Feb 14, 2018

Non-Consolidated Financial Results (Excerpt) for the First Quarterof Fiscal 2018 [J-GAAP basis]
Listed Company Name:
SHl-JAPAN Ltd.
Registered on Tokyo Stock Exchange
Securities Code:4327
URL:http://www.shl.co.jp/
Representative:
Manabu Nara, Managing Director
Contact:
Naohiro Nakamura, executive director        Tel: +81-3-5385-8781
Date to submit the Quarterly Securities Report:
Feb 14, 2018
Date to start distributing dividends:
ʊSupplementary documents for this summary of financial statements
NoneResults briefing for financial results:
NoneThe original disclosure in Japanese was released on Jan 31, 2018 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the First Quarter of Fiscal 2018 (October 1, 2017 to Dec 31, 2017)(1) Non-consolidated Business Results(The percentages indicate the rate of increase or decrease compared with the same period of the previous fiscal year.)Net sales

Operating income

Millions of Yen

First three monthsof Fiscal 2018
First three monthsof Fiscal 2017%

Millions of Yen

Ordinary income%Millions of Yen

Net income%Millions of Yen%

299

7.2‫ڹ‬22㸫‫ڹ‬22㸫‫ڹ‬15㸫278‫ڹ‬0.7‫ڹ‬12㸫

‫ڹ‬12㸫

‫ڹ‬5

㸫

Net income per share

Fully diluted
net income per shareYenYen‫ڹ‬2.62

㸫‫ڹ‬0.97㸫First three monthsof Fiscal 2018
First three monthsof Fiscal 2017

The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, net income per share has been calculated under theassumption that the stock split was conducted at the beginning of the year ended September 30, 2017. Fully diluted net income per share has not beenrecorded, because, although there are dilutive shares, the Company posted a quarterly net loss per share.

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions of Yen

Equity ratio

Millions of Yen

Dec 31, 2017
4,094
Sep 30, 2017
4,591
(Reference) Equity capital: Dec 31, 2017: ¥3,661 millon

%

3,665
3,894
Sep 30, 2017: ¥3.890million

89.4
84.7

2. Dividends
Q1
EndFiscal 2017
Fiscal 2018
Fiscal 2018 (forecast)

Q2
EndDividend per share
Q3
Year-EndEnd

Annual

Yen

Yen

Yen

Yen

Yen

㸫
㸫

55.00

㸫72.00

127.0

32.00

㸫32.0064.00(Note) Revisions to recent dividends forecast: NoneThe Company conducted a two-for-one stock split of common shares on October 1, 2017. However, the actual amount of dividend distributed isrecorded for the year ended September 30, 2017.

3. Non-Consolidated Forecast for the Year Ending September 30, 2018 (October 1, 2017 to September 30, 2018)
Net sales

Fiscal 2018

Operating income

Ordinary income

Net income
per share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

2,692

4.5

1,117

1.1

1,116

1.1

771

1.7

129.69(Note) Revisions to recent business forecast: None
Net income per share has been adjusted based on the average number of shares outstanding (5,947,185 shares) for the year ending September 30, 2018,
which was calculated taking into account the number of shares issued during the first quarter of the year ending September 30, 2018 through theexercise of share subscription rights as a stock option, and the number of treasury shares held.
.

*Note(1) Application of particular accounts procedures to the preparation of quarterly non-consolidated financial statements:Yes(2) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies caused by revision of accounting standards:
None(ii) Changes in accounting policies other than ხ :None(iii) Changes in accounting estimates:None(iv) Restatement:
None(3) Number of shares outstanding (common stock)(i) Number of shares outstanding(including treasury shares)

As of Dec 31, 2017

6,098,358

As of Sep 30, 2017

6,096,358(ii) Number of treasury shares

As of Dec 31, 2017

150,844

As of Sep 30, 2017

150,844(iii) Average Number of shares outstanding

First three monthsof Fiscal 2018

5,946,210First three monthsof Fiscal 2017

6,083,870

The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, calculations were made under theassumption that the stock split was conducted at the beginning of the year ended September 30, 2017.

* Implementation status of quarterly review proceduresThis financial results summary is not subject to quarterly review procedures.

* Explanations and other special notes concerning the appropriate use of financial results forecasts
1.
2.

The forward-looking statements regarding financial results forecasts, etc., appearing in this financial results summary have been prepared basedon information currently available to the Company and certain assumptions that the Company believes to be reasonable. The Company makes
no guarantee as to their realization. Actual financial results may differ substantially from the forecasts due to various factors.
As the Company’s services are often used for the screening of new graduates to be employed by corporate customers, our sales inevitably
involve seasonal fluctuations. Accordingly, the Company’s performance management is conducted on an annual basis.

Qualitative information regarding the quarterly settlement of accounts(1) Explanation of operating results
During the first three months of the year ending September 30, 2018 (October 1, 2017, through December 31,2017), net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥20 million, or 7.2%, year over year to ¥299
million. By business segment, “Product sales” increased 16.0% to ¥181 million, “Consultancy sales” decreased
4.7% to ¥107 million and “Training sales” increased 3.6% to ¥10 million.
“Product sales” increased ¥25 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of “GAB”, Web test of general abilities. On the other hand,“Consultancy sales” decreased ¥5 million compared with the same period of the previous fiscal year. This wasprimarily due to the weak sales of customized versions of the “Web Test” and various valuation services. “Trainingsales” recorded a slight increase.
Operating loss for the three-month period under review totaled ¥22 million (compared with operating loss of ¥12
million for the same period of the previous fiscal year). The factors for the widening loss were that, while there wasan increase in revenue, the cost of goods sold increased ¥9 million, or 16.0%, year over year to ¥67 million andselling, general and administrative expenses increased ¥21 million, or 9.0%, year over year to ¥254 million. The
increase in the cost of goods sold was primarily attributable to an increase in shipment of test booklets, etc.
resulting from the rush of demand in anticipation of a price hike. The primary factors for the increase in selling,general and administrative expenses were increases in labor costs and royalties.
Ordinary loss for the three-month period under review totaled ¥22 million (compared with ordinary loss of ¥12
million for the same period of the previous fiscal year). This figure was almost equal to operating loss because both
non-operating income and non-operating expenses were small as in the same period of the previous fiscal year.
Loss before income taxes for the three-month period under review totaled ¥22 million (compared with loss
before income taxes of ¥8 million for the same period of the previous fiscal year). This was primarily due to thereporting of ¥3 million of gain on sales of investment securities as extraordinary gains for the same period of theprevious fiscal year.
After taking into account the above factors and income taxes—current and income taxes—deferred, net loss forthe three-month period under review totaled ¥15 million (compared with net loss of ¥5 million for the same periodof the previous fiscal year).
<Reference 1: Sales by business segment>
Product
Consultancy
Training
Total

First three months of Fiscal 2017
Millions of Yen
Component ratio
156
56.1
112
40.3
103.6
278
100.0

<Reference 2: Sales by quarterly basis>
First Quarter
Millions of Yen

Second Quarter
Millions of Yen

First three months of Fiscal 2018
Millions of Yen
Component ratio
181
60.7
107
35.8
10
3.5
299
100.0

Rate of increase(decrease)16.0‫ڹ‬4.7
3.6
7.2

Third Quarter

Year-End

AnnualMillions of Yen nMillions of Yen

Millions of Yen

Fiscal 2016
280
744
995
399
2,420
Fiscal 2017
278
896
1,030
369
2,575
Fiscal 2018
299
㸫
㸫㸫
㸫
*Note: As the Company’s services are often used for the screening of new graduates to be employed by corporate customers, oursales inevitably involve seasonal fluctuations. Moreover, the rate of fluctuation may at times increase due to changes in therecruiting and screening periods and other reasons. In recent years, sales have tended to concentrate in the second and thirdquarters of the fiscal year.

(2) Explanation about future prospects such as business forecasts
In the year under review, the Company believes that the screening market environment for new graduates willcontinue to grow steadily as in the previous fiscal year, because the industry's self-imposed controls on thescreening of new graduates* are still in place from the previous fiscal year and corporations remain highly
motivated to hire more employees.
However, we intend to continue enhancing our operating performance by speedily providing optimum services
based on our precise analysis and understanding of corporate customers’ needs.
In light of the above, and based on our analysis and study of the business results, financial position and otherbusiness management materials for the three-month period under review, no changes have been made to thebusiness forecast for the year ending September 30, 2018, which was released on October 27, 2017.
* The industry has self-imposed controls regarding the employment of new graduates, under which industry
groups agreed not to start employment PR activity and the screening process for new graduates prior to a fixed
date in light of the academic schedules for students. The Keidanren (Japan Business Federation) stipulated in
its “Guidelines for Recruiting and Employing New Graduates” that corporations’ PR activity for new
graduates who will enter corporations in fiscal 2017 onwards shall commence on and after March 1 of the year
just preceding the year of graduation or post-graduate completion, and screening activity on and after June 1of the year of graduation or completion.