 were above the previous year's levels and the number of homes sold, which in the first half underreview had fallen below the figures in the same period of the previous fiscal year due to the timing of the delivery
of some of the homes, recorded only a small decline, recovering to a level basically the same as the previous
year's. Moreover, profit was improved year-on-year due to cost reduction and a year-on-year decrease in selling,
general and administrative expenses among other expenses.
As a result of these initiatives, the Grandy House Group's consolidated results for the third quarter(cumulative) of Fiscal 2019 were as follows. Net sales were ¥32,758 million, down 0.2% year-on-year; operating
income rose to ¥2,273 million, an increase of 22.4% year-on-year; ordinary income was ¥2,384 million, an
increase of 23.3% year-on-year; and net income attributable to owners of the parent company totaled ¥1,434
million, an increase of 11.8% year-on-year.
Results by business segment are presented as follows.
a. Real Estate Sales
In the new home sales, we boosted sales activities for large housing lots by holding various experience eventsat the new model houses at Yotsuba no Mori housing lots (211 lots in Tsukuba in Ibaraki Prefecture) andGRAND BEAT PARK Kaminokawa (141 lots, Kaminokawamachi in Tochigi Prefecture), in addition to ourefforts to boost customer responses through a complete renewal of our website. Moreover, in order to further
develop the northern area of Tochigi Prefecture, in December 2018 we opened a next-generation experiencebased showroom GRANDY PLAZA Nasushiobara (Nasushiobara in Tochigi Prefecture) and bolstered our sales
structure by relocating our Kenhoku branch to the site. In terms of products, we continued to differentiate our
products from those of our competitors by pursuing our "Townscape creation" policy that gave a theme to eachhousing lot and harmonized the distinctive appearance of homes and the uniform image of the housing lot, as
well as to make new proposals such as building homes that were equipped with IoT. As for expanding our sales
area to include Saitama Prefecture, we opened the Saitama branch (Urawa-ku, Saitama) and made progress inpurchasing housing lots with the branch as our purchasing base.
Through initiatives such as these, orders received were above the previous year's level, but the number of new
homes sold during the nine months ended December 31, 2018 was 986 homes (a decrease of 3 homes year-onyear), a level basically the same as the previous year's, albeit a slight decrease. Meanwhile, profit was improved
because the cost-cutting initiative had borne fruit.
In existing home sales, we continued making efforts to expand existing home sales, etc. by enhancing productinventory as we did in the previous fiscal year. Amid competition intensifying due to auctions related topurchasing, orders received for the third quarter of Fiscal 2019 were above the previous year's level as a result of
our efforts to reinforce procurement and shorten the construction period for commercialization by setting up agoal of keeping 70 completed homes in inventory at any time. As a result, the number of homes sold during thenine months ended December 31, 2018 was 111 homes (an increase of 13 homes year-on-year).
As a result of these initiatives, sales in the real estate sales segment decreased 0.9% year-on-year to ¥30,178
million. Segment profit rose to ¥2,136 million, up 25.8% year-on-year.
―2―b. Construction Material Sales
In the construction material sales, while new housing starts for wooden houses including custom-madehouses had stayed below those in the same period of the previous fiscal year, such movements appear to havebottomed out. Meanwhile, in terms of wood material prices, the prices of North American logs have fallen
significantly since May due to the slowdown of housing investment arising from the interest rate increase in the
United States. Under such circumstances, the Grandy House Group expanded sales of materials to wood material
processing businesses while continuing to make efforts, such as boosting sales of building materials/housing
equipment other than pre-cut materials. As a result, sales in the construction material sales segment increased
8.6% year-on-year to ¥2,391 million. Segment profit rose to ¥135 million, up 26.0% from a year earlier.
c. Real Estate Leasing
In the real estate leasing, while more stores were opened in or relocated to the city center in the officebuilding market in and around Utsunomiya, which is our main market, office vacancies increased due to theresumption of offering for lease in some offices where offering for lease had been suspended for a long period. In
the parking lot market, competition remained intense among parking lots in the vicinity. In this context, while we
made efforts to improve the operation rate of existing assets and reduce management costs, the impact of the risein vacancy rates at the end of the third quarter of the previous year persisted, one pay-by-the-hour parking lot was
sold, and repair expenses for rental properties were incurred. Consequently, sales in the real estate leasing
segment were ¥188 million, a decrease of 5.1% year-on-year, and segment profit was ¥117 million, a decrease of
12.0% year-on-year.
(2) Explanation regarding Financial Position
As of the end of the third quarter of Fiscal 2019, total consolidated assets fell to ¥46,280 million, a decreaseof ¥1,000 million compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease
in inventories following sales of large housing lots for the current fiscal year, in terms of new home sales.
Liabilities decreased to ¥25,791 million, down ¥1,932 million compared to the end of the previous
consolidated fiscal year due mainly to a decrease in inventories, also ending up limiting new loans. Furthermore,
we are making efforts that are continued from the previous fiscal year to switch our fund procurement method tofinancing by bonds for part of our loans in order to reduce the burden of interest payments and to flexibly use
funds.
Total net assets stood at ¥20,488 million as of December 31, 2018. This represents an increase of ¥932
million from the balance recorded as of March 31, 2018. This is largely due to the acquisition of net income
attributable to owners of the parent company despite the payment of dividends.
(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts
There is no change to financial forecasts announced on May 7, 2018.

―3―

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES(1) Quarterly Consolidated Balance Sheets(Thousands of Yen)FY2018(As of March 31, 2018)

Third Quarter of FY2019(As of December 31, 2018)

AssetsCurrent assets
Cash and deposits

9,813,941

9,359,344

672,527566,261

16,588,298

17,551,498

2,414

13,178

Real estate for sale in process

8,936,229

7,065,772

Merchandise and finished goods

211,897

239,830

Raw materials and supplies

166,467

139,682

Other

413,250

631,515

Allowance for doubtful accounts(4,348)(3,453)36,800,680

35,563,630

3,256,709

3,228,069

Notes and accounts receivable – trade
Real estate for sale
Costs on uncompleted construction contracts

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net

6,175

2,954

Tools, furniture and fixtures, net

62,56372,283

5,319,659

5,573,051

69,00287,7408,714,109

8,964,098

66,862

83,644428,336

368,107

Land
Leased assets, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

14,85913,993

Deferred tax assets

381,203379,621

Other

846,788872,597

Allowance for doubtful accounts(4,901)(5,195)

Total investments and other assets

1,666,286

1,629,124

10,447,258

10,676,867

33,38839,897

Total non-current assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets―4―33,38839,89747,281,326

46,280,395

(Thousands of Yen)FY2018(As of March 31, 2018)

Third Quarter of FY2019(As of December 31, 2018)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,408,906

2,960,027

Short-term loans payable

19,177,700

17,750,000

Current portion of long-term loans payable

494,513535,496

Current portion of bonds

21,00021,000

Lease obligations

24,40329,617

Income taxes payable

495,419

218,431

Provision for warranties for completed construction

58,68658,048

Other

755,677

798,125

24,436,306

22,370,746

Bonds payable

1,066,000

1,545,000

Long-term loans payable

Total current liabilities
Non-current liabilities

1,384,806

967,015

Lease obligations

50,09965,580

Provision for directors' retirement benefits

166,279

160,979

Net defined benefit liability

571,584

629,053

Asset retirement obligations

4,296

9,518

Other
Total non-current liabilities
Total liabilities

45,48344,006

3,288,549

3,421,152

27,724,855

25,791,899

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,223,038

2,223,038

Retained earnings

15,407,196

16,379,903

Treasury shares(341,339)(341,339)

19,366,395

20,339,101(3,824)(44,505)

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets―5―(3,824)(44,505)

193,900

193,900

19,556,471

20,488,496

47,281,326

46,280,395

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended
December 31, 2017
(From April 1, 2017 to
December 31, 2017)

Nine months ended
December 31, 2018
(From April 1, 2018 to
December 31, 2018)

Net sales

32,839,105

32,758,766

Cost of sales

27,243,065

26,819,809

Gross profit

5,596,040

5,938,957

Selling, general and administrative expenses

3,739,075

3,665,157

Operating income

1,856,965

2,273,799

Non-operating income
Interest income

1,043

656

Dividends income

6,203

5,703

Operations consignment fee

176,619

170,569

Office work fee

114,805

118,092

Other

41,13521,074

Total non-operating income

339,807

316,096

253,091

193,649

Commission for syndicate loan

6,072

4,999

Other

4,531

7,150

263,694

205,800

1,933,078

2,384,095–

75

Loss on retirement of non-current assets

12,492

13,267

Impairment loss

26,112–Non-operating expenses
Interest expenses

Total non-operating expenses
Ordinary income
Extraordinary loss
Loss on sales of non-current assets

Loss on cancellation of lease contracts

–

2,528

Directors' retirement benefits–

300,000

Total extraordinary loss

38,604

315,871

Net income before income taxes

1,894,473

2,068,223

Income taxes – current

628,057

614,708

Income taxes – deferred(16,589)

19,401

Total income taxes

611,467

634,110Net income

1,283,006

1,434,113

Net income attributable to owners of the parent company

1,283,006

1,434,113―6―

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)

Nine months ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

1,283,006

1,434,113

Valuation difference on available-for-sale securities

11,126(40,680)

Total other comprehensive income

11,126(40,680)

1,294,132

1,393,432

Comprehensive income attributable to owners of the parent
company

1,294,132

1,393,432

Comprehensive income attributable to non-controlling interests––

Net income
Other comprehensive income

Comprehensive income
Comprehensive income attributable to:―7―(3) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Notes on Significant Changes in the Amount of Shareholders' Equity)
Not applicable.
(Supplemental Information)(Adoption of "Partial Amendments to Accounting Standard for Tax Effect Accounting," etc.)
We adopted "Partial Amendments to Accounting Standard for Tax Effect Accounting" (Corporate AccountingStandards No. 28: February 16, 2018), etc. from the beginning of the first quarter of Fiscal 2019, and deferred tax
assets are reported in Investments and other assets.
(Segment and Other Information)
Segment Information
I. The nine months ended December 31, 2017 (April 1, 2017 to December 31, 2017)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

Net sales
Sales to outside
customers
Inter-segment sales
and transfers
Total
Segment profit(Thousands of Yen)
AmountRecorded on
Adjustments
Quarterly(Note 1)
Consolidated
Statements ofIncome (Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

Total

30,439,245

2,201,511

198,348

32,839,105—

32,839,105—

2,404,264

59,583

2,463,847(2,463,847)—

30,439,245
1,698,485

4,605,775
107,542

257,932
133,031

35,302,953
1,939,059(2,463,847)(5,981)

32,839,105
1,933,078

Notes: 1 Adjustments of segment profit (−¥5,981 thousand) are eliminations of inter-segment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

2. Information concerning the impairment loss of non-current assets and goodwill by reportable segment
In the real estate leasing segment, we implemented a book value reduction in property, plant andequipment down to the recoverable value and recorded the reduction amount in extraordinary loss as
impairment loss. The recorded amount of the impairment loss was ¥26,112 thousand during the nine month
period ended December 31, 2018.
II. The nine months ended December 31, 2018 (April 1, 2018 to December 31, 2018)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

Net sales
Sales to outside
customers
Inter-segment sales
and transfers
Total
Segment profit(Thousands of Yen)
AmountRecorded on
Quarterly
Adjustments(Note 1)
Consolidated
Statements ofIncome (Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

Total

30,178,831

2,391,703

188,230

32,758,766—

32,758,766—

2,343,984

62,652

2,406,637(2,406,637)—

30,178,831
2,136,865

4,735,688
135,485

250,883
117,091

35,165,403
2,389,441(2,406,637)(5,345)32,758,766
2,384,095

Notes: 1 Adjustments of segment profit (−¥5,345 thousand) are eliminations of inter-segment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

2. Information concerning the impairment loss of non-current assets and goodwill by reportable segment
Not applicable.
―8―