Consolidated Financial Statements for the First Quarter of
the Fiscal Year Ending March 31, 2023
[Japanese GAAP]
August 2, 2022
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: +81-3-3275-3303
Scheduled date of filing quarterly report: August 9, 2022
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 First Quarter of the Fiscal Year Ending March 31, 2023
(April 1, 2022 – June 30, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Operating profit
Profit attributable to
Net sales
Ordinary profit(loss)
owners of parent
Three months ended
Million yen%
Million yen%
Million yen%
Million yen%
June 30, 2022
143,521
0.4
452
19.8
1,198
12.3
640
(0.6)
June 30, 2021
142,916
5.8
377
1,067
644
(Note) Comprehensive income: Three months ended June 30, 2022: ¥3,068 million [37.7%]
Three months ended June 30, 2021: ¥2,228 million [(35.1)%]
Basic earnings per
Diluted earnings per
share
share
Three months ended
Yen
Yen
June 30, 2022
12.05
June 30, 2021
11.67
(2) Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

As of June 30, 2022
314,221
101,361
As of March 31, 2022
313,033
100,041(Reference) Equity: As of June 30, 2022: ¥100,249 million
As of March 31, 2022: ¥98,961 million

31.9
31.6

2. Cash Dividends
1stquarter-end
Yen

Annual dividends
2nd quarter- 3rd quarterYear-end
end
end
Yen

Yen

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

Total

Yen

Yen

14.00

26.00

12.00

24.00

3. Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2023
(April 1, 2022 - March 31, 2023)(% indicates changes from the previous corresponding period.)
Net sales
Million yen

Operating profit% Million yen

Ordinary profit% Million yen

Profit attributableto owners of parent% Million yen

Second quarter
284,000 (0.4)
1,200
28.4
2,500
6.1
1,700
(cumulative)
Full year
563,300 (2.4)
2,300 (21.9)
4,900 (16.0)
4,500(Note) Revision to forecast of consolidated results announced most recently: None

Basic earnings
per share

%

Yen

20.5

31.93

(5.7)

84.53

* 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):
June 30, 2022: 61,224,796 shares
March 31, 2022: 61,224,796 shares2) Total number of treasury stocks at the end of the period:
June 30, 2022: 9,442,031 shares
March 31, 2022: 7,987,331 shares
3) Average number of shares during the period:
Three months ended June 30, 2022: 53,125,895 shares
Three months ended June 30, 2021: 55,227,622 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 three months ended June 30, 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 adopt 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 three months ended June 30, 2022, net sales were ¥143,521 million (100.4% of that of the same
period of the previous year), operating profit was ¥452 million (119.8% of that of the same period of theprevious year), ordinary profit was ¥1,198 million (112.3% of that of the same period of the previous year), andprofit attributable to owners of parent was ¥640 million (99.4% of that of the same period of the previous year).
Performance results by business segment are as follows.
1) Pharmaceutical Wholesale BusinessIn the three months ended June 30, 2022, the pharmaceutical wholesale business, our Group’s primarybusiness segment, has been gradually recovering from the impact of restrictions on medical examinations dueto the COVID-19 pandemic, although negatively affected by 6.69% based on medical costs due to drug pricerevisions. Amid this trend, sales of prescription pharmaceuticals (mainly price maintenance premium drugs) tothe hospital market have primarily increased, and sales of COVID-19-related medical devices, clinical test
reagents, etc. have remained steady. As a result, sales slightly increased from the same period of the previous
year.
Profit increased from the same period of the previous year, however as the impact of negative accounting
treatment for old and new settlement prices of inventories as of the end of the previous year associated withdrug price revisions has extended to the three months ended June 30, 2022, the progress rate of operating profit
against the forecast for the cumulative second quarter (April through September) was lower than the reference
rate (50%).
As a result, net sales were ¥135,193 million (100.3% of that of the same period of the previous year), andsegment profit (operating profit) was ¥389 million (133.7% of that of the same period of the previous year).
However during the second quarter (from July to September) the aforementioned inventories as of the endof the previous year will be eliminated and the negative accounting treatment will be resolved, while we will
focus on selling various vaccines of which demand is expected to increase this summer. Through these efforts,
the forecast for each consolidated profit for the cumulative second quarter (from April to September) is
expected to be achieved (for details, please refer to supplementary explanatory materials released on August 2,2022).
2) Pharmacy BusinessIn the pharmacy business, net sales were ¥4,481 million (101.0% of that of the same period of theprevious year) as a result of strengthening pharmacy functions with the goal of becoming a regional family
pharmacy, however segment profit (operating profit) was ¥14 million (36.5% of that of the same period of theprevious year) due to the impact of negative drug price revisions.
23) Veterinary Drug Wholesale BusinessIn the veterinary drug wholesale business, net sales were ¥2,657 million (102.9% of that of the same
period of the previous year), and segment profit (operating profit) was ¥118 million (110.7% of that of the same
period of the previous year), due to the increase in sales of high-profit margin products.
4) Other Businesses
In other businesses, sales were strong for the agricultural chemicals wholesale business, whereas the sports
facility management business performed insufficiently. As a result, net sales were ¥1,189 million (106.2% ofthat of the same period of the previous year), and segment loss (operating loss) was ¥69 million (segment lossof ¥45 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 June 30, 2022

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

27,950124,065
30,13914,7363,727(50)
200,569

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

21,185
20,735
3,995
45,916

2,874
2,162
5,036

2,788
2,021
4,809

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

51,011
12,336(422)
62,925
113,651
314,221

(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 June 30, 2022

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

177,235
990
970
482
2,391
9,457
191,527

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

7,517
243
516
13,054
21,332
212,859

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

5,000
12,81064,296(7,578)74,527

21,64524,127

1,683

1,593

23,32925,721

1,080
100,041
313,033

1,112
101,361
314,221

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30, 2021 and 2022
(Million yen)
For the three months ended
June 30, 2021
Net sales
Cost of sales
Gross profit
Gross profit - net
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
Other
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on valuation of investment securities
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 three months ended
June 30, 2022

142,916
132,694
10,221
10,221
9,843
377

143,521
132,786
10,735
10,735
10,282
452

11
178

15
185

3

24

390
158
742

397
173
795

24
21
7
53
1,067

26
20
3
49
1,198

11
0
11

3
－
3

19
－
1
21
1,057
383
674
29
644

－
55
64
119
1,081
406
675
35
640

Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 30, 2021 and 2022
(Million yen)
For the three months ended
June 30, 2021

For the three months ended
June 30, 2022

674

675

1,625

2,234

(97)

(89)

25

247

1,553
2,228

2,392
3,068

2,198

3,032

29

35

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 interests7(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
For the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)
Not applicable.
(Notes in the case of significant changes in amount of shareholders’ equity)
For the three months ended June 30, 2022 (from April 1, 2022 to June 30, 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”) fromthe beginning of the first quarter under review, 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 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.
(Notes relating to changes in reportable segments, etc.)
As described in the changes in accounting policies, the Company has applied the Accounting Standard for
Revenue Recognition from the beginning of the year ending March 31, 2023 and changed the accounting
method regarding revenue recognition, and it has changed the calculation method for profit or loss of businesssegments accordingly. The change reduced net sales of the “Pharmaceutical Wholesale Business” in the year
ending March 31, 2023 by ¥242 million, while it did not affect the segment profit (operating profit). It increased
net sales of the “Veterinary Drug Wholesale Business” by ¥0 million, while it did not affect the segment profit(operating profit).
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 “Basis8for 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.
3. Information on net sales, income (loss), assets and other items by reportable segment
For the fiscal year ended March 31, 2022 (from April 1, 2021 to June 30, 2021)
Reportable segment
PharmaceVeterinary
uticalPharmacy
Drug
Wholesale Business Wholesale
Business
Business

Total

Others(Note 1)

Total

(Million yen)Amountrecorded in
Adjustment Consolidated(Note 2) Statements ofIncome(Note 3)

Net sales
Net sales to outside
customers
Inter-segment net
sales or transfers
Total
Segment income (loss)

134,777

4,437

2,581

141,796

1,119

142,916-

142,916

2,211

1

0

2,212

626

2,839

(2,839)-136,988

4,438

2,581

144,008

1,746

145,755(2,839)142,916

290

39

106

437

(45)

391

(13)

377

(Notes) 1. “Others” is the segment which is not included in reportable segments, including such businesses as wholesale ofagricultural chemicals, nursing care service business, transportation business, and consulting services for medical
institutions.
2. Adjustment of segment income (loss) of ¥(13) 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 ofincome.

For the fiscal year ending March 31, 2023 (from April 1, 2022 to June 30, 2022)
Reportable segment
PharmaceVeterinary
uticalPharmacy
Drug
Wholesale Business Wholesale
Business
Business

Total

135,193

4,481

2,657

142,332

2,777

0

0

2,777

137,970

4,481

2,657

145,110

389

14

118

521

Others(Note 1)

Total

(Million yen)Amountrecorded in
Adjustment Consolidated(Note 2) Statements ofIncome(Note 3)

Net sales
Net sales to outside
customers
Inter-segment net
sales or transfers
Total
Segment income (loss)-

143,5213,404(3,404)-

1,815 146,925-

143,521(0)452

1,189 143,521
626

(69)

452

(Notes) 1. “Others” is the segment which is not included in reportable segments, including such businesses as wholesale ofagricultural chemicals, nursing care service business, transportation business, and consulting services for medical
institutions.
2. Adjustment of segment income (loss) of ¥(0) 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 ofincome.

9