Business Results for the Third Quarter of the Year Ending December 31, 2020
(Nine Months Ended September 30, 2020)[Japan GAAP] (Consolidated)
November 5, 2020

Company:
The Pack Corporation
Listed on the TSE1
Stock code:3950
URL: https://www.thepack.co.jp
Representative: Mitsuo Inada, President & CEO
Contact:
Michihisa Fujii, Managing Director, Corporate Division
TEL: +81-6-4967-1221
Expected date of filing of quarterly report:
November 6, 2020
Expected starting date of dividend payment:
Preparation of supplementary quarterly financial document:
None
Quarterly results briefing:
None(Rounded down to million yen)

1. Consolidated business results for the third quarter of the year ending December 31, 2020
(January 1, 2020 through September 30, 2020)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating profit

Million yen

Nine months ended Sep. 30, 2020
Nine months ended Sep. 30, 2019
(Note) Comprehensive income%Million yen

Profit attributable toowners of parent

Ordinary profit

Million yen%

54,165 (18.7)
1,582 (60.8)
1,795 (57.8)
1,113
66,611
5.1
4,037
1.5
4,258
2.02,626
Nine months ended Sep. 30, 2020:
96 million yen (down 96.3%)
Nine months ended Sep. 30, 2019: 2,593 million yen (down 4.0%)(57.6)(6.3)

Basic earnings per
share
Nine months ended Sep. 30, 2020
Nine months ended Sep. 30, 2019%

Million yen%

Diluted earnings per
share

YenYen58.65
135.63

58.57
135.42(2) Consolidated financial position
Total assets

Capital adequacy
ratio

Net assets

Million yen

Million yen

80,122
57,46888,44658,495
As of Sep. 30, 2020: 57,379 million yen

As of Sep. 30, 2020As of Dec. 31, 2019
(Reference) Owner’s equity%

71.6
66.0
As of Dec. 31, 2019: 58,371 million yen

2. Dividends
End of 1Q

End of 2Q

Yen

Dividend per share
End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Year ended Dec. 31, 2019
25.00
Year ending Dec. 31, 2020
30.00
Year ending Dec. 31, 2020
(forecasts)(Note) Revisions to the most recently announced dividend forecast: None-30.00

55.00

30.00

60.00

3. Forecast of consolidated business results for the year ending December 31, 2020
(January 1, 2020 through December 31, 2020)(Percentages represent year-on-year changes)
Net sales
Million yen

Operating profit%

Million yen

Profit attributable toowners of parent

Ordinary profit%

Basic earnings
per share

Million yen%

Million yen%

Yen

Full year
77,000 (19.4)
2,600(62.0)
2,900(Note) Revisions to the most recently announced consolidated forecast: Yes(59.7)

2,000(57.4)

105.31

Regarding to the consolidated forecast, please refer to the November 5, 2020 press release “ Notice of theConsolidated Forecast” (Japanese version only).

* Notes(1) Material changes in subsidiaries during this period (Changes in scope of consolidations resulting from changes
in subsidiaries): None
(2) Applying of specific accounting of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective restatement
1) Changes in accounting policies based on revisions of accounting standard: None
2) Changes in accounting policies other than ones based on revisions of accounting standard: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None

(4) Number of issued and outstanding shares (common stock)1) Number of issued and outstanding shares at the end of fiscal year (including treasury shares)
As of Sep. 30, 2020:

19,900,000 shares

As of Dec. 31, 2019:

19,900,000 shares

As of Dec. 31, 2019:925,347 shares

2) Number of treasury shares at the end of fiscal year
As of Sep. 30, 2020:

909,347 shares

3) Average number of shares
Nine months ended Sep. 30, 2020:

18,984,873 shares

Nine months ended Sep. 30, 2019:19,363,048 shares*The current quarterly financial summary is not subject to quarterly review by certified public accountants or auditing
firms.
*Explanation regarding appropriate use of business forecasts and other special instructions
Forecasts regarding future performance in these materials are based on information that was available when this document was
released and incorporates a number of current assumptions about uncertainties that may affect future results of operations.
Therefore, actual results may differ significantly from the forecasts due to various factors. Please refer to “Explanation ofConsolidated Forecasts and Other Forward-looking Statements” on page 3 for forecast assumptions.

The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6(3) Notes to Quarterly Consolidated Financial Statements

8Going Concern Assumption

8Significant Changes in Shareholders’ Equity

8-1-The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of 2020, the spread of the COVID-19 pandemic seriously affected people’s lives,employment, and corporate activities. Although economic activities have gradually resumed following thecomplete lifting of the government’s emergency declaration, a complete recovery is still way ahead.
The U.S. economy is recovering but the outlook remains uncertain because of the spread of the COVID -19
pandemic and the worsening conflict with China. On the other hand, personal consumption is recovering steadilyin China and economic recovery is accelerating due to the growth in imports.
In the first nine months of 2020, under the slogan “Gather the strengths of our group, and progress forward withtenacity,” all group companies were focused on entering new markets, making substantial capital expendituresand improving quality management in order to increase earnings. However, the continuing spread of theCOVID-19 pandemic has affected our business performance.
Net sales decreased 18.7% year-on-year to 54,165 million yen, operating profit decreased 60.8% to 1,582 million
yen, ordinary profit decreased 57.8% to 1,795 million yen, and profit attributable to owners of parent decreased
57.6% to 1,113 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 64.3% of consolidated sales in the first nine months of 2020. Sales of
paper bags, which accounted for 26.4% of consolidated sales, decreased 29.0% to 14,311 million yen. The main
reason was slowing personal consumption due to the spread of the COVID -19 pandemic. The impact of thespread of COVID-19 also brought down paper bag sales of overseas subsidiaries.
Sales of paper folding cartons, which accounted for 21.1% of consolidated sales, decreased 9.5% to 11,402
million yen. This was the result of lower sales to specialty retail stores in Japan despite firm sales of cartons fortake-out food products and to the e-commerce sector.
Sales of corrugated boxes, which accounted for 14.1% of consolidated sales, decreased 0.3% to 7,630 million yen.
This decrease was attributable to lower sales to large manufacturers although sales of boxes to the e -commerce
sector were strong.
Printing sales, which accounted for 2.7% of consolidated sales, decreased 7.0% to 1,473 million yen. Sales at
Keihin Tokushu Printing Corp. and NIKKO PRINT CORPORATION were weak.
Overall, sales in this segment decreased 17.1% to 34,818 million yen, and operating profit decreased 47.5% to1,657 million yen.
(Film Packaging)
The film packaging segment accounted for 18.5% of consolidated sales in the first nine months of 2020. Segment
sales decreased 28.4% to 10,005 million yen due to a decrease in sales of disposable diaper products and theimpact of the introduction of a mandatory charge for plastic shopping bags. Operating profit was down 50.7% to303 million yen.
(Other Businesses)
Other businesses accounted for 17.2% of consolidated sales in the first nine months of 2020. Sales decreased
12.3% to 9,341 million yen due to a decrease in sales of miscellaneous supplies to large retailers. Operating
profit decreased 56.7% to 413 million yen.

-2-The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

(2) Explanation of Financial Position
Assets totaled 80,122 million yen at the end of the third quarter of 2020, down 8,323 million yen from the end of
2019. The main factors were an increase of 1,491 million yen in machinery, equipment and vehicles, and adecrease of 10,021 million yen in notes and accounts receivable-trade.
Liabilities decreased 7,296 million yen to 22,654 million yen. The main factors were decreases of 5,642 million
yen in notes and accounts payable-trade and 1,323 million yen in electronically recorded obligations-operating.
Net assets decreased 1,026 million yen to 57,468 million yen. The main factor was a decrease of 619 million yen
in valuation difference on available-for-sale securities.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
The release of the forecast of consolidated financial results for the fiscal year ending December 31, 2020 waspending because it was difficult to reasonably estimate the impact of the spread of the COVID-19 pandemic on
our business performance. We have now announced the consolidated forecast for the current fiscal year based on
the business performance in the first nine months, the current economic trends, and information available tomanagement at present.
For more information, please refer to the November 5, 2020 press release “Notice of the Consolidated Forecast”(Japanese version only).

-3-The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2019)(Million yen)
Third quarter ofthe current fiscal year
(As of September 30, 2020)

AssetsCurrent assets
Cash and deposits

14,317

16,669Notes and accounts receivable-trade

24,717

14,695

Securities

10,0005,999

Merchandise and finished goods

5,675

6,553

Work in process

931

813

Raw materials and supplies

887

844

Other501

1,011

Allowance for doubtful accounts

(13)

(9)

57,017

46,577

Buildings and structures, net

6,523

6,350

Machinery, equipment and vehicles, net

5,468

6,959

Total current assets
Non-current assets
Property, plant and equipment

Tools, furniture and fixtures, netLand
Construction in progress

164

173

8,397

8,302

226

580

20,781

22,366169

164

Investment securities

8,842

8,905

Deferred tax assets

774

1,113

Other

911

1,052

Total property, plant and equipment
Intangible assets
Investments and other assets

Allowance for doubtful accounts

(50)

(57)

Total investments and other assets

10,47811,014

31,42933,54588,44680,122

Total non-current assets
Total assets-4-The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

(Million yen)
Third quarter ofthe current fiscal year
(As of September 30, 2020)

Previous fiscal year
(As of December 31, 2019)
Liabilities
Current liabilities
Notes and accounts payable-trade

15,005

9,362

Electronically recorded obligations-operating

5,763

4,440

Current portion of long-term borrowings
Income taxes payable

48

38

1,055-

283

613

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other

43

30

3,449

3,579

Total current liabilities

25,64818,06430-

Non-current liabilitiesLong-term borrowings
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

504

482

3,648

4,038

118

68

4,302

4,590

29,951

22,654

2,553

2,553

Net assets
Shareholders’ equity
Share capital
Capital surplus

3,164

3,164

Retained earnings

54,60754,581

Treasury shares(2,765)(2,717)

Total shareholders’ equity

57,56057,582

1,462

842

00

Foreign currency translation adjustment

(283)

(315)

Remeasurements of defined benefit plans

(367)

(729)

811

(202)

Share acquisition rights9365

Non-controlling interests

2922

58,49557,46888,44680,122

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total accumulated other comprehensive income

Total net assets
Total liabilities and net assets-5-

The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expensesFreight and packing costs
Salaries and allowances
Remuneration for directors (and other officers)
Provision of allowance for doubtful accounts
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Retirement benefit expenses
Depreciation
Rent expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rental costs
Sales discounts
OtherTotal non-operating expenses
Ordinary profitExtraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of non-current assets
Loss on valuation of investment securities
Impairment loss
Demolition cost of non-current asset
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

First nine months ofthe previous fiscal year
(from January 1, 2019
to September 30, 2019)
66,611
50,764
15,846(Million yen)First nine months ofthe current fiscal year
(from January 1, 2020
to September 30, 2020)
54,16541,652
12,513

3,397
2,820
370
23
353

2,782
2,769
328
15
309

29

28

207
273
2,023
2,310
11,809
4,037

240
259
2,097
2,099
10,930
1,582

78
66
41
30
28
245

75
66
40
28
26
238

2
7
3
9
23
4,258

1
7
3
13
26
1,795

2
83
85

3
25
28

21
3
164
190
378
3,965
1,400(60)1,339
2,625(0)2,6263105588
1,734556
67
624
1,110(2)
1,113-6-The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months ofthe previous fiscal year
(from January 1, 2019
to September 30, 2019)
2,625(Million yen)First nine months ofthe current fiscal year
(from January 1, 2020
to September 30, 2020)
1,110

Valuation difference on available-for-sale securities

6(620)

Deferred gains or losses on hedges

0(0)ProfitOther comprehensive income

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

(77)

(32)

38(361)(32)(1,013)

2,593

96

2,597

100

(4)

(3)

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-7-

The Pack Corporation (3950) Financial Report for the Third Quarter of 2020

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.

* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

-8-