Consolidated Financial Statements for the Third Quarter of
the Fiscal Year Ending March 31, 2024
[Japanese GAAP]
February 7, 2024
Company name: VITAL KSK HOLDINGS, INC.
Stock exchange listing: Tokyo Stock Exchange
Code number: 3151
URL: https://www.vitalksk.co.jp/
Representative: Mr. Taisuke Murai, President & CEO
Contact: Mr. Kiharu Takahashi, Executive Officer and General Manager of Corporate PlanningPhone: +81-3-5787-8565
Scheduled date of filing quarterly report: February 14, 2024
Scheduled date of commencing dividend payments: —Preparation of supplementary explanatory materials: Yes
Quarterly financial results meeting: None
(Amounts of less than one million yen are rounded down.)
1. Consolidated Results for the Third Quarter of the Fiscal Year Ending March 31, 2024 (April 1, 2023 – December 31, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Nine months ended

Million yen%

Million yen%

Million yen%

Million yen

December 31, 2023
448,909
‒
5,658
‒
6,506
‒
December 31, 2022
444,384
‒
3,061
‒
4,302
‒
(Note) Comprehensive income: Nine months ended December 31, 2023: ¥ 6,526 million [‒%]
Nine months ended December 31, 2022: ¥ 4,740 million [‒%]
Basic earnings
Diluted earnings
per shareper share
Nine months ended

December 31, 2023
December 31, 2022

Yen

Yen

99.12
46.59

‒
‒

(2) Consolidated Financial Position
Total assets
As of

Net assets

Million yen

5,054
2,433

%

‒
‒

Equity ratio

Million yen%

December 31, 2023
328,344
102,703
March 31, 2023
297,316
100,165(Reference) Equity: As of December 31, 2023: ¥101,447 million
As of March 31, 2023: ¥98,986 million

30.9
33.3

2. Cash Dividends
Cash dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end
Year-end
Yen

Yen

Year ended March 31, 2023‒
12.00
Year ending March 31, 2024‒
19.00
Year ending March 31, 2024
(forecast)(Note) 1. Revision to the forecast for dividends announced most recently: None

Total

Yen

Yen

Yen

‒
‒

27.00

39.00

20.00

39.00

3. Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2024 (April 1, 2023 - March 31, 2024)(% indicates changes from the previous corresponding period.)
Profit attributable to
Basic earnings
Net sales
Operating profit
Ordinary profit
owners of parent
per share
Million yen% Million yen% Million yen% Million yen%

Yen

Full year
584,000
‒
5,200
‒
6,300
‒
5,500
‒
108.27(Note) Revision to forecast of consolidated results announced most recently: Yes* The percentage increase/decrease is not shown due to a change in presentation method. For details, please see (Change in method ofpresentation) in (3) Notes to Quarterly Consolidated Financial Statements of 2. Quarterly Consolidated Financial Statements and Primary Notes.
* Notes:(1) Changes in significant subsidiaries during the period under review: None
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes* For details, please see “(3) Notes to Quarterly Consolidated Financial Statements (Accounting policies adopted specially for the preparation ofquarterly consolidated financial statements)” on page 8 of the attached materials.
(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Total number of outstanding shares (common shares)
1) Total number of outstanding shares at the end of the period (including treasury stocks):
December 31, 2023: 51,902,976 shares
March 31, 2023: 61,224,796 shares2) Total number of treasury stocks at the end of the period:
December 31, 2023: 1,706,337 shares
March 31, 2023: 9,438,699 shares
3) Average number of shares during the period:
Nine months ended December 31, 2023: 50,997,734 shares
Nine months ended December 31, 2022: 52,229,190 shares* These quarterly financial results are outside the scope of quarterly review by certified public accountants or audit corporations.
* Explanation of the proper use of performance forecast and other notes
The earnings forecast and other forward-looking statements herein are based on the information currently available and certain assumptions deemed
reasonable by the Company, and thus actual results may differ significantly from these forecasts due to a wide range of factors.

Table of Contents
1. Qualitative Information on Quarterly Financial Results ........................................................................................... 2(1) Explanation of Operating Results ......................................................................................................................... 2(2) Explanation of Forward-looking Information, including Consolidated Performance Forecast............................ 3
2. Quarterly Consolidated Financial Statements and Primary Notes ............................................................................ 4(1) Quarterly Consolidated Balance Sheets ............................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ....................................................... 6(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................ 8(Notes on going concern assumption) .................................................................................................................. 8(Notes in the case of significant changes in amount of shareholders’ equity) ...................................................... 8(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) ....... 8(Change in method of presentation)...................................................................................................................... 8(Segment information) .......................................................................................................................................... 8

11. Qualitative Information on Quarterly Financial Results
The Group previously recognized income from the provision of sales information to manufacturers as administrative service fee income
under non-operating income but changed the method of presentation and this income is included in net sales from the first quarter of theconsolidated fiscal year. As a result of this change, the results for the nine months of the previous fiscal year have been retrospectively adjusted
to reflect the change in method of presentation.
For details, please see (Change in method of presentation) in (3) Notes to Quarterly Consolidated Financial Statements of 2. Quarterly
Consolidated Financial Statements and Primary Notes.
(1) Explanation of Operating Results
During the nine months ended December 31, 2023, the Japanese economy saw increased social and economic activities, reflecting inbounddemand surpassing pre-COVID level and gradual recovery in domestic demand. However, uncertainties remained elevated due to concerns about
international affairs, continuing depreciation of the yen, rising prices, supply restrictions and instability in financial and capital markets, and theeconomic visibility remains limited.
In the pharmaceutical wholesale business sector, which is the Group’s main business, the drug price revisions in April 2023 cut
approximately ¥310 billion from national healthcare costs and, going forward, discussions aimed at radically reforming policies and systems
related to people’s lives and health such as the social security system and the drug pricing system are likely to increase and the policy of curbing
drug costs is likely to be maintained. With pharmaceutical market development, manufacturing and distribution operations also changing
dynamically day by day, the solutions to pharmaceutical distribution related problems are also becoming increasingly complex and the businessenvironment remains challenging.
In light of such changes in the market structure and operating environment, the Group formulated its Long-term Vision 2035 from the fiscal
year ending March 31, 2024, which is “to transform the future of medical care by transcending boundaries and “acting as a bridge” to cuttingedge medicines.” Based on this long-term vision, the Group will expand medical care-related businesses with the aim of developing a sustainabledistribution structure for drugs and medical care-related products through independence and cooperation and contributing to the resolution ofsocial issues and the extension of healthy life expectancy. Furthermore, with “business model innovation looking at next-generation capabilities”
as its medium-term vision, the Group is implementing its fifth Medium-Term Management Plan, spanning the three-year period from the year
ending March 31, 2023 to the year ending March 31, 2025. In the medium-term management plan, the Company has set out and is working toachieve the practical tasks: “1. Explore a pharmaceutical distribution model to adapt to changes in the market structure and meet market
characteristics,” “2. Evolve distribution and marketing models tailored to the advancement of DX in the field of medical care,” and “3. Promote
Group management that meets Prime Market requirements.”
With regard to business results for the first nine months of the fiscal year under review, revenue increased slightly, attributable to favorable
sales of anti-cancer drug and anti-coronavirus agents, in addition to growth of the overall market for prescription pharmaceuticals. Profits
exceeded the level of a year ago, mainly attributable to the absence of allowance for doubtful accounts for certain major customers which wasposted in the previous fiscal year, in addition to the effect of the increased revenue described above. As a result, net sales were ¥448,909 million(compared with ¥444,384 million for the same period of the previous year), operating profit was ¥5,658 million (compared with ¥3,061 million
for the same period of the previous year), ordinary profit was ¥6,506 million (compared with ¥4,302 million for the same period of the previous),and profit attributable to owners of parent was ¥5,054 million (compared with ¥2,433 million for the same period of the previous).
Performance results by business segment are as follows.
1) Pharmaceutical Wholesale BusinessIn the first nine months of the fiscal year under review, the pharmaceutical wholesale business posted a slight increase in revenue, attributable
to higher-than-expected growth in sales of anticancer drugs, COVID-19 treatments, flu treatments, etc., which more than offset the negative
impact of a decrease in revenue that mainly reflected drug price revisions, the suspension of the handling of certain drugs by certain manufacturers
and decreased sales of COVID-related test agents, equipment, etc. In addition, the Company negotiated prices while paying attention totransaction costs with each of its customers, resulting in significantly higher profits than in the previous year.
As a result of the foregoing, net sales were ¥423,218 million (compared with ¥419,449 million for the same period of the previous year),and segment profit (operating profit) was ¥5,211 million (compared with ¥2,810 million for the same period of the previous year).
2) Pharmacy Business
The pharmacy business posted net sales of ¥14,295 million (compared with ¥13,769 million for the same period of the previous year),reflecting, in addition to an increase of one store due to the business acquisition in August 2023, efforts to expand income from dispensing
technical fees and income from pharmaceutical management fees as well as an increase in the number of prescriptions received as a result of
increased movement of people with the downgrading of COVID-19 to a Class 5 infectious disease under the Infectious Diseases Act. Segment
profit (operating profit) was ¥259 million (compared with ¥77 million for the same period of the previous year) due to the effect of this sales
growth as well as a significant decrease in amortization of goodwill.
23) Veterinary Drug Wholesale Business
The veterinary drug wholesale business recorded net sales of ¥8,472 million (compared to ¥8,164 million in the same period of the previous
fiscal year), driven by sales growth in companion animal operations. Segment profit (operating profit) was ¥288 million (compared to ¥283
million a year ago), mainly reflecting the impact of higher purchase prices.
4) Other Businesses
The other business posted net sales of ¥2,922 million (compared to ¥3,000 million a year ago), primarily due to a decrease in revenue in thewholesale business handling agricultural chemicals, agricultural materials, etc. Segment loss (operating loss) came to ¥162 million (compared toa segment loss of ¥236 million a year ago), due to the improved profitability of nursing care-related business.
(2) Explanation of Forward-looking Information, including Consolidated Performance Forecast
In light of recent earnings trends, etc., the Company revised its earnings forecasts for the fiscal year ending March 31, 2024 released on
May 12, 2023. For details, please refer to the Notice of Revision to Full-year Consolidated Earnings Forecasts announced on February 7, 2024.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

As of December 31, 2023

19,029118,585
30,846
16,466
3,616(41)
188,50231,100131,235
33,863
16,523
2,903(50)
215,575

20,37024,917
3,736
49,024

19,601
25,083
4,062
48,747

818
2,558
3,377

716
3,339
4,055

44,642
12,771(1,002)56,411
108,813297,316

47,563
13,159(756)
59,966
112,769
328,344(Million yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Other provisions
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

5

As of December 31, 2023

164,571
990
970
2,095
1,569
8,462
178,659

195,107
980
970
1,070
613
8,518
207,259

6,790
251
855
10,594
18,491
197,150

6,065
245
900
11,17018,381
225,641

5,000
12,81067,864(7,575)78,0995,000
5,272
70,550(1,653)
79,17019,972

21,638913

639

20,88622,2771,179
100,165
297,316

1,255
102,703
328,344(2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31, 2022 and 2023
(Million yen)
For the nine months ended
December 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using
equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rental expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Impairment losses
Loss on sale of investment securities
Loss on valuation of investment securities
Soil treatment cost
Demolition cost
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

For the nine months ended
December 31, 2023

444,384
409,345
35,03831,977
3,061

448,909412,537
36,37230,714
5,658

51
555

50
492

83

21

695
1,385

439
1,004

74
60
9
144
4,302

74
58
23
156
6,506

15
59
‒
74

46
1,221
26
1,295

0
22
26
56
136
‒
2
244
4,132
1,622
2,510
77
2,433

‒
49
‒
42
‒
47
36
176
7,625
2,490
5,134
80
5,054

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31, 2022 and 2023
(Million yen)
For the nine months ended
December 31, 2022
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans, net oftax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

7

For the nine months ended
December 31, 2023

2,510

5,134

2,416

1,327

(267)

(273)

81

337

2,230
4,740

1,391
6,526

4,663

6,445

77

80

(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
For the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
Not applicable.
(Notes in the case of significant changes in amount of shareholders’ equity)
For the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
Not applicable.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)
Calculation of tax expenses
Tax expenses are calculated by the method in which the effective tax rate on profit before income taxes for the current consolidated fiscal year
after application of tax effect accounting is reasonably estimated, and profit before income taxes was multiplied by the estimated effective tax
rate.
(Change in method of presentation)
The Group previously recognized income from the provision of sales information to manufacturers as administrative service fee income under
non-operating income but changed the method of presentation and this income is included in net sales from the first quarter of the consolidated
fiscal year.
Based on its medium-term vision “business model innovation looking at next-generation capabilities” and under a basic policy of “evolutionof distribution and marketing model in step with progress of DX in health care,” the Group positions information provision as an important
operating activity given the increasing importance of information provision services and the purpose of this change in presentation method is toproperly present the results of the Group’s operating activities.
The quarterly consolidated financial statements for the first nine months of the previous consolidated fiscal year and the consolidated financial
statements for the previous consolidated fiscal year have been restated to reflect this change in presentation method.
As a result, administrative service fee income of ¥1,194 million, which had been presented under under non-operating income, has been
restated as net sales, resulting in net sales of ¥444,384 million and operating profit of ¥3,061 million. Ordinary profit and profit before income
taxes are not affected by this change.
In addition, accounts receivable-other of ¥199 million, which had been presented in current assets, has been restated as notes and accounts
receivable-trade, resulting in notes and accounts receivable-trade of ¥118,585 million.
(Segment information)
As described in “change in reporting method,” the Company changed the method for reporting administrative service fee income under nonoperating income to include it in net sales, starting in the first three months of the current fiscal year.
To reflect this change in the reporting method, the financial results for the first nine months of the previous fiscal year have been
retrospectively adjusted. As a result, compared to the previous method, net sales increased in the pharmaceutical wholesale business andveterinary drug wholesale business by ¥1,187 million and ¥7 million, respectively, while segment profit increased by ¥1,187 million and ¥7
million, respectively.
1. Overview of reportable segments
The Group’s reportable segments are components of the Group about which separate financial information is available. These segments are subject
to periodic examinations to enable the company’s Board of Directors to decide how to allocate resources and assess performance.
The Group’s segment is categorized based on the business of its operating company, and thus its main segments, the “Pharmaceutical Wholesale
Business,” the “Pharmacy Business,” and the “Veterinary Drug Wholesale Business” comprise the Group’s reportable segments.
The “Pharmaceutical Wholesale Business” is engaged in sales of drugs, diagnostic products, medical devices, materials, etc. to medical institutions,such as hospitals, clinics, and pharmacies. The “Pharmacy Business” is engaged in sales of drugs, medical devices and equipment, and hygienematerials, etc. to general consumers. The “Veterinary Drug Wholesale Business” is engaged in sales of veterinary drugs, feeds, etc. to farms, ranches,
veterinary hospitals, clinics, etc.

8

2. Method of measurement for the amounts of net sales, income (loss), assets and other items for each reportable segment
The method of accounting for the reportable business segments is generally the same as those stated in “Basis for the Presentation of theConsolidated Financial Statements.”
Profit in the reportable segments is based on operating profit.
Inter-segment revenues and transfers are calculated at prevailing market prices.
3. Information on net sales, income (loss), assets and other items by reportable segment
For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)(Million yen)
Reportable segment
Adjustment(Note 2)

Amountrecorded in
Consolidated
Statements ofIncome(Note 3)444,384‒444,384

1,896

9,880

(9,880)‒449,367

4,896

454,264(9,880)444,384

3,171

(236)

2,935

126

3,061

Pharmacy
Business

Veterinary
Drug
Wholesale
Business

419,449

13,7698,164

441,384

3,000

7,976

6

0

7,983

Total

427,426

13,776

8,164

Segment income (loss)

2,810

77

283

Pharmaceutical
Wholesale
Business
Net sales
Net sales to outside
customers
Inter-segment net
sales or transfers

Total

Others(Note 1)

Total

(Notes) 1. “Others” is the segment which is not included in reportable segments, including such businesses as wholesale of agricultural chemicals, nursing
care service business, transportation business, and consulting services for medical institutions.
2. Adjustment of segment profit (loss) of ¥126 million refers to elimination of inter-segment transactions.
3. Adjustments are made to reconcile segment income (loss) to operating profit reported on the consolidated statements of income.

For the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)(Million yen)
Reportable segment
Adjustment(Note 2)

Amountrecorded in
Consolidated
Statements ofIncome(Note 3)448,909‒448,909

1,955

9,997

(9,997)‒454,028

4,878

458,907(9,997)448,909

5,759

(162)

5,597

61

5,658

Pharmacy
Business

Veterinary
Drug
Wholesale
Business

423,218

14,2958,472

445,987

2,922

8,031

9

0

8,041

Total

431,250

14,304

8,473

Segment income (loss)

5,211

259

288

Pharmaceutical
Wholesale
Business
Net sales
Net sales to outside
customers
Inter-segment net
sales or transfers

Total

Others(Note 1)

Total

(Notes) 1. “Others” is the segment which is not included in reportable segments, including such businesses as wholesale of agricultural chemicals, nursing
care service business, transportation business, and consulting services for medical institutions.
2. Adjustment of segment profit (loss) of ¥61 million refers to elimination of inter-segment transactions.
3. Adjustments are made to reconcile segment income (loss) to operating profit reported on the consolidated statements of income.

9