SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the Third Quarter Ended December 31, 2019
[Japanese Standards]

The financial figures in this document are based on Japanese Accounting Standards and accompanying laws. Amounts arerounded off to 1 decimal place. This document is an English translation of the Japanese-language original.

Consolidated Financial Statements for the Third Quarter ended December 31, 2019
SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

https://sanix.jp

President and CEO:

Hiroshi Munemasa

Contact:

Kozo Inoue, Director, Management Corporate Officer,
General Manager of Corporate Planning Division, Administration Division andManagement & Planning Division

1. Business Results – Operating results for the Third Quarter ended December 31,
2019 (April 1, 2019 to December 31, 2019)(1) Consolidated Operating Results(In Millions of Yen)
Third Quarter
From April 1 to December 31
FY2019%change

FY2018%change

Net Sales ······························································

37,893

2.3%

37,037

1.3%

Operating Income ··················································

2,284

133.5%

97826.5%

Ordinary Income ····················································

2,087

122.4%

938

68.2%

Net Income ···························································

1,531

692.7%

193(43.5%)Net Income per Share (¥) ········································¥32.03

－

¥4.04

－

Net Income per Share, Diluted(¥)······························

－

－

－

－

(Note) Comprehensive Income ································

1,508

976.3%

140(66.7%)(2) Consolidated Financial Position(In Millions of Yen)
As of December 31

As of March 31

FY2019FY2018

Total Assets···························································

31,93531,009Net Assets ····························································

5,702

4,193

Shareholders’ Equity Ratio (%) ·······························

17.8%

13.4%

Net assets per share(¥)···········································¥118.73¥87.08(Reference) Equity Capital ·······································

5,675

4,162

2. Dividends
End of Quarterly Period
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter
0.00

0.00

0.00

0.00

Annual(Dividends per Share)
FY2018 ended March 31, 2019 (¥) ···························

0.00

0.00

0.00

FY2019 ended March 31, 2020 (¥) ···························

0.00

0.00

0.00

FY2019 ended March 31, 2020 (¥) (Forecast) ············(Note) Revision from the most recently announced dividend forecast: None

0.00

3. Forecasts for Consolidated Business Results (April 1, 2019 to March 31, 2020)(In Millions of Yen)
Fiscal Year 2019
Full Year%change

Net Sales······························································

51,082

0.7%

Operating Income ··················································

2,550

108.2%

Ordinary Income ····················································

2,330

97.1%

Net Income ···························································

1,808

653.2%Net Income per Share (¥) ········································¥37.84(Note) Revision from the most recently announced forecast of consolidated business results: Exist* Notes(1) Changes in significant subsidiaries during the period(Change in scope of consolidations resulting from change in subsidiaries): None
Number of subsidiaries newly consolidated－
Name of subsidiaries newly consolidated－
Number of subsidiaries excluded from consolidation－
Name of subsidiaries excluded from consolidation－(2) Adoption of special quarterly accounting methods: None
(3) Changes in accounting policies and accounting estimates retrospective restatementⅰ) Changes in accounting policies based on revisions of accounting standard: Noneⅱ) Changes in accounting policies other than ones based on revisions of accounting standard: Noneⅲ) Changes in accounting estimates: Noneⅳ) Retrospective restatement: None
(4) Number of Issued and Outstanding Shares (Common Stock)(Shares)
End of term
December 31,

March 31,

2019

2019

Number of issued and outstanding shares ,end of period (including treasury stock)48,919,396

48,919,396

Number of treasury stock ,end of period··································································

1,114,343

1,114,173

Average number of shares during the fiscal term ······················································

47,805,182*

47,805,458* December 31, 2018

* This summary of financial statements is exempt from audit procedure required by Financial instruments and Exchange Act.
* Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may
differ significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change ineconomical conditions. For details of these assumptions, prospects and plans, and for notes appropriate use of forecasts for thebusiness results, please see page 2 of the Attachment.

Index of the attachment
1. Qualitative Information for the Third Quarter ended December 31, 2019 .............
(1) Information of Consolidated Business Results .............................................................................
(2) Information of Consolidated Financial Position ............................................................................

224(3) Information on the Future Outlook,
Including the Forecasts of Consolidated Business Results ........................................................

4

2. Quarterly Consolidated Financial Statements and the Primary Notes for theThird Quarter ended December 31, 2019.................................................................................

5(1) Quarterly Consolidated Balance Sheets ........................................................................................

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income ..........................

7

Quarterly Consolidated Statements of Income
for the Third Quarter of the fiscal year ending March 31,2019 ...............................................

7

Quarterly Consolidated Statements of Comprehensive Income
for the Third Quarter of the fiscal year ending March 31,2019 ...............................................

8(3) Notes regarding the Quarterly Consolidated Financial Statements ...........................................

9Note to the Assumption of a Going Concern ...........................................................................

9Notes to Remarkable Changes in the amount of Shareholders’ Equity ..............................

9

Segment Information, etc. ........................................................................................................

10

3. Others ....................................................................................................................................................

12

Consolidated Net Sales by Division ................................................................................................

12

2

1. Qualitative Information for the Third Quarter ended December 31, 2019(1) Information of Consolidated Business Results
In the third quarter of the fiscal year ending March 31, 2020 (April 1, 2019 to December 31,2019), the Japanese economy continued to follow a modest recovery path, despite the effects
of a slowdown in overseas economies and natural disasters. In addition, capital spending
showed an upward trend as corporate earnings remained at high levels overall. Meanwhile,
consumer spending is slowly increasing on the back of steady improvements in employment
and income environment, despite the impact of the consumption tax hike.
Under these circumstances, the Group established the Energy Business Division andimplemented a structure consisting of five business divisions under the Medium-Term
Management Plan (FY2019–FY2021), which puts priority on establishing a stable profit
structure based on existing businesses and at the same time aims to achieve further growthby developing new businesses and services.
As for net sales in the first three quarters under review, sales rose in the Environmental
Resources Development Business Division. However, sales declined in the Energy Business
Division. As a result, net sales of the entire Group stood at ¥37, 893 million (up 2.3% year onyear).
The sales increase in the Environmental Resources Development Business Divisioncontributed to profit. As a result, for the entire Group, operating income came to ¥2,284
million (up 133.5% year on year) and ordinary income was ¥2,087 million (up 122.4% year onyear). Net income attributable to the owners of the parent company substantially grew to¥1,531 million (up 692.7% year on year) as a result of posting ¥427 million, the expectedamount of expenses for restoring the facilities stricken by the Hokkaido Eastern Iburi
earthquake in September 2018, as a loss caused by the disaster under extraordinary losses
in the same period of the previous fiscal year.
Operating results by segment for the first three quarters under review are as follows.
Reportable segment was reviewed in the first quarter and the Power Producer and Supplier(PPS) Business was separated from the Environmental Resources Development Business
Division, and the Energy Business Division was established. Consequently, year-on-yearcomparisons are being reclassified into new segments.
a. SE (Solar Engineering) Division
As the contracted size of the solar electric power market is gradually becoming smaller,
sales from solar electric power systems increased (up 4.8% year on year), due primarily tothe effect of sales of solar electric power systems with land as a new sales approach. As aresult, net sales came to ¥9,869 million (up 2.1% year on year).
Operating income increased due to higher sales, cost cutting through the transfer of staff tothe HS Division and a decrease in the cost of materials, and the segment posted operating
income of ¥741 million (up 44.5% year on year).

3b. HS (Home Sanitation) Division
The HS Division strengthened the sales and construction systems so that the Division would
be able to make carefully crafted proposals for the maintenance of ordinary houses by
increasing personnel through transfers and recruitment. Termite extermination increased
5.3% year on year, and underfloor/ceiling ventilation systems rose 38.7% year on year. As aresult, the division’s sales rose to ¥8,529 million (up 5.6% year on year).
Operating income stood at ¥1,633 million (down 4.2% year on year) after an increase in
expenses such as labor caused by the addition of personnel to expand our operations despite
higher sales.
c. ES (Establishment Sanitation) Division
Sales of anti-rust equipment installation (brand name: Daelman Shock), our main product,
increased 14.5% year on year, and sales of and building waterproof paint repair rose 86.1%
year on year as a result of increasing personnel through transfers and recruitment,
strengthening sales activities with the owners of buildings and condominiums and enhancing
relationships with partner companies, including management companies. As a consequence,the division’s net sales rose to ¥1,584 million (up 14.4% year on year).
Operating income declined to ¥155 million (down 20.6% year on year) due to an increase in
expenses such as labor caused by the addition of personnel to expand the business size of
the Division despite higher sales.
d. Environmental Resources Development (ERD) Division
Plastic fuel sales increased 16.0% year on year because the Division emphasized the
profitability and the quality of plastic fuels and proceeded with careful examination of
accepted articles, although the acceptance volume of waste plastics decreased. Moreover,power plant sales increased 27.7% year on year due to the impact of the suspension of theTomakomai Power Plant caused by the earthquake in the previous third quarter. As a result,net sales amounted to ¥12,294 million (up 14.8% year on year).
Operating income increased to ¥2,317 million (up 208.4% year on year) due to the operationof the Tomakomai Power Plant as well as the careful examination of waste plastics andaccepted articles in the organic wastewater recycling.
e. Energy Businees Division
Retail net sales declined chiefly due to a fall in the number of high pressure contracts and areduction in transaction prices in the wholesale market. As a result, net sales stood at ¥7,103
million (down 13.2% year on year).
Operating income decreased to ¥10 million (down 96.9% year on year) due to lower net
sales and the reduction in profit ratio resulting from the rising wholesale ratio.

4(2) Information of Consolidated Financial Positiona. Information on the status of Assets, of Liabilities, and of Net Assets
Total assets as of the end of the third quarter under review amounted to ¥31,935 million, an
increase of ¥925 million from the end of the previous consolidated fiscal year, which wascaused by an increase in construction in progress (others under property, plant andequipment) of ¥711 million.
Total liabilities stood at ¥26,232 million, a decline of ¥582 million from the end of theprevious consolidated fiscal year, which was attributable largely to increases in long-termloans payable of ¥724 million and bonds payable of ¥500 million, while short-term loans
payable decreased by ¥1,836 million.
Net assets totaled ¥5,702 million, an increase of ¥1,508 million from the end of the previous
consolidated fiscal year, mainly due to the posting of net income attributable to the owners of
the parent company of ¥1,531 million.
Consequently, the shareholders’ equity ratio at the end of the third quarter of the fiscal year
under review came to 17.8%, an increase from 13.4% at the end of the previous fiscal year.

(3) Information on the Future Outlook, Including the Forecasts of Consolidated BusinessResults
The Group revised the forecasts for the consolidated business results for the current fiscal
year ending March 31, 2020, on February 13, 2020, as described below, taking into accountthe operating results for the third quarter of the fiscal year ending March 31, 2020.
Net sales are expected to exceed the previous forecast due to an increase in net sales in the
SE Business Division, after taking into consideration the operating results of the first threequarters of the fiscal year ending March 31, 2020.
Operating income, ordinary income, and net income attributable to owners of the parent are
expected to exceed the previous forecasts reflecting higher-than-expected net sales and theoperating results of the first three quarters of the fiscal year ending March 31, 2020.

5

The forecast of Consolidated Business Results for the full fiscal year ending March 31, 2020
(From April 1, 2019 to March 31, 2020)

Net Sales

Operating
IncomeOrdinary
Income(In Millions of Yen)
Net Income
Net Income
per Share/¥Previous Forecast(A)

50,131

2,248

2,079

1,579

¥33.04

Revised Forecast(B)

51,082

2,550

2,330

1,808

¥37.84

(B－A)

950

302

251

229

－

(％)

1.9

13.5

12.1

14.5

－

50,719

1,224

1,182

240

¥5.02

Changes
Rate of Change
Reference:
Results for FY2018(ended March 31,2019)

2. Quarterly Consolidated Financial Statements and the Primary Notes for theThird Quarter ended December 31, 2019(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of Mar. 31

As of Dec. 31

FY2018FY2019Assets :Current Assets :Cash and deposits

5,238

5,543

Notes and accounts receivable-trade

6,010

5,167

Merchandise and finished goods

1,019

447

Work in process-construction

122

225

Raw materials and supplies

3,546

3,889

Other

975

1,296

Allowance for doubtful accounts

(299)

(251)

16,613

16,318

Buildings and structures (net of depreciation)

1,901

1,767

Machinery, Equipment and Vehicles(net of depreciation)

1,355

1,724

Land

7,811

8,053

Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Other (net of depreciation)
Total Property, Plant and Equipment
Intangible Fixed Assets

989

1,765

12,057

13,311262

318

Investments and Other Assets :

2,074

1,986

Total Fixed Assets

14,395

15,61631,00931,935

Total Assets

6(In Millions of Yen)

As of Mar. 31

As of Dec. 31

FY2018FY2019Liabilities :Current Liabilities :Notes and accounts payable-trade

4,188

3,660

Short-term loans payable

12,297

10,461

143

225

3,930

3,461

Accrued income taxes

462

358

Provision for bonuses

4126

Current portion of long-term loans payable
Accounts payable

12

13

Other

2,488

2,908

Total Current Liabilities

23,52921,214

-

500

210

934

9

9

Allowance for resource-recycling expenses

Non-Current Liabilities :Bonds
Long-term loans payable
Provision for directors’ retirement benefits
Provision for disposal site closing expenses
Liability related to retirement benefits
Other
Total Non-Current Liabilities
Total Liabilities

603

631

1,642

1,679

819

1,262

3,285

5,018

26,81526,232

14,041

14,041Net Assets :Shareholders’ Equity :Capital stock

1

1

Retained earnings(8,357)(6,825)

Treasury stock(1,481)(1,481)

Total Shareholders’ Equity

4,204

5,736

Valuation difference on available-for-sale securities

60

49

Foreign currency translation adjustment

(17)

(67)

Adjustment for retirement benefits (cumulative)

(85)

(42)

Total Accumulated other comprehensive income

(42)

(60)

Capital surplus

Accumulated other comprehensive income :31

26

Total Net Assets

4,193

5,702

Total Liabilities and Assets

31,00931,935

Non-controlling Interests

7(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(for Third Quarter of the fiscal year ending March 31, 2019)(In Millions of Yen)

Third Quarter
From April 1 to December 31
FY2019FY2018Net sales

37,03737,893

Cost of sales

25,83924,632Gross profit

11,197

13,260

Selling, general and administrative expenses

10,21910,976

978

2,284

7

13

Operating income
Non-operating income :Interest income
Dividends income22Land and house rent revenue

48

47

Foreign exchange gains

10-

Subsidy income

88Compensation income

70

-

Other

28

34

Total non-operating income

176

105

Interest expenses

176

153

Commission paid

18

90

Other

21

57

Total non-operating expenses

216

302

938

2,087

Loss on disaster

427-

Total extraordinary loss

427-

Income (loss) before income taxes and minority interests

511

2,087

Income taxes-current

322

477

Non-operating expenses :Ordinary income (loss)
Extra ordinary loss :Income taxes-deferred

(1)

83

Total income taxes

320

560

Net Income (loss)

191

1,526

Net Income (loss) belonging to the non-controlling shareholders

(1)
193

(4)
1,531

Net income (loss) belonging to the shareholders of the parent

company8(Quarterly Consolidated Statements of Comprehensive Income)(for Third Quarter of the fiscal year ending March 31, 2019)(In Millions of Yen)

Third Quarter
From April 1 to December 31
FY2019FY2018Net Income (loss)

191

1,526

Other comprehensive income :Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(14)
0

(10)
-

(38)

(50)

1

42

Foreign currency translation adjustment
Adjustment for retirement benefit adjustment

(51)

(18)

140

1,508

Comprehensive income belonging to the shareholders of the parent
company

141

1,513

Comprehensive income belonging to non-controlling shareholders

(1)

(4)

Total other comprehensive income
Comprehensive net income(Breakdown)

9(3) Notes regarding the Quarterly Consolidated Financial Statements(Notes to the Assumption of a Going Concern): None(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None10(Segment Information, etc.)
Ⅰ The previous third Quarter (From April 1, 2018 to December 31, 2018)ⅰ) Information concerning the Amount of Net Sales and Operating Income (loss)
by Segment(In Millions of Yen)

Segments

Elimination
or Group(note 1)

Consolidated(note 2)

SE

HS

ES

ERD

Energy

Total

9,664

8,074

1,385

9,724

8,188

37,037-37,037

-

-

-

980

-

980

(980)

-

9,664

8,074

1,385

10,705

8,188

38,017(980)

37,037

513

1,704

196

751

336

3,502

(2,524)

978Sales:
Sales to customers
Internal sales
Among segments andtransfer accounts
Total
Operating income (loss)(note 1)
Negative ¥2,524 million for adjustments of Operating income (loss) represents corporate expenses not allocatedto reportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

Ⅱ The Third Quarter (From April 1, 2019 to December 31, 2019)ⅰ) Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

SE

HS

ES

ERD

EnergyTotal

Elimination
or Group(note 1)

9,869

8,529

1,584

10,805

7,103

37,893-37,893

-

-

-

1,488

-

1,488

(1,488)

-

9,869

8,529

1,584

12,294

7,103

39,381(1,488)37,893

741

1,633

155

2,317

10

4,858

(2,574)

2,284

Segments

Consolidated(note 2)

Sales:
Sales to customers
Internal sales
Among segments andtransfer accounts
Total
Operating income (loss)(note 1)
Negative ¥2,574 million for adjustments of Operating income (loss) represents corporate expenses not allocatedto reportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

11ii) Change in Reportable Segments
The reportable segments have been changed in association with an organizational change made on
April 1, 2019. From the first quarter under review, the Power Producer and Supplier (PPS) business, which was
included in the Environmental Resources Development (ERD) Division, and the energy business development
department, which was established on April 1, 2019, are presented as the Energy Business Division. The
segment information for the third quarter of the previous fiscal year is prepared based on the reportablesegments after the organizational change.

12

3. Others
Consolidated Net Sales by Division(In Millions of Yen)

From April 1 to December 31
FY2018Commercial PV system
Wholesale of PV components

FY2019Changes

9,142

9,581

439

400

186

(214)

121

101

(20)

Solar Engineering Division Total

9,664

9,869

205

Termite Eradication Service

2,623

2,762

138

Under-Floor/Roof Ventilation System

1,328

1,843

514

Foundation Repairing/Home Reinforcement
System

1,600

1,388

(212)

OthersOthers

2,521

2,535

13

Home Sanitation Division Total

8,074

8,529

454

Anti-rust equipment installation

667

763

96

Repair of building water-woks

326

329

2

Water proofing of building

114

213

98

Others

276

278

1

1,385

1,584

199

6,451

7,484

1,032

1,731

2,211

480

1,413

1,473

59

Final disposal

595

722

126

OthersEnvironmental
Division Total :

512

402

(109)

Establishment Sanitation Division Total
Plastic fuelPower Stations
Industrial waste
Recycle)(Organic

Resources

Waste

Water

Development
10,705

12,294

1,589

Electricity sales
OthersEnergy Business Division Total:

8,188
8,188

7,032
71
7,103

(1,156)71(1,084)

Adjustment of inter-segment sales(980)(1,488)(507)

37,03737,893855

Total Net Sales