Consolidated Financial Statements for the Second Quarter of
the Fiscal Year Ending March 31, 2023
[Japanese GAAP]
November 10, 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: November 14, 2022
Scheduled date of commencing dividend payments: December 5, 2022
Preparation of supplementary explanatory materials: Yes
Quarterly financial results meeting: No(Amounts of less than one million yen are rounded down.)
1. Consolidated Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
(April 1, 2022 – September 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
Six months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 2022
289,3761.5
730 (21.8)
2,423
2.8
1,437
1.9
September 30, 2021
285,229
7.0
934
2,355
439.2
1,411
221.6
(Note) Comprehensive income: Six months ended September 30, 2022: ¥5,328 million [123.4%]
Six months ended September 30, 2021: ¥2,385 million [(64.3)%]
Basic earnings per
Diluted earnings per
share
share
Six months ended
Yen
Yen
September 30, 2022
27.42
September 30, 2021
25.67
(2) Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

As of September 30, 2022
316,432
103,628
As of March 31, 2022
313,033
100,041(Reference) Equity: As of September 30, 2022: ¥102,502 million
As of March 31, 2022: ¥98,961 million

32.4
31.6

2. Cash Dividends
1stquarter-end
Yen

Annual dividends
2nd
3rd
Year-endquarter-end
quarter-end
Yen

Yen

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

Total

Yen

Yen

14.00

26.00

27.00

39.00

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

Basic earnings
per share% 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 “(4) Notes to Quarterly Consolidated Financial Statements (Accounting policies adopted
specially for the preparation of quarterly consolidated financial statements)” on page 10 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):
September 30, 2022: 61,224,796 shares
March 31, 2022: 61,224,796 shares2) Total number of treasury stocks at the end of the period:
September 30, 2022: 9,438,637 shares
March 31, 2022: 7,987,331 shares
3) Average number of shares during the period:
Six months ended September 30, 2022: 52,451,916 shares
Six months ended September 30, 2021: 54,968,265 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
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) Quarterly Consolidated Statements of Cash Flows ...................................................................................... 8(4) Notes to Quarterly Consolidated Financial Statements .............................................................................. 10(Notes on going concern assumption) ................................................................................................... 10(Notes in the case of significant changes in amount of shareholders’ equity)....................................... 10(Accounting policies adopted specially for the preparation of quarterly consolidated financial
statements) ........................................................................................................................................... 10(Changes in accounting policies) .......................................................................................................... 10(Segment information) .......................................................................................................................... 10

1

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
The Japanese economy during the six months ended September 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 six months ended September 30, 2022, net sales were ¥289,376 million (101.5% of that of thesame period of the previous year), operating profit was ¥730 million (78.2% of that of the same period of theprevious year), ordinary profit was ¥2,423 million (102.8% of that of the same period of the previous year), andprofit attributable to owners of parent was ¥1,437 million (101.9% of that of the same period of the previousyear).
Performance results by business segment are as follows.
1) Pharmaceutical Wholesale BusinessIn the six months ended September 30, 2022, the pharmaceutical wholesale business, our Group’s
primary business segment, has been gradually recovering from the impact of restrictions on medical
examinations due to the COVID-19 pandemic, although negatively affected by 6.69% based on medical costs
due to drug price revisions. Amid this trend, in addition to focusing on sales of various vaccines, mainly pricemaintenance premium drugs and influenza vaccines, sales of COVID-19-related medical devices, clinical test
reagents, etc. have remained steady. As a result, sales increased from the same period of the previous year.
Operating profit was estimated to significantly exceed the previous year’s results due to thorough pricenegotiations with an awareness of transaction costs and, to repeat, increased sales of vaccines, especiallyinfluenza vaccines, and COVID-19-related medical equipment and clinical test reagents, etc., as well as higherthan-expected revenue from COVID-19 vaccine delivery continued to be commissioned by national and local
governments since the previous fiscal year, even after absorbing the impact of negative accounting treatment
for old and new settlement prices of inventories as of the end of the previous year associated with drug pricerevisions that occurred in the first quarter of the fiscal year under review.
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, thus operating profit fell below the previous year’s results.
As a result, net sales were ¥273,045 million (101.4% of that of the same period of the previous year), andsegment profit (operating profit) was ¥607 million (82.2% of that of the same period of the previous year).
2) Pharmacy BusinessIn the pharmacy business, aiming to become a family pharmacy required by the government, we worked
to calculate the related dispensing fees, but net sales were ¥9,009 million (99.6% of that of the same period of
the previous year) and segment profit (operating profit) was ¥32 million (39.6% of that of the same period of
the previous year) due to the impact of drug price revisions.

23) Veterinary Drug Wholesale BusinessIn the veterinary drug wholesale business, net sales were ¥5,309 million (103.5% of that of the same
period of the previous year) due to the increase in sales of high-profit margin products, while due to an increasein distribution costs, segment profit (operating profit) was ¥178 million (94.1% of that of the same period of theprevious year).
4) Other Businesses
In other businesses, sales were strong for the agricultural chemicals wholesale business, whereas due toimpacts of COVID-19, the nursing care business and the sports facility management business performed
insufficiently. As a result, net sales were ¥2,011 million (105.4% of that of the same period of the previousyear), and segment loss (operating loss) was ¥146 million (segment loss of ¥97 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 September 30, 2022

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

27,374
123,569
31,444
15,9093,453(830)
200,920

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

20,917
20,654
3,947
45,519

2,874
2,162
5,036

2,702
2,047
4,750

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

53,263
12,434(456)
65,241
115,511
316,432(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 September 30, 2022

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

179,248
990
970
1,067
1,482
7,471
191,230

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

7,275
238
590
13,46821,573
212,803

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

5,000
12,81065,096(7,575)75,332

21,64525,666

1,683

1,504

23,32927,1701,080
100,041
313,033

1,126
103,628
316,432(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30, 2021 and 2022
(Million yen)
For the six months ended
September 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
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 removal expenses
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 six months ended
September 30, 2022

285,229
264,276
20,953
20,95320,018934

289,376
267,227
22,14922,14921,418
730

24
409

35
384

14

27

765
319
1,533

790
556
1,794

48
43
20
112
2,355

51
41
9
102
2,423

11
－
0
11

13
59
－
72

19
47
8
－
11
87
2,280
814
1,466
55
1,411

0
22
55
62
5
145
2,350
862
1,487
49
1,437

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30, 2021 and 2022
(Million yen)
For the six months ended
September 30, 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 six months ended
September 30, 2022

1,466

1,487

1,051

3,806

(194)

(178)

61

213

919
2,385

3,841
5,328

2,330

5,279

55

49

(3) Quarterly Consolidated Statements of Cash Flows(Million yen)
For the six months ended
September 30, 2021

For the six months ended
September 30, 2022

2,280
1,335
47
171

2,350
1,460
22
171

(20)

660

(85)
(293)
(433)
(124)
(765)
48

(60)
(2,093)
(419)
(113)
(790)
51

(14)

(27)

8

(3)

8

(13)

(6,589)(2,089)(132)
49
10,330
(176)
3,556
433
742
(49)
(286)
1,156
4
5,557

(4,036)
344
713
4,301
2,563
(794)
4,285
408
784
(51)
(2,255)
857
5
4,035

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Interest and dividend income
Rental income
Office work fee
Interest expenses
Share of loss (profit) of entities accounted forusing equity method
Loss (gain) on sale and valuation of investment
securities
Loss (gain) on sale and retirement of property,
plant and equipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in accounts receivable - other
Decrease (increase) in guarantee deposits
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Office work fee received
Interest paid
Income taxes paid
Income taxes refund
Other, net
Net cash provided by (used in) operating activities

8

For the six months ended
September 30, 2021
Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Loan advances
Proceeds from collection of loans receivable
Proceeds from redemption of investment securities
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Proceeds from disposal of treasury shares
Purchase of treasury shares
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents
resulting from change in scope of consolidation
Cash and cash equivalents at end of period

9

For the six months ended
September 30, 2022

(200)
(2,328)(150)(1,108)

199

102

(190)
(177)
－
(10)
19
－

(306)
(183)
265
(60)
25
100

(217)

－

133
(2,772)113(1,200)

(130)
(485)
(321)
3
(712)
(0)
(2)
(1,648)1,136
26,252

－
(485)
(379)
－
(998)
(745)
(4)
(2,611)
223
23,239－29

27,38823,492

(4) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
For the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
Not applicable.
(Notes in the case of significant changes in amount of shareholders’ equity)
For the six months ended September 30, 2022 (from April 1, 2022 to September 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, 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 ofthe 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.

10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 September 30, 2021)
Reportable segment
PharmaceVeterinary
uticalPharmacy
Drug
Wholesale Business Wholesale
Business
Business

Total

Net sales to outside
customers
Inter-segment net
sales or transfers

269,146

9,045

5,128

283,320

4,287

1

0

4,289

Total

273,434

9,047

5,128

287,610

739

83

189

1,012

Others(Note 1)

Total

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

Net sales

Segment income (loss)

1,909 285,229-

285,229

5,535(5,535)-

3,154 290,764(5,535)285,229

19

934

1,245

(97)

915

(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 ¥19 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 September 30, 2022)
Reportable segment
PharmaceVeterinary
uticalPharmacy
Drug
Wholesale Business Wholesale
Business
Business

Total

Net sales to outside
customers
Inter-segment net
sales or transfers

273,045

9,009

5,309

287,364

5,125

3

0

5,128

Total

278,170

9,013

5,309

292,493

607

32

178

819

Others(Note 1)

Total

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

Net sales

Segment income (loss)

2,011 289,376-

289,376

6,392(6,392)-

3,274 295,768(6,392)

289,376

58

730

1,263

(146)

672

(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 ¥58 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.

11