Summary of Financial Statements for the First Quarter of Fiscal Year Ending April 2019
[Japan GAAP] (Consolidated)
August 30, 2018
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:
September 14, 2018–

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

Yes
No(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the first quarter of fiscal year ending April 30, 2019 (May 1, 2018 to July 31, 2018)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Three months ended July 31, 2018
Three months ended July 31, 2017
(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

65,013

(1.6)

3,450

(12.9)

3,610(12.7)

1,851(12.7)

73.7
4,135
74.0
¥1,854 million (-12.7%)¥2,123 million (+53.4%)

2,120

54.6

66,095
14.3
3,963
Three months ended July 31, 2018:
Three months ended July 31, 2017:
Earnings
per share

Diluted earnings
per share
Yen

Yen

Three months ended July 31, 2018

52.27

–

Three months ended July 31, 2017

66.88

–

(2) Consolidated financial position

As of July 31, 2018
As of April 30, 2018
(Reference) Shareholders’ equity:

Shareholders’equity ratio

Net assets

Total assets

Net assets per
share

Million yen

Million yen%

Yen

182,663

96,81653.0

2,731.97

183,380

96,73352.7

2,729.44

As of July 31, 2018: ¥96,786 million

As of April 30, 2018: ¥96,697 million

2. Dividends

Year ended April 30, 2018

End of firstquarterYen–

End of second
quarterYen
0.00–
Year ending April 30, 2019Year ending April 30, 2019
0.00
(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

50.00

50.00

55.00

55.00

3. Consolidated financial forecasts for the fiscal year ending April 30, 2019 (May 1, 2018 to April 30, 2019)(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
First six
132,3500.0
7,040 (15.9)
7,290 (15.9)
3,740 (15.4)
105.57monthsFull year
272,870
1.7
17,500 (10.8)
18,000 (10.6)
9,260 (12.4)
261.38(Note) Revision to the most recently announced consolidated financial forecasts: No*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
shares (including treasury
As of July 31, 2018
stock):
2) Number of shares held in
As of July 31, 2018
treasury:
3) Average number ofThree months ended
shares outstanding:July 31, 201835,428,212 shares As of April 30, 201835,428,212 shares

688 shares As of April 30, 2018688 shares

Three months ended
July 31, 2017

31,707,568 shares

35,427,524 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.
(Method of obtaining supplementary materials for the quarterly financial statements)
Supplementary materials for the quarterly financial statements are disclosed on the Company’s website appropriately as thefinancial statements.
(Change in monetary unit)
Amounts for items listed in the quarterly consolidated financial statements and for other items in the statements have beenshown using thousand yen units. However, effective from the first quarter and the cumulative first quarter of the fiscal year
under review, thousand yen units have been replaced with million yen units.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019

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 statement of income ....................................................................................................................... 6
Quarterly consolidated statement of comprehensive income.............................................................................................. 7(3) Notes on quarterly consolidated financial statements ........................................................................................................ 8(Notes on the premise of a going concern)......................................................................................................................... 8(Note on significant changes in the amount of shareholders’ equity) ................................................................................. 8(Application of specified accounting methods for the preparation of quarterly consolidated financial statements) ............. 8(Supplementary information) ............................................................................................................................................ 8(Segment information, etc.) .............................................................................................................................................. 8

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019

1. Qualitative information on consolidated results for the period under review(1) Consolidated operating results
During the first three months of the current fiscal year (May 1, 2018 to July 31, 2018), the Japanese economy improved
at a moderate pace amid signs of a pickup in consumer spending and improving corporate earnings and employment
conditions.
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 three months of the fiscal year, net sales decreased 1.6% year on year to ¥65,013 million, operating income
declined 12.9% to ¥3,450 million, ordinary income dropped 12.7% to ¥3,610 million, and profit attributable to owners ofparent decreased 12.7% to ¥1,851 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In drug price and dispensing fee revisions in April 2018, the role of pharmacies located near hospitals and pharmacies
located in the same premises was reviewed, with primary care dispensing pharmacies and pharmacists receiving a higher
evaluation as part of government efforts to drive a structural shift from dispensing focused only on dispensing drugs todispensing focused on services that contribute to local healthcare 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 addition, we stepped up training for the 279 newly graduated pharmacists that joined the Group in April
2018 in order to enhance their skills as primary care pharmacists.
In June 2018, the Group was registered as Japan’s first provider of remote drug guidance services in Aichi Prefecture’s
National Strategic Special Zone and started providing guidance online. This service allows patients who do not live close toa dispensing pharmacy or have difficulty visiting their local pharmacy for various reasons to receive guidance for drug usage
via videophone or other methods, enabling fully integrated home-based healthcare, from medical examinations and guidancefor drug usage to receipt of medicines. The Group intends to use this service to further increase convenience for patientsand improve the quality of healthcare provision.
In business development, the Group pushed ahead with business expansion by opening new dispensing pharmacies andusing M&A deals. Store operations are also being overhauled.
As a result, for the first three months of the fiscal year, the dispensing pharmacy business reported lower sales and profits,with sales decreasing 3.1% year on year to ¥57,090 million and segment income dropping 17.4% to ¥3,984 million.
During the period under review, the Group opened 5 new dispensing pharmacies, including those acquired through M&A
deals, and closed 10 pharmacies, resulting in a total of 1,024.
(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 that
also extends to other business sectors.
Against this backdrop, the Group continued to open ainz & tulpe cosmetic and drug stores in the Tokyo metropolitan area
and worked to make stores more appealing by refurbishing existing stores and strengthening merchandise lineups,
particularly cosmetic and drug products. Stores opened in the previous fiscal year made a significant contribution to sales,
while sales from existing stores also increased year on year. Earnings also improved, supported by lower costs due to greaterbusiness efficiency and by an increase in the gross margin due to active efforts to develop LIPS and HIPS, cocodecica andother proprietary brands and an overhaul of procurement activities.
As a result, for the first three months of the fiscal year, the cosmetic and store business reported an increase in sales of
11.6% year on year to ¥6,505 million and a rise in segment income of 866.1% to ¥364 million.
During the period under review, there were no store openings or closures, resulting in a total of 48 cosmetic and drug
stores at the end of the period.
(Other businesses)
Net sales from other businesses rose 5.9% year on year to ¥1,417 million and segment loss was ¥67 million comparedwith the loss of ¥238 million a year earlier.

2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019(2) Consolidated financial position
The balance of total assets at the end of the first quarter decreased by ¥717 million from the end of the previous fiscal
year to ¥182,663 million.
That mainly reflected an increase in inventories against decreases in cash on hand and in banks and goodwill.
The balance of liabilities decreased ¥800 million to ¥85,846 million, mainly reflecting an increase in accounts payable anddecreases in accrued income taxes and the balance of long-term debt.
The balance of short- and long-term debts decreased by ¥689 million to ¥17,538 million.
Total net assets increased by ¥83 million to ¥96,816 million and the shareholders’ equity ratio improved 0.3 percentage
points to 53.0%.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has made no change to its earnings forecasts for the first six months of the fiscal year and for the full fiscal
year, announced on June 5, 2018.

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019

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

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
Investment 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

Fiscal year endedApril 30, 2018
(As of April 30, 2018)

Three months ended
July 31, 2018
(As of July 31, 2018)

63,77910,466
9,372
208
641
7,751
2,470
(131)
94,55761,725
11,511
11,014
213
664
7,899
1,657
－
94,685

14,934
10,041
2,878
27,853

14,773
10,197
2,912
27,88438,011
2,121
40,13237,266
2,018
39,285

2,375
3,772
11,3393,785(540)
20,732
88,718103
183,380

2,320
3,819
11,4143,515(354)
20,71587,885
92
182,663

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019

(Million yen)

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
Provision for sales returns
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 gains on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

Fiscal year endedApril 30, 2018
(As of April 30, 2018)

Three months ended
July 31, 2018
(As of July 31, 2018)

38,728
6,717
4,947
12,675
1,911
16
420
6
4,525
69,95041,646
7,486
1,577
14,162
1,663
7
431
－
3,764
70,73911,511
2,625
2,560
16,696
86,646

10,0522,693
2,361
15,10685,846

21,89420,50054,268(1)
96,662

21,89420,50054,349(1)
96,743

84
(50)
34
36
96,733
183,380

95
(51)
43
29
96,816
182,663

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income(Million yen)

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
Gain on sales of fixed assets
Gain on transfer of business
Surrender value of insurance
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Directors' retirement benefits
Other extraordinary losses
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLosses attributable to non-controlling interests
Profit attributable to owners of parent

6

Three months ended
July 31, 2017
(May 1, 2017 toJuly 31, 2017)
66,09555,034
11,0607,096
3,963

Three months ended
July 31, 2018
(May 1, 2018 to
July 31, 2018)
65,01354,325
10,687
7,236
3,450

16
19
20
59
46
102
265

13
23
9
48
42
110
248

33
17
25
17
92
4,135

25
17
16
29
89
3,610

1
5
17
5
31

3
83
－
0
87

71
70
41
183
3,983
1,865
2,118
(2)
2,120

174
－
80
254
3,442
1,597
1,845
(6)
1,851

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019

Quarterly consolidated statement of comprehensive income(Million yen)

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

7

Three months ended
July 31, 2017
(May 1, 2017 toJuly 31, 2017)
2,118

Three months ended
July 31, 2018
(May 1, 2018 to
July 31, 2018)
1,845

16
(10)
5
2,123
2,126

10
(1)
9
1,854
1,861

(2)

(6)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019(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.
(Supplementary information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”)
Effective from the first quarter of the current fiscal year, the Company has applied “Partial Amendments to AccountingStandard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018). As a result, the Company now classifies
deferred tax assets as investments and other assets, and deferred tax liabilities as non-current liabilities.
(Segment information, etc.)
I Three months ended July 31, 2017 (May 1, 2017 to July 31, 2017)
1. Net sales and income (loss) by reportable segment
Reportable segments
Adjustments(Note) 1(Million yen)
Carried onquarterly
consolidated
statements ofincome(Note) 2

Dispensing
pharmacybusiness

Cosmetic anddrug store
business(1) Sales to third parties

58,929

5,827

1,338

66,095－66,095(2) Intersegment sales

－

－

84

84

(84)

－

Total sales

58,929

5,827

1,423

66,180(84)

66,095

Segment income (loss)

4,821

37

(238)

4,620

(484)

4,135

Other
business

Total

Sales

Notes:

1. The adjustment of ¥(484) million to segment income (loss) includes ¥930 million in corporate expenses, ¥(440)
million in (income) loss that is not allocated to reportable segments, and ¥(5) million in eliminations due tointersegment transactions.
Overall group 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]:
There are no applicable matters to be reported.

8

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the First Quarter of the Fiscal Year Ending April 30, 2019

II Three months ended July 31, 2018 (May 1, 2018 to July 31, 2018)
1. Net sales and income (loss) by reportable segment
Reportable segments
Adjustments(Note) 1(Million yen)
Carried onquarterly
consolidated
statements ofincome(Note) 2

Dispensing
pharmacybusiness

Cosmetic anddrug store
business(1) Sales to third parties

57,090

6,505

1,417

65,013－65,013(2) Intersegment sales

－

－

38

38

(38)

－

Total sales

57,090

6,505

1,456

65,051(38)

65,013

Segment income (loss)

3,984

364

(67)

4,281

(671)

3,610

Other
business

Total

Sales

Notes:

1. The adjustment of ¥(671) million to segment income (loss) includes ¥1,109 million in corporate expenses, ¥(427)
million in (income) loss that is not allocated to reportable segments, and ¥(10) million in eliminations due tointersegment transactions.
Overall group 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]:
There are no applicable matters to be reported.

9