Summary of Financial Statements for the Second Quarter of Fiscal Year Ending April 2020
[Japan GAAP] (Consolidated)

December 3, 2019

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:
December 16, 2019–

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.)

Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the second quarter of fiscal year ending April 30, 2020 (May 1, 2019 to October 31, 2019)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Six months ended October 31, 2019
Six months ended October 31, 2018
(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

145,851

10.7

8,354

24.1

8,762

24.9

4,622

27.0

131,781(0.4)
6,731(19.6)
7,018 (19.0)
Six months ended October 31, 2019: ¥4,607 million (+28.9%)
Six months ended October 31, 2018: ¥3,573 million (-19.2%)

3,639(17.6)

Earnings
per share

Diluted earnings
per share
Yen

Yen

Six months ended October 31, 2019130.47-Six months ended October 31, 2018

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

Net assets

Shareholders’ equity ratio

Million yen

Million yen%

187,767
189,021106,580
103,92256.7
54.9

As of October 31, 2019: ¥106,511 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

300,330

9.0

18,70016.4

19,20015.4

10,13012.2

285.94(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 (4) Notes on quarterly consolidated
financial statements” on page 11 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 October 31,
shares (including treasury
2019
stock):
2) Number of shares held in
As of October 31,
treasury:
20193) Average number ofSix months ended
shares outstanding:
October 31, 201935,428,212 shares As of April 30, 201935,428,212 shares

728 shares As of April 30, 2019728 shares

Six months ended
October 31, 201835,427,511 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 Second 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) Quarterly consolidated statements of cash flows ......................................................................................................... 8(4) Notes on quarterly consolidated financial statements ................................................................................................ 10(Notes on the premise of a going concern) ...................................................................................................................... 10(Notes on significant changes in the amount of shareholders’ equity) ............................................................................. 10(Application of specified accounting methods for the preparation of quarterly consolidated financial statements) .......... 10(Segment information, etc.) .............................................................................................................................................. 10

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second 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 six months of the current fiscal year (May 1, 2019 to October 31, 2019), the Japanese economy recoveredat a modest pace, supported by a continued strong level of corporate earnings. However, trends in consumer confidence
require monitoring for signs of 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.
Some stores and pharmacies were forced to close or reduce operating hours due to a series of typhoons, but planned
closures and rapid recovery work minimized any damage, resulting in only a limited impact on earnings.
In the first six months of the fiscal year, net sales increased 10.7% year on year to ¥145,851 million, operating income
increased 24.1% to ¥8,354 million, ordinary income increased 24.9% to ¥8,762 million, and profit attributable to owners ofparent increased 27.0% to ¥4,622 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
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. The Group is also stepping up education and training, such as holding Ain Innovative Conference 2019, anationwide in-house conference designed to help lift the quality of pharmacists. The conference features presentations on
the outcomes of active and ongoing research efforts to contribute to healthcare, such as further enhancing the capabilities
of primary care pharmacists, identifying issues in drug treatments and putting forward proposals to resolve those issues, andimproving patient QOL through proactive coordination with other healthcare professionals.
In business development, the Group continued to overhaul dispensing pharmacy operations and pushed ahead withbusiness expansion by opening new dispensing pharmacies and using M&A deals.
As a result, for the first six months of the fiscal year, the dispensing pharmacy business reported higher sales and profits,with sales increasing 12.1% year on year to ¥130,499 million and segment income increasing 29.3% to ¥10,185 million.
During the period under review, the Group opened 10 new dispensing pharmacies, including those acquired through M&A
deals, and closed 36 pharmacies, resulting in a total of 1,106 pharmacies.
(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 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.
Store opening costs and sales promotion expenses are rising temporarily due to the aggressive store opening strategy,
but the Group is working to improve earnings capabilities by developing original brands such as LIPS and HIPS andcocodecica and by constantly reducing underlying costs.
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 six months of the fiscal year, the cosmetic and drug store business reported an increase in salesof 4.4% year on year to ¥13,099 million. And segment income decreased 19.9% to ¥442 million.
During the same period, the Group opened 10 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) and closed
four stores, resulting in a total of 60 cosmetic and drug stores at the end of the second quarter.

2

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

(Other businesses)
Net sales from other businesses decrease 21.3% year on year to ¥2,251 million and segment loss was ¥133 million
compared with the loss of ¥163 million a year earlier.
(2) Consolidated financial position
The balance of total assets at the end of the second quarter decreased by ¥1,254 million from the end of the previous
fiscal year to ¥187,767 million. This mainly reflected increases in merchandise and notes and accounts receivable,
outweighed by a decrease in cash and deposits due to store openings and M&A deals.
The balance of liabilities decreased ¥3,913 million to ¥81,186 million.
The balance of short- term and long-term debts decreased by ¥2,922 million to ¥8,634 million.
Total net assets increased by ¥2,658 million to ¥106,580 million and the shareholders’ equity ratio increased 1.8
percentage points to 56.7%.
(Cash flows)
In the first six months of the fiscal year, cash and cash equivalents (“cash”) decreased by ¥3,436 million from the previous
fiscal year end to ¥44,059 million.
Cash flows from each activity and their relevant factors are as follows.
During the first six months of the fiscal year, net cash provided by operating activities was ¥6,024 million, compared with
¥4,402 million provided in the same period a year earlier. The main cash inflows were profit before income taxes of ¥8,439
million, depreciation and amortization of ¥1,928 million and amortization of goodwill of ¥2,182 million. The main cash outflow
was income taxes paid of ¥2,821 million.
Net cash used in investing activities amounted to ¥4,361 million, compared with ¥5,860 million used in the same period ayear earlier. The main use of cash was ¥3,448 million for purchases of property, plant and equipment.
Net cash used in financing activities totaled ¥5,100 million, compared with ¥5,183 million used in the same period a year
earlier. The main uses of cash were net repayment of ¥2,953 million from short-term and long-term debt repayment andproceeds and ¥1,948 million for cash dividends paid.
(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 ending April 30, 2019, announced on June4, 2019.

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second 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)Six months ended
October 31, 2019
(As of October 31, 2019)

48,091
12,771
12,673
225
236
8,438
3,012
(2)
85,44644,441
14,932
14,195
244
227
8,113
2,077
(1)
84,23016,352
10,394
3,439
30,186

16,55810,6583,684
30,90145,2492,327
47,577

43,1192,642
45,761

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

2,096
4,260
15,4016,760(1,683)
26,836
103,49937
187,767AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second 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 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(Million yen)Six months ended
October 31, 2019
(As of October 31, 2019)

44,794
5,571
3,261
12,737
2,139
17
450
4,772
73,74445,6394,555
3,868
11,008
2,534
20
465
3,793
71,885

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

4,079
3,103
2,118
9,301
81,186

21,89420,50061,526(2)
103,920

21,89420,50064,200(2)
106,594

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

(33)
(49)
(83)
69
106,580
187,767AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2020

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Six months ended
October 31, 2018
(May 1, 2018 to
October 31, 2018)

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
Gain on transfer of businessInsurance income
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Impairment losses on investments in securities
Loss on sales of shares of subsidiaries and associates
Other extraordinary losses
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

6(Million yen)Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

131,781
110,368
21,413
14,681
6,731

145,851
122,191
23,66015,305
8,354

31
24
19
92
80
254
501

30
20
10
259
90
180
590

82
34
36
59
214
7,018

37
31
68
45
182
8,762

2
1
164
22
0
191

10
201
0
0
212

230
73
127
110
541
6,668
3,041
3,627
(11)
3,639

372
26
34
102
536
8,439
3,814
4,624
2
4,622

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

Quarterly consolidated statements of comprehensive income
Six months ended
October 31, 2018
(May 1, 2018 to
October 31, 2018)

ProfitOther 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 owners of parent
Comprehensive income (loss) attributable tonon-controlling interests

7(Million yen)Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

3,627

4,624

(54)
0
(53)
3,573
3,585

(26)
9
(17)
4,607
4,604

(11)

2

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

(3) Quarterly consolidated statements of cash flows
Six months ended
October 31, 2018
(May 1, 2018 to
October 31, 2018)

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Amortization of goodwill
Loss on sales of shares of subsidiaries and associates
Increase in defined benefit liability
Increase in allowance for bonuses to employees
Increase in allowance for bonuses to directors
Interest and dividend income
Interest expenses
Losses on disposal and sales of fixed assets(Increase) decrease in accounts receivable(Increase) in inventories(Increase) decrease in other accounts receivable
Increase in accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments for purchases of property, plant andequipment and intangible fixed assets
Proceeds from sales of property, plant andequipment and intangible fixed assets
Payments for purchase of investments in securities
Proceeds from sales of investments in securities
Purchase of subsidiaries’ shares resulting in obtaining
controls
Payments for loans receivable
Proceeds from collections of loans receivable
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee
deposits(Increase) decrease in other investments
Payments for time deposits
Proceeds from withdrawal of time deposits
Other, net
Net cash used in investing activities

8(Million yen)Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

6,668
1,795
2,007
127
86
367
2
(55)
82
228
1,030
(1,953)(364)
994(1,095)
9,924
56
(83)
(5,495)
4,402

8,439
1,928
2,182
34
136
391
2
(50)
37
362
(2,104)(1,530)336
765(2,099)
8,831
52
(37)
(2,821)
6,024(1,923)(3,448)

263

514

(28)
13

(300)
29

(4,018)

(148)

(40)
60
(625)

(29)
826
(713)

440

339

17
(36)
7
8
(5,860)(1,641)
(101)
314
(3)
(4,361)AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2020

(Million yen)Six months ended
October 31, 2018
(May 1, 2018 to
October 31, 2018)

Cash flows from financing activities
Net increase (decrease) in short-term debts
Repayments of long-term debts
Repayments of lease obligations
Payments for purchase of treasury stock
Cash dividends paid
Net cash (used in) provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period472(3,577)(307)(0)(1,771)(5,183)(6,642)
63,23356,5909Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)(3)(2,950)(197)(1,948)(5,100)(3,436)47,49544,059AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2020

(4) 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 Six months ended October 31, 2018 (May 1, 2018 to October 31, 2018)
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

116,376

12,544

2,860

131,781-

131,781(2) Intersegment sales

-

-

49

49

(49)

-

Total sales

116,376

12,544

2,910

131,831(49)

131,781

Segment income (loss)

7,875

552

(163)

8,265

(1,246)

7,018

Total

Sales

Notes:

1. The adjustment of ¥(1,246) million to segment income (loss) includes ¥2,108 million in corporate expenses, ¥(842)million in income that are not allocated to reportable segments, and ¥(19) million in eliminations due tointersegment 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 seven dispensing pharmacy companies. During
the first six months of the fiscal year, the increase in goodwill related to these companies was ¥5,059 million.

10

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

II Six months ended October 31, 2019 (May 1, 2019 to October 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

130,499

13,0992,251

145,851-

145,851(2) Intersegment sales

-

-

57

57

(57)

-

Total sales

130,499

13,0992,309

145,908(57)

145,851

Segment income (loss)

10,185442(133)

10,494(1,731)

8,762

Total

Sales

Notes:

1. The adjustment of ¥(1,731) million to segment income (loss) includes ¥2,693 million in corporate expenses,¥(1,011) million in income that are not allocated to reportable segments, and ¥49 million in eliminations due tointersegment 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.

11