Consolidated Financial Statements for the Third Quarter of
the Fiscal Year Ending March 31, 2023
[Japanese GAAP]
February 3, 2023
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: +81-3-5787-8550
Scheduled date of filing quarterly report: February 10, 2023
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, 2023
(April 1, 2022 – December 31, 2022)(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, 2022
443,1900.9
1,866(10.5)
4,302
1.9
December 31, 2021
439,329
7.5
2,086
‒
4,220
665.7
(Note) Comprehensive income: Nine months ended December 31, 2022: ¥ 4,749 million [‒%]
Nine months ended December 31, 2021: ¥(554) million [‒%]
Basic earnings
Diluted earnings
per shareper share
Nine months ended

December 31, 2022
December 31, 2021

Yen

Yen

46.59
44.84

‒
‒

(2) Consolidated Financial Position
Total assets
As of

Net assets

Million yen

2,433
2,448

%

(0.6)
629.2

Equity ratio

Million yen%

December 31, 2022
336,058
102,417
March 31, 2022
313,033
100,041(Reference) Equity: As of December 31, 2022: ¥101,263 million
As of March 31, 2021: ¥98,961 million

30.1
31.6

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

Yen

Year ended March 31, 2022‒
12.00
Year ending March 31, 2023‒
12.00
Year ending March 31, 2023
(forecast)(Note) Revision to the forecast for dividends announced most recently: None

Total

Yen

Yen

Yen

‒
‒

14.00

26.00

27.00

39.00

3. Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2022
(April 1, 2022 - March 31, 2023)(% 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
567,300(1.7)
1,940 (34.1)
4,900 (16.0)
4,400(Note) Revision to forecast of consolidated results announced most recently: None

(7.8)

84.42

* 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 of quarterly 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: Yes
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, 2022: 61,224,796 shares
March 31, 2022: 61,224,796 shares2) Total number of treasury stocks at the end of the period:
December 31, 2022: 9,438,644 shares
March 31, 2022: 7,987,331 shares
3) Average number of shares during the period:
Nine months ended December 31, 2022: 52,229,190 shares
Nine months ended December 31, 2021: 54,604,495 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 fromthese forecasts due to a wide range of factors.

Table of Contents
1. Qualitative Information on Quarterly Financial Results ........................................................................................... 2
Explanation of Operating Results ......................................................................................................................... 2
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(Changes in accounting policies) .......................................................................................................................... 8(Segment information) .......................................................................................................................................... 8

11. Qualitative Information on Quarterly Financial Results
Explanation of Operating Results
The Japanese economy during the nine months ended December 31, 2022 remained unpredictable with theongoing COVID-19 pandemic, while vaccination rates increased.
Under these circumstances, the Group started its fifth medium-term management plan for the three-year
period from the year ending March 31, 2023 to the year ending March 31, 2025. In the fifth medium-term
management plan, the Company will continue to work on its long-term vision toward 2025 of “Becoming an
indispensable presence in regional and community healthcare by strategically providing products and services
to support medicine and nursing.” In addition, under its medium-term vision “to drive business model
innovation for the next generation,” the Company has set out practical tasks to “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 the Group management that meets Prime Market requirements.” By steadily solving these issues, wewill aim to further evolve as a company indispensable for local healthcare.
For the nine months ended December 31, 2022, net sales were ¥443,190 million (100.9% of that of thesame period of the previous year), operating profit was ¥1,866 million (89.5% of that of the same period of theprevious year), ordinary profit was ¥4,302 million (101.9% of that of the same period of the previous year), andprofit attributable to owners of parent was ¥2,433 million (99.4% of that of the same period of the previousyear).
Performance results by business segment are as follows.
1) Pharmaceutical Wholesale BusinessIn the nine months ended December 31, 2022, in the pharmaceutical wholesale business, our Group’s
primary business segment, although it was negatively affected by the NHI drug price revision rate of 6.69% ona pharmaceutical spending basis, sales, mainly of COVID-19-related medical devices and clinical test reagents,
etc., remained steady. As a result, sales increased from the same period of the previous year.
Even after absorbing the impact of negative accounting treatment for old and new settlement prices ofinventories as of the end of the previous year associated with drug price revisions that occurred in the firstquarter of the fiscal year under review, operating profit was expected to significantly exceed the level a year
earlier due to thorough price negotiations with an awareness of transaction costs and increased sales of vaccines
and COVID-19-related medical equipment and clinical test reagents, etc., as well as higher-than-expected
revenue from COVID-19 vaccine delivery continued to be commissioned by national and local governments
since the previous fiscal year.
However, on October 28, 2022, some of the Group’s customer filed for voluntary bankruptcy with theTokyo District Court. The Group judged that its receivables may become uncollectible and recorded anallowance for doubtful accounts in the second quarter, resulting in lower operating profit than the level a year
earlier. As a result, net sales were ¥418,262 million (100.8% of that of the same period of the previous year),and segment profit (operating profit) was ¥1,623 million (96.1% of that of the same period of the previous year).

22) Pharmacy BusinessIn the pharmacy business, we worked to calculate relevant dispensing fees, aiming to offer family
pharmacies as required by the government; however, due to the impact of drug price revisions, net sales were¥13,769 million (99.8% of the level a year earlier) and segment profit (operating profit) was ¥77 million(47.7% of the level a year earlier).
3) Veterinary Drug Wholesale BusinessIn the veterinary drug wholesale business, net sales were ¥8,157 (103.9% of the level a year earlier) due
to the increase in sales of high-profit margin products, while due to an increase in distribution costs, segment
profit (operating profit) was ¥276 million (86.6% of the level a year earlier).
4) Other Businesses
In other businesses, strong sales in the agricultural chemicals wholesale business were offset by alackluster performance in the nursing care business and the sports facility management business due to impactsof COVID-19, and net sales were ¥3,000 million (107.5% of the level a year earlier), and segment loss
(operating loss) was ¥236 million (segment loss of ¥119 million in the same period of the previous year).

32. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2022
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, 2022

26,971
119,533
31,788
16,617
3,672(50)
198,532

35,219132,150
35,205
16,821
3,149(50)
222,495

19,303
20,735
5,722
45,761

20,67820,655
4,216
45,550

2,874
2,162
5,036

2,617
2,134
4,751

47,508
16,771(576)
63,703
114,501
313,033

51,191
13,520(1,452)
63,259113,562
336,058(Million yen)
As of March 31, 2022
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, 2022

176,685
990
970
2,399
1,542
7,505
190,092

201,769
990
970
534
613
8,163
213,041

7,760
244
2,629
12,26522,898
212,991

7,032
240
626
12,70020,598233,640

5,000
12,81064,402(6,581)
75,631

5,000
12,81065,469(7,575)75,704

21,64524,144

1,683

1,414

23,32925,5591,080
100,041
313,033

1,154
102,417
336,058

(2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated
Statements of Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31, 2021 and 2022
(Million yen)
For the nine months ended
December 31, 2021
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
Administrative service fee income
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 valuation of investment securities
Soil treatment 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, 2022

439,329
407,034
32,29530,2082,086

443,190409,345
33,844
31,977
1,866

37
578

51
555

49

83

1,180
453
2,298

1,194
695
2,580

74
64
25
164
4,220

74
60
9
144
4,302

12
‒
5
17

15
59
‒
74

19
47
8
‒
16
92
4,145
1,608
2,536
88
2,448

0
22
56
136
28
244
4,132
1,622
2,510
77
2,433

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31, 2021 and 2022
(Million yen)
For the nine months ended
December 31, 2021
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, 2022

2,536

2,510

(2,629)

2,416

(291)

(267)

(169)

81

(3,091)
(554)

2,230
4,740

(642)

4,663

88

77

(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
Not applicable.
(Notes in the case of significant changes in amount of shareholders’ equity)
For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
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 forthe 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.
(Changes in accounting policies)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”) from the beginning of
the first quarter, and will prospectively apply the new accounting policies stipulated by the Fair Value
Measurement Guidance in accordance with the transitional treatment provided in Paragraph 27-2 of the Fair Value
Measurement Guidance. The decision does not affect the quarterly consolidated financial statements.
(Segment information)
1. Overview of reportable segments
The Group’s reportable segments are components of the Group about which separate financial information isavailable. These segments are subject to periodic examinations to enable the company’s Board of Directors todecide 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” isengaged in sales of drugs, medical devices and equipment, and hygiene materials, 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.
2. Method of measurement for the amounts of net sales, income (loss), assets and other items for each reportablesegment
The method of accounting for the reportable business segments is generally the same as those stated in “Basisfor the Presentation of the Consolidated Financial Statements.”
Profit in the reportable segments is based on operating profit.
Inter-segment revenues and transfers are calculated at prevailing market prices.

83. Information on net sales, income (loss), assets and other items by reportable segment
For the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021)
Reportable segment(Million yen)Amountrecorded in
Consolidated
Statements ofIncome(Note 3)

Pharmacy
Business

Veterinary
Drug
Wholesale
Business

414,895

13,791

7,850

436,537

2,791

439,329‒439,329

6,611

1

0

6,613

1,859

8,472

(8,472)‒

Total

421,507

13,792

7,850

443,150

4,651

447,801(8,472)439,329

Segment income (loss)

1,688

162

318

2,169

(119)

2,050

36

2,086

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

Total

Others(Note 1)

Total

Adjustment(Note 2)

(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, andconsulting services for medical institutions.
2. Adjustment of segment income (loss) of ¥36 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, 2022 (from April 1, 2022 to December 31, 2022)
Reportable segment(Million yen)Amountrecorded in
Consolidated
Statements ofIncome(Note 3)

Pharmacy
Business

Veterinary
Drug
Wholesale
Business

418,262

13,7698,157

440,1893,000

443,190‒443,190

7,976

6

0

7,983

1,896

9,880

(9,880)‒Total

426,239

13,7768,157

448,173

4,896

453,070(9,880)443,190

Segment income (loss)

1,623

77

276

1,976

(236)

1,740

126

1,866

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

Total

Others(Note 1)

Total

Adjustment(Note 2)

(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, andconsulting services for medical institutions.
2. Adjustment of segment income (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.

9