Summary of Financial Statements for the Third Quarter of Fiscal Year Ending April 2018
[Japan GAAP] (Consolidated)
March 2, 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:

http://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 19, 2018
Start of dividend payment:–

Supplementary documents for quarterly results:

Yes

Quarterly results briefing:No(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the third quarter of fiscal year ending April 30, 2018 (May 1, 2017 to January 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
Nine months ended January 31,
2018
Nine months ended January 31,
2017(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

200,043

9.9

14,31049.2

14,760

47.3

7,931

45.8

182,100

7.5

9,591

(4.1)

10,019

(2.9)

5,438

(1.7)

Nine months ended January 31, 2018: ¥7,901 million (+41.7%)
Nine months ended January 31, 2017: ¥5,576 million (+3.1%)
Earnings
per share

Nine months ended January 31,
2018
Nine months ended January 31,
2017

Diluted earnings
per share
Yen

Yen

235.74–171.53–(2) Consolidated financial position

As of January 31, 2018
As of April 30, 2017
(Reference) Shareholders’ equity:

Shareholders’equity ratio

Net assets

Total assets

Net assets per
share

Million yen

Million yen%

Yen

182,243

94,25751.7

2,659.05

156,323

60,17838.4

1,895.63

As of January 31, 2018: ¥94,203 million

As of April 30, 2017: ¥60,105 million

2. Dividends

Year ended April 30, 2017

End of firstquarterYen–

End of second
quarter
Yen
0.00

Dividend per share
End of third
quarter
Yen
–

–
0.00
Year ending April 30, 2018Year ending April 30, 2018
(forecast)(Note) Revision to the most recently announced dividend forecasts: No

End of year

Full year

Yen

Yen

50.00

50.00

50.00

50.00

–

3. Consolidated financial forecasts for the fiscal year ending April 30, 2018 (May 1, 2017 to April 30, 2018)(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

267,500

7.8

18,00023.6

18,500

22.7

9,200

15.7

269.96(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
As of January 31,
shares (including treasury
2018
stock):
2) Number of shares held in
As of January 31,
treasury:
20183) Average number ofNine months ended
shares outstanding:January 31, 201835,428,212 shares As of April 30, 2017

31,888,212 shares

688 shares As of April 30, 2017180,644 shares

Nine months ended
January 31, 2017

31,707,568 shares

33,644,821 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
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, 2018

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, 2018

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, 2017 to January 31, 2018), the Japanese economy
improved at a moderate pace amid signs of a pickup in consumer spending and improving corporate earnings andemployment conditions.
In this economic environment, the AIN HOLDINGS Group (the Group) worked to expand its business and increase
earnings, opening new dispensing pharmacies and using M&A to grow its operations and developing its urban drug andcosmetic store business.
In the first nine months of the fiscal year, net sales rose 9.9% year on year to ¥200,043 million, operating income
increased 49.2% to ¥14,310 million, ordinary income increased 47.3% to ¥14,760 million, and profit attributable to ownersof parent increased 45.8% to ¥7,931 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In drug price and dispensing fee revisions in April 2018, we expect the role of pharmacies located near hospitals andpharmacies located in the same premises to be reviewed, but primary care dispensing pharmacies and pharmacists arelikely to receive a higher evaluation as part of government efforts to drive a structural shift from dispensing focused only
on dispensing drugs to dispensing focused on services that contribute to local healthcare services.
To ensure our pharmacists and dispensing pharmacies fulfill their primary care role, the Group will continue to build
links with local medical service providers, strengthen pharmaceutical management and guidance based on the integrated
and continuous management of drug information using patient medication notebooks and other means, and promotewider use of generic drugs.
In business development, the Group continued to push ahead with business expansion by opening new dispensing
pharmacies and through M&A deals.
As a result, for the first nine months of the fiscal year, the dispensing pharmacy business reported sales and profit
growth with sales rising 9.6% year on year to ¥178,136 million and segment income increasing 22.9% to ¥16,013 million.
During the period under review, the Group opened 25 new dispensing pharmacies, including those acquired throughM&A deals, and closed 50 pharmacies, resulting in a total of 1,041.
(Drug and cosmetic store business)
In the drug and cosmetic 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 realignmentthat also extends to other business sectors.
Against this backdrop, the Group continued to open ainz & tulpe urban drug stores in Tokyo metropolitan area andworked to make stores more appealing by refurbishing existing stores and strengthening merchandise lineups,
particularly drug and cosmetics products. Earnings also improved, supported by lower costs due to greater businessefficiency and by an increase in the gross margin due to active efforts to develop LIPS and HIPS, cocodecica and otherproprietary brands and an overhaul of procurement activities.
As a result, for the first nine months of the fiscal year, the drug and cosmetic store business reported an increase insales of 11.8% year on year to ¥17,779 million. And segment income was ¥425 million, compared with segment loss of¥578 million in the same period a year earlier.
In the same period, the Group opened the ainz & tulpe Odakyu Department Store Machida (Machida City, Tokyo) andainz & tulpe MARUI KICHIJOJI (Musashino City, Tokyo) and closed six stores, resulting in a total of 48 drug and cosmetic
stores at the end of the third quarter.
(Other businesses)
Net sales from other businesses rose 14.9% year on year to ¥4,127 million and segment loss was ¥326 million
compared with the loss of ¥1,114 million a year earlier.

2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

(2) Consolidated financial position
The balance of total assets at the end of the third quarter increased by ¥25,920 million from the end of the previous
fiscal year to ¥182,243 million. That mainly reflected an increase in cash and deposits from the public offering and private
placements.
The balance of liabilities decreased ¥8,158 million to ¥87,985 million.
The balance of short- term and long-term debts decreased by ¥4,632 million to ¥21,219 million.
Total net assets increased by ¥34,078 million to ¥94,257 million and the shareholders’ equity ratio increased 13.3
percentage points to 51.7%.
(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 December 5, 2017.

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet
Fiscal year endedApril 30, 2017
(As of April 30, 2017)

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
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(Thousand yen)
Nine months ended
January 31, 2018
(As of January 31, 2018)

29,775,207
9,990,401
11,402,078
266,095
1,166,620
632,826
9,402,024
2,829,934(44,443)
65,420,745

60,572,671
10,269,375
12,247,301
235,076
1,393,727
652,470
6,735,674
2,263,831
94,370,130

15,365,264
9,958,446
3,140,296
28,464,007

15,228,714
10,150,528
2,873,812
28,253,056

40,939,448
2,170,041
43,109,490

38,476,795
2,012,628
40,489,424

2,435,333
2,167,711
10,443,221
4,595,122(312,044)
19,329,345
90,902,843
156,323,588

2,389,816
2,041,250
10,740,294
4,183,602(338,097)
19,016,866
87,759,346
114,358
182,243,834

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

Fiscal year endedApril 30, 2017
(As of April 30, 2017)

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(Thousand yen)
Nine months ended
January 31, 2018
(As of January 31, 2018)

39,325,588
7,596,939
2,898,695
14,223,768
1,903,976
16,090410,502
14,1656,566,001
72,955,729

41,351,106
8,207,070
3,249,999
12,175,652
877,132
6,633
431,097
10,195
3,849,488
70,158,376

18,254,657
2,331,956
2,602,261
23,188,874
96,144,603

13,012,350
2,437,816
2,377,336
17,827,502
87,985,878

8,682,976
6,367,844
45,286,878(419,598)
59,918,101

21,894,976
20,500,942
51,632,818(1,869)94,026,868

86,407
101,414
187,82173,06160,178,984
156,323,588

108,706
67,914
176,620
54,466
94,257,955
182,243,834

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Nine months ended
January 31, 2017
(May 1, 2016 toJanuary 31, 2017)

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
Fiduciary obligation fee
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
Impairment losses on investments in securities
Other extraordinary losses
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6(Thousand yen)
Nine months ended
January 31, 2018
(May 1, 2017 toJanuary 31, 2018)

182,100,350
152,007,928
30,092,422
20,501,181
9,591,241

200,043,578
164,849,844
35,193,734
20,883,697
14,310,036

72,18338,666
31,128
155,914
111,486
293,484
702,864

49,68434,89851,318
162,521
154,585
266,590719,600

120,313
48,97363,387
41,810274,485
10,019,621

91,48152,51873,09952,389269,489
14,760,147

152,400
10,71770,37965,349298,847

8,773
28,041
31,71053,114
121,639

289,660
72,827
59,121
421,610
9,896,858
4,472,517
5,424,340(14,460)
5,438,800

442,383
177,044
259,182
878,610
14,003,176
6,090,453
7,912,723(18,595)
7,931,318

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

Quarterly consolidated statements of comprehensive income
Nine months ended
January 31, 2017
(May 1, 2016 toJanuary 31, 2017)

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

7(Thousand yen)
Nine months ended
January 31, 2018
(May 1, 2017 toJanuary 31, 2018)

5,424,340

7,912,723

176,542

22,298(24,513)152,029
5,576,369
5,590,829(33,499)(11,200)
7,901,522
7,920,118(14,460)(18,595)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

(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)
The Company issued new shares through a public offering, disposed treasury stock through a public offering andissued new shares through a private placement, all with a payment date of September 6, 2017. The Company also issued
new shares through a private placement for a secondary offering using an over-allotment option with a payment date ofOctober 3, 2017. As a result, during the first nine months of the fiscal year, capital increased ¥13,212,000 thousand,capital reserves increased ¥14,133,097 thousand and treasury stock declined ¥418,102 thousand, resulting in capital of¥21,894,976 thousand and capital reserves of ¥20,500,942 thousand as of the end of the third quarter.
(Application of specified accounting methods for the preparation of quarterly consolidated financial statements)
To calculate tax expenses, the effective tax rate on profit before income taxes for the consolidated fiscal year after theapplication of tax effect accounting is reasonably estimated and the estimated rate is applied to profit before income taxes
for the quarterly period.
(Segment Information, etc.)
I Nine months ended January 31, 2017 (May 1, 2016 to January 31, 2017)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

162,599,949

15,907,287

3,593,114

182,100,350-

182,100,350(2) Intersegment sales--

282,915

282,915(282,915)-

Total sales

162,599,949

15,907,287

3,876,029

182,383,266(282,915)

182,100,350

Segment income (loss)

13,029,406(578,991)(1,114,301)

11,336,112(1,316,491)

10,019,621

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,316,491) thousand to segment income (loss) includes ¥2,506,952 thousand in corporate
expenses, ¥(1,172,991) thousand in (income) losses that are not allocated to reportable segments, and ¥(17,470)
thousand 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 38 dispensing pharmacy companies. During
the first nine months of the fiscal year, the increase in goodwill related to these companies was ¥10,629,661 thousand.

8

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2018

II Nine months ended January 31, 2018 (May 1, 2017 to January 31, 2018)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

178,136,270

17,779,688

4,127,620

200,043,578-

200,043,578(2) Intersegment sales--

231,875

231,875(231,875)-

Total sales

178,136,270

17,779,688

4,359,495

200,275,454(231,875)

200,043,578

Segment income (loss)

16,013,564

425,194(326,271)

16,112,487(1,352,340)

14,760,147

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,352,340) thousand to segment income (loss) includes ¥2,670,465 thousand in corporate
expenses, ¥(1,294,461) thousand in (income) losses that are not allocated to reportable segments, and ¥(23,663)
thousand 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 4 dispensing pharmacy companies. During thefirst nine months of the fiscal year, the increase in goodwill related to these companies was ¥569,252 thousand.

9