[Translation]
Consolidated Business Results for the Third Quarter of the Fiscal Year Ending March 31, 2020
[U.S. GAAP]
January 31, 2020
Listed Company: Wacoal Holdings Corp.
Code Number: 3591
(URL: https://www.wacoalholdings.jp/)
Representative: Position: Representative Director and President
Name: Hironobu Yasuhara
For Inquiries: Position: Managing Director, General Manager of Corporate Planning
Name: Akira Miyagi

Stock Exchange: Tokyo

Tel: +81 (075) 682-1010

Scheduled quarterly report submission date:February 12, 2020
Supplementary materials regarding quarterly business results: Yes
Explanatory meeting regarding quarterly business results:
No(Amounts less than 1 million yen have been rounded )1.

Third Quarter of the Fiscal Year Ending March 31, 2020 (April 1, 2019 – December 31, 2019)(1)

Consolidated Business Results(% indicates increase (decrease) from the corresponding period of the previous fiscal year)

Net Sales

Millions of Yen

Operating Income%

Third Quarter ended
144,031 (2.2)
December 31, 2019
Third Quarter ended
147,247 (0.8)
December 31, 2018
(Note)
Quarterly comprehensive income:Third Quarter ended
December 31, 2019
Third Quarter ended
December 31, 2018(2)

Millions of Yen%

Income Before
Income Taxes andEquity in Net Incomeof AffiliatedCompanies
Millions of Yen%

Net Income
Attributable to
Wacoal Holdings
Corp.
Millions of Yen

%

9,801

(12.3)

15,669175.8

11,014

153.7

11,174

(8.8)

5,681

(61.7)

4,342(56.0)

10,212 million yen (186.5 %) for the third quarter ended
December 31, 2019
3,565 million yen ((82.0) %) for the third quarter ended
December 31, 2018

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

171.16170.49

65.33

65.09

Consolidated Financial Condition

As of December 31, 2019
As of the end of Fiscal
Year (March 31, 2019)

Total Assets

Total Equity(Net Assets)

Total
Shareholders’EquityTotal
Shareholders’Equity Ratio

Millions of Yen

Millions of Yen

Millions of Yen%

293,633

220,919

216,195

73.6

3,412.34

281,767

221,144

216,49476.8

3,321.57

Shareholders’Equity Per Share
Yen

2.

Status of Dividends

End of First
Quarter

Annual Dividend
End of Second End of Third
Quarter
Quarter

Yen

Yen

Yen

Fiscal Year Ended March 31, 2019
–
36.00
–
Fiscal Year Ending March 31, 2020
–
40.00
–
Fiscal Year Ending March 31, 2020
(Estimates)(Note) Revision of estimated dividends announced during the latest quarter: None
(Note)

3.

Year-End

Total

Yen

Yen

36.00

72.00

40.00

80.00

Breakdown of the end of second quarter cash dividend per share for the fiscal year ending March 31, 2020:
Ordinary dividend: 36.00 yen
Special anniversary dividend: 4.00 yen
Breakdown of the year-end cash dividend per share for the fiscal year ending March 31, 2020 (Estimates):
Ordinary dividend: 36.00 yen
Special anniversary dividend: 4.00 yen
Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2020 (April 1, 2019 - March 31,
2020)(% indicates increase (decrease) from the previous fiscal year)

Net Sales

Millions of Yen %Operating
IncomeIncome Before
Income Taxes
Net Income
Net Income
and Equity in Net Attributable toAttributable to
Income of
Wacoal Holdings Wacoal Holdings
AffiliatedCorp.
Corp. Per Share
Companies

Millions of Yen % Millions of Yen %Millions of Yen %Annual191,000 (1.6)
7,000 43.5
9,500 331.2
6,500(Note) Revision of forecast of consolidated business results announced during the latest quarter: Yes

Yen

101.01

Notes(1)

Changes in significant subsidiaries in the consolidated cumulative third quarter of the current fiscal year (i.e.
changes in specified subsidiaries (tokutei kogaisha) which involve change in scope of consolidation): None

(2)

Application of simplified accounting methods and specific accounting methods: None

(3)

Changes in accounting principles:(i) Changes due to modifications in accounting standards, etc.: Yes(ii) Changes other than (i) above: None
(Note) For details, please see “2. Consolidated Quarterly Financial Statements and Accompanying Notes (5)Notes to Consolidated Quarterly Financial Statements (Changes in Accounting Policy).”(4)

Number of Issued Shares (Common Stock)
Third Quarter ended
December 31, 2019
(i)
(ii)
(iii)

Number of issued shares (including
treasury stock) as of the end of:
Number of shares held as treasury
stock as of the end of:
Average number of shares duringconsolidated third quarter (third
quarter ended December 31):

Fiscal Year ended
March 31, 2019

68,589,042 shares

70,689,042 shares

5,232,292 shares

5,510,891 shares

64,348,678 shares

66,461,009 shares*These quarterly financial statements are exempt from the review procedures.

*Cautionary Statement regarding Forecast of Business Results(Cautionary note on forward-looking statements)
The forecast of business results is based on reasonable information we obtained as of the date hereof and, due to various
risks, uncertainties and other factors arising in the future, actual results in the future may differ largely from the estimates
set out in this document.

Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the Third Quarter ----------------------------- 2(1)

Qualitative Information regarding Consolidated Business Results ------------------------------------------------------ 2(2)

Qualitative Information regarding Consolidated Financial Condition --------------------------------------------------- 6(3)

Qualitative Information regarding Forecast of Consolidated Business Results ---------------------------------------- 7

2.

Consolidated Quarterly Financial Statements and Accompanying Notes ----------------------------------------------- 8(1)

Consolidated Quarterly Balance Sheets -------------------------------------------------------------------------------------- 8(2)

Consolidated Quarterly Statements of Income ---------------------------------------------------------------------------- 10(3)

Consolidated Quarterly Statements of Comprehensive Income -------------------------------------------------------- 10(4)

Consolidated Quarterly Statements of Cash Flows ----------------------------------------------------------------------- 11(5)

Notes to Consolidated Quarterly Financial Statements ------------------------------------------------------------------ 12(Notes on Going Concern) -------------------------------------------------------------------------------------------------- 12(Notes on Significant Changes in the Amount of Total Shareholders’ Equity) -------------------------------------- 12(Changes in Accounting Policy) -------------------------------------------------------------------------------------------- 12(Segment Information) ------------------------------------------------------------------------------------------------------- 13(6)

Status of Sales ----------------------------------------------------------------------------------------------------------------- 14

-1-

1.

Qualitative Information regarding Consolidated Performance during the Third Quarter(1)

Qualitative Information regarding Consolidated Business Results(i)Performance Overview of the Nine Months ended December 31, 2019

Net sales
Cost of sales
Sales profit
Selling, general and administrative expenses
Operating income
Other income (expenses)
A: Valuation gain (loss) on marketable securities andinvestments – net
Income before income taxes and equity in net incomeof affiliated companies
Net income attributable to Wacoal Holdings Corp.
Reference figure: Income before income taxes and equity
in net income of affiliated companies not taking into
account A

Previous Cumulative
Third Quarter(From April 1, 2018 to
December 31, 2018)
Amount147,247
67,06680,18169,007
11,174
2,419(7,912)Current Cumulative
Third Quarter(From April 1, 2019 to
December 31, 2019)
Amount144,031
63,915
80,11670,315
9,801
1,382
4,486

(Millions of Yen)
Increased/(Decreased) fromprevious cumulative third
quarter
Amount(3,216)(3,151)(65)+1,308(1,373)(1,037)+12,398

%
(2.2)
(4.7)
(0.1)
+1.9
(12.3)(42.9)-

5,681

15,669+9,988+175.8

4,342

11,014+6,672+153.7

13,593

11,183(2,410)(17.7)

Our group entered the first year of our mid-term business plan. In order for our business to return to growth,
Wacoal Corp. has focused on rebuilding relationships with customers through innovation, including opening of innerwear
shops for the next generation that have introduced 3D body scanning and AI (artificial intelligence), and on further
improving profitability. In the overseas markets, we have made efforts to create growth opportunities and strengthen ourcompetitiveness in e-commerce in each country. As part of such initiative, we acquired all of the issued and outstanding
shares of Intimates Online, Inc. (“Intimates Online”), a women’s innerwear design and sales company in the U.S. under its
LIVELY brand, at the end of July 2019, making Intimates Online our wholly-owned subsidiary. Our domestic subsidiaries
have shifted toward a business framework that can generate stable earnings by being selective about and concentrating its
businesses. The operating results of our acquired subsidiary, Intimates Online, have been included in our consolidated
results from the current second quarter and are disclosed along with Wacoal International Corp. (the United States) underthe “Wacoal Business (Overseas)” segment.
Consolidated sales for the nine months ended December 31, 2019 (April 1, 2019 – December 31, 2019) decreased
by 2% from such sales for the corresponding period of the previous fiscal year. Revenue from our domestic businessremained at about the same level as such revenue for the corresponding period of the previous fiscal year, reflecting the net
effect of the last-minute rise in demand before the consumption tax increase, which was offset by the subsequent decreasein demand after the tax increase. Despite the positive impact of the consolidation of Intimates Online results and arecovery seen in sales from our existing business in the United States, revenue from our overseas business decreased due tothe weak sales from our raw materials factory in Thailand and the negative impact of exchange rate fluctuation (equivalent
to 1.5 billion yen). Revenue from our Peach John business and other business segments also decreased.

Consolidated operating income decreased by 12% from such operating income for the corresponding period of theprevious fiscal year. In our domestic business, we recorded a decrease in profit due to an increase in IT related expenses.
Profit from our overseas business significantly decreased due to the impact of the inclusion of operating loss for Intimates
Online, and the recognition of non-recurring expenses incurred for the acquisition. We recorded income, as compared tooperating loss that we recorded for the corresponding period of the previous fiscal year, for both our Peach John businessand other business segments.

Consolidated income before income taxes and equity in net income of affiliated companies significantly increased
by 176% from such consolidated income for the corresponding period of the previous fiscal year. This increase was as aresult of the recognition of valuation gain on marketable securities and investments of 4.49 billion yen for the current third-2-

quarter, while we recorded valuation loss of 7.91 billion yen on marketable securities and investments for thecorresponding period of the previous fiscal year (See Row A in the table above: a 12.40 billion yen increase). (We havebeen using U.S. accounting standards, under which equity securities held by the Company and consolidated subsidiaries
are measured at fair value, and any change from the beginning of the period are recognized as other income (expenses).)

The key exchange rates used for the current consolidated third quarter (previous third quarter) were: 108.67 yen(111.14 yen) to the U.S. dollar; 137.79 yen (146.34 yen) to the Sterling pound; and 15.90 yen (16.85 yen) to the Chinese
yuan.

-3-

(ii)

Business Overview of Our Operating Segments(Millions of Yen)
Previous Cumulative
Third Quarter(from April 1, 2018 to
December 31, 2018)
AmountTotal Net Sales
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

Operating Income/(Loss)
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

147,247
86,581
39,924
8,012
12,730Current Cumulative
Third Quarter(from April 1, 2019 to
December 31, 2019)

Distribution
Ratio (%)
100.0
58.8
27.1
5.4
8.7

Amount144,03185,955
38,110
7,865
12,101

Distribution
Ratio (%)
100.0
59.7
26.4
5.5
8.4

Increased/(Decreased) fromprevious cumulative
third quarter
Amount%(3,216)(626)(1,814)
(147)
(629)

(2.2)
(0.7)
(4.5)
(1.8)
(4.9)

Previous Cumulative
Third Quarter(from April 1, 2018 to
December 31, 2018)

Current Cumulative
Third Quarter(from April 1, 2019 to
December 31, 2019)

Increased/(Decreased) fromprevious cumulative
third quarter

Amount% to Sales

Amount% to Sales

Amount

%

7.6
8.3
10.3
-

9,801
6,982
2,627
168
24

6.8
8.1
6.9
2.1
0.2

(1,373)(232)(1,479)+197+141(12.3)(3.2)(36.0)-

11,174
7,214
4,106
(29)
(117)

(Reference) Net Sales and Operating Income/ (Loss) of Major Subsidiaries(Millions of Yen)

Net Sales

Previous Cumulative
Third Quarter(from April 1, 2018 to
December 31, 2018)

78,7693,585
14,064

Distribution
Ratio (%)
53.5
2.4
9.6

10,324
8,717
8,012
4,659
6,856

7.0
5.9
5.4
3.2
4.7

AmountWacoal Corp.
Ai Co., Ltd.
Wacoal International Corp.
(U.S)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.
*Sales to external customers only

Operating Income/(Loss)

Wacoal Corp.
Ai Co., Ltd.
Wacoal International Corp.
(U.S.)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

Current Cumulative
Third Quarter(from April 1, 2019 to
December 31, 2019)78,7493,083
14,241

Distribution
Ratio (%)
54.7
2.1
9.9

9,875
8,288
7,865
4,363
6,480

6.9
5.8
5.5
3.0
4.5

AmountIncreased/(Decreased) fromprevious cumulative
third quarter
Amount

%

(20)
(502)
+177

(0.0)
(14.0)
+1.3

(449)
(429)
(147)
(296)
(376)

(4.3)
(4.9)
(1.8)
(6.4)
(5.5)

Previous Cumulative
Third Quarter(from April 1, 2018 to
December 31, 2018)

Current Cumulative
Third Quarter(from April 1, 2019 to
December 31, 2019)

Increased/(Decreased) fromprevious cumulative
third quarter

Amount% to Sales

Amount% to Sales

Amount

%

5,764
(233)
1,660

7.3
11.8

4,927
(118)
479

6.3
3.4

(837)
+115
(1,181)(14.5)(71.1)

846
903
(29)
(334)
230

8.2
10.4
3.4

750
733
168
(162)
177

7.6
8.8
2.1
2.7

(96)
(170)
+197
+172
(53)

(11.3)(18.8)(23.0)-4-a.

Wacoal Business (Domestic)

Sales attributable to our “Wacoal Business (Domestic)” segment remained at about the same level, but operating
income attributable to our “Wacoal Business (Domestic)” segment decreased by 3%, as compared to such sales andoperating income, respectively, for the corresponding period of the previous fiscal year.
Wacoal Corp.:
Sales from Wacoal Corp. remained at about the same level as such sales for the corresponding period of theprevious fiscal year. Revenue decreased in our wholesale business due to the greater than anticipated impact of thedecrease in demand following the consumption tax, as well as weak over-the-counter sales at our core sales channels
throughout the current consolidated third quarter. On the other hand, revenue increased in our retail business as we
intensified our sales promotion of our brassieres with better design “Grama-Rich” in October, and due to other successful
initiatives to minimize the impact of the decrease in demand following the consumption tax increase. Despite a decrease
recorded in sales from our mail-order catalogue business due to the impact of the decrease in demand following theconsumption tax increase, we also achieved an increase in revenue for our website business as a result of strong sales fromour e-commerce website, which resulted from strengthened communication attributable to marketing automation.
Operating income decreased by 15% as compared to such operating income for the corresponding period of theprevious fiscal year due to an increase in IT related expenses incurred for the implementation of our omni-channel
strategies, despite our effort to save a part of advertising spending and an improvement in gross profit rate from ourwholesale and retail businesses.
b.

Wacoal Business (Overseas)

Sales attributable to our “Wacoal Business (Overseas)” segment on a Japanese yen basis decreased by 5% ascompared to such sales for the corresponding period of the previous fiscal year due to downward pressure of exchange rate
fluctuations, as well as weak sales from our raw materials factory in Thailand attributable to a decrease in the number oforders received. Operating income decreased by 36% as compared to such operating income for the corresponding periodof the previous fiscal year due to the impact of decreased revenue from Wacoal International Corp. (U.S.) resulting fromthe acquisition of Intimates Online.
Wacoal International Corp. (U.S.):
Sales from Wacoal International Corp. (U.S.) on a local currency basis increased by 4% as compared to such sales
for the corresponding period of the previous fiscal year, while sales on a Japanese yen basis increased by 1%. This increase
was due to the inclusion of sales of 0.76 billion yen from Intimates Online, which was newly consolidated in our businessresults after August, as well as sales from our existing business which continued to show improvement. Operating income
on a local currency basis decreased by 70% (71% on a Japanese yen basis) as compared to such operating income for thecorresponding period of the previous fiscal year. This decrease was due to lower gross profit rate resulting from the higher
percentage of sales subject to discounts, the impact of decreased revenue from the existing business resulting from higher
labor costs and office lease expenses, the impact of inclusion of operating loss ((0.65 billion yen)) from Intimates Online,
as well as non-recurring expenses incurred for the acquisition.
Wacoal Europe Ltd.:Sales from Wacoal Europe Ltd. on a local currency basis increased by 2% as compared to such sales for thecorresponding period of the previous fiscal year, while sales on a Japanese yen basis decreased by 4% due to the impact of
exchange rate fluctuations. Sales exceeded such sales for the corresponding period of the previous fiscal year resulting
from the expansion of sales in the North America, France and other European countries, while sales were weak in the
United Kingdom due to poor sales at department stores. We have launched our full-scale sales operations on ourredesigned e-commerce website from the current consolidated third quarter. Operating income on a local currency basis
decreased by 6% (11% on a Japanese yen basis) as compared to such operating income for the corresponding period of theprevious fiscal year. This decrease was due to an increase in packing and shipping costs incurred as a result of promoting
small-lot delivery, a more aggressive advertising campaign to expand our brand awareness, as well as recognition of
expenses incurred for the redesign of our own e-commerce website.
Wacoal China Co., Ltd.:Sales from Wacoal China Co., Ltd. on a local currency basis remained at about the same level as such sales for thecorresponding period of the previous fiscal year, while sales on a Japanese yen basis decreased by 5% due to the impact of
exchange rate fluctuations. Although we maintained high growth from our e-commerce sales by strengthening our alliance-5-with online mall providers and promoting sales during the high demand season, the closing of certain department storesand the weak sales of our products other than the “Wacoal” brand products affected sales. Operating income on a local
currency basis decreased by 14% (19% on a Japanese yen basis) as compared to such operating income for thecorresponding period of the previous fiscal year. We recorded a decrease in profit due to an increase in advertisingexpenses and recognition of non-recurring expenses incurred for relocation of a warehouse, despite improvement in the
gross profit rate resulting from a lower percentage of products with low profit margins.
c.

Peach John BusinessOverall sales attributable to our “Peach John Business” segment decreased by 2% as compared to such sales for thecorresponding period of the previous fiscal year. Revenue from our domestic retails stores increased after closing certain
underperforming stores in Japan due to steady sales of our regular products, as well as strong winter sales. On the other
hand, revenue from the mail-order business decreased as we ceased distribution of the winter catalogue in an effort toimprove business efficiency. We recorded operating income, as compared to operating loss for the corresponding periodof the previous fiscal year due to efforts including reduction of selling, general and administrative expenses in Japan andabsence of non-recurring expenses incurred for the relocation of the head office during the corresponding period of theprevious fiscal year.
d.

Other

Overall sales attributable to our “Other” business segment decreased by 5% as compared to such sales for thecorresponding period of the previous fiscal year, while we recorded an operating income, as compared to operating loss forthe corresponding period of the previous fiscal year.
Lecien Corporation:
Although a sign of recovery was visible in the sales of our private products handled at core general merchandise
stores and specialty stores, sales from Lecien Corporation decreased by 6% as compared to such sales for thecorresponding period of the previous fiscal year due to the impact of decreased revenue in our material business. The
amount of operating loss was less compared to such operating loss for the corresponding period of the previous fiscal year
due to efforts including reduction of selling, general and administrative expenses. As part of business restructuring, Lecien
is scheduled to withdraw from the business of fabrics for crafts and hobbies and clothing and apparel business at the end of
March 2020.
Nanasai Co., Ltd.:Sales from Nanasai Co., Ltd decreased by 6% as compared to such sales for the corresponding period of theprevious fiscal year due to the absence of the one-time increase in revenue (large-scale construction for renovation of
department stores) in the corresponding period of the previous fiscal year. Operating income decreased by 23% ascompared to such operating income for the corresponding period of the previous fiscal year due to decreased revenue.
(2)

Qualitative Information regarding Consolidated Financial Condition(i)

Assets, Liabilities and Total Shareholders’ Equity

Our total assets as of the end of the current consolidated third quarter were 293,633 million yen, an increase of
11,866 million yen from the end of the previous fiscal year, mainly due to the recognition of operating leases right-of-use
assets following the changes in the accounting policy.
Our total liabilities were 72,714 million yen, an increase of 12,091 million yen from the end of the previous fiscal
year, mainly due to similar factor as the assets section, the recognition of operating lease liabilities following the changes in
the accounting policy, as well as increases in contingent consideration liability and other current liabilities.
Total Wacoal Holdings Corp. shareholders’ equity was 216,195 million yen, a decrease of 299 million yen fromthe end of the previous fiscal year, due to a decrease in foreign currency translation adjustments.
As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated third quarter
was 73.6%, a decrease of 3.2% from the end of the previous fiscal year.

-6-

(ii)

Cash Flows

Cash and cash equivalents as of the end of the consolidated third quarter of the current fiscal year were 27,885
million yen, a decrease of 2,248 million yen from the end of the previous fiscal year.
(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 13,019 million yen, a decrease of 306 million yen as compared tothe corresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net incomeof 11,124 million yen plus adjustments for depreciation, amortization and deferred income taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 830 million yen, an decrease of 2,647 million yen as compared to thecorresponding period of the previous fiscal year, due to acquisition of subsidiaries (net of cash acquired) as well as capital
expenditures and payments to acquire tangible and intangible assets, despite proceeds from sales and redemption of equity
securities and a decrease in time deposits.
(Cash Flow Used in Financing Activities)
Cash flow used in financing activities was 14,067 million yen, an increase of 3,313 million yen as compared to thecorresponding period of the previous fiscal year, due to a decrease in short-term bank loans, repurchase of treasury stockand cash dividend payments.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results

We have revised our forecast of consolidated business results for the fiscal year ending March 31, 2020 which wasannounced on May 15, 2019 due to several reasons including: the impact of the consolidation of results of Intimates Online(a U.S. entity), which we acquired in July 2019; the delay in the recovery of sales after the consumption tax increase; andexpenses expected to incur in connection with the business restructuring of the domestic and foreign subsidiaries. Also,
the impact of any change in valuation gain or loss on equity securities has not been reflected in our forecast of consolidated
business results.
(Unit: Millions of Yen, unless otherwise indicated)

Net sales

OperatingincomePre-tax net
incomeNet income
attributable to
WacoalHoldings
Corp.
shareholders

Net income
attributable to
WacoalHoldings
Corp.
shareholders
per share(in Yen)Previous Forecast (“A”)
Revised Forecast (“B”)
Variance (B - A)
Variance as Percentage (%)(Reference)
Results for the Previous
Fiscal Year ended March 31,
2019

200,000
191,000(9,000)(4.5)

11,0007,000(4,000)(36.4)

12,0009,500(2,500)(20.8)

9,000
6,500(2,500)(27.8)

138.08101.01

194,201

4,879

2,203

341

5.16

-7-

2.

Consolidated Quarterly Financial Statements and Accompanying Notes(1)

Consolidated Quarterly Balance SheetsI.

Accounts

Previous Fiscal Year
as of March 31, 2019

(Assets)

Millions of Yen

Current Consolidated
Third Quarteras of December 31, 2019
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

30,133

27,885(2,248)Time deposits

4,004

852

(3,152)Marketable securities

446

551

105

Notes and accounts receivable

24,98920,485(4,504)

Allowance for doubtful receivables
Inventories(229)
42,508(240)
44,207(11)
1,699

Return assets

1,180

1,382

202

Other current assets

4,985

4,795

(190)

108,016

99,917(8,099)Land

21,54921,471(78)

Buildings and structures

74,03374,286

253

Machinery and equipment

18,91418,909(5)

Total current assets
II. Property, plant and equipment:

Construction in progress

478

1,106

628

114,974

115,772798(61,704)(62,956)(1,252)

53,27052,816(454)

Operating leases right-of-use assets-

13,361

13,361

Investments in affiliated companies

21,85921,200(659)

Investments

63,37257,369(6,003)

Goodwill

11,954

23,516

11,562Other intangible assets

12,297

14,8282,531

Prepaid pension expense

3,990

4,198

208

Deferred income taxes

1,362

940

(422)

Other

5,647

5,488

(159)

120,481

140,900

20,419281,767

293,633

11,866

Accumulated depreciation
Net property, plant and equipment
III. Other assets:

Total other assets
Total assets

-8-

I.

Accounts

Previous Fiscal Year
as of March 31, 2019

(Liabilities)

Millions of Yen

Current Consolidated
Third Quarteras of December 31, 2019
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

8,116

4,048

(4,068)Trade notes payable

1,155

1,275

120

Trade accounts payable

10,638

9,395(1,243)

Notes and accounts payable:

Other payables

6,548

4,861

(1,687)

18,341

15,531(2,810)Accrued payroll and bonuses

7,209

5,496

(1,713)

Income taxes payable

2,759

4,250

1,491

Refund liability

3,482

3,750

268

Short-term operating lease liabilities

-

4,332

4,332

Contingent consideration (short-term)

-

1,096

1,096

3,955

5,957

2,002

Total current liabilities

43,862

44,460598

II. Long-term liabilities:
Liability for termination and retirement
benefits
Deferred income taxes

1,828

1,878

50

12,567

11,730

(837)

-

9,179

9,179

Other current liabilities

Long-term operating lease liabilities
Contingent consideration(long-term)

-

3,111

3,111

2,366

2,356

(10)

Total long-term liabilities

16,761

28,254

11,493

Total liabilities

60,62372,714

12,091

13,26013,260-

Other long-term liabilities(Equity)I.

Common stock

II. Additional paid-in capital

29,807

29,846

39

III. Retained earnings
IV. Accumulated other comprehensive (loss)
income:Foreign currency translation adjustments

193,139

192,791

(348)

1,551

(10)

(1,561)

Pension liability adjustments(5,679)(5,062)617

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(15,584)(14,630)

954

216,494

216,195

(299)

4,650

4,724

74

Total equity

221,144

220,919(225)

Total liabilities and equity

281,767

293,633

11,866-9-

(2)Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

Previous Consolidated
Cumulative Third Quarter(From April 1, 2018
to December 31, 2018)
Millions of Yen%

Current Consolidated
Cumulative Third Quarter(From April 1, 2019
to December 31, 2019)
Millions of Yen%

Increase/(Decrease)
Millions of Yen

147,247100.0

144,031100.0(3,216)

Cost of sales

67,066

45.5

63,91544.4(3,151)

Selling, general and administrative expenses

69,00746.9

70,315

48.8

1,308

Total operating costs and expenses

136,07392.4

134,230

93.2(1,843)Operating income

11,174

7.6

9,801

6.8

(1,373)

II. Operating costs and expenses:

III. Other income (expenses):
Interest income

200

167

(33)

Interest expense

(10)

(17)

(7)

1,365

1,452

87

140

-

(140)

(7,912)

4,486

12,398

724

(220)

(944)

Dividend income
Gain or loss on sales or exchange ofmarketable securities and investments - net
Valuation loss on marketable securities andinvestments - net
Other – net(3)

Total other income (expenses)
Income before income taxes and equity in net
income of affiliated companies
Income taxes
Income before equity in net income of affiliatedcompanies
Equity in net income of affiliated companies(5,493)

(3.7)

5,868

4.1

11,361

5,681

3.9

15,669

10.9

9,988

1,980

1.4

4,887

3.4

2,907

3,701

2.5

10,782

7.5

7,081

795

0.5

342

0.2

(453)

Net income
Net income attributable to noncontrollinginterests
Net income attributable to Wacoal Holdings
Corp.

4,496

3.0

11,124

7.7

6,628

(154)

(0.1)

(110)

(0.1)

44

4,342

2.9

11,014

7.6

6,672

Consolidated Quarterly Statements of Comprehensive Income

Accounts

I. Net income
II. Other comprehensive income (loss)- net of tax:
Foreign currency translation adjustments

Previous Consolidated
Cumulative Third Quarter(From April 1, 2018
to December 31, 2018)
Millions of Yen

Current Consolidated
Cumulative Third Quarter(From April 1, 2019
to December 31, 2019)
Millions of Yen

Increase/(Decrease)
Millions of Yen

4,496

11,124

6,628

(829)

(1,529)(700)

Unrealized loss on securities

(104)

-

104

Pension liability adjustments

2

617

615

Other comprehensive loss

(931)

(912)

19

Comprehensive income
Comprehensive income attributable tononcontrolling interests
Comprehensive income attributable to Wacoal
Holdings Corp.

3,565

10,212

6,647

(190)

(142)

48

3,375

10,070

6,695- 10 -

(4)Consolidated Quarterly Statements of Cash Flows

Accounts

Previous Consolidated Cumulative
Third Quarter(From April 1, 2018
to December 31, 2018)
Millions of Yen

I. Operating activities
1. Net income
2. Adjustments to reconcile net income to net cash provided
by operating activities(1) Depreciation and amortization(2) Allowance for returns and doubtful receivables - net(3) Deferred income taxes(4) Loss (gain) on sales or disposal of property, plant andequipment - net(5) Gain on sales or exchange of marketable securities andinvestments – net(6) Valuation (gain) loss on marketable securities andinvestments – net(7) Equity in net income of affiliated companies,
less dividends received(8) Changes in assets and liabilities
Decrease in notes and receivable
Increase in inventories
Increase in return assets
Decrease (increase) in other current assets
Decrease in notes and accounts payable
Increase in refund liability
Increase (decrease) in liability for termination andretirement benefits
Increase in other liabilities(9) Other
Net cash provided by operating activities
II.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of equity securities
Payments to acquire equity securities
Proceeds from redemption of debt securities
Payments to acquire debt securities
Proceeds from sales of property, plant and equipment
Capital expenditures
Payments to acquire intangible assets
Acquisition of a subsidiary (net of cash acquired)
Other
Net cash used in investing activities

III. Financing activities
1. Net (decrease) increase in short-term bank loans withoriginal maturities of three months or less
2. Repayment of long-term debt
3. Repurchase of treasury stock
4. Dividends paid on common stock
5. Dividends paid to noncontrolling interests
6. Proceeds from stock issuance to noncontrolling interests
Net cash used in financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents
V. Net decrease in cash and cash equivalents
VI. Cash and cash equivalents, beginning of period
VII. Cash and cash equivalents, end of period- 11 -

Current Consolidated Cumulative
Third Quarter(From April 1, 2019
to December 31, 2019)
Millions of Yen

4,496

11,1244,141(2,282)(2,199)4,409
26(1,505)

(96)

49

(140)

-

7,912

(4,486)

(290)

199

4,372
(962)
(1,474)(1,351)(2,717)
4,022

4,358
(1,790)(202)
163(2,445)
268

(437)

727

284
46
13,325

1,771
353
13,019(4,327)
3,079
1,610
(117)
677
(567)
265
(1,878)(2,252)33(3,477)

(473)
3,534
10,291(262)
326
94(2,582)(2,591)(9,181)
14
(830)

1,205

(4,053)(38)(6,919)(4,811)(191)(10,754)(38)(5,001)(4,907)(184)
116(14,067)

186

(370)

(720)
29,48728,767(2,248)30,133
27,885

Additional Cash Flow Information

Accounts

Previous Consolidated Cumulative
Third Quarter(From April 1, 2018
to December 31, 2018)

Cash paid for:
Interest
Income taxes
Noncash investing activities
Acquisition of a subsidiary (contingent
consideration)
Acquisition of fixed assets by assuming payment
obligation(5)

Current Consolidated Cumulative
Third Quarter(From April 1, 2019
to December 31, 2019)

11
4,708

18
4,633

-

4,173

519

521

Notes to Consolidated Quarterly Financial Statements(Notes on Going Concern)
Not applicable.
(Notes on Significant Changes in the Amount of Total Shareholders’ Equity)
Not applicable.
(Changes in Accounting Policy)
LeasesThe new accounting guidance related to leases (ASU2016-02, 2018-01, 2018-11) has been adopted starting withthe current consolidated fiscal year. This guidance requires an entity to recognize right-to-use assets and lease liabilities on
the balance sheet for those leases classified as operating leases under the previous U.S. GAAP with a few exceptions. Ourgroup has adopted the modified retrospective approach, electing to apply the transition requirements at the effective datewith a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, and prior periods
were not restated. Our group elected to apply the package of practical expedients permitted under the transition guidance
which does not require to reassess whether any expired or existing contracts are leases, lease classification and initial direct
costs. Our group also elected to apply the practical expedient not to assess whether existing or expired land easements thatwere not previously accounted for as leases are leases. As a result of this adoption, operating leases right-of-use assets andoperating leases liabilities of 14,550 million yen were recorded in the consolidated balance sheet as of April 1, 2019. In
addition, the application of deferred tax accounting resulted in the recording of deferred tax liabilities of 515 million yen
and the decreasing of the opening balance of retained earnings as a cumulative-effect adjustment in the same amount. The
adoption of this guidance is not expected to have a material impact on our group’s cash flows.

- 12 -

(Segment Information)(i)

Operating Segment Information

Previous Consolidated Cumulative Third Quarter (From April 1, 2018 to December 31, 2018)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

86,581

39,924

8,012

12,730147,247-

147,247(2) Intersegment

718

8,206

868

4,015

13,807(13,807)-

Total

87,29948,1308,880

16,745

161,054(13,807)147,247

Operating income (loss)

7,214

4,106

(29)

(117)

11,174-

11,174Current Consolidated Cumulative Third Quarter (From April 1, 2019 to December 31, 2019)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales
85,955

38,110

7,865

12,101

144,031-

144,031(2) Intersegment

696

8,444

541

3,970

13,651(13,651)-

Total

86,651

46,554

8,406

16,071

157,682(13,651)

144,031

Operating income

6,982

2,627

168

24

9,801

-

9,801

(1) External customers(Note)(ii)

1.

Core products of respective businesses:
Wacoal business (Domestic): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Wacoal business (Overseas): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
other textile-related products, etc.
Peach John business:
innerwear (foundation, lingerie, and nightwear), outerwear, and other textile-related products,
etc.
Other:
innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, othertextile-related products, mannequins, construction of stores and interior design, etc.

2.

Information on assets by operating segment:
Assets attributable to our “Wacoal Business (Overseas)” segment increased by 12,126 million yen from the end of the previous
fiscal year as a result of making Intimates Online our consolidated subsidiary during the current consolidated second quarter.
Accordingly, assets attributable to our “Wacoal Business (Overseas)” segment as of the end of the current consolidated third
quarter were 91,038 million yen.

Segment Information by Region

Previous Consolidated Cumulative Third Quarter (From April 1, 2018 to December 31, 2018)(Millions of Yen)

Net sales
External customers
Distribution ratio
Operating income

Japan

Asia/Oceania

Europe/N.A.

Consolidated

106,692
72.5%

17,007
11.5%

23,54816.0%

147,247
100.0%

7,022

1,885

2,267

11,174Current Consolidated Cumulative Third Quarter (From April 1, 2019 to December 31, 2019)(Millions of Yen)

Net sales
External customers
Distribution ratio
Operating income(Note)

1.
2.

Japan

Asia/Oceania

Europe/N.A.

Consolidated

105,18873.0%

15,74010.9%

23,10316.1%

144,031100.0%

7,252

1,460

1,089

9,801

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan:- 13 -

3.

(6)

Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries
Sales in respect of consolidated companies are categorized by location.

Status of Sales

Type of productFoundationand lingerie
Innerwear Nightwear
Children’s
underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods andrelated products
Other
Total

Previous Consolidated Cumulative
Third Quarter(From April 1, 2018 to
December 31, 2018)
AmountDistribution Ratio
Millions of Yen%

Current Consolidated Cumulative
Third Quarter
Increase/(Decrease)(From April 1, 2019 to
December 31, 2019)
AmountDistribution Ratio
AmountRatio
Millions of Yen%
Millions of Yen%

111,233

75.5

111,667

77.5

434

0.4

6,500

4.4

5,915

4.1

(585)

(9.0)

989

0.7

834

0.6

(155)

(15.7)

118,72280.6

118,416

82.2

(306)

(0.3)

11,216
1,469

7.6
1.0

9,970
1,290

6.9
0.9

(1,246)(179)(11.1)(12.2)

7,150

4.9

5,903

4.1

(1,247)(17.4)

8,690
147,247

5.9
100.0

8,452
144,031

5.9
100.0

(238)
(3,216)

(2.7)
(2.2)

- 14 -