Summary of Financial Statements for the Third Quarter of Fiscal Year Ending April 2020
[Japan GAAP] (Consolidated)
March 4, 2020
Name of listed company:

AIN HOLDINGS INC.

Exchange listed on:First Section of Tokyo Stock Exchange and Sapporo Securities Exchange

Code number:

9627

URL:

https://www.ainj.co.jp/

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Representative Senior Managing Director
TEL: +81-11-814-1000
Date of filing quarterly securities report:
March 16, 2020-

Start of dividend payment:
Supplementary documents for quarterly
results:
Quarterly results briefing:

Yes (Supplementary materials for the quarterly results are disclosed on the Company’s website
appropriately as the financial statements.)

No(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the third quarter of fiscal year ending April 30, 2020 (May 1, 2019 to January 31, 2020)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Million yen%

Million yen%

Million yen%

Million yen%

220,085

8.7

12,4474.5

13,008

4.7

7,110

4.9

Nine months ended January 31, 2019
202,522
1.2
11,909(16.8)
12,425 (15.8)(Note) Comprehensive income:Nine months ended January 31, 2020: ¥7,100 million (+5.8%)
Nine months ended January 31, 2019: ¥6,713 million (-15.0%)

6,781(14.5)

Nine months ended January 31, 2020

Earnings
per share

Diluted earnings
per share
Yen

Yen

Nine months ended January 31, 2020

200.71-

Nine months ended January 31, 2019

191.41-(2) Consolidated financial position
Total assets
As of January 31, 2020
As of April 30, 2019
(Reference) Shareholders’ equity:

Net assets

Shareholders’ equity ratio

Million yen

Million yen%

188,063
189,021

109,074
103,92258.0
54.9

As of January 31, 2020: ¥109,008 million As of April 30, 2019: ¥103,855 million

2. Dividends

Year ended April 30, 2019

End of firstquarterYen-

End of second
quarter
Yen
0.00

0.00
Year ending April 30, 2020
Year ending April 30, 2020
(forecast)(Note) Revision to the most recently announced dividend forecasts: No

Dividend per share
End of third
quarterYen-

End of year

Full year

Yen

Yen

55.00

55.00

55.00

55.00

-

3. Consolidated financial forecasts for the fiscal year ending April 30, 2020 (May 1, 2019 to April 30, 2020)(Percentage figures show year-on-year changes.)
Profit attributable toEarnings
Net sales
Operating income
Ordinary income
owners of parent
per share
Million yen%
Million yen%
Million yen%
Million yen%
Yen
Full year

293,230

6.4

16,5002.7

17,200

3.4

9,250

2.4

261.10(Note) Revision to the most recently announced consolidated financial forecasts: Yes
For more details about the revisions, please refer to today’s release (March 4, 2020), “Notice on the Revision of Consolidated Business
Performance Forecast.”*Notes(1) Major changes in subsidiaries during the period (changes in specified subsidiaries resulting from changes in scope of
consolidation): No
Newly consolidated: –Excluded: –(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements: Yes(Note) For detail, please refer to “2. Quarterly consolidated financial statements and major notes (3) Notes on quarterly consolidated financial
statements” on page 8 of the Attachment.

(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions
1) Changes in accounting principles as a result of revisions to accounting standards, etc.:
No2) Changes in accounting principles other than 1):
No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of outstanding shares (common stock)1) Number of outstanding
As of January 31,
shares (including treasury
2020
stock):
2) Number of shares held in
As of January 31,
treasury:
20203) Average number ofNine months ended
shares outstanding:January 31, 2020

35,428,212 shares As of April 30, 201935,428,212 shares

728 shares As of April 30, 2019728 shares

Nine months ended
January 31, 201935,427,502 shares

35,427,484 shares*This Summary of Financial Statements is outside the scope of quarterly review procedures.
*Statement regarding the proper use of financial forecasts and other special remarks(Caution concerning forward-looking statements)
The above forecasts are calculated based on the information available as of the publication date of this material, and actual
financial results may vary due to change in future economic conditions and others.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

Contents of the Attachment

1. Qualitative information on consolidated results for the period under review............................................................................ 2(1) Consolidated operating results ........................................................................................................................................... 2(2) Consolidated financial position ........................................................................................................................................... 3(3) Forecast of consolidated financial results and other forward-looking information............................................................... 3
2. Quarterly consolidated financial statements and major notes ................................................................................................. 4(1) Quarterly consolidated balance sheet ................................................................................................................................ 4(2) Quarterly consolidated statements of income and comprehensive income ........................................................................ 6
Quarterly consolidated statements of income..................................................................................................................... 6
Quarterly consolidated statements of comprehensive income ........................................................................................... 7(3) Notes on quarterly consolidated financial statements ........................................................................................................ 8(Notes on the premise of a going concern) ........................................................................................................................ 8(Notes on significant changes in the amount of shareholders’ equity) ................................................................................ 8(Application of specified accounting methods for the preparation of quarterly consolidated financial statements)............. 8(Segment information, etc.) ................................................................................................................................................ 8

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

1. Qualitative information on consolidated results for the period under review(1) Consolidated operating results
During the first nine months of the current fiscal year (May 1, 2019 to January 31, 2020), the Japanese economy recoveredat a modest pace, supported by a strong level of corporate earnings. However, the outlook is becoming increasingly uncertain
amid an unexpected increase in public anxiety related to the growing COVID-19 outbreak, as well as a pullback in demand
after the hike to consumption tax.
In this economic environment, the AIN HOLDINGS Group (the Group) worked to expand its business and increase
earnings. Specifically, the Group opened new dispensing pharmacies and used M&A to expand the business. It also
developed its cosmetic and drug store business.
In the first nine months of the fiscal year, net sales rose 8.7% year on year to ¥220,085 million, operating income increased
4.5% to ¥12,447 million, ordinary income increased 4.7% to ¥13,008 million, and profit attributable to owners of parent rose
4.9% to ¥7,110 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In the dispensing fee revisions scheduled for April this year, we anticipate adjustments that normalize a greater emphasis
on appropriately evaluating the primary care functions of dispensing pharmacies in each community, as well as revisions
aimed at spurring a structural shift from dispensing focused on products to dispensing focused on services.
To ensure our pharmacists and dispensing pharmacies fulfill their primary care role, the Group continues to build links withlocal medical service providers, strengthen pharmaceutical management and guidance based on the integrated andcontinuous management of drug information using patient medication notebooks and other means, and promote wider use
of generic drugs.
In business development, the Group is pushing ahead with business expansion and measures to improve the efficiencyof pharmacy operations, including actively opening large pharmacies and tightening the criteria for M&A deals, as well as
adjusting the store opening strategy to withdraw from small-scale pharmacies.
As a result, for the first nine months of the fiscal year, the dispensing pharmacy business reported higher sales and profits,with sales increasing 9.7% year on year to ¥196,753 million and segment income increasing 15.4% to ¥15,569 million.
During the same period, the Group opened a total of 14 dispensing pharmacies, including those acquired through M&A
deals, and as part of an overhaul of store operations, closed 16 dispensing pharmacies and sold 29, resulting in a total of
1,101.
(Cosmetic and drug store business)
In the cosmetic and drug store business, the market environment remained challenging due to a narrowing competitive
gap between companies in the sector and the emergence of new competitors from sector consolidation and realignment. A
pullback in demand after the hike to consumption tax and a slowdown in consumer spending amid the COVID-19 outbreak
are also having an impact on the market.
Against that backdrop, the Group continues to open ainz & tulpe cosmetic and drug stores in the major urban area, as
well as strategically develop sales areas at each store, based on the concept of creating stores where customers would be
happy to browse for an hour. The Group also released the official ainz & tulpe app on October 1, 2019, creating an app
version of its point card to improve convenience and service levels for customers.
On November 1, 2019, the Group acquired the business of make-up and cosmetic brand DAZZSHOP. With the acquisition,
the Group is targeting synergies across its operations to help expand sales channels, including overseas. Specifically, theGroup plans to actively introduce DAZZSHOP's product range, which is focused on color contact lenses and eye make-up
products, into ainz & tulpe stores, to expand and strengthen the merchandise lineup and acquire new customers.
As a result, for the first nine months of the fiscal year, the cosmetic and drug store business reported an increase in salesof 6.0% year on year to ¥20,071 million. And segment income decreased 22.4% to ¥575 million.
During the same period, the Group opened 12 ainz & tulpe stores: ainz & tulpe bono SAGAMIONO (Sagamihara,
Kanagawa Prefecture), ainz & tulpe ASAKUSA ROX (Taito Ward, Tokyo), ainz & tulpe PERIE Chiba (Chiba, Chiba
Prefecture) , ainz & tulpe KAWASAKI ZERO GATE (Kawasaki, Kanagawa Prefecture), ainz & tulpe Pole Town 2 (Sapporo,
Hokkaido), ainz & tulpe KASHIWA Modi (Kashiwa, Chiba Prefecture), ainz & tulpe SAKAE Central Park (Nagoya, Aichi
Prefecture), ainz & tulpe OMIYA ARCHE (Saitama, Saitama Prefecture), ainz & tulpe PERIE Kaihimmakuhari (Chiba, Chiba
Prefecture), ainz & tulpe BEAUTY FACTORY YOKOHAMA HAMMERHEAD (Yokohama, Kanagawa Prefecture), ainz & tulpe
GINZA INZ (Chuo Ward, Tokyo) , ainz & tulpe LINKS UMEDA (Osaka, Osaka) and closed four stores, resulting in a total of
62 cosmetic and drug stores at the end of the third quarter.

2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

(Other businesses)
Net sales from other businesses decreased 22.3% year on year to ¥3,260 million and segment loss was ¥170 million
compared with the loss of ¥107 million a year earlier.
(2) Consolidated financial position
The balance of total assets at the end of the third quarter declined by ¥958 million from the end of the previous fiscal yearto ¥188,063 million. That mainly reflected an increase in merchandise, outweighed by declines for cash on hand and inbanks and for goodwill.
The balance of liabilities decreased ¥6,110 million to ¥78,989 million.
The balance of short- term and long-term debts decreased by ¥4,351 million to ¥7,205 million.
Total net assets increased by ¥5,152 million to ¥109,074 million and the shareholders’ equity ratio increased 3.1
percentage points to 58.0%.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has revised its consolidated financial forecasts for the fiscal year ending April 30, 2020, which were announced
on June 4, 2019. For more details, please refer to today’s release (March 4, 2020), “Notice on the Revision of Consolidated
Business Performance Forecast.”

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet

Fiscal year endedApril 30, 2019
(As of April 30, 2019)

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Short-term loans
Other accounts receivable
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Land
Other property, plant and equipment, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investments in securities
Deferred tax assets
Deposits and guarantees
Other investments and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Deferred assets
Total assets

4(Million yen)
Nine months ended
January 31, 2020
(As of January 31, 2020)

48,091
12,771
12,673
225
236
8,438
3,012
(2)
85,446

46,276
13,71314,368
268
225
7,314
2,580
(1)
84,746

16,352
10,394
3,439
30,186

16,705
11,0393,283
31,02845,2492,327
47,57742,0752,691
44,767

1,795
4,284
15,133
6,221(1,683)25,751
103,51559
189,021

2,466
4,272
15,713
6,723(1,681)
27,494103,29026
188,063

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

Fiscal year endedApril 30, 2019
(As of April 30, 2019)

Liabilities
Current liabilities
Accounts payable
Short-term debt
Accrued income taxes
Deposits received
Allowance for bonuses to employees
Allowance for bonuses to directors
Reserve for reward obligations
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Net defined benefit liability
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding losses on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive loss
Non-controlling interests
Total net assets
Total liabilities and net assets

5(Million yen)
Nine months ended
January 31, 2020
(As of January 31, 2020)

44,794
5,571
3,261
12,737
2,139
17
450
4,772
73,74446,7844,196
2,196
12,431
917
7
473
3,718
70,726

5,985
2,977
2,391
11,35585,099

3,009
3,163
2,089
8,262
78,98921,89420,50061,526(2)
103,920

21,89420,50066,689(2)
109,082

(6)
(59)
(65)
67
103,922
189,021

(29)
(45)
(74)
66
109,074
188,063

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Nine months ended
January 31, 2019
(May 1, 2018 toJanuary 31, 2019)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commissions received
Real estate rental revenue
Consignment income
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Losses on sales of accounts receivables
Real estate rental expenses
Other non-operating expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sales of investments in securities
Gains on sales of fixed assets
Gains of transfer of business
Surrender value of insurance
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Impairment losses on fixed assets
Other extraordinary losses
Total extraordinary losses
Income before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

6(Million yen)
Nine months ended
January 31, 2020
(May 1, 2019 toJanuary 31, 2020)

202,522
168,768
33,753
21,844
11,909220,085
184,284
35,801
23,353
12,447

55
38
19
242
119
344
819

46
36
12
304
134
301
835

109
52
64
76
303
12,425

53
49
101
70
274
13,008

2
11
247
14
0
278

34
313
0
1
349

386
95
352
834
11,868
5,107
6,761
(19)
6,781

415
84
193
693
12,664
5,554
7,109
(0)
7,110

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

Quarterly consolidated statements of comprehensive income
Nine months ended
January 31, 2019
(May 1, 2018 toJanuary 31, 2019)

ProfitOther comprehensive income
Unrealized holding gains (losses) on securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive loss attributable to non-controllinginterests

7(Million yen)
Nine months ended
January 31, 2020
(May 1, 2019 toJanuary 31, 2020)

6,761

7,109

(53)
5
(47)
6,713
6,733

(23)
14
(8)
7,100
7,101

(19)

(0)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

(3) Notes on quarterly consolidated financial statements(Notes on the premise of a going concern)
There are no applicable matters to be reported.

(Notes on significant changes in the amount of shareholders’ equity)
There are no applicable matters to be reported.
(Application of specified accounting methods for the preparation of quarterly consolidated financial statements)
To calculate tax expenses, the effective tax rate on income before income taxes for the consolidated fiscal year after theapplication of tax effect accounting is reasonably estimated and the estimated rate is applied to income before income taxes
for the quarterly period.
(Segment information, etc.)
I Nine months ended January 31, 2019 (May 1, 2018 to January 31, 2019)
1. Net sales and income (loss) by reportable segment(Million yen)
Carried onquarterly
consolidated
statements ofincome(Note) 2

Reportable segments
Adjustments(Note) 1

Dispensing
pharmacybusiness

Cosmetic anddrug store
business

Otherbusinesses(1) Sales to third parties

179,397

18,927

4,198

202,522-202,522(2) Intersegment sales

-

-

97

97

(97)

-

Total sales

179,397

18,927

4,295

202,620(97)

202,522

Segment income (loss)

13,488741(107)

14,122(1,697)

12,425

Total

Sales

Notes:

1. The adjustment of ¥(1,697) million to segment income (loss) includes ¥3,077 million in corporate expenses,¥(1,357) million in (income) losses that are not allocated to reportable segments, and ¥(22) million in eliminations
due to intersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.

2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
In the dispensing pharmacy business segment, the Company acquired 7 dispensing pharmacy companies. During thefirst nine months of the fiscal year, the increase in goodwill related to these companies was ¥5,059 million.

8

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2020

II Nine months ended January 31, 2020 (May 1, 2019 to January 31, 2020)
1. Net sales and income (loss) by reportable segment(Million yen)
Carried onquarterly
consolidated
statements ofincome(Note) 2

Reportable segments
Adjustments(Note) 1

Dispensing
pharmacybusiness

Cosmetic anddrug store
business

Otherbusinesses(1) Sales to third parties

196,753

20,071

3,260

220,085-

220,085(2) Intersegment sales

-

-

85

85

(85)

-

Total sales

196,753

20,071

3,346

220,171(85)

220,085

Segment income (loss)

15,569575(170)

15,974(2,966)

13,008

Total

Sales

Notes:

1. The adjustment of ¥(2,966) million to segment income (loss) includes ¥4,405 million in corporate expenses,¥(1,514) million in (income) losses that are not allocated to reportable segments, and ¥75 million in eliminations
due to intersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions and the system
logistics division of the parent company.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.

2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
There are no applicable matters to be reported.

9