Kyoritsu Maintenance Co., Ltd.
(Securities Code: 9616)

Third Quarter of Fiscal Year Ending March 2016
Consolidated Earnings Results Update
February 20161

Third Quarter of Fiscal Year Ending March 2016 Consolidated Earnings Announcement
February 9, 2016

Company Name: Kyoritsu Maintenance Co., Ltd.
Stock Code: 9616, URL: http://www.kyoritsugroup.co.jp/
Director: Mitsutaka Sato, President
Contact: Takumi Ueda, Vice President; Tel: +81-3-5295-7778
Quarterly Earnings Announcement Report Filing Date (Anticipated): February 12, 2016
Dividend Payment Date (Anticipated): ―Quarterly Earnings Presentation Document (Anticipated): None
Quarterly Earnings Presentation Meeting (Anticipated): None

Tokyo Stock Exchange(All figures of less than one million yen are rounded down to the nearest digit)
1. Third Quarter of Fiscal Year Ending March 2016 Consolidated Earnings (April 1, 2015 to December 31, 2015)(1) Consolidated Earnings (Aggregated)(% figures show year-on-year change)
Net Sales

Operating Income

Profit attributable to ownersof parent

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

99,702

23.7

8,586

31.8

8,073

29.8

5,256

31.4

3Q FY3/15
80,595
5.1
6,513
17.7
6,220
22.4
3,999
(Note) Comprehensive income: ¥4,973 million (4.3% YoY) in 3Q FY3/16; ¥4,768 million (42.8% YoY) in 3Q FY3/15

35.3

3Q FY3/16

Profit attributable to owners ofparent per share
Yen

Profit attributable to owners ofparent per share (Diluted)
Yen

278.60269.453Q FY3/16

255.63204.873Q FY3/15(Note) The Company carried out a stock split on April 1, 2015 at a ratio of 1.2 shares per one common share. Accordingly, profit
attributable to owners of parent per share and profit attributable to owners of parent per share (diluted) have been calculated presumingthat this stock split was carried out at the start of the previous consolidated fiscal year.
(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Book Value Per Share

Millions of yen

Millions of yen%

Yen

144,941

57,44839.6

2,973.64

3Q FY3/16

FY3/15
139,750
46,91333.6
2,658.90(Note) Capital: ¥57,448 million in 3Q FY3/16; ¥46,913 million in FY3/15(Note) The Company carried out a stock split on April 1, 2015 at a ratio of 1.2 shares per one common share. Accordingly, book value
per share has been calculated presuming that this stock split was carried out at the start of the previous consolidated fiscal year.
2. Dividend Conditions
Dividend Per Share
1Q-End2Q-EndYen

3Q-EndFY3/15

―

Yen
24.00

FY3/16―25.00

4Q-End
Yen

―
―

Total
Yen
26.00

Yen
50.00

FY3/16 (Projected)
25.00
50.00
(Note) Recent changes in dividend projections: None
(Note) The Company carried out a stock split on April 1, 2015 at a ratio of 1.2 shares per one common share. The actual dividend amountprior to the stock split is noted here for the fiscal year ended in March 2015.
3. Fiscal Year Ending March 2016 Consolidated Earnings Estimates (April 1, 2015 to March 31, 2016)(% figures show year-on-year change for the full year)
Net Sales

Ordinary Income

Profit attributable toowners of parent

Profit attributableto owners ofparent per share

Millions of yen% (YoY)

Millions of yen% (YoY)

Millions of yen% (YoY)

Yen

Full Year
131,600
19.4
10,160(Note) Recent changes in earnings estimates: None

23.6

9,430

23.1

5,420

23.5

280.55

Millions of yen% (YoY)

Operating Income2Notes(1) Important changes in our subsidiaries, including changes to the scope of our consolidation: None
(2) Application of special accounting procedures in the preparation of our quarterly consolidated financial statements: Applicable(Note) Please refer to “2. Summary Information (Notes), (2) Application of special accounting procedures in the preparation of ourquarterly consolidated financial statements” on page 7 for further details.
(3)

Changes in the accounting policies, procedures, and changes or revisions in the display of accounting estimates:
1. Changes accompanying revisions in accounting standards:
Applicable
2. Other changes:
None
3. Changes in accounting estimates:
None
4. Redisplay of revisions:
None(Note) Please refer to “2. Summary Information (Notes), (3) Changes in the accounting policies, procedures, and changes orrevisions in the display of accounting estimates” on page 7 for further details.

(4)

Shares issued (common stocks)
1. Shares issued as of term-end (including treasury shares)
3Q FY3/16
19,427,374 FY3/15
18,150,698
2. Treasury stock as of term-end
3Q FY3/16
107,971 FY3/15
506,662
3. Average during the term (first nine months)
3Q FY3/16
18,866,190 3Q FY3/15
15,644,414(Note) The Company carried out a stock split on April 1, 2015 at aratio of 1.2 shares per one common share. Accordingly, shares issued (common stocks) have been calculated presuming that this stock
split was carried out at the start of the previous consolidated fiscal year.

* Information Regarding Quarterly Review Practices:
The practices for review of quarterly consolidated earnings statements pursuant to the “Financial Instruments and Exchange Act” ofJapan have not been conducted for the disclosure of this document.
* Notes and explanations regarding the appropriate use of our earnings projections:(Notes on forecast results)
All projections provided within this document are based on the most accurate information available at the time of this writing.
However, our actual results may differ from our projections due to various unforeseen reasons.
Concerning qualitative information regarding our quarterly earnings, please refer to the segment of this document “1. Qualitative
Information about Quarterly Earnings, (3) Explanation of future forecasts including consolidated earnings estimates.”3

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
Index
1. Qualitative Information about Quarterly Earnings

5(1) Explanation of business performance5(2) Explanation of financial position

6(3) Explanation of future forecasts including consolidated earnings estimates6

2. Summary Information (Notes)

7(1) Changes in important consolidated subsidiaries during the quarter

7(2) Application of special accounting procedures in the preparation of7

our quarterly consolidated financial statements(3) Changes in the accounting policies, procedures, and changes or revisions

7

in the display of accounting estimates
3. Quarterly Consolidated Financial Statements

8(1) Quarterly consolidated balance sheet

8(2) Quarterly consolidated income statement and comprehensive income statement

10

Quarterly consolidated income statement
Consolidated third quarter
Quarterly consolidated comprehensive income statement

11

Consolidated third quarter(3) Quarterly consolidated financial statement notes

12(Notes regarding going concern assumptions)

12(Significant changes in shareholders’ equity notes)

12(Segment information)

124

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
1. Qualitative Information about Quarterly Earnings(1) Explanation of business performance
During the first nine months of the fiscal year ending March 2016, the Japanese economy underwent improvements in thecorporate earnings and employment environment underpinned by ongoing fiscal and monetary policy. However,prevailing uncertainties were also present, as private consumption was weak in Japan, combined with the risk of downturnin China and other emerging countries and foreign exchange rates.
Against this backdrop, our dormitory business got off to a solid start with occupancy rates rising by 0.1 percentage point
year on year to 97.3% at the start of the fiscal year, partially due to growing needs with respect to company dormitories.
In the hotel business segment, both the Dormy Inn business hotels and the resort hotel sub-segments maintained highoccupancy rates and high guest room unit prices brought about by continuing tailwinds provided by Japanese domestic
travelers and growing demand for inbound tourism.
As a result, during the third quarter of the current fiscal year, both revenues and earnings increased significantly, withsales up 23.7% year on year to ¥99,702 million, operating income up 31.8% to ¥8,586 million, ordinary income up 29.8%
to ¥8,073 million, and profit attributable to owners of parent up 31.4% to ¥5,256 million.
Details of our earnings are provided by business segment as follows.
Dormitory businessOur dormitory business started the fiscal year with the occupancy rate gaining 0.1 percentage point year on year to 97.3%,
and as of the end of December, the total number of contracted residents had risen by 1,710 year on year to 31,652 residents.
In addition, student dormitories trended favorably during the third quarter of the current fiscal year partially due toincreasing numbers of students from overseas, while corporate dormitories achieved substantial gains in numbers ofcontracts due to factors that included companies hiring greater numbers of employees and more companies now opting tooffer employee dormitories.
In addition, the implementation of stringent cost controls on a facility-by-facility basis also contributed to a growth inprofits.
Consequently, sales and operating income rose by 4.4% and 9.0% year on year to ¥32,226 million and ¥4,237 million,
respectively.
Hotel businessWith respect to our Dormy Inn business hotels, this fiscal year we have opened three establishments — the “Natural
Springs Kinko no Yu Dormy Inn PREMIUM Nagoya Sakae,” and the “Kachi no Yu Dormy Inn Ueno Okachimachi” and“Kousho no Yu Dormy Inn Higashimuroran” facilities.
Moreover, our existing facilities generated substantial income gains due to occupancy rates exceeding the levels at thesame period in the previous fiscal year and high guest room unit prices, underpinned by increasing inbound tourism
mainly from South Korea and Taiwan, along with strong demand from domestic Japanese travelers as well. Overseas,“DormyInn PREMIUM SEOUL Garosugil” was selected as No. 1 in the new hotel division of the South Korean versionof the “Booking.com” accommodation reservation site, reflecting its strong reputation in the South Korean market.
In the resort hotel sub-segment, Kyoritsu opened the three facilities “Akangawa Onsen Kamui no Yu La Vista
Akangawa,” “La vista Fuji Kawaguchiko,” and “Hakone Onsen Tsukino Yado Sara” during the period. Meanwhile, withthe lowering of the heightened volcanic alert level for Mount Hakone in November, occupancy at facilities in the Hakone
region in December rivaled those of the same period during the previous fiscal year. While there was a mixture of strong
and weak results depending on geographic area, occupancy and guest room unit prices overall remained high and above
previous year figures. We also implemented cost controls geared toward changes in rates of occupancy, such as byensuring flexibility in making staff assignments in line with facility utilization.
Consequently, sales and operating income rose by 12.9% and 22.0% year on year to ¥40,359 million and ¥5,700 million,
respectively.
Contracted services businessIn the contracted services business, we generated increases in both sales and income due to rental properties acquired in theprevious fiscal term along with more business taken on by the building management sector.
Consequently, sales and operating income rose by 21.0% and 118.1% year on year to ¥10,167 million and ¥255 million,
respectively.
Food service business
The food service business generated higher sales thanks to new store openings, but lower operating income due to an
adverse impact from expenses for new store openings and other such costs.

5

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
Consequently, sales rose by 5.6% year on year to ¥4,218 million, and operating income fell by 20.0% year on year to ¥16
million.
Construction businessDespite development costs remaining at high levels, the construction business generated increases in sales and income as aresult of bringing in greater numbers of orders for hotel development.
Consequently, sales and operating income rose by 114.1% and 309.0% year on year to ¥9,926 million and ¥370 million,
respectively.
Other business
Our other business segments are the Senior Life (former Wellness Life) business (management of senior citizen housing), thePublic Kyoritsu Partnership business (PKP: consigned services business provided to regional government bodies), single life
support business and insurance agency business, comprehensive human resource services business, and financing andadministrative outsourcing services.
The other business segments posted total net sales of ¥8,775 million, an increase of 32.2% year on year, but still incurred an
operating loss of ¥98 million, in comparison with an operating loss of ¥466 million in the same period of the previous fiscal
year.
The substantial year-on-year increases were largely attributable to higher profitability associated with expansion of the PKP
business and operational streamlining.
(2) Explanation of financial position(Assets)
Total consolidated assets grew by ¥5,190 million from the end of the previous fiscal year to ¥144,941 million at the end of thethird quarter. One of the main factors behind this increase was a rise in land.
(Liabilities)
Total consolidated liabilities declined by ¥5,344 million from the end of the previous fiscal year to ¥87,492 million at theend of the third quarter, due primarily to a decrease in convertible bond-type bonds with subscription rights to shares.
(Net assets)
Net assets grew by ¥10,535 million from the end of the previous fiscal year to ¥57,448 million at the end of the third quarter,due mainly to increases in capital stock, capital surplus, and retained earnings.
Consequently, equity ratio rose by 6.0 points from the end of the previous fiscal year to 39.6% at the end of the third quarter.

(3) Explanation of future forecasts including consolidated earnings estimates
There is no change to the consolidated earnings forecasts for the full fiscal year from the forecasts announced on November
9, 2015.

6

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
2. Summary Information (Notes)(1) Changes in important consolidated subsidiaries during the quarter
Not applicable(2) Application of special accounting procedures in the preparation of our quarterly consolidated financial statements(Calculation of tax expense)
With regards to taxes, a rational estimate of the effective tax rate has been used to calculate the tax effect accounting for net
income before taxes during the third quarter, and this rate has been applied to net income before taxes. However, in theevent that the estimate for the effective tax rate appears to lack logical rationale, then the legally determined effective tax
rate will be employed.
(3) Changes in the accounting policies, procedures, and changes or revisions in the display of accounting estimates
Changes in accounting policies(Application of accounting standards for business combinations)
Effective from the first quarter of the current fiscal year, the Company has applied the “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21; September 13, 2013), the “Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22; September 13, 2013), the “Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7; September 13, 2013) and other accounting standards. As a result, the method of recording differences
caused by changes in the Company’s ownership interests in subsidiaries in the case of subsidiaries under ongoing control of
the Company was changed to one in which such amounts are recorded as capital surplus, and the method of recording
acquisition-related costs was changed to one in which such amounts are recognized as expenses for the fiscal year in which
they are incurred. Furthermore, for business combinations carried out on or after the beginning of the first quarter of thecurrent fiscal year, the accounting method was changed to one in which the reviewed acquisition cost allocation resulting
from the finalization of the tentative accounting treatment is reflected in the quarterly consolidated financial statements forthe fiscal quarter in which the business combination occurs. In addition, changes have also been made in the presentation ofquarterly net income, etc. The consolidated financial statements for the third quarter of the previous fiscal year and thosefor the entire previous fiscal year have been reclassified to reflect these changes in presentation.
The Accounting Standard for Business Combinations and other standards are applied in accordance with the transitional
treatment set forth in paragraph 58-2 (4) of the Accounting Standard for Business Combinations, paragraph 44-5 (4) of the
Accounting Standard for Consolidated Financial Statements and paragraph 57-4 (4) of the Accounting Standard forBusiness Divestitures, and will be applied from the beginning of the first quarter of the current fiscal year and on into the
future.
This will not have an effect on the Company’s profits and losses.

7

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
3. Quarterly Consolidated Financial Statements(1) Quarterly consolidated balance sheet
FY3/15(March 31, 2015)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Real estate for sale
Real estate for sale in process
Costs on uncompleted construction contracts
Other
Allowance for loan losses
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Lease deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

8(Unit: Millions of yen)
3Q FY3/16(December 31, 2015)

16,115
6,841
1,007
706
514
6,295
(24)
31,457

13,701
6,265
1,088
3,272
169
5,891
(23)
30,36532,99928,704
10,561
72,265
1,818

36,37833,8697,390
77,638
1,782

6,142
11,874
9,240
7,038
(189)
34,105
108,190103
139,750

5,147
12,112
9,820
8,163
(179)
35,064
114,48490
144,941

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement(Unit: Millions of yen)
3Q FY3/16(December 31, 2015)

FY3/15(March 31, 2015)
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Advances received
Provision for bonuses
Provision for directors' bonuses
Provision for warranties for completed construction
Provision for point card certificates
Other
Total current liabilities
Non-current liabilities
Bonds payable
Convertible bond-type bonds with subscription
rights to shares
Long-term loans payable
Director retirement benefit reserve
Provision for point card certificates
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

9

5,238
15,7601,350
1,648
12,031
1,270
327
8
9
9,946
47,5904,352
33,510
1,350
1,697
8,281
950
299
9
18
6,212
56,683

6,950

5,950

7,253

704

25,512
307
24
1,042
4,155
45,246
92,836

18,546
287
20
1,080
4,220
30,80987,492

5,136
9,313
32,670(1,109)46,011

7,606
12,46137,060(299)
56,829

747
120
34
902
46,913
139,750

783
(181)
17
619
57,448144,941

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement(2) Quarterly consolidated income statement and comprehensive income statement(Quarterly consolidated income statement)(Consolidated third quarter)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Deposit redemption income
Other
Total non-operating income
Non-operating expenses
Interest payment
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Compensation income
Gain on cancellation of leasehold contracts
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Settlement funds
Other
Total extraordinary losses
Income before income taxes
Income taxes

3Q FY3/15(April 1, 2014 toDecember 31, 2014)
80,59563,203
17,391
10,878
6,513(Unit: Millions of yen)
3Q FY3/16(April 1, 2015 to
December 31, 2015)
99,702
78,86020,842
12,255
8,586

88
40
72
430
632

98
42
66
95
301

662
262
925
6,220

602
212
815
8,073

93
－
93

－
432
432

17
－
－

－
175
26
201
8,303
3,047
5,256
5,256

17
6,296
2,297
3,999
3,999

ProfitProfit attributable to owners of parent

10

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
Quarterly consolidated comprehensive income statement
Consolidated third quarter

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to owners of parent

11

3Q FY3/15(April 1, 2014 toDecember 31, 2014)
3,999(Unit: Millions of yen)
3Q FY3/16(April 1, 2015 to
December 31, 2015)
5,256

698
84
(13)
769
4,768

36
(302)
(17)
(283)
4,973

4,768

4,973

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement(3) Quarterly consolidated financial statement notes(Notes regarding going concern assumptions)Not applicable(Significant changes in shareholders’ equity notes)
During the third quarter under review, capital and capital reserves increased by ¥2,470 million and ¥3,147 million,
respectively, and treasury stock decreased by ¥930 million as a result of having exercised stock options of convertible
bonds with stock options. Consequently, capital was ¥7,606 million, capital reserves were ¥12,461 million, and treasury
stock was ¥299 million as of the end of the third quarter.
(Segment information)
Segment information
I. Third quarter of fiscal year ended March 2015 (From April 1 to December 31, 2014)
1. Information pertaining to segment sales, profits and losses(Unit: Millions of yen)
Reporting segments
Others(Note 1)

Total

Adjustments(Note 2)

Consolidated(Note 3)

Dormitories

HotelsContracted
Services

30,71135,657

4,713

1,111

2,056

74,251

6,343

80,595－80,595

170

79

3,688

2,881

2,579

9,398

296

9,695

(9,695)－

Total

30,88135,736

8,402

3,993

4,636

83,6496,640

90,290(9,695)80,595

Segment profit/loss

3,885

4,672

117

21

90

8,787

(466)

8,320

(1,807)

6,513

Food
Services

Construction

Subtotal

Sales
External sales
Inter-segment sales
and transfers(Notes)1. Others is not considered as a reporting business segment and comprises the Wellness Life (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life
support business and insurance agency business, comprehensive human resource services business, financing services,administrative outsourcing services and other related services.
2. Adjustment for segment profit and loss of ¥1,807 million includes ¥142 million for inter-segment transaction
eliminations, and ¥1,664 million in companywide expenses that cannot be allocated to specific reported segments.
Companywide expenses are primarily those expenses arising from the finance and accounting, and management
divisions.
3. Segment profits or losses are derived by adjusting the operating income used in the quarterly consolidated income
statement.

2. Impairment accounting losses and goodwill amortization of fixed assets by reporting segments
None

12

Kyoritsu Maintenance (9616), 3Q FYE March 2016 Earnings Announcement
II. Third quarter of fiscal year ending March 2016 (From April 1 to December 31, 2015)
1. Information pertaining to segment sales, profits and losses(Unit: Millions of yen)
Reporting segments
Others(Note 1)

Total

Adjustments(Note 2)

Consolidated(Note 3)

Dormitories

HotelsContracted
Services

External sales

32,05440,281

5,537

1,242

12,13091,247

8,455

99,702－

99,702

Inter-segment
sales andtransfers

171

77

4,629

2,975

(2,204)

5,650

320

5,970

(5,970)－Total

32,22640,359

10,167

4,218

9,926

96,897

8,775

105,673(5,970)99,702

Segment
profit/loss

4,237

5,700

255

16

370

10,580(98)

10,482(1,896)

8,586

Food
Services

Construction

Subtotal

Sales(Notes)1. Others is not considered as a reporting business segment and comprises the Senior Life (former Wellness Life) business(management of senior citizen housing), PKP business (consigned services business provided to regional government
bodies), single life support business and insurance agency business, comprehensive human resource services business,financing services, administrative outsourcing services and other related services.
2. Adjustment for segment profit and loss of ¥1,896 million includes ¥152 million for inter-segment transaction
eliminations, and ¥1,743 million in companywide expenses that cannot be allocated to specific reported segments.
Companywide expenses are primarily those expenses arising from the finance and accounting, and management
divisions.
3. Segment profits or losses are derived by adjusting the operating income used in the quarterly consolidated income
statements.

2. Impairment accounting losses and goodwill amortization of fixed assets by reporting segmentsNone13