Summary of Financial Statements for the Third Quarter of Fiscal Year Ending April 2015
[Japan GAAP] (Consolidated)
February 24, 2015
Name of listed company:

AIN PHARMACIEZ INC.

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

Code number:

9627

URL:

http://www.ainj.co.jp/

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Senior Managing Director and Chief Director of Administration
TEL: +81-11-814-1000
Date of filing quarterly securities report:
March17, 2015
Start of dividend payment:–

Supplementary documents for quarterly results:

No

Quarterly results briefing:

No (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the third quarter of fiscal year ending April 30, 2015 (May 1, 2014 to January 31, 2015)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Net sales
Operating income
Ordinary income
Net income
Nine months ended January 31,
2015
Nine months ended January 31,
2014(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

136,394

8.2

7,510

0.1

7,824

0.2

4,471

4.4

126,043

9.9

7,506

9.9

7,810

7.5

4,284

16.1

Nine months ended January 31, 2015: ¥4,618 million (+8.2%)
Nine months ended January 31, 2014: ¥4,270 million (+10.2%)
Net income
per share

Nine months ended January 31,
2015
Nine months ended January 31,
2014

Yen

Diluted net income
per shareYen

141.04–134.38–* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Net income per share is calculated by deeming stock
splits to have occurred at the beginning of the previous fiscal year.

(2) Consolidated financial position

Million yen

Million yen%

Net assets per
share
Yen

110,404

46,22941.8

1,455.50

Total assets

As of January 31, 2015
As of April 30, 2014
(Reference) Shareholders’ equity:

Net assets

101,382
42,240
As of January 31, 2015: ¥46,150 million

Shareholders’equity ratio

41.5
1,328.43
As of April 30, 2014: ¥42,122 million* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Net assets per share is calculated by deeming stock
splits to have occurred at the beginning of the previous fiscal year.

2. Dividends

Year ended April 30, 2014

End of firstquarterYen–

End of second
quarter
Yen
0.00

–

0.00

Dividend per share
End of third
quarter
Yen–

Year ending April 30, 2015
Year ending April 30, 2015
(forecast)(Note) Revision to the most recently announced dividend forecasts: No

End of year

Full year

Yen

Yen

60.00

60.00

30.00

30.00

–

* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. The year-end dividend per share for the fiscal year
ending April 30, 2015 (forecast) is based on the number of shares after the stock split.

3. Consolidated financial forecasts for the fiscal year ending April 30, 2015 (May 1, 2014 to April 30, 2015)(Percentage figures show year-on-year changes.)

Million yen%

Million yen%

Million yen%

Million yen%

Net income
per shareYen

190,000

11.6

10,2601.5

10,700

1.1

5,500

4.6

173.46

Net sales

Full year

Operating income

Ordinary income

Net income(Note) Revision to the most recently announced consolidated financial forecasts: No* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Net income per share for the fiscal year ending April
30, 2015 is calculated by deeming stock splits to have occurred at the beginning of the current fiscal year.

*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. Matters concerning summary information (notes) (2) Application of specified accounting methods forthe preparation of quarterly consolidated financial statements” on page 3 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.:
Yes2) Changes in accounting principles other than 1):
No3) Changes in accounting estimates:
No4) Restatement of revisions:No(Note) For detail, please refer to “2. Matters concerning summary information (notes) (3) Changes in accounting principles, changes inaccounting estimates, and restatement of revisions” on page 3 of the Attachment.

(4) Number of outstanding shares (common stock):1) Number of outstanding
As of January 31,
shares (including treasury
2015
stock):
2) Number of shares held in
As of January 31,
treasury:
20153) Average number ofNine months ended
shares outstanding:January 31, 2015

31,888,212 shares As of April 30, 2014

31,888,212 shares

180,572 shares As of April 30, 2014

179,832 shares

Nine months ended
January 31, 2014

31,881,404 shares

31,708,010 shares* On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Number of outstanding shares (common stock) is
calculated by deeming stock splits to have occurred at the beginning of the previous fiscal year.
*Status of execution of the quarterly review of financial statements
This quarterly financial summary is not subject to the quarterly review procedure based on the Financial Instruments and Exchange Act. Asof the time of disclosure, this review procedure for quarterly financial consolidated statements had not been completed.
*Statement regarding the proper use of financial forecasts and other special remarks
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 PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

Contents of 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. Matters concerning summary information (notes) ................................................................................................................... 3(1) Major changes in subsidiaries during the period ................................................................................................................ 3(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements ............... 3(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions .................................. 3
3. Quarterly consolidated financial statements ............................................................................................................................ 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(Notes on significant changes in the amount of shareholders’ equity) .................................................................................. 8(Segment Information, etc.) .................................................................................................................................................. 8

1

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

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, 2014 to January 31, 2015), the Japanese economy
recovered steadily, albeit at a moderate pace, supported by signs of a bottom in consumer confidence, a pickup in
production activity and corporate earnings, and continued improvement in the employment and income environment.
In this economic environment, the AIN PHARMACIEZ 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
pushed ahead with the comprehensive development of medical malls and developed its urban drug and cosmetic store
business.
In the first nine months of the fiscal year, net sales rose 8.2% year on year to ¥136,394 million, operating income
increased 0.1% to ¥7,510 million, ordinary income rose 0.2% to ¥7,824 million, and net income increased 4.4% to ¥4,471
million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In the dispensing pharmacy business, sales at existing dispensing pharmacies were slightly higher year on year. This
reflected steady prescription volumes amid a firm number of patients visiting existing pharmacies and an increase inaverage sales per prescription.
Profitability is deteriorating in the dispensing pharmacy business due to higher operating costs and rising procurement
costs. The increase in operating costs reflects steps to improve pharmaceutical management and promote dispensing
services for home healthcare patients in response to dispensing fee revisions in April 2014.
The Group continued to open new pharmacies and sign M&A deals, utilize economies of scale secured through businessexpansion and improve dispensing pharmacy operations on a pharmacy by pharmacy basis. As a result, segment income in
the third quarter of the fiscal year recovered, exceeding the level in the same period a year earlier.
In addition, the Group concluded a share transfer agreement in January 2015 to make Medio Pharmacy Co., Ltd. a wholly
owned consolidated subsidiary (share transfer scheduled for February 27, 2015). The acquisition of MEDIO PHARMACY
Inc., which operates 52 dispensing pharmacies, mainly in Shizuoka Prefecture, is aimed at strengthening the Group’s
network in the Tokai region and further reinforcing the Group’s business development division in the same region.
As a result, for the first nine months of the fiscal year, the dispensing pharmacy business reported sales and profit growthwith sales rising 9.4% year on year to ¥122,592 million and segment income increasing 0.1% to ¥9,608 million.
During the period under review, the Group opened 82 new dispensing pharmacies, including those acquired throughM&A deals, and closed 11 pharmacies, resulting in a total of 687.
(Drug and cosmetic store business)
In the drug and cosmetic store business, the market environment remained challenging mainly due to a narrowing
competitive gap between companies in the sector and the emergence of new competitors from sector consolidation andrealignment that also extends to other business sectors.
However, consumer spending is gradually recovering from the pullback in demand caused by the consumption tax hikein April 2014, with sales at existing stores rising year on year in the third quarter.
Against this backdrop, the Group is continuing to open urban drug and cosmetic stores under the ainz & tulpe brand,
particularly in urban areas with high customer traffic. Also, the Group is implementing a range of measures to rejuvenate
existing stores, such as reinforcing merchandise lineups to tailor them to each retail area and location, and making use ofcommunication apps such as LINE in sales promotion activities.
In addition, the Company has leased all eight above-ground floors and two basement floors in the STV Central Buildingin Sapporo’s Odori area (Chuo ward, Sapporo) and is currently working to convert the building into a specialist health andbeauty retail complex focused on the ainz & tulpe brand. The target opening date for the complex is autumn 2015.
Also, as of the end of the first nine months of the fiscal year, the Group had secured permission for 28 of its 55
drugstores to provide duty-free services. This move was taken in response to new rules from October 2014 that expand
the type of products on which overseas visitors to Japan are exempt from consumption tax. This supported higher sales
year on year across the Group’s drugstore chain.
As a result, for the first nine months of the fiscal year, the drug and cosmetic store business reported a decrease insales of 2.0% year on year to ¥13,102 million. However, segment income surged 660.4% to ¥92 million.
During the period under review, there were one new store opening, and closed five stores mainly in suburban locations,
resulting in a Group total of 55 stores.

2

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

(Other businesses)
Net sales and segment loss from other businesses were ¥699 million and ¥340 million, respectively.
(2) Consolidated financial position
The balance of total assets at the end of the third quarter increased by ¥9,021 million from the end of the previous fiscal
year to ¥110,404 million.
This mainly reflected increases in inventories, property, plant and equipment such as land and buildings, and goodwill
due to the Group’s business expansion through new store openings and M&A deals, as well as an increase in cash andcash equivalents to fund M&A and a decline in other accounts receivable.
The balance of liabilities increased by ¥5,032 million to ¥64,175 million. This primarily reflected an increase in accounts
payable, deposits received and long-term debt and decreases in accrued income taxes and net defined benefit liability.
The balance of long- and short- term debts increased by ¥3,786 million to ¥14,824 million.
Total net assets increased by ¥3,988 million to ¥46,229 million and the shareholders’ equity ratio improved 0.3
percentage points to 41.8%.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has made no change to its earnings forecasts for the full fiscal year, announced on May 27, 2014, in light ofearnings trends at new stores and existing stores in the first nine months of the fiscal year and future store opening plans.

2. Matters concerning summary information (notes)(1) Major changes in subsidiaries during the period
There are no applicable matters to be reported.
(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements
Tax expenses were calculated by reasonably estimating the effective tax rate after the application of tax effectaccounting to net income before taxes for the consolidated fiscal year including the third quarter, and multiplying theestimated effective tax rate by income before income taxes for the quarter.
(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions[Changes in accounting principles]
From the first quarter of the fiscal year ending April 30, 2015, the Company has applied the “Accounting Standard for
Retirement Benefits” (Accounting Standards Board of Japan (ASBJ) Statement No. 26, May 17, 2012; herein, “theretirement benefit accounting standard”) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ
Guidance No. 25, May 17, 2012; herein, “the retirement benefit guidance”), specifically content stipulated in paragraph 35of the retirement benefit accounting standard and stipulated in paragraph 67 of the retirement benefit guidance. As aresult, the methods for calculating retirement benefit obligations and service costs have been revised in the following
respects: the method for attributing projected benefits to periods has been changed from the straight-line basis to thebenefit formula basis, and the method for determining the discount rate has been changed from a bond period based on
the number of years approximate to the average remaining working lives of employees to a single weighted-average
discount rate that reflects the periods until the expected payment of retirement benefits and the amount of projected
benefits for each such period.
For the application of the Accounting Standard and the Guidance, pursuant to past adjustments stipulated in paragraph
37 of the Accounting Standard, monetary effects accompanying changes in the method for calculating retirement benefit
liability and service costs, are adjusted with retained earnings at the beginning of the period starting from the first quarterof the consolidated fiscal year ending April 30, 2015.
As a result, net defined benefit asset at the beginning of the period for the first quarter of the fiscal year ending April 30,
2015 increased by ¥8,366 thousand, while net defined benefit liability decreased by ¥592,370 thousand. In parallel,
retained earnings increased by ¥386,510 thousand. The application of the new accounting standard had an immaterial
impact on operating income, ordinary income and net income before income taxes in the third quarter of the current fiscal
year.

3

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheet
Fiscal year endedApril 30, 2014
(As of April 30, 2014)

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Deferred tax assets
Short-term loans
Other accounts receivable
Other current assets
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
Total assets

4(Thousand yen)
Nine months ended
January 31, 2015
(As of January 31, 2015)

18,846,760
6,718,670
9,578,858
180,570
1,245,406
708,297
5,679,761
1,376,190
44,334,515

23,032,479
7,488,709
10,437,394
177,111954,602729,5484,650,030
1,435,861
48,905,738

9,962,423
6,698,782
2,922,726
19,583,933

10,756,822
7,476,849
3,143,031
21,376,703

20,017,440
1,111,957
21,129,397

22,546,447
1,241,568
23,788,016

2,559,386
1,068,129
8,081,230
4,866,487(240,307)
16,334,926
57,048,257
101,382,772

2,389,108
767,5098,683,029
4,734,360(240,307)
16,333,700
61,498,420
110,404,158

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

Fiscal year endedApril 30, 2014
(As of April 30, 2014)

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 (loss)
Unrealized holding gains on securities
Remeasurement of defined benefit plans
Total accumulated other comprehensive income(loss)
Minority interests
Total net assets
Total liabilities and net assets

5(Thousand yen)
Nine months ended
January 31, 2015
(As of January 31, 2015)

28,002,426
6,535,438
3,079,805
8,686,700
1,149,395
11,934332,315
2,551,384
50,349,400

31,309,783
6,412,007
604,328
9,656,946
543,925
4,774
332,315
3,015,417
51,879,498

4,502,810
1,927,033
2,363,437
8,793,281
59,142,681

8,412,324
1,488,017
2,395,302
12,295,644
64,175,142

8,682,976
7,872,970
26,007,464(417,338)
42,146,073

8,682,976
7,872,970
29,914,679(419,202)
46,051,424

34,590(58,224)(23,633)
117,651
42,240,091
101,382,772

136,683(37,516)
99,16778,42346,229,015
110,404,158

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income
Nine months ended
January 31, 2014
(May 1, 2013 toJanuary 31, 2014)

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
Insurance income
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
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in income (loss)
Net income

6(Thousand yen)
Nine months ended
January 31, 2015
(May 1, 2014 toJanuary 31, 2015)

126,043,003
106,926,020
19,116,982
11,610,719
7,506,262

136,394,428
116,156,197
20,238,230
12,727,547
7,510,683

56,44928,152
13,351
62,246
111,803
287,148559,152

54,39530,67735,504122,014116,048
197,374
556,01473,22364,17834,311
83,601
255,315
7,810,098

62,826
61,685
66,12951,551
242,1937,824,503

49,667
4,096
193,941
9,523
257,229

7,040
2,298
9,338

111,515
56,738168,254
7,899,073
3,617,788
4,281,284(3,053)
4,284,338

128,151
106,960
85,890321,0027,512,839
3,016,963
4,495,876
23,9204,471,955

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

Quarterly consolidated statement of comprehensive income
Nine months ended
January 31, 2014
(May 1, 2013 toJanuary 31, 2014)

Income before minority interests
Other comprehensive income
Unrealized holding gains (losses) on securities
Remearurements of defined benefit plans, net of tax
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to shareholders of
the parent
Comprehensive income (loss) attributable to minority
interests

7(Thousand yen)
Nine months ended
January 31, 2015
(May 1, 2014 toJanuary 31, 2015)

4,281,284

4,495,876(11,004)

102,093(11,004)
4,270,280

20,707
122,801
4,618,677

4,273,333

4,594,756(3,053)23,920AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

(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.
(Segment Information, etc.)
I Nine months ended January 31, 2014 (May 1, 2013 to January 31, 2014)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statement ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

112,101,198

13,372,693

569,111

126,043,003-

126,043,003(2) Intersegment sales--

154,028

154,028(154,028)-

Total sales

112,101,198

13,372,693

723,139

126,197,031(154,028)

126,043,003

Segment income (loss)

9,601,761

12,205(331,878)

9,282,087(1,471,988)

7,810,098

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,471,988) thousand to segment income (loss) includes ¥1,392,808 thousand in corporate
expenses, ¥131,021 thousand in losses that are not allocated to reportable segments, and ¥(51,840) thousand ineliminations 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 statement 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]:
The dispensing pharmacy segment includes nine dispensing pharmacy companies that have been acquired by theGroup. During the first nine months of the fiscal year, the increase in goodwill related to these companies was¥1,510,250 thousand.
II Nine months ended January 31, 2015 (May 1, 2014 to January 31, 2015)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statement ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

122,592,022

13,102,848

699,557

136,394,428-

136,394,428(2) Intersegment sales--

241,792

241,792(241,792)-

Total sales

122,592,022

13,102,848

941,350

136,636,221(241,792)

136,394,428

Segment income (loss)

9,608,081

92,812(340,201)

9,360,691(1,536,187)

7,824,503

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,536,187) thousand to segment income (loss) includes ¥1,510,308 thousand in corporate
expenses, ¥94,473 thousand in losses that are not allocated to reportable segments, and ¥(68,594) thousand ineliminations due to intersegment transactions.
8

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2015

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 statement 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]:
The dispensing pharmacy segment includes nine dispensing pharmacy companies that have been acquired by theGroup. During the first nine months of the fiscal year, the increase in goodwill related to these companies was¥3,914,715 thousand.

9