Consolidated Financial Results for the First Three Months of the
Fiscal Year Ending March 31, 2020 [Japanese GAAP]
July 31, 2019
Company name: TOKAI Holdings Corporation
Stock listing:Tokyo Stock Exchange
Stock code:
3167
URL:
https://tokaiholdings.co.jp
Representative:
Katsukiho Tokita, President & CEO
Contact:
Kuniyoshi Muramatsu, Managing Executive Officer, General Manager of General Affairs
Division Headquarters
Telephone: +81-54-275-0007
Scheduled date of filing quarterly report:
August 9, 2019
Scheduled date of dividend payment:
Supplementary materials on quarterly financial results:
Yes
Quarterly financial results briefing:No(Figures are rounded to the nearest million yen)

1. Consolidated Financial Results for the Three-months Ended June 30, 2019
(April 1, 2019 to June 30, 2019)(1) Consolidated Operating Results (cumulative)(% figures represent year-on-year changes)

Sales

Operating Profit

Millions of yen%

Millions of yen

Quarterly Net
IncomeAttributable to
Owners of the
ParentRecurring Profit%

Millions ofyen%Millions of yen

Three-months Ended
45,804
2.8
3,231
35.2
3,351
34.7
June 30, 2019
Three-months ended
44,553
4.8
2,390
11.0
2,487
12.9
June 30, 2018
(Note) Comprehensive income: 2,060 million yen in the Three-months Ended June 30, 2019 (52.1%)
1,354 million yen in the Three-months ended June 30, 2018 (12.1%)
Quarterly Net Income
per Share
Three-months Ended
June 30, 2019
Three-months ended
June 30, 2018

%

2,239

56.3

1,432

21.2

Quarterly Net Income
per Share (Diluted)

Yen

Yen

17.10

-

10.94

-

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Millions of yen

Millions of yen%

Three-months Ended
163,992
64,107
June 30, 2019Year ended
167,606
63,894
March 31, 2019
(Reference) Equity: 62,780 million yen for the Three-months Ended June 30, 2019
62,627 million yen for the year ended March 31, 2019

38.3
37.4

2. Dividends
End of Q1

End of Q2
Yen

Yen

Year ended March 31, 2017―
14.00
Year ending March 31, 2018―Year ending March 31, 2018
14.00
(Forecast)(Note) Revisions to most recently announced dividend forecasts: No

Annual Dividend
End of Q3

Year-end

Total

Yen

Yen

Yen

―

14.00

28.00

―

14.00

28.00

3. Consolidated Earnings Forecasts for the Year Ending March 31, 2020 (April 1, 2019 to March 31,
2020)(% figures represent year-on-year changes)

Sales
Millions ofyen%Operating Profit

Recurring Profit

Net Income
Attributable to
Owners of the
ParentMillions ofyenMillions ofyen%Millions of
yen

%

Yen

21.7

2,360

35.8

18.02

5.9

8,230

5.9

62.85

%

Six months ending
92,500
4.1
4,410
26.8
4,360
September 30,2019Year ending March
200,800
4.8
14,1708.5
14,04031, 2019(Note) Revisions to most recently announced earnings forecasts: No

Net Income
per Share

業績予想欄については、上場会社各社の実情に応じて、開示対象項目や開示対象期間の追加又は削除、開示形式の変更を行うことが可能です。
*Notes(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries affecting the scope of consolidation): No(2) Application of special accounting procedures in the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, estimates, and restatements
1) Changes in accounting policies accompanying revisions in accounting standards, etc.: No
2) Changes in accounting policies other than 1): No
3) Changes in accounting estimates: No4) Restatements: No(4) Number of shares issued (common stock)
1) Shares issued at the end of each period (including treasury stock):

Q1 FY3/2020

2) Number of shares of treasury stock at the end of each period:

Q1 FY3/2020

8,731,593 shares FY3/2019

8,731,411 shares

3) Average number of shares during the period (cumulative):

Q1 FY3/2020

130,948,486 shares Q1 FY3/2019

130,943,526 shares

139,679,977 shares FY3/2019

139,679,977 shares(Note) Board benefit trust shares(BBT) is included in the number of year-end treasury stock.(410,800 stocks at Q1 FY3/2020, 410,800
stocks at FY3/2019) And the company shares held in ESOP trust accounts are included in the treasury stock, which is subtracted
from calculations of the average number of shares during the period (410,800 shares for the Three-months Ended June 31, 2019;
416,600 shares for the Three-months ended June 30, 2018).

* Quarterly financial results not covered by quarterly review* Explanation regarding the Appropriate Uses of Earnings Forecasts and Other Notes
All earnings forecasts provided within this document are based on the most accurate information available at the time of the release of thisdocument. Actual results may differ from forecasts due to various factors going forward.

[Attachment]

Contents
1. Qualitative Information on Financial Results for the Period Under Review(1)

Explanation of Consolidated Operating Performance ···································································· 2(2)Explanation of Consolidated Financial Position············································································ 4(3)Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information ···················· 4

2. Quarterly Consolidated Financial Statements and Notes(1)

Quarterly Consolidated Balance Sheets ····················································································· 5(2)Quarterly Consolidated Statements of Income, Consolidated Statements of Comprehensive Income ······ 7(3)Quarterly Consolidated Statements of Cash Flows ······································································· 9(4)Notes to Quarterly Consolidated Financial Statements ································································ 10(Notes to Premise of Going Concern) ·························································································· 10(Notes to Significant Changes in Shareholders’ Equity) ··································································· 10(Segment Information, etc) ········································································································ 10

11. Qualitative Information on Financial Results for the Period Under Review(1) Explanation of Consolidated Operating Performance
In the first three months of the fiscal year ending March 31, 2020, the Japanese economy was on a gradual
recovery path, with a rally in personal consumption and steady improvement in the employment situation. However,
the economic outlook remains clouded by uncertainties in overseas economies, including US–China trade friction
and other factors.
Against this backdrop, the TOKAI Group passes the halfway point of its four-year medium-term management plan,
Innovation Plan 2020 “JUMP,” in the current fiscal year, which is the third year of the plan. In the three months ended
June 30, 2019, the TOKAI Group continued to follow its strategy to expand its earnings base by developing existing
businesses, making acquisitions, and entering new businesses. The key themes included realizing the Group visionof becoming a Total Life Concierge (TLC)*1, and ABCIR+S*2 initiatives.
In the three months ended June 30, 2019, with the success of measures to acquire new customers and increase
orders, the Group booked sales of 45,804 million yen (+2.8% year on year) and posted significant growth in all profit
categories, with operating profit of 3,231 million yen (+35.2% year on year), recurring profit of 3,351 million yen(+34.7% year on year), and net income attributable to owners of the parent of 2,239 million yen (+56.3% year onyear). The results for sales and all profit categories were at record highs.
As of June 30, 2019, the number of continuing customers rose by 5 thousand from March 31, 2019, to 2,907
thousand, and members of the TLC Membership Service increased by 26 thousand to 830 thousand.
In the three months ended June 30, 2019, initiatives included entering the LP gas business in Mie Prefecture in
April 2019. In May, the Group signed an agreement to acquire a cable television business operated by Shioya
Limited (Mishima City, Shizuoka Prefecture), and another agreement to buy a city gas business operated by Nikaho
City in Akita Prefecture.
*1

Vision of becoming a TLC: The Group seeks to support comfortable living by customers in a comprehensive
and detail-oriented way through various services it offers, with the aim of enhancing customer satisfaction.

*2

ABCIR+S: An acronym formed from the first letters of AI, Big data, Cloud, IoT, Robotics, and Smartphones.
It refers to the Group’s strategies toward technological innovation.

Performance by segment was as follows.

(Gas and Petroleum)
In the LP gas business, amid intensifying competition from rival operators, the Group focused on customer growththrough measures such as strengthening acquisition in existing service areas, preventing contract cancellations, andexpanding into new areas. As a result, the number of customers rose by 3 thousand from March 31, 2019, to 631
thousand. Sales came to 15,446 million yen (+4.8% year on year), aided by solid growth in customer count.
In the city gas business, the number of customers was in line with March 31, 2019, at 56 thousand. Still, sales
totaled 3,131 million yen (+9.1% year on year), supported by a higher unit sales price stemming from the fuel costadjustment regulations.
As a result, segment sales amounted to 18,577 million yen (+5.5% year on year) and operating profit to 890 million
yen (+45.8% year on year).

(Building and Real Estate)
In the Building and Real Estate business, segment sales totaled 3,777 million yen (-9.3% year on year) due to the2absence of a large project from the same period of the previous fiscal year, but operating profit came to 74 million
yen (+15.4% year on year) thanks to cost control.

(CATV)In the CATV business, amid intensifying competition from telecommunications companies, the Group worked toincrease competitiveness and boost customer count, and took steps to prevent contract cancellations. It offereddiscounts for broadcasting and communications bundles and discounted packaged services including smartphones
in partnership with major mobile phone carriers. The Group also stepped up efforts to create community channel
programs with a local focus. As a result, the CATV business had 791 thousand customers, up by 2 thousand fromMarch 31, 2019, while customers of communications services increased by 5 thousand to 278 thousand.
Consequently, segment sales amounted to 7,738 million yen (+3.0% year on year) and operating profit to 1,171
million yen (+9.1% year on year).

(Information and Communications Service)
In consumer-oriented services, amid intensifying competition from major mobile phone carriers, the Groupunveiled an expanded range of plans including bundled set sales of Hikari Collaboration and the TOKAI-brand
MVNO service LIBMO, in addition to standalone services, to win customers. The LIBMO service added 2 thousand
customers since March 31, 2019 to bring customer count to 42 thousand, but the number of ISP customers declinedby 10 thousand to 736 thousand (326 thousand Hikari Collaboration and 411 thousand conventional ISP customers).
As a result, sales totaled 7,294 million yen (-6.2% year on year).
In corporate services, sales came to 5,501 million yen (+16.2% year on year), mainly reflecting an increase inrecurring-revenue operations and an increase in contracted system development projects.
Due to these factors, segment sales were 12,795 million yen (+2.3% year on year), and operating profit was 919
million yen (+113.7% year on year).

(Aqua)In the Aqua business, the Group actively worked to acquire customers mainly for “The gift of delicious water:
Ulunom” brand, targeting large commercial and other facilities. The number of customers increased by 1 thousand
from March 31, 2019, to 157 thousand. The Group also worked to reduce manufacturing and logistics costs.
As a result, segment sales came to 1,798 million yen (+8.8% year on year) and operating profit to 104 million yen(+184.5% year on year).

(Others)
Turning to other businesses, sales in the nursing care business totaled 285 million yen (+9.1% year on year),
supported by an increase in the number of care recipients. In the shipbuilding business, sales amounted to 356
million yen (+9.6% year on year), reflecting an increase in work volume for ship repairs. In the bridal events business,sales came to 274 million yen (-18.3% year on year) due to a decline in the number of wedding ceremonies.
As a result, segment sales were 1,116 million yen (+1.4% year on year), and operating profit was 24 million yen (0.5% year on year).

3(2) Explanation of Consolidated Financial Position
1) Assets, Liabilities, and Net Assets
As of June 30, 2019, total assets amounted to 163,992 million yen, down 3,614 million yen from March 31, 2019.
This mainly reflected a 3,613 million yen decrease in notes and accounts receivable–trade owing to seasonal factors.
Total liabilities stood at 99,884 million yen, down 3,826 million yen from March 31, 2019. This was primarily due todecreases of 1,688 million yen in notes and accounts payable–trade stemming from seasonal factors and 2,423
million yen in income taxes payable resulting from income tax payments.
Net assets totaled 64,107 million yen, up 212 million yen from March 31, 2019. This was mainly attributable to thebooking of 2,239 million yen in net income attributable to owners of the parent, offsetting the payment of 1,839
million yen in dividends of surplus.

2) Cash Flows
As of June 30, 2019, cash and cash equivalents stood at 3,824 million yen, down 194 million yen from March 31,
2019.
Cash flows from each activity during the period under review and the factors behind them are as follows.

(Cash flows from operating activities)
Net cash provided by operating activities was 6,245 million yen, up 1,896 million yen from the same period of theprevious fiscal year. Income tax payments and a decline in trade payables led to cash outflows, but higher net
income before income taxes and lower trade receivables, as well as depreciation and amortization expenses (noncash items) increased cash inflows.

(Cash flows from investing activities)
Net cash used in investing activities was 3,227 million yen, up 256 million yen from the same period of theprevious fiscal year, as a result of the purchase of property, plant and equipment and intangible assets.

(Cash flows from financing activities)
Net cash used in financing activities was 3,210 million yen, down 2,050 million yen from the same period of theprevious fiscal year. This was due to repayments of lease obligations and payments of dividends.

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information
Earnings results for the three months ended June 30, 2019 were generally in line with forecasts, and the Group
maintains its consolidated earnings forecasts for the fiscal year ending March 31, 2020, which was announced on
May 9, 2019.
The earnings forecasts are based on information currently available to the Company. Actual results may differ fromthese forecasts due to a variety of factors.

4

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Fiscal Year Ended
March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

5(Millions of yen)Three Months Ended
June 30, 2019

4,164
24,798
4,173
660
865
8,264
-419
42,506

3,975
21,184
3,959
1,327
888
8,583
-424
39,49533,756
23,592
22,921
16,76097,03033,35423,26022,927
16,81996,362

5,044
6,084
11,128

4,814
5,783
10,5972,365
14,958-386
16,937125,0972
167,606

2,375
15,600-440
17,535
124,4942
163,992

Fiscal Year Ended
March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Accruals
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Accruals
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6(Millions of yen)Three Months Ended
June 30, 201915,021
22,265
168
3,491
1,705
18,73361,385

13,332
23,716
148
1,068
207
20,88059,352

230
27,940149
719
13,28642,325
103,711

220
26,123151
744
13,29340,532
99,88414,00025,527
21,863-2,222
59,167

14,00025,52722,263-2,22359,567

1,573
-319
-10
2,217
3,460
1,267
63,894
167,606

1,380
-326
-11
2,171
3,213
1,326
64,107
163,992

(2) Quarterly Consolidated Statements of Income, Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Three Months Ended June 30, 2019)

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Commission fee
Other
Total non-operating profit
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of non-current assets
Transmission line facility subsidies
Subsidy income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Quarterly net income before income taxes
Income taxes (current)
Income taxes (deferred)
Total income taxes
Quarterly net income
Quarterly net income attributable to non-controlling interests
Quarterly net income attributable to owners of the parent

7

Three Months Ended
June 30, 2018
(April 1, 2018 toJune 30, 2018)
44,553
26,587
17,965
15,5752,390(Millions of yen)Three Months Ended
June 30, 2019
(April 1, 2019 toJune 30, 2019)45,80427,097
18,706
15,475
3,231

2
102
22
90
217

2
108
11
97
219

96
24
120
2,487

78
21
99
3,351

0
22
2
0
25

0
38
49
87

0
161
161
2,352
1,061
-172
889
1,463
30
1,432

0
248
248
3,191
1,360
-476
883
2,307
68
2,239

(Consolidated Statements of Comprehensive Income)(Three Months Ended June 30, 2019)

Quarterly net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurement of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using the equity method
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable to ownersof the parent
Quarterly comprehensive income attributable to noncontrolling interests

8

Three Months Ended
June 30, 2018
(April 1, 2018 toJune 30, 2018)
1,463(Millions of yen)Three Months Ended
June 30, 2019
(April 1, 2019 toJune 30, 2019)
2,307

-50
1
-54

-193
-6
-1
-46

-6

0

108
1,354

-247
2,060

1,323

1,992

30

68

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)Three Months Ended Three Months Ended
June 30, 2018
June 30, 2019
(April 1, 2018 to(April 1, 2019 toJune 30, 2018)
June 30, 2019)
Cash flows from operating activities
Quarterly net income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit asset and liability
Interest and dividend income
Loss (gain) on sales of investment securities
Interest expenses(Gain) loss on sales of non-current assets
Loss on retirement of non-current assets(Increase) decrease in notes and accounts payable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable–trade
Increase (decrease) in accrued consumption taxes
Increase (decrease) in deposits received
Other
Subtotal
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Interest and dividend income received
Purchase of securities
Proceeds from sales of securities
Purchase of tangible and intangible assets
Proceeds from sales of tangible and intangible assets
Collection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Interest expenses paid
Net increase (decrease) in short-term loans payable
Repayments of lease obligations
Repayment of long-term loans payable
Payments for acquisition of treasury stock
Proceeds from disposal of treasury shares
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

9

2,352
3,351
290
-1,240
-52
-104
-0
96
-0
161
3,250
-105
-2,441
196
2,669
-707
7,714
-3,365
4,348

3,191
3,525
267
-1,260
-50
-111
-49
78
-0
248
4,305
-477
-1,685
-80
2,764
-821
9,844
-3,599
6,245

118
-3
0
-3,87749
3
224-3,484123-2
97-3,20135
3-283-3,227

-93
4,112
-930
-2,458-0-1,754-35-1,159
-1
-296
3,004
2,707

-76
1,850
-973
-2,216-00-1,755-38-3,210
-1
-194
4,018
3,824

(4) Notes on Quarterly Consolidated Financial Statements(Notes to Premise of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders’ Equity)
Not applicable.
(Segment Information, etc.)[Segment Information]
I. Three Months Ended June 30, 2018 (April 1, 2018 to June 30, 2018)
Sales and Income of Losses by Reportable Segment
Reportable segments
Building
Information
1
Other
Gas and
and
and
CATV
Aqua Subtotal
Petroleum Real
CommuniEstatecations
Sales
Sales toexternalcustomers
Intersegment
sales andtransfers
Subtotal
Segment income(loss)(Notes)17,60834

4,166 7,511

226

12,513185

708

17,642

4,393 7,697

13,221610

64 1,074430

1,653 43,452

636

Adjustments2

1,100 44,553-

44,553

1,206-1,206-

1,145 45,759-1,20644,553

148

2,390

1,161

1,659 44,614

Total(Millions of yen)Amount inquarterly
consolidated
statements of
3
Income

44

2,217

25

2,242

1. The “Other” category is a business segment not included in the reportable segments. This category includes businesses such as
weddings, ship repair, insurance, and nursing care.
2. Adjustments to segment income (loss) are mainly eliminations due to intersegment transactions.
3. Segment income (loss) is adjusted to match operating profit in the quarterly consolidated statements of income.

II. Three Months Ended June 30, 2019 (April 1, 2019 to June 30, 2019)
Sales and Income of Losses by Reportable Segment
Reportable segments
Building
Information
1
Other
Gas and
and
and
CATV
Aqua Subtotal
Petroleum Real
CommuniEstatecations

Total Adjustments2(Millions of yen)Amount inquarterly
consolidated
statements of
3
IncomeSales
Sales toexternalcustomers
Intersegment
sales andtransfers
Subtotal
Segment income(loss)(Notes)

18,57739

3,777 7,738

235

174

18,617

4,013 7,913

890

74 1,171

12,795 1,798 44,687

899

6

1,356

13,694 1,805 46,044
919

104

3,161

1,116 45,804

46-

45,804

1,402-1,402-

1,163 42,207-1,40245,804

45

3,231

24

3,186

1. The “Other” category is a business segment not included in the reportable segments. This category includes businesses such as
weddings, ship repair, insurance, and nursing care.

102. Adjustments to segment income (loss) are mainly eliminations due to intersegment transactions.
3. Segment income (loss) is adjusted to match operating profit in the quarterly consolidated statements of income.

11