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. Thissummary 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 2020 Ending March 31, 2020 (Japanese GAAP)
Company Name:Grandy House Corporation
Stock Exchange Listing:
Securities Code:
8999
URL:
Representative:
Yasuro Hayashi, President
Inquiries:
Nobuyasu Takeuchi, Director & General Administration Manager
Scheduled date of quarterly securities report filing:
February 13, 2020
Scheduled date of dividend payment commencement:―
Preparation of quarterly supplementary explanatory materials:
None
Quarterly results briefing held:
None

February 10, 2020
Tokyo Stock Exchange
https://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, 2020
(April 1, 2019 to December 31, 2019)(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(¥ million)%(¥ million)%(¥ million)%(¥ million)%

32,8170.2

1,538(32.4)

1,662(30.3)

1,057(26.3)

32,758

(0.2)

2,273

22.4

2,384

23.3

1,434

11.8

Nine months ended
December 31, 2019
Nine months ended
December 31, 2018
Note: Comprehensive income

Nine months ended December 31, 2019: ¥1,052 million (-24.5%)
Nine months ended December 31, 2018: ¥1,393 million (7.7%)
Net Income per ShareNet Income per Share(Diluted)(¥)(¥)

Nine months ended
December 31, 2019
Nine months ended
December 31, 2018

36.58

36.11

49.73

49.03

Total Assets(¥ million)
56,21046,864

Net Assets(¥ million)
21,701
21,124(2) Consolidated Financial Position

December 31, 2019
March 31, 2019
Reference: Shareholders' equity

December 31, 2019:
March 31, 2019:¥21,522 million¥20,932 million

1Q-End2Q-EndShareholders' Equity Ratio
%
38.3
44.7

Net Assets per Share(¥)
742.63725.35

2. Dividends

(¥)
—
—

Fiscal 2019
Fiscal 2020
Fiscal 2020 (Forecast)

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

Period-End

Total

(¥)
18.00

(¥)
18.00

23.00

23.00

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

3. Consolidated Financial Forecasts for Fiscal 2020 (April 1, 2019 to March 31, 2020)

Net Sales

Full Fiscal Year(¥ million)
45,150%1.6(Percentage figures show the year-on-year increase (decrease) for each corresponding period.)
Net Income
Operating Income
Ordinary Income
Attributable to
Net Income per ShareOwners of the Parent(¥ million)%(¥ million)%(¥ million)%(¥)
2,000 (36.1)
2,150(34.6)
1,400(32.2)
48.41

Note: Revisions to the most recently announced financial forecasts in the current quarter: Yes

* Notes(1) Significant changes to subsidiaries during the period(Transfers of specific subsidiaries with changes 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 restatement of revisions
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 issued shares (common stock)1) Number of issued shares(including treasury shares)
2) Number of treasury shares
3) Average number of shares during the period

December 31,
2019
December 31,
2019
Nine months
ended December
31, 2019

None
None
None
None

30,823,200 shares

March 31, 201930,823,200 shares

1,842,445 shares

March 31, 2019

1,965,245 shares

28,901,235 shares

Nine months
ended December
31, 2018

28,837,955 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 assumptions, beliefs, anduncertainties 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 the accuracy 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 ....................................... 4
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES................................................. 5(1) Quarterly Consolidated Balance Sheets ............................................................................................................. 5(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ......... 7(Quarterly Consolidated Statements of Income)(Consolidated cumulative third quarter) ......................................................................................................7(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third quarter) ......................................................................................................8(3) Notes to Quarterly Consolidated Financial Statements ...................................................................................... 9(Notes on Going Concern Assumptions) ............................................................................................................9(Notes on Significant Changes in the Amount of Shareholders' Equity) ...........................................................9(Segment Information) .......................................................................................................................................9― 1 ―1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS(1) Explanation regarding Operating Results
During the nine months ended December 31, 2019, the Japanese economy was considered to be on amoderate recovery trend despite continually soft exports.
In the housing sector, interest rates on housing loans continue to remain at low levels and the overall
environment surrounding housing purchases remain favorable, but the customer mindset regarding housingpurchases turned cautious, due to an increase in consumption tax that took effect last October and housing
damage caused by flooding brought on by Typhoon Hagibis that affected a vast area of eastern Japan. On theother hand, competition between businesses has kept intensifying; for example, new housing starts continued todemonstrate year-on-year growth, buoyed between July and November of last year by new housing due to becompleted after the increase in consumption tax took effect.
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 ended 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 strengthen organizational
structures of subsidiaries, boost sales of strategic large housing lots, reinforce our product appeal, expand abusiness area to Saitama Prefecture and so on, as well as acquired shares in two business companies in Kawasaki
City and made them subsidiaries for the purpose of expanding into Kanagawa Prefecture. In existing home sales,
we continued the effort to build up product inventory toward expanding home sales.
However, there were other factors other than the increase in consumption tax. Due to the effect of thedampened consumer mindset brought on by Typhoon Hagibis, orders received in the current quarter havecontinued to be challenging, with results ending with net sales for the third quarter on a consolidated basis
coming in at approximately the same level year-on year (a slight increase). Also in terms of profit, in addition to
weak sales of new homes in the current quarter, an increase in personnel expenses associated with investment in
human resources toward expanding operations in the future, M&A expenses, the amortization of goodwill andother factors led to a decline in profit year-on-year.
As a result of these initiatives, the Grandy House Group's consolidated results for the third quarter(cumulative) of Fiscal 2020 were as follows. Net sales were ¥32,817 million, an increase of 0.2% year-on-year;
operating income decreased to ¥1,538 million, a decrease of 32.4% year-on-year; ordinary income was ¥1,662
million, a decrease of 30.3% year-on-year; and net income attributable to owners of the parent totaled ¥1,057
million, a decrease of 26.3% year-on-year.
Results by business segment are presented as follows.
a. Real Estate Sales
In new home sales, we reviewed the structure of officers of subsidiaries last April for the purpose of activating
subsidiaries that were not able to achieve the sales plan in the previous period, and made efforts to reinforce theorganization and structure, as well as endeavoring to increase orders received. Furthermore, toward expanding sales,
we continued to strengthen sales promotion activities with a focus on efforts toward early sales of strategic large
housing lots such as Yotsuba no Mori housing lots (211 lots in Tsukuba in Ibaraki Prefecture) and GRAND BEATPARK Kaminokawa (141 lots, Kaminokawamachi in Tochigi Prefecture). In terms of products, we continued todifferentiate our products from those of our competitors by pursuing our "Townscape creation" policy that gave atheme to each housing lot and harmonized the distinctive appearance of homes and the uniform image of the
housing lot, and through products with superior design, functionality, energy saving and safety, we initiated a newundertaking in Saitama Prefecture by adopting a plan with standardized air-conditioning system for the entire house.
As for expanding our sales area, homes were put up for sale in Saitama Prefecture in the order they werecompleted, and advertising was intensified in an effort to close at an early stage sales of completed homes by theend of the current quarter. In addition, the company focused on PMI (Post Merger Integration) for Plaza House
Inc. (Kawasaki in Kanagawa Prefecture) and Welcome House Inc. (Kawasaki in Kanagawa Prefecture) in thereal-estate sales and mediation business, which the company subsidized last July with the aim of advancing into
the Kanagawa Prefecture market and expand business within the prefecture.
However, despite an increase in the number of closed housing in the areas which the company expanded into,
orders received during the current quarter remained challenging due to the increase in consumption tax that tookeffect last October and the dampened mindset of consumers in an extensive area of flooding damage brought on― 2 ―by Typhoon Hagibis, especially around Tochigi Prefecture. Consequently, the total number of new housing units
sold came in at 962 units (down 24 units year-on-year).
In existing home sales, we continued making efforts to expand existing home sales, and so on by enhancing
product inventory. Amid competition intensifying related to purchasing, the number of homes in inventory wasalmost above the target as a result of our efforts to reinforce procurement and shorten the period forcommercialization of product by setting up a goal of keeping 80 completed homes in inventory at any time.
Consequently, despite the impact of the consumption tax increase that took effect once in the current quarter,
increase in orders received during the first half contributed, and the total number of existing homes sold came inat 117 units (up 6 units year-on-year).
As a result of these initiatives, sales in the real estate sales segment increased 1.2% year-on-year to ¥30,527
million. Segment profit decreased to ¥1,450 million, down 32.1% year-on-year.
b. Construction Material Sales
In the construction material sales, a downward trend in new housing starts for wooden houses has beenremarkable in the second quarter year-on-year due to a decrease in built-for-rent housing starts and a decrease inowner-occupied housing starts before a rise in the consumption tax. Meanwhile, wood material prices have been
declining toward the summer season, but prices have shown some signs of increasing after the current quarter due
to a production adjustment by lumber producers and others.
Under such circumstances, the Grandy House Group has been making efforts to improve the gross margin of
pre-cut materials, which are the group's main products, and to increase orders received for building andconstruction materials for housing. Net sales declined because the selection of customers and other measures
were conducted in an effort to ensure profitability, among the intensified competition due to the decreased
number of wooden housing starts. Meanwhile, profit decreased due to an increase in personnel expenses
associated with addition of manpower starting from the end of the previous period and occurrence of
uncollectible accounts receivable despite the gross margin rate improved.
As a result, sales in the construction material sales segment decreased 12.3% year-on-year to ¥2,096 million.
Segment profit declined to ¥102 million, down 24.3% year-on-year.
c. Real Estate Leasing
In the real estate leasing, more stores were opened in or relocated to the city center in the office building
market in and around Utsunomiya, which is our main market, and vacancy rates were improving continuously. In
the parking lot market, competition remained intense between parking lots in the vicinity.
In this context, in addition to efforts made to improve the operational rate of existing assets and reducemanagement costs, there was a slight increase in the value of rental assets. Consequently, sales in the real estateleasing segment during the third quarter (cumulative) of Fiscal 2020 were ¥193 million, an increase of 2.9%
year-on-year, and segment profit was ¥127 million, an increase of 9.1% year-on-year.
(2) Explanation regarding Financial Position
As of the end of the third quarter of Fiscal 2020, total consolidated assets increased to ¥56,210 million, an
increase of ¥9,345 million compared to the end of the previous consolidated fiscal year. This was mainly due toan increase in assets as two companies became subsidiaries of the Grandy House Group, in addition to anincrease in current assets following an acquisition of large-scale housing lots as part of an effort to expand thereal estate sales segment, and an increase in fixed assets due to good will accompanying the acquisition of sharesof the two companies which became the group's subsidiaries.
Liabilities increased to ¥34,508 million, up ¥8,768 million compared to the end of the previous consolidated
fiscal year, due mainly to incorporation of liabilities of the two companies which became subsidiaries of theGrandy House Group, coupled with loans to fund the acquisition of the aforementioned housing lots and sharesof the two companies which became the group's subsidiaries. Furthermore, we are making efforts that arecontinued from the previous fiscal year to switch our fund procurement method to financing by bonds for part ofour loans in order to reduce the burden of interest payments and to flexibly use funds.
Total net assets stood at ¥21,701 million as of December 31, 2019. This represents an increase of ¥577
million from the balance recorded as of March 31, 2019. This is largely due to the acquisition of net income
attributable to owners of the parent despite the payment of dividends.

― 3 ―(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts
In regard to the consolidated financial forecast for Fiscal 2020, taking recent business performance into
consideration, the Grandy House Group has revised the consolidated financial forecast for Fiscal 2020, originally
announced on May 7, 2019. Please refer to the "Notice of Adjustment of the Financial Forecast" (Japanese
language only) which was announced today (February 10, 2020) for additional details.

― 4 ―2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES(1) Quarterly Consolidated Balance Sheets(Thousands of Yen)FY2019(As of March 31, 2019)

Third Quarter of FY2020(As of December 31, 2019)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Real estate for sale
Costs on uncompleted construction contracts

10,001,725

9,209,938

547,282

605,340

17,322,784

17,880,284

7,244

6,986

Real estate for sale in process

7,062,704

14,555,469

Merchandise and finished goods

244,048244,326

Raw materials and supplies

128,188

122,997

Other

816,802828,461

Allowance for doubtful accounts(3,305)(5,462)36,127,474

43,448,341

3,201,619

3,450,797

Machinery, equipment and vehicles, net

4,171

38,040Tools, furniture and fixtures, net

68,52358,851

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

Land5,576,884

5,779,413

Leased assets, net

80,45697,552

Construction in progress

1,011

11,7088,932,666

9,436,362–

1,342,049

Total property, plant and equipment
Intangible assets
Goodwill
Other

80,07789,511

Total intangible assets

80,077

1,431,560

Investment securities

363,031353,802

Long-term loans receivable

13,701

39,189Deferred tax assets

413,834

465,374

Other

897,508

1,006,432

Allowance for doubtful accounts(1,030)(9,152)

Investments and other assets

Total investments and other assets

1,687,045

1,855,647

10,699,789

12,723,570

Bond issuance costs

37,51238,443

Total deferred assets

37,51238,443

46,864,776

56,210,356

Total non-current assets
Deferred assets

Total assets― 5 ―(Thousands of Yen)FY2019(As of March 31, 2019)

Third Quarter of FY2020(As of December 31, 2019)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,132,890

3,280,180

Short-term loans payable

17,324,800

23,136,750

Current portion of long-term loans payable

503,345634,399

Current portion of bonds

21,00021,000

Lease obligations

28,36635,041

Income taxes payable

544,514

144,740

Provision for warranties for completed construction

85,85375,220Other

758,230

693,136

22,398,999

28,020,468

1,545,000

1,824,000

Long-term loans payable

881,461

3,623,436

Lease obligations

58,582

72,140

Provision for directors' retirement benefits

168,654

194,616

Net defined benefit liability

629,972

709,139

Asset retirement obligations

12,227

12,279Other

45,73052,625

Total current liabilities
Non-current liabilities
Bonds payable

Total non-current liabilities
Total liabilities

3,341,627

6,488,237

25,740,627

34,508,705

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,228,898

2,264,878

Retained earnings

17,011,385

17,549,280

Treasury shares(337,899)(316,777)

20,979,883

21,574,880(47,634)(52,850)

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― 6 ―(47,634)(52,850)

191,900

179,620

21,124,148

21,701,650

46,864,776

56,210,356

(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended
December 31, 2018
(From April 1, 2018 to
December 31, 2018)

Nine months ended
December 31, 2019
(From April 1, 2019 to
December 31, 2019)

Net sales

32,758,766

32,817,966

Cost of sales

26,819,809

27,204,678

Gross profit

5,938,957

5,613,288

Selling, general and administrative expenses

3,665,157

4,075,129

Operating income

2,273,799

1,538,159

Non-operating income
Interest income

656

964

Dividends income

5,703

5,722

Operations consignment fee

170,569

172,870

Office work fee

118,092

115,121

Other

21,07452,062

Total non-operating income

316,096346,741

193,649

186,775

Non-operating expenses
Interest expenses
Commission for syndicate loan

4,999

5,977

Other

7,150

30,036

205,800

222,789

2,384,095

1,662,110

75

1,143

Loss on retirement of non-current assets

13,267

9,028

Loss on cancellation of lease contracts

2,528

9,460

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

300,000––

27,767

Total extraordinary loss

315,871

47,398Net income before income taxes

2,068,223

1,614,711

Income taxes – current

614,708

563,831

Income taxes – deferred

19,401(6,457)

Total income taxes

634,110557,373

Net income

1,434,113

1,057,338

Net income attributable to owners of the parent

1,434,113

1,057,338

Directors' retirement benefits
Loss on disaster― 7 ―(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended December
31, 2018(From April 1, 2018
to December 31, 2018)
Net income

Nine months ended December
31, 2019(From April 1, 2019
to December 31, 2019)

1,434,113

1,057,338

Valuation difference on available-for-sale securities(40,680)(5,215)

Total other comprehensive income(40,680)(5,215)

1,393,432

1,052,122

Comprehensive income attributable to owners of theparent

1,393,432

1,052,122

Comprehensive income attributable to non-controllinginterests––

Other comprehensive income

Comprehensive income
Comprehensive income attributable to:― 8 ―(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.
(Segment Information)
I. 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
Adjustments
Quarterly
Consolidated(Note 1)
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.
II. The nine months ended December 31, 2019 (April 1, 2019 to December 31, 2019)
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
Consolidated(Note 1)
Statements ofIncome (Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

Total

30,527,748

2,096,557

193,660

32,817,966–

32,817,966–

2,357,952

63,9002,421,852(2,421,852)–

30,527,748
1,450,210

4,454,509
102,621257,560
127,710

35,239,819
1,680,542(2,421,852)(18,431)

32,817,966
1,662,110

Notes: 1 Adjustments of segment profit (−¥18,431 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.

― 9 ―