Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018 (U.S. Accounting Standards)[Translation]
May 15, 2018
Listed Company: Wacoal Holdings Corp.
Stock Exchanges: Tokyo (1st section)
Code Number: 3591 URL: http://www.wacoalholdings.jp/
Representative: (Position) Representative Director(Name) Yoshikata Tsukamoto
For Inquiries:(Position) General Manager of Corporate Planning(Name) Akira Miyagi
Tel: +81 (075) 682-1010
Scheduled date of Ordinary Shareholders’ Meeting: June 28, 2018 Scheduled Commencement Date of Dividend Payment: June 5, 2018
Scheduled date of Annual Securities Report Filing: June 28, 2018
Supplementary materials regarding Annual Business Results: Yes
Explanatory meeting regarding Annual Business Results: Yes(Amounts less than 1 million yen have been rounded.)1.

Consolidated Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Consolidated Business Results(% indicates changes from previous fiscal year)

Net Sales

Fiscal Year Ended March 31, 2018
Fiscal Year Ended March 31, 2017
(Note) Comprehensive income:Operating Income

Income Before Income
Taxes and Equity in Net
Income of AffiliatedCompanies

Net Income
Attributable to Wacoal
Holdings Corp.

Millions of Yen %Millions of Yen %Millions of Yen %195,725 (0.1)
12,53413.3
14,286(13.8)
195,881 (3.5)
11,065(20.2)
16,569
10.8
Fiscal Year ended March 31, 2018: 16,448 million yen (33.8 %)Fiscal Year ended March 31, 2017: 12,296 million yen (- %)Millions of Yen %9,745 (22.2)
12,525
12.2

Ratio of Income
Before Income
Ratio of Net Income
Net Income
Diluted Net Income
Taxes and
Ratio of
Attributable toAttributable toAttributable toEquity in Net
OperatingWacoal Holdings
Wacoal Holdings
Wacoal Holdings
Income ofIncome to Net
Corp. toCorp. Per ShareCorp. Per Share
AffiliatedSales
Shareholders’ Equity
Companies toTotal Assets
Yen
Yen
%
%
%
Fiscal Year Ended March 31, 2018
143.46142.98
4.2
4.8
6.4
Fiscal Year Ended March 31, 2017180.26179.71
5.5
5.6
5.6(Reference) Equity in net income of affiliated companies:
Fiscal Year ended March 31, 2018: 916 million yen
Fiscal Year ended March 31, 2017: 1,359 million yen(Note) We have conducted a share consolidation of common stock of Wacoal Holding Corp. (the “Company”) pursuant to which two (2)shares were consolidated into one (1) share effective as of October 1, 2017. Accordingly, the “net income attributable to Wacoal
Holdings Corp. per share” and the “diluted net income attributable to Wacoal Holdings Corp. per share” have been calculated
assuming that such share consolidation has been conducted at the beginning of the previous fiscal year.
(2) Consolidated Financial Condition
Shareholders’EquityPer Share
Millions of Yen Millions of Yen Millions of Yen%
Yen
Fiscal Year Ended March 31, 2018298,534
237,497
232,71278.0
3,454.40
Fiscal Year Ended March 31, 2017294,958
232,482
227,56877.2
3,317.05(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares were consolidated intoone (1) share effective as of October 1, 2017. Accordingly, the “shareholders’ equity per share” has been calculated assuming thatsuch share consolidation has been conducted at the beginning of the previous fiscal year.
Total Assets

Total Equity(Net Assets)

Total Shareholders’ Total Shareholders’EquityEquity Ratio(3) Consolidated Cash Flow Status

Fiscal Year Ended March 31, 2018
Fiscal Year Ended March 31, 2017

Cash Flow provided Cash Flow provided by Cash Flow provided by Balance of Cash and Cashby Operating(used in) Investing(used in) Financing
Equivalents at End of Fiscal
Activities
Activities
Activities
Year
Millions of Yen
Millions of Yen
Millions of Yen
Millions of Yen
15,493(7,362)(12,303)29,487
16,351(3,032)(13,055)
33,995-1-

2.

Status of Dividends

Annual Dividend
End ofFirst
Quarter

End ofSecondQuarter

End ofThird
QuarterYear-end

Annual

Yen

Yen

Yen

Yen

Yen

Total
Amount ofDividends(annual)Millions of
Yen
4,940
4,871

Payout Ratio(consolidated)

Ratio of
Dividend to
Shareholders’Equity(consolidated)%%

Fiscal Year Ended March 31, 2017
36.00
36.00
39.9
2.2
Fiscal Year Ended March 31, 2018
18.00
36.00
50.2
2.1
Fiscal Year Ending March 31,
36.00
36.00
72.00
48.5
2019 (Estimates)(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares were consolidated intoone (1) share effective as of October 1, 2017. Please note that such share consolidation is taken into consideration in determining theamount of the year-end cash dividend per share for the fiscal year ended March 31, 2018 mentioned above and the total annual
dividend amount is indicated as “-“. The year-end cash dividend per share and total annual dividend amount per share for the fiscal
year ending March 31, 2018, without taking into consideration of the share consolidation, are 18 yen and 36 yen, respectively.
3.

Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)(% indicates changes from the previous fiscal year with respect to “Annual” and from the six-month period ended September 30, 2017 withrespect to “Six-month Period Ending September 30, 2018”)
Net Income
Net Income
Attributable toAttributable to
Net Sales
Operating Income Pre-tax Net Income
Wacoal Holdings
Wacoal Holdings
Corp.
Corp. Per Share
Millions of Yen %Millions of Yen %Millions of Yen %Millions of Yen %YenSix-month Period Ending
103,000 1.0
8,000 (20.7)
9,500 (13.7)
7,000 (5.9)
103.91
September 30, 2018
Annual
200,000 2.2
10,000 (20.2)
13,000 (9.0)
10,000 2.6
148.44*Notes(1) Changes in significant subsidiaries during the fiscal year ended March 31, 2018 (change in scope of consolidation): None
New: None
Excluded: None
(Note) For details, please see “(7) Basic Significant Matters in Preparation of Consolidated Financial Statements” in Section 3“Consolidated Financial Statements” on page 17.
(2) 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 “(7) Basic Significant Matters in Preparation of Consolidated Financial Statements” in Section 3“Consolidated Financial Statements” on page 17.
(3) Number of Issued Shares (Common Stock)
Fiscal Year Ended
Fiscal Year Ended
March 31, 2018
March 31, 2017(i)
Number of issued shares (including treasury stock) as of period-end:
71,689,042 shares
71,689,042 shares(ii) Number of shares held as treasury stock as of period-end:
4,322,121 shares
3,083,605 shares(iii) Average number of shares during the period:
67,928,557 shares
69,483,315 shares(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares wereconsolidated into one (1) share effective as of October 1, 2017. Accordingly, the “number of issued shares,” “number of shares held
as treasury stock as of period-end” and “average number of shares during the period” have been calculated assuming that such shareconsolidation has been conducted at the beginning of the previous fiscal year.

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(Reference) Summary of Non-consolidated Results1.

Non-consolidated Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Non-consolidated Business Results

Fiscal Year Ended March 31, 2018
Fiscal Year Ended March 31, 2017

Net Sales
Millions of Yen %12,644(3.8)
13,13920.2

Operating Income
Millions of Yen %
8,546
(7.5)
9,241
31.7

(% indicates changes from previous fiscal year)
Ordinary Income
Net Income
Millions of Yen %Millions of Yen %6,308(31.5)
6,461(43.6)
9,215
30.8
11,45370.0

Net Income
Diluted Net Income
Per Share
Per Share
Yen
Yen
Fiscal Year Ended March 31, 2018
95.12
94.47
Fiscal Year Ended March 31, 2017164.85164.32(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares were consolidated intoone (1) share effective as of October 1, 2017. Accordingly, the “net income per share” and “diluted net income per share” have been
calculated assuming that such share consolidation has been conducted at the beginning of the previous fiscal year.
(2) Non-consolidated Financial Condition(% indicates changes from previous fiscal year)
Total Assets
Net Assets
Capital-to-asset Ratio
Net Asset per Share
Millions of Yen
Millions of Yen%
Yen
Fiscal Year Ended March 31, 2018
160,140
140,51087.4
2,078.38
Fiscal Year Ended March 31, 2017
165,113
145,49687.9
2,114.38(Reference) Equity Capital: As of the end of the fiscal year ended March 31, 2018: 140,013 million yen
As of the end of the fiscal year ended March 31, 2017: 145,057 million yen(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares were consolidated into one(1) share effective as of October 1, 2017. Accordingly, the “net asset per share” has been calculated assuming that such share consolidation has
been conducted at the beginning of the previous fiscal year.
*These financial statements are not subject to audit procedures by the certified public accountants or the independent auditor.
*Cautionary Statement regarding Forward 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.
(Representation of Calendar Dates)
We have changed the indication of dates in this document (in Japanese) to follow the western calendar rather than the Japanese calendar.

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Table of Contents for Attached Materials
1.

Business Results -------------------------------------------------------------------------------------------------------------------------------------- 5(1)

Business Results for Fiscal Year 2018 ------------------------------------------------------------------------------------------------------------ 5(2)

Financial Condition as of Fiscal Year 2018 ------------------------------------------------------------------------------------------------------- 9(3)

Basic Policy Regarding Distribution of Profits and Dividends for Fiscal Year 2018 and Fiscal Year 2019 ----------------------------- 10

2.

Basic Policies regarding Selection of Accounting Standards----------------------------------------------------------------------------------- 10

3.

Consolidated Financial Statements --------------------------------------------------------------------------------------------------------------- 11(1)

Consolidated Balance Sheets ---------------------------------------------------------------------------------------------------------------------- 11(2)

Consolidated Statements of Income--------------------------------------------------------------------------------------------------------------- 13(3)

Consolidated Statements of Comprehensive Income ------------------------------------------------------------------------------------------- 14(4)

Consolidated Statements of Equity ---------------------------------------------------------------------------------------------------------------- 15(5)

Consolidated Statements of Cash Flows ---------------------------------------------------------------------------------------------------------- 16(6)

Notes on Going Concern --------------------------------------------------------------------------------------------------------------------------- 17(7)

Basic Significant Matters in Preparation of Consolidated Financial Statements ------------------------------------------------------------ 17(8)

Notes to the Consolidated Financial Statements ------------------------------------------------------------------------------------------------ 18

4.

Other -------------------------------------------------------------------------------------------------------------------------------------------------- 22-4-

Qualitative Information and Financial Statements
1.

Business Results(1) Business Results for Fiscal Year 2018
Results for the Fiscal Year Ended March 31, 2018
During the current fiscal year (from April 1, 2017 to March 31, 2018), the consumer spending in the domestic economy showed a sign ofrecovery to some extent as the employment environment improved. The environment surrounding women’s domestic innerwear market,
however, remained difficult, due to a slowdown in the recovery of consumer spending, led by deep-rooted concern for future, which continued
to make consumers budget-conscious, and as we continued to experience a series of closings of general merchandise stores and management of
inventories. In the overseas markets, consumer spending was stable in Europe and the United States, as consumer sentiment remained strong in
the United States, and the employment environment continued to improve in the Eurozone area, despite the significant uncertainty underlying
Brexit in Europe. In China, consumer spending was stable as a result of strong growth in the real per capita disposable income, and retail sales
continued to achieve a high level of growth due to reduced employment uncertainty.
In such an environment, our group moved forward with efforts to improve and strengthen our business structure toward achieving theobjectives of our mid-term business plan. In our domestic business, we made efforts to improve business efficiency through restructuring andstrengthening of our wholesale business structure, to realize omni-channel services that will achieve synergies with our wholesale business andretail business, to form core IT systems which will improve inventory efficiency, and to improve profitability by updating each of our brands
and product groups. In our overseas business, we focused on our initiatives to pursue business collaboration among Europe and the UnitedStates and Asian countries, strengthen our ability to respond to the e-commerce market, and improve product quality and cost competitivenessin China and ASEAN-member countries where our product supply bases are located.
Our consolidated sales for the current fiscal year slightly fell by 0.1% from such sales for the previous fiscal year. While consolidated
sales from our domestic business for the current fiscal year fell by 2% from such sales for the previous fiscal year due to difficult environment
for our wholesale business, our consolidated sales from our overseas business exceeded such sales for the previous fiscal year by 7% as a resultof strong e-commerce sales and steady sales at the existing stores in Europe and the United States, and China. Revenue from our Peach Johnand other business segments decreased.
Consolidated operating income increased by 13% as compared to such consolidated operating income for the previous fiscal year. In
addition to our initiatives to improve business profitability in the domestic business, an increase in sales profit resulting from increased revenue
from our overseas business contributed to the increase. Also, consolidated operating income increased as a result of recognition ofcompensation income from leaving a factory space occupied by our subsidiary and the absence of non-recurring expenses related to theliquidation proceedings for our French subsidiary that we recorded for the previous fiscal year.
Consolidated income before income taxes and equity in net income of affiliated companies fell by 14% from such consolidated income forthe previous fiscal year, due to the absence of gain on sales of fixed assets (land) that we recorded for the previous fiscal year.
The key exchange rates used for the current fiscal year were: 110.85 yen to the U.S. dollar; 147.03 yen to the Sterling pound; and 16.63 yen
to the Chinese yuan.
Net sales:

195,725 million yen(a decrease of 0.1% as compared to the previous fiscal year)

Operating income:

12,534 million yen(an increase of 13.3% as compared to the previous fiscal year)

Income before income
taxes and equity in net
income of affiliatedcompanies:

14,286 million yen(a decrease of 13.8% as compared to the previous fiscal year)

Net income
attributable to Wacoal
Holdings Corp.:

9,745 million yen(a decrease of 22.2% as compared to the previous fiscal year)

Business Overview of Our Operating Segmentsa.

Wacoal Business (Domestic)

Wacoal Corp. reorganized its divisions, formerly called the Wacoal Brand Operation Division and Wing Brand Operation Division, into
the Wacoal Brand Operation Division, which is responsible for planning and development of “Wacoal” brand products and wholesale business-5-mainly with department stores and specialty store channels, and the Chain Store Operation Division, which is responsible for planning anddevelopment of “Wing” brand products and wholesale business with general merchandise stores.
Sales from our wholesale business, mainly composed of wholesale business from the Wacoal Brand Operation Division and the ChainStore Operation Division, decreased by 2% as compared to such sales for the previous fiscal year. Over-the-counter sales at department storesremained at about the same level as such sales for the previous fiscal year due to weak sales in the provincial cities of the Kanto, Koshinetsu,
and Hokuriku regions, although sales expanded significantly in Tokyo and the Osaka area as a result of consumption by inbound tourists.
Although we have actively promoted renovations of our shops for “Dual W” that effectively brings together our Wacoal and Wing brands, andexpanded our share in the market, over-the-counter sales at general merchandise stores remained at about the same level as such sales for theprevious fiscal year due to poor sales of men’s innerwear products and nightwear. With respect to over-the-counter sales of our core brassieres
products, while sales of our Wacoal brand products increased by 6% from such sales for the previous fiscal year due to strong sales of“GOCOCi,” our brassieres marketed for their comfort, which achieved 2.9 times more than such sales for the previous fiscal year, sales of our
Wing brand products only increased by 1%. Although the over-the-counter sales were stable, a series of closings of general merchandise storesand management of inventories impacted sales from our wholesale business.
In our retail business, sales only increased by 1% as compared to such sales for the previous fiscal year as a result of prioritizing improving
business profitability and closing 11 underperforming stores, while minimizing the number of new shop openings. Sales of our cross-store
common products among directly managed retail stores “BRAGENIC” have increased by 54% from such sales for the previous fiscal year,
which accounts for approximately 20% of the overall sales, and the number of registered shop members, mainly from our core directly managed
retail stores, “AMPHI,” has reached over 660 thousand. We focused on increasing sales per product, and reducing discount sales throughstrengthening relationships with our important customers.
Sales from our wellness business fell by 5% as compared to such sales for the previous fiscal year due to decreased sales (by 9%) of ourcore “CW-X” brand products, which were impacted by the termination of business with certain sport specialty stores. Sales of “SUCCESS
WALK” were strong.
In our Web sales business (formerly catalog sales business), sales increased by 1% as compared to such sales for the previous fiscal year.
Sales from our webstore business increased by 14% as compared to such sales for the previous fiscal year as a result of our efforts to give
guidance to our registered shop members and to recapture our inactive customers, in collaboration with our retail business, as well as our efforts
to strengthen our ability to respond to phone orders and launch of consulting services by beauty advisers. On the other hand, sales from ourcatalog sales business decreased by 4%, due to a gradual decrease in the number of users and purchasers in our winter and spring catalogues.
Sales from Ai Co., Ltd. were weak, which decreased by 8% as compared to such sales for the previous fiscal year. Sales from our coreswimwear business decreased by 4% as compared to such sales for the previous fiscal year despite our efforts to enhance revenue efficiency per
store by reducing the number of our seasonal stores opened only during a period of peak demand, while retaining temporary sales
representatives became difficult. Sales from the underwear business were also weak and decreased by 14% as compared to such sales for theprevious fiscal year due to closure of underperforming stores, and a decline in the competitiveness of our products.
As a result, sales attributable to our “Wacoal Business (Domestic)” segment decreased by 2% as compared to such sales for the previous
fiscal year.
Operating income increased by 13% as compared to such sales for the previous fiscal year. We focused on improving the gross profit rate
and to minimize selling, general and administrative expenses with our efforts to improve business efficiency by reducing the amount ofreturned items in our wholesale business and to strengthen profitability of our retail business, while IT infrastructure related expenses, expenses
related to changes in the health insurance premium rate, and selling, general and administrative expenses such as retirement benefit expenses
increased. In addition, recognition of compensation income from leaving a factory space occupied by our subsidiary during the first quarter ofthe current fiscal year contributed to the increase.

b.

Net sales:

116,085 million yen(a decrease of 1.9% as compared to the previous fiscal year)

Operating income:

7,885 million yen(an increase of 13.3% as compared to the previous fiscal year)

Wacoal Business (Overseas)

Sales (on a local currency basis) from Wacoal International Corp. (the United States) increased by 3% as compared to such sales for theprevious fiscal year. This was due to overall sales driven by e-commerce sales through our website and third-party e-commerce websites,
which showed strong sales growth, as well as the positive impact of initial product delivery due to an increase in the number of department
stores handling Wacoal brand products during the first quarter of the current fiscal year. However, although over-the-counter sales were steadyat department stores (physical shops) throughout the current fiscal year, sales for the second half of the current fiscal year fell by 3% ascompared to such sales for the corresponding period of the previous fiscal year due to the management of inventories by certain department
stores and the EC companies specialized for e-commerce.

-6-Operating income on a local currency basis increased by 2% (ratio of operating income: 11%) as compared to such operating income forthe previous fiscal year. While the gross profits rate increased as a result of reducing discount sales and increasing the percentage of sales fromour own e-commerce website, selling, general and administrative expenses as a percentage of sales increased due to costs related to productlisting advertisements and website renewal to strengthen e-commerce sales, and an increase in medical insurance premiums. In addition,
one-off expenses from restructuring our subsidiary, Wacoal Sports Science Corp., in the United States during the fourth quarter of the current
fiscal year impacted the results.
Sales on a local currency basis (Sterling pound) for Wacoal Europe increased by 3% as compared to such sales for the previous fiscal year.
This was due to steady sales through third-party e-commerce websites which specialize in selling luxury lingerie and specialty stores in the
major markets in the United Kingdom and the United States, while sales in France fell below such sales for the previous fiscal year due to theeffect of loss of sales that could have been recorded from the brands which were liquidated. In addition, sales in Germany and Spain achieveda double-digit increase from such sales for the previous fiscal year due to an expansion in the number of Wacoal brands handled by our clientsand sales which enjoyed the favorable effect of the appreciation of the Euro. In our underwear business, sales of our plus-size brand “elomi”
products continued to show strong growth with an increase of 20% as compared to such sales for the previous fiscal year, and sales of ourswimwear products under “FANTASIE” and “Freya” were also strong with an increase of 17%, respectively, contributing to sales growth invarious countries.
Operating income as a percentage of sales for the current fiscal year was 9%, as compared to the previous fiscal year which recorded an
operating loss due to the non-recurring expenses related to the liquidation proceedings for our French subsidiary. Also, operating income
improved over budget as a result of improvement in the gross profit rate from a depreciation of the dollar and reduction in transportation costs,
as well as minimizing selling, general and administrative expenses following the postponement of our website renewal for e-commerce sales.
In China, sales on a local currency basis increased by 10% as compared to such sales for the previous fiscal year. We captured consumers
who are becoming more sensitive to fashion trends and enhanced sales initiatives, including through the openings of specialty stores during
China’s high-demand seasons such as the Chinese New Year, International Women’s Day and China National Day. As a result, sales per
department store increased by 8% as compared to such sales for the previous fiscal year. In addition, e-commerce sales through third-party
e-commerce websites increased by 29% as compared to such sales for the previous fiscal year as a result of focusing on handling regular-priced
products and of strong sales from the China Double 11 shopping festival sales. By brands, sales of our Wacoal brand products increased by
10%, and sales of our Peach John brand products, including our popular product “Cover Cleavage Strapless” bras, also increased by 51%,
resulting from steady growth in the number of repeat users.
Operating income on a local currency basis increased by 9% (ratio of operating income: 5%) as compared to such operating income for theprevious fiscal year. While we continued to minimize selling, general and administrative expenses through closure of underperforming stores,
selling, general and administrative expenses as a percentage of sales increased during the fourth quarter of the current fiscal year due tocommencement of operation of our centralized distribution warehouse to achieve effective distribution of bargain products, and costs related toadvertisements to strengthen e-commerce sales.
As a result of the above, the overall sales attributable to our “Wacoal Business (Overseas)” segment on the Japanese Yen basis increased
by 7% as compared to such sales for the previous fiscal year. The overall operating income attributable to “Wacoal Business (Overseas)”segment on the Japanese Yen Basis increased by 26% as compared to such operating income for the previous fiscal year. This increase wasaffected by the impairment charges of 206 million yen on goodwill related to our raw materials company, A Tech Textile Co., Ltd., in Thailand,
which was recognized for the current fiscal year.

c.

Net sales:

51,888 million yen(an increase of 7.2% as compared to the previous fiscal year)

Operating income:

3,852 million yen(an increase of 26.1% as compared to the previous fiscal year)

Peach John BusinessOverall sales attributable to our “Peach John Business” segment fell below by 3% as compared to such sales for the previous fiscal year
due to weak sales from our domestic mail-order catalogue business, while operating income attributable to our “Peach John Business” segment
increased by 18% as compared to such operating income for the previous fiscal year as a result of an improvement in the gross profit rate inJapan, as well as an improvement in profitability of our Chinese business.
Sales from our domestic business, specifically from retail stores, remained at about the same level as such sales for the previous fiscal year.
Although sales from our premium themed “Salon by Peach John” increased by 31% as a result of a positive impact of new shop openings, salesof our “Peach John” products decreased by 2% as it was impacted by a decrease in the number of shop visitors, despite the strong sales of“Miracle Work Bra” launched in the fourth quarter of the current fiscal year. Sales from our mail-order catalogue business decreased by 12%
from such sales for the previous fiscal year. This was due to a decrease in the number of users who visited our own e-commerce website as our
products failed to attract consumers’ attention, while average spending per customer increased. Sales from our wholesale business, particularly
for the third-party e-commerce websites increased by 4% from such sales for the previous fiscal year as a result of successful sales during thefourth quarter of the current fiscal year. Sales from our overseas business were strong as demonstrated by the sales from Taiwan Peach John

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Ltd., which, after commencing operations in May 2017, achieved sales over budget by 56% and were twice the sales budgeted for our own
e-commerce website.
Positive factors including an improvement in the gross profit rate resulting from a reduction in discount sales of our domestic innerwear
products, our efforts to reduce advertising expenses, and an improvement in profitability of our businesses resulting from sales expansion in
China and Taiwan were attributable to the result of operating income.

d.

Net sales:

10,795 million yen(a decrease of 2.8% as compared to the previous fiscal year)

Operating income:

441 million yen(an increase of 17.9% as compared to the previous fiscal year)

Other

Sales from the business of Lecien Corporation (“Lecien”) decreased by 16% from such sales for the previous fiscal year. This was
impacted by sales of our core innerwear business decreased by 13% from such sales for the previous fiscal year, due to a decrease in the numberof orders received for our private brand products sold at major general merchandise stores, a reduction in the number of products handled andweak shop sales. In addition, sales from our art & hobby business decreased by 4% from such sales for the previous fiscal year, due to poorsales of sewing fabrics, despite steady sales of handcraft products. Sales from our material business were also weak, decreasing 13% from suchsales for the previous fiscal year due to a decrease in demand for garment laces. Further, sales from our apparel business significantly
decreased by 47% from such sales for the previous fiscal year due to the withdrawal of our private brand business sold at major generalmerchandise stores and the impact of weak sales from teleshopping.
Operating income decreased by 86% from such operating income for the previous fiscal year due to a drop in sales profit resulting fromdecreased revenue, despite our efforts to reduce selling, general and administrative expenses, and the absence of the favorable effect of theexchange rate fluctuation on sales profit during the previous fiscal year.
Sales from Nanasai Co., Ltd. (“Nanasai”) fell by 2% as compared to such sales for the previous fiscal year. Although business confidence
in the clothing industry continued to show no sign of prominent improvement, a sign of recovery was seen in demand for short-term leases for
specialty stores at department stores and demand for renovation projects in our construction business for department stores and specialty storesas we entered the second half of the current fiscal year. As a result, we were able to maintain sales from both rental business and sales businessat about the same level as such sales for the previous fiscal year. However, sales from construction business could not make up for the absenceof the number of large-scale orders received during the previous fiscal year, and decreased by 2%, which impacted the overall sales.
Operating income increased by 90% as compared to such operating income for the previous fiscal year due to cost rate improvement in ourrental business and an improvement in the gross profit rate from a decrease in the percentage of sales from our construction business.
As a result of the above, overall sales and operating income attributable to our “Other” segment decreased by 6% and 47%, respectively, as
compared to the sales and operating income for the previous fiscal year.
Net sales:

16,957 million yen(a decrease of 5.6% as compared to the previous fiscal year)

Operating income:

356 million yen(a decrease of 47.4% as compared to the previous fiscal year)

Forecast for Next Fiscal YearOur group will continue to move forward with improving and strengthening of our business structure in accordance with the basic policies
stipulated in our mid-term business plan.
“To ensure profits from our domestic business,” we will integrate our wholesale business into one organization. We will make efforts tooptimize our value chain process, including the product planning, production, inventory controls, distribution, and in-store customer service,and to enhance further efficiency of each of our brands, product mix, and human resources. With respect to our retail business, we will continue
to strengthen business profitability by improving the gross profit rate, and to improve operational efficiency by promoting the phased
introduction of RFID (radio frequency identification). Simultaneously, we will accelerate new shop openings at suitable locations. In addition,
we will conduct website renewal and application development, in order to enhance user-friendliness of our own e-commerce website. In linewith the functional enhancement of our own e-commerce website, we will aim to recover growth potential by promoting the realization ofomni-channel services that will achieve synergies with our wholesale and retail businesses through the utilization of digital devices such astablets at the stores.
“To achieve further growth of our overseas business,” we will continue to pursue business collaboration between Europe and the UnitedStates, and to establish system infrastructure that enables sharing of information on product planning and product management, aiming for thedevelopment of highly competitive products and decreases in procurement lead time. Further, in China, we will strengthen our ability to-8-respond to the rapidly expanding e-commerce market. While strengthening our display advertising on third-party e-commerce websites, wewill conduct flexible sales promotion, using our centralized distribution warehouse for bargain products. We will also aim to achieve growth inresponse to the purchasing habit seen in the accelerating expansion of e-commerce markets in Europe and the United States, by adding new
languages and currencies available on our own e-commerce website and thereby expanding sales in the surrounding countries. In China and
ASEAN-member countries, where our product supply bases are located, we will promote an environment that enables us to accurately reactwith our product quality and cost competitiveness to diversifying trends and to different needs. We will seek to supply high-value-added
materials/products and stabilize procurement costs for our group companies within and outside Japan.
We will actively promote growth investment in these fields. In addition, following changes in the accounting standards generally acceptedin the United States, the expected return on plan assets which was recorded under the retirement benefit expenses, as operating income(expenses), will be recorded as non-operating income or loss from the next fiscal year, which will reduce our operating income by 1.1 billion
yen. Also, it will be required to record the valuation gain or loss on available for sale securities, which has been recorded as unrealized gain on
securities, as non-operating income or loss. However, such change in accounting is not reflected in the forecast below.
Our forecast for the next fiscal year is as follows. The exchange rate used for the U.S. dollar is 110 yen to the dollar; the exchange rateused for the Sterling pound is 150 yen to the pound; and the exchange rate used for the Chinese yuan is 17 yen to the yuan.
Net sales:

200,000 million yen(an increase of 2.2% as compared to the previous fiscal year)

Operating income:

10,000 million yen(a decrease of 20.2% as compared to the previous fiscal year)

Income before income
taxes and equity in net
income of affiliatedcompanies:

13,000 million yen(a decrease of 9.0% as compared to the previous fiscal year)

Net income
attributable to Wacoal
Holdings Corp.:

10,000 million yen(an increase of 2.6% as compared to the previous fiscal year)(2) Financial Condition as of Fiscal Year 2018
Status of Assets, Liabilities and Shareholders’ Equity
Our total assets as of March 31, 2018 were 298,534 million yen, an increase of 3,576 million yen from the end of the previous fiscal
year, mainly due to an increase in investments at market value.
With regard to liabilities, our current liabilities were 61,037 million yen, a decrease of 1,439 million yen from the end of the previous
fiscal year, due to decreases in income taxes payable and deferred income taxes.
Shareholders’ equity was 232,712 million yen, an increase of 5,144 million yen from the end of the previous fiscal year, due toincreases in retained earnings and unrealized gain on securities.
As a result of the above, our total shareholders’ equity ratio as of March 31, 2018 was 78.0%, an increase of 0.8% from the end of theprevious fiscal year.
Cash Flows Status
Cash flow provided by operating activities:
Cash flow provided by operating activities was 15,493 million yen, a decrease of 858 million yen as compared to the previous fiscal
year, after adjustments for changes in assets and liabilities to our net income of 9,660 million yen plus adjustments for depreciation expenses
and deferred taxes.
Cash flow used in investing activities:
Cash flow used in investing activities was 7,362 million yen, an increase of 4,330 million yen as compared to the previous fiscal year,
due to increases in time deposits and capital expenditures.
Cash flow used in financing activities:
Cash flow used in financing activities was 12,303 million yen, a decrease of 752 million yen as compared to the previous fiscal year,
due to cash dividend payments and repurchase of treasury stock.
-9-As a result, the balance of cash and cash equivalents at the end of fiscal year 2018, calculated by adding the exchange difference on
cash and cash equivalents to the above total, was 29,487 million yen, a decrease of 4,508 million yen as compared to the end of the previous
fiscal year.
Free cash flow, which was calculated by subtracting the amount of capital investment from the cash flow provided by operating
activities, amounted to 9,609 million yen.
Trends in certain cash-flow indicators

Shareholders’ equity ratio (%)
Shareholders’ equity ratio basedon market value (%)
Debt redemption years (years)
Interest coverage ratio (times)

Fiscal Year
Ended
March 31, 2016

Fiscal Year
Ended
March 31, 2017

Fiscal Year
Ended
March 31, 2018

76.6

77.2

78.0

64.6

63.9

69.5

1.0

0.5

0.5

188.6

605.6

1,408.5

Shareholders’ equity ratio = shareholders’ equity/total assets
Shareholders’ equity ratio based on the market value = aggregate market value of shareholders’ equity/total assets
Debt redemption years = interest-bearing debt/cash flow provided by operating activities
Interest coverage ratio = cash flow provided by operating activities/interest payment
Interest payment = “cash paid for interest” as described in the additional cash flow information following the consolidated statementsof cash flows(3) Basic Policy Regarding Distribution of Profits and Dividends for Fiscal Year 2018 and Fiscal Year 2019
Our basic policy on profit distributions to shareholders is to make stable distributions based on consideration of our consolidated
performance, while seeking to increase our enterprise value through active investments aimed at higher profitability and to increase net income
per share. With respect to retained earnings, we have actively invested and will continue to actively invest in expanding our customer bases forour domestic business and our overseas businesses, with the aim of improving our corporate value. We also plan to use our retained earnings
for strategic investments for maintaining competitiveness and reinforcing growth. With these efforts, we seek to benefit our shareholders by
improving future profitability.
We also intend to acquire treasury stock in a flexible manner taking into account the level of free cash flow as well as the market
environment, and will make effort to improve capital efficiency and return profits to our shareholders.
Based on this policy, we are scheduled to distribute 36.00 yen per share as a year-end dividend for the current fiscal year, the estimateddividend as announced during the latest quarter. As a result, the dividend payout ratio on a consolidated basis will be 50.2% for the current
fiscal year (Note: We have conducted a share consolidation of Company common stock pursuant to which two (2) shares have been
consolidated into one (1) share effective as of October 1, 2017. Without taking into consideration the share consolidation, the year-end
dividend per share will be 18.00 yen, and the annual dividend amount per share will be 36.00 yen, including the interim dividend per share of
18.00 yen).
For the fiscal year ending March 31, 2019, annual cash dividend per share will be 72.00 yen, the total of interim dividend per share of
36.00 yen and year-end dividend per share of 36.00 yen.
2.

Basic Policies regarding Selection of Accounting Standards

Our group has been preparing our consolidated financial statements based on the accounting standards prior to the introduction of theaccounting standards for consolidated financial statements in Japan and, for this reason, we have been adopting the accounting standards
generally accepted in the United States.
In view of adopting International Financial Reporting Standards in the future, our group is making efforts to prepare internal manuals andguidelines.

- 10 -

3.

Consolidated Financial Statements (Unaudited)(1) Consolidated Balance Sheets
AmountIncreased/(Decreased)
Millions of Yen

Accounts

As of March 31, 2017

As of March 31, 2018

(Assets)

Millions of Yen

Millions of Yen

Cash and cash equivalents

33,99529,487(4,508)Time deposits

2,722

4,296

1,574

Marketable securities

1,457

1,567

110

Notes and accounts receivable
Allowance for returns anddoubtful receivables
Inventories

25,56325,873310(2,477)
43,822(2,459)42,67618(1,146)

Deferred income taxes

4,049

-

(4,049)Other current assets

4,683

4,372

(311)

113,814

105,812(8,002)

Land

21,555

21,561

6

Buildings and building improvements

72,66473,618954

Machinery and equipment

17,722

18,268546

Construction in progress

274

254

(20)

112,215

113,701

1,486(56,927)(59,368)(2,441)

55,28854,333(955)

Investments in affiliated companies

20,86822,512

1,644

Investments

59,847

69,318

9,471

Goodwill

16,071

16,594

523

Other intangible assets

11,84912,8591,010

Prepaid pension expense

10,287

10,178(109)

Deferred income taxes

1,060

1,194

134

Other

5,874

5,734

(140)

125,856

138,389

12,533294,958

298,534

3,576

I. Current assets

Total current assets
II. Property, Plant and Equipment

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

Total other assets
Total Assets- 11 -

Amount
Increased/(Decreased)
Millions of Yen

Accounts

As of March 31, 2017

As of March 31, 2018

(Liabilities)

Millions of Yen

Millions of Yen

7,716

7,104

(612)

Trade notes

1,438

1,174

(264)

Trade accounts

11,605

11,393(212)

Other payables

6,185

7,053

868

19,228

19,620392

Accrued payroll and bonuses

7,093

7,213

120

Income taxes payable

2,964

1,979

(985)

50

50

-

I. Current Liabilities
Short-term bank loans
Notes and accounts payables

Current portion of long-term debt
Other current liabilities
Total current liabilities

4,008

3,666

(342)

41,05939,632(1,427)

185

138

(47)

II. Long-term liabilities
Long-term debt
Liabilities for termination and retirement
benefit
Deferred income taxes

1,956

1,852

(104)

17,862

17,231(631)

Other long-term liabilities

1,414

2,184

770

Total long-term liabilities

21,417

21,405(12)

Total liabilities

62,47661,037(1,439)13,26013,260-(Equity)
I. Common stock
II. Additional paid-in capital

29,707

29,765

58

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

170,062

172,418

2,356

1,212

2,274

1,062

Unrealized gain on securities

21,07527,424

6,349

Pension liability adjustments(414)(1,101)(687)

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests
Total equity(7,334)(11,328)(3,994)

227,568

232,712

5,144

4,914
232,482

4,785
237,497

(129)
5,015

294,958

298,534

3,576

Total liabilities and equity- 12 -

(2) Consolidated Statements of Income

Accounts

Fiscal Year Ended
March 31, 2017

Fiscal Year Ended
March 31, 2018％

Millions of Yen％

Millions of Yen

195,881100.0

195,725

100.0

(156)

92,95047.5

91,90947.0(1,041)

91,866

46.9

91,784

46.9

(82)

-

(708)

(0.4)

(708)

Millions of Yen
I.

Net Sales

AmountIncreased/(Decreased)

II. Operating costs and expenses
Cost of sales
Selling, general and administrative
expensesCompensation income
Impairment charges on goodwill
Total operating costs and expenses
Operating income

-

206

0.1

206

184,816

-

94.4

-

183,191

93.6(1,625)

11,065

5.6

12,534

6.4

1,469

III. Other income (expenses)
Interest income
Interest expense

157

194

37

(27)

(10)

17

Dividend income
Gain or loss on sale or exchange ofmarketable securities and investments– net
Valuation loss on marketable securities
and investments – net
Gain on sale of property, plant andequipment
Other – net

1,176

1,329

153

441

203

(238)

1

3

2

3,770

-

(3,770)

(14)

33

47

Total other income (expenses)

5,504

2.9

1,752

0.9

(3,752)

16,5698.5

14,286

7.3(2,283)Current

4,830

2.5

4,880

2.5

50

Deferred

450

0.2

662

0.3

212

5,280

2.7

5,542

2.8

262

11,289

5.8

8,744

4.5

(2,545)

1,359

0.7

916

0.4

(443)

12,648

6.5

9,660

4.9

(2,988)

(123)

(0.1)

85

0.1

208

12,525

6.4

9,745

5.0

(2,780)

Income before income taxes and equity in
net income of affiliated companies
Income taxes

Total income taxes
Income before equity in net income ofaffiliated companies
Equity in net income of affiliatedcompanies
Net income
Net income attributable tonon-controlling interests
Net income attributable to Wacoal
Holdings Corp.

- 13 -

(3) Consolidated Statements of Comprehensive Income
Fiscal Year Ended
March 31, 2017

Fiscal Year Ended
March 31, 2018

AmountIncreased/(Decreased)

Millions of Yen

Millions of Yen

Millions of Yen

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

12,6489,660(2,988)(4,079)

1,113

5,192

Net unrealized gain on securities

3,109

6,355

3,246

Accounts

Pension liability adjustments

618

(680)

(1,298)Other comprehensive income (loss)

(352)

6,788

7,140

12,296

16,448

4,152

(6)

21

27

12,29016,4694,179

Comprehensive income (loss)
Comprehensive income (loss) attributable tononcontrolling interests
Comprehensive income (loss) attributable to
Wacoal Holdings Corp.

- 14 -

(4) Consolidated Statements of Equity
Fiscal Year Ended March 31, 2017
EquityShares of
Outstanding Common
Item

Common

Stock

Stock
Thousandshares

As of April 1, 2016
Cash dividends paid to
Wacoal Holdings Corp.
shareholders
Cash dividends paid tononcontrolling interests
Repurchase of treasury
stock
Other
Net income
Other comprehensive
income (loss)
As of March 31, 201770,429Additional
Paid-in
CapitalRetained

Accumulated othercomprehensive

Earnings

incomeTreasurystock

EquityNoncontrolling
Interests

Total Equity

Millionsof YenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillionsof Yen13,26029,686

162,196

22,108(2,876)

224,374

5,027

229,401(4,648)(4,648)(1,851)(4,522)27

68,605

Total
Shareholders’

13,26021(11)
12,52529,707

170,062

64(235)
21,873(7,334)(4,648)(4,522)

(167)

(167)
(4,522)74
12,52548
123

122
12,648(235)
227,568

(117)
4,914

(352)
232,482

Fiscal Year Ended March 31, 2018
EquityShares of
Outstanding Common
Item

Common

Stock

Stock
Thousandshares

As of April 1, 2017
Cash dividends paid to
Wacoal Holdings Corp.
shareholders
Cash dividends paid tononcontrolling interests
Repurchase of treasury
stock
Other
Net income
Other comprehensive
income (loss)
As of March 31, 2018

68,605Additional
Paid-in
CapitalRetained

Accumulated other

Earnings

comprehensive
incomeTreasurystock

EquityNoncontrolling
Interests

Total Equity

Millionsof YenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillions ofYenMillionsof Yen13,26029,707

170,062

21,873(7,334)

227,568

4,914

232,482(7,386)(1,243)
5

67,367

Total
Shareholders’

13,260

58

(3)
9,745

29,765

172,418(7,386)(4,007)13

6,724
28,597(11,328)(7,386)

-

(194)

(194)

(4,007)
68
9,745

86
(85)

(4,007)
154
9,660

6,724
232,712

64
4,785

6,788
237,497(Note) We have conducted a share consolidation of common stock of the Company pursuant to which two (2) shares were consolidated into one(1) share effective as of October 1, 2017. Accordingly, the “shares of outstanding common stock” have been calculated assuming that suchshares consolidation has been conducted at the beginning of the previous fiscal year.

- 15 -

(5)Consolidated Statements of Cash Flows

Accounts

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

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sale and redemption of marketablesecurities
4. Payments to acquire marketable securities
5. Proceeds from sale of property, plant and equipment
6. Compensation income
7. Capital expenditures
8. Payments to acquire intangible assets
9. Proceeds from sales of investments
10. Payments to acquire investments
11 Proceeds from sale of shares of an affiliated company
12. Other
Net cash used in investing activities
III. Financing activities
1. Net decrease in short-term bank loans
2. Proceeds from issuance of long-term debt
3. Repayment of long-term debt
4. Repurchase of treasury stock
5. Dividends paid on common stock
6. Dividends paid to noncontrolling interests
7. OtherNet 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 year
VII. Cash and cash equivalents, end of year

Fiscal Year Ended
March 31, 2017

Fiscal Year Ended
March 31, 2018

AmountIncreased/(Decreased)

Millions of Yen

Millions of Yen

Millions of Yen

12,6489,660(2,988)

5,032
264
450

5,492
18
662

460
(246)
212

(3,374)
-

250
(708)
206

3,624
(708)
206

(441)

(203)

238

(1)

(3)

(2)

(837)

(397)

440

882
(378)
475
(95)

(232)
1,012
270
676

(1,114)
1,390
(205)
771

(417)
1,615
528
16,351

(833)
(518)
141
15,493(416)(2,133)
(387)
(858)

(4,336)
3,717(5,129)
3,368

(793)
(349)

1,257
(295)
3,585
(5,504)(1,941)
835
(387)
4
33
(3,032)

827
(112)
159
708
(3,429)(2,455)134(1,515)82(7,362)(430)
183(3,426)
708
2,075
(514)
(701)
(1,128)(4)
49(4,330)(3,613)250(403)(4,522)(4,648)(167)
48(13,055)

(755)
(47)
(4,007)(7,386)(194)
86(12,303)

2,858
(250)
356
515
(2,738)
(27)
38
752

(328)
(64)
34,05933,995(336)(4,508)33,99529,487(8)(4,444)(64)(4,508)- 16 -

Additional Cash Flow Information

Accounts

Fiscal Year Ended
March 31, 2017

Fiscal Year Ended
March 31, 2018

AmountIncreased/(Decreased)

27
2,812

11
5,853

(16)
3,041

795

583

(212)

Cash paid forInterest
Income taxes
Noncash investing activities
Acquisition of fixed assets by assuming payment
obligation(6) Notes on Going Concern
Not applicable.

(7) Basic Significant Matters in Preparation of Consolidated Financial Statements(i)

Matters Regarding the Scope of Consolidation and Application of the Equity Method

Major consolidated subsidiaries:
Wacoal Corporation, Peach John Co., Ltd., Lecien Corporation, Kyushu Wacoal Manufacturing Corp., Torica Co., Ltd., Nanasai Co.,
Ltd., Wacoal International Corp., Wacoal America, Inc., Wacoal Europe Ltd., Wacoal EMEA Ltd., Wacoal Europe SAS, Wacoal
Hong Kong Co., Ltd., Wacoal Investment Co. (Taiwan), Ltd., Wacoal China Co., Ltd., Wacoal International Hong Kong Co., Ltd.
and A Tech Textile Co., Ltd.
Major Affiliated Companies:
Shinyoung Wacoal Inc., Taiwan Wacoal Co., Ltd. and Thai Wacoal Public Co., Ltd.
(ii) Changes Regarding Subsidiaries and Affiliated Companies
Consolidated (new):
Wacoal I Next Corp.
Consolidated (excluded):
Wacoal Sports Science Corp.
(iii) Standard of Preparation of Consolidated Financial Statements
The consolidated financial statements have been prepared based on terms, format and preparation methods in compliance withaccounting standards generally accepted in the United States as required in connection with the issuance of American Depositary
Receipts. For this reason, the consolidated financial statements may be different from those that have been prepared based on theConsolidated Financial Statement Regulations and the Standard of Preparation of Consolidated Financial Statements in Japan.
(iv) Significant Accounting Policiesa.

Valuation Standard of Inventories
The average cost method was mainly used for goods, products and supplies, and the first-in first-out method was used for
raw materials, with both valued at the lower of cost or market.

b.

Valuation Standard of Property, Plant and Equipment and Method of Depreciation
Property, plant and equipment are valued at the acquisition cost. Depreciation expenses are calculated mainly using the
fixed-rate method based on the estimated useful lives of the assets (the lease term is used for capitalized leased assets).

c.

Valuation Standard of Securities and Investments
Based on the provisions of U.S. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)320, marketable securities and investments have been classified as “trading securities,” “available for sale securities” and“held-to-maturity securities.” “Trading securities” and “available for sale securities” are valued at fair value and“held-to-maturity securities” are valued at amortized cost. Gain or loss on sale of marketable securities is calculated basedon acquisition cost using the moving-average method. Nonmarketable securities are valued at cost using themoving-average method.

d.

Liabilities for Termination and Retirement Benefits
This is accounted for based on FASB ASC 715.

e.

Consumption Taxes
Consumption taxes have been excluded from sales.
- 17 -

f.

Consolidated Statements of Cash Flows
In preparing the consolidated cash flow statements, highly liquid investments with original maturities of three (3) months
or less have been included in cash and cash equivalents.

(v) Changes in Accounting Policy
New accounting guidance has been adopted for the balance sheet classification of deferred taxes from the current consolidated fiscal
year. The new guidance requires deferred tax assets and liabilities to be classified as noncurrent on the balance sheet. The new
accounting guidance has not been applied retrospectively for the consolidated financial statements for the prior periods. The amountof current deferred tax assets as of the end of the previous consolidated fiscal year was 4,049 million yen.

(8) Notes to the Consolidated Financial Statements(i)Marketable Securities and Investments(Millions of Yen)
As of March 31, 2017
Cost

As of March 31, 2018

Gross
Gross Unrealized
Unrealized Gain
Loss

Fair
Value

Cost

Gross
Unrealized Gain

Gross Unrealized
Loss

Fair
Value

Marketable Securities
National debt
securities
10
0
10
10
0
10
Mutual Fund
701
168
1
868
575
15
590
Total
711
168
1
878
585
15
600
Investments
Corporate debt
securities
464
150
614
Equity securities
23,153
34,833
10
57,976 23,106
43,645066,751
Total
23,153
34,833
10
57,976 23,570
43,795067,365(Note) Securities which are classified as trading and available for sale securities are shown in the above table and investments in nonmarketable
equity securities for which there are no readily determinable fair values are not shown.
(ii) Contract Amount, Market Value and Valuation Profit/Loss of Derivative Transactions
Our subsidiaries have been utilizing foreign exchange forward contracts to prepare for exposure to market risks from changes in foreignexchange rates. The disclosure of gains and losses of such contracts has been omitted as the amounts involved are non-material.
(iii) Per Share Information
Fiscal Year Ended
March 31, 201712,525 million yen
69,483,315 shares180.26 yen

Fiscal Year Ended
March 31, 2018
9,745 million yen
67,928,557 shares
143.46 yen

Net income attributable to Wacoal Holdings Corp.
Number of average shares issued during the year
Net income attributable to Wacoal Holdings Corp. per share
Diluted net income attributable to Wacoal Holdings Corp. per
179.71 yen
142.98 yen
share(Note) The “number of average shares issued during the year,” “net income attributable to Wacoal Holdings Corp. per share,” “diluted net income
attributable to Wacoal Holdings Corp. per share” and “net income attributable to Wacoal Holdings Corp.” have been calculated assumingthat the share consolidation, which we conducted during the current consolidated fiscal year, has been conducted at the beginning of theprevious fiscal year.

- 18 -

(iv) Segment Informationa.

Operating Segment Information

Fiscal Year Ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Millions of Yen)
Wacoalbusiness(Domestic)

Wacoalbusiness(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

118,389

48,423

11,107

17,962

195,881-

195,881(2) Intersegment

1,098

9,236

1,006

5,947

17,287(17,287)-

Total

119,487

57,65912,11323,909213,168(17,287)

195,881

Operating costs and expenses

112,528

54,604

11,73923,232

202,103(17,287)

184,816

Operating income

6,959

3,055

374

677

11,065-

11,065

Fiscal Year Ended March 31, 2018 (April 1, 2017 - March 31, 2018)(Millions of Yen)
Wacoalbusiness(Domestic)

Wacoalbusiness(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

116,085

51,888

10,795

16,957

195,725-

195,725(2) Intersegment

1,051

10,180

1,281

5,283

17,795(17,795)-

Total

117,136

62,06812,07622,240213,520(17,795)

195,725

Operating costs and expenses

109,251

58,010

11,63521,884

200,780(17,795)

182,985

Impairment charges on goodwill

-

206

-

-

206

-

206

Total operating costs andexpenses

109,251

58,216

11,63521,884200,986(17,795)

183,191

Operating income

7,885

3,852

441

356

12,534-

12,534(Note) 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,
hosiery, and 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, shop design and implementation, etc.

- 19 -

b.

Information by Region

Fiscal Year Ended March 31, 2017 (April 1, 2016 to March 31, 2017)(Millions of Yen)
Elimination or
corporateJapan

Asia/Oceania

Europe/N.A.

Total

External customers

147,061

19,187

29,633

195,881-

195,881

II.

Operating income

7,738

1,758

1,569

11,065-

11,065

III.

Long-lived assets

47,452

4,661

3,175

55,288-55,288I.

Consolidated

Net sales

Fiscal Year Ended March 31, 2018 (April 1, 2017 to March 31, 2018)(Millions of Yen)

I.

Japan

Asia/Oceania

Europe/N.A.

Total

Elimination or
corporate

Consolidated

Net sales
External customers

143,196

21,05731,472

195,725-

195,725

II.

Operating income

8,521

1,200

2,813

12,534-

12,534

III.

Long-lived assets

46,367

4,916

3,050

54,333-54,333(Note) 1.
2.

3.
4.

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan
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.
Long-lived assets include property, plant and equipment.
c.

Overseas Sales

Fiscal Year Ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Millions of Yen)I.

Overseas net sales

II.

Consolidated net sales

Asia/Oceania

Europe/N.A.

Total

19,187

29,633

48,820--195,881

9.8%

15.1%

24.9%

Asia/Oceania

Europe/N.A.

Total

21,05731,472

52,529--195,725

10.7%

16.1%

26.8%

III. Ratio of overseas net sales to total consolidated net
sales
Fiscal Year Ended March 31, 2018 (April 1, 2017 - March 31, 2018)(Millions of Yen)I.

Overseas net sales

II.

Consolidated net sales

III. Ratio of overseas net sales to total consolidated net
sales(Note) 1.
2.

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan
Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries- 20 -

(v) Status of Sales

Type of productFiscal Year Ended March 31, 2017
AmountMillions of Yen

Fiscal Year Ended March 31, 2018

Distribution ratio%

AmountMillions of Yen

Distribution ratio%

Innerwear
Foundation and lingerieNightwear
Children’s underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods andrelated products
OthersTotal

145,188
9,154

74.1
4.7

146,970
8,758

75.1
4.5

1,429

0.7

1,376

0.7

155,77179.5

157,104

80.3

17,189
2,235
9,346

8.8
1.1
4.8

16,128
1,983
8,907

8.2
1.0
4.6

11,340195,8815.8
100.0

11,603
195,7255.9100.0(vi) Significant Subsequent Events
Not applicable.

Omission of Disclosure:
We have omitted notes regarding the lease transactions, related-party transactions, stock options and income taxes etc. because we believe it is
not sufficiently necessary to disclose information on these matters in these financial statements.

- 21 -

4.

Other
Changes to Corporate Officers

The scheduled changes to the composition of the board of directors after the conclusion of the 70th Ordinary General Meeting of
Shareholders to be held on June 28, 2018 will be as follows.
(Please note that the following information has already been disclosed, as announced on April 26, 2018 in our press release “Announcementof Change of Representative Director and President” and “Announcement of Officer Change.”)1.

Promotion of Director (as of June 28, 2018 (scheduled))
Current Representative Director and President Yoshikata Tsukamoto is scheduled to be promoted to and appointed as
Representative Director and Chairman.
Current Director and Vice President Hironobu Yasuhara is schedule to be promoted and appointed as Representative
Director and President.

2.

Resignation of Director (as of June 28, 2018 (scheduled))
Atsushi Horiba is scheduled to resign as Director (outside director).

3.

New appointment of Director (as of June 28, 2018 (scheduled))
Current General Manager of Corporate Planning Akira Miyagi is schedule to be appointed as Director.
Tsunehiko Iwai, Senior Advisor of Shiseido Co., Ltd., is schedule to be appointed as Director (outside director).

4.

Resignation of Audit & Supervisory Board Member (as of June 28, 2018 (scheduled))
Akira Katayanagi is scheduled to resign as Audit & Supervisory Board Member (outside auditor).

5.

New appointment of Audit & Supervisory Board Member (as of June 28, 2018 (scheduled))
Minoru Shimada, Representative Director and President of Naigai Kensetsu Kabushiki Kaisha, Representative Director
and President of SOTSU CORPORATION, and Representative Director and President of SOTSU Amenity Service
Kabushiki Kaisha, is schedule to be appointed as Audit & Supervisory Board Member (outside auditor).

The management and administrative organization after the conclusion of the 70th Ordinary General Meeting of Shareholders to beheld on June 28, 2018 will be as follows:
Management and Administrative Organization for the 71st Fiscal Year
Director/Audit & Supervisory Board Member
Representative Director and Chairman
Representative Director and President
Director and Vice PresidentManaging Director
Director
Director (outside director)
Director (outside director)
Director (outside director)

Name
Yoshikata Tsukamoto
Hironobu Yasuhara
Masaya Wakabayashi
Masashi Yamaguchi
Akira Miyagi
Madoka Mayuzumi
Shigeru Saito
Tsunehiko Iwai (newly appointed)

Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member(outside auditor)
Audit & Supervisory Board Member(outside auditor)
Audit & Supervisory Board Member(outside auditor)

Tomoki Nakamura
Kiyotaka Hiroshima
Hiroshi Shirai
Mitsuhiro Hamamoto
Minoru Shimada (newly appointed)- 22 -

(Reference)
The management and administrative organization for the 14th term of Wacoal Corporation will be as follows:
Management and Administrative Organization for the 14th Term
Director/ Audit &Supervisory Board Member
Representative Director
and Chairman
Representative Director
Director
Director
Director
Director
Director
Director
Director

Corporate Officer

Name

Responsibility

Hironobu Yasuhara
President andCorporate Officer

Tomoyasu Ito

Vice President andCorporate Officer
Vice President andCorporate Officer
Managing Corporate
OfficerManaging Corporate
OfficerManaging Corporate
OfficerManaging Corporate
Officer
Corporate Officer

Yuzo Ide (*)

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberMasashi Yamaguchi
Kuniharu Suzuki (*)

In charge of Administration and General Manager
of Personnel Division
Assistant to president of special affairs

Hidehiko Imaizumi

General Manager of Retail Operation Division

Yasuo Kamoshita

Chief of Corporate Planning Office

Masaaki Yajima

General Manager of Wholesale Division

Junko Kasai

Chief of Diversity Promotion, President of Wacoal
I Next Corp.

Kiyotaka Hiroshima
Hisashi Mazuyama

Managing Corporate
OfficerManaging Corporate
Officer
Corporate Officer

Hideo Senoue

General Manager of Department Store Sales
Control of Wholesale Division
Atsushi Kotani
General Manager of Chain Store Sales Control ofWholesale Division
Hiroshi Shimoyama
General Manager of Omni-channel Strategy
Promotion, Corporate Planning Office
Corporate Officer
Toshihiro Inokuma
General Manager of Public Relations andAdvertising, Corporate Planning Office
Corporate Officer
Takahiko Hasegawa
Personnel Administrator of Personnel and
Administration DivisionCorporate Officer
Hiroshi Imai
Director of Human Science Research Center
Corporate Officer
Shuji Morimoto
General Manager of Information System DivisionCorporate Officer
Masahiro Shigemoto
General Manager of Business Administration
Department, Wholesale DivisionCorporate Officer
Katsuya Kodama
General Manager of East Japan Sales Control ofWholesale DivisionCorporate Officer
Toshiaki Sato
General Manager of West Japan Sales Control ofWholesale DivisionCorporate Officer
Katsuhiro Okamoto
General Manager of Wacoal Brand ProductControl, Wholesale DivisionCorporate Officer
Hiroyuki Sekiguchi
General Manager of Direct Marketing Operations
Corporate Officer
Kazuhiro Shibahara
General Manager of Technology/Production
Division
Corporate Officer
Mitsuru Sekiguchi
General Manager of International DivisionCorporate Officer
Masami Ono
Director, General Manager of Wacoal China Co.,Ltd.
Corporate Officer
Takuya Miura
Chairman of Wacoal Europe Limited*Mr. Yuzo Ide, Director, Vice President and Corporate Officer, and Mr. Kuniharu Suzuki, Director, Managing Corporate Officer, are to resign
upon the closure of the Ordinary General Meeting of Shareholders to be held in late June 2018.

- End -

- 23 -