Business Results for the Second Quarter of the Year Ending December 31, 2020
(Six Months Ended June 30, 2020)[Japan GAAP] (Consolidated)
August 6, 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:
August 11, 2020
Expected starting date of dividend payment:
September 2, 2020
Preparation of supplementary quarterly financial document:
Yes
Quarterly results briefing:
None(Rounded down to million yen)

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

Operating profit

Million yen

Six months ended Jun. 30, 2020
Six months ended Jun. 30, 2019
(Note) Comprehensive income%Million yen%

36,046 (18.6)
1,229 (52.6)
1,375 (50.1)
863
44,284
5.3
2,595(3.7)
2,754(3.7)
1,804
Six months ended Jun. 30, 2020:
254 million yen (down 84.7%)
Six months ended Jun. 30, 2019: 1,664 million yen (down 5.7%)(52.1)(6.4)

Basic earnings per
share
Six months ended Jun. 30, 2020
Six months ended Jun. 30, 2019

Million yen

Profit attributableto owners of parent

Ordinary profit%

Million yen%

Diluted earnings per
share

Yen

Yen

45.51
92.41

45.45
92.27

(2) Consolidated financial position
Total assets

Net assets

Million yen

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

Capital adequacy
ratio

Million yen

81,031
58,19588,446
58,495
As of Jun. 30, 2020: 58,107 million yen

%

71.7
66.0
As of Dec. 31, 2019: 58,371 million yen

2. Dividends
End of 1Q
Yen

End of 2Q

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

-30.0055.00-30.0060.00

3. Forecast of consolidated business results for the year ending December 31, 2020
(January 1, 2020 through December 31, 2020)
There is no forecast for the year ending December 31, 2020 because it is not possible to establish an appropriate and reliable
forecast at this time due to COVID-19. An announcement will be made promptly once it becomes possible to determine a reliable
forecast. For more information, please refer to the July 27, 2020 press release “Revision of the first half and full-year consolidated
forecast for the year ending December 31, 2020” (Japanese version only).
(Note) Revisions to the most recently announced consolidated forecast: None* 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 Jun. 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 Jun. 30, 2020:

909,347 shares

3) Average number of shares
Six months ended Jun. 30, 2020:

18,982,396 shares

Six months ended Jun. 30, 2019:19,529,486 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 wasreleased 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 Second 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 Income6(3) Quarterly Consolidated Statement of Cash Flows8(4) Notes to Quarterly Consolidated Financial Statements

9Going Concern Assumption

9Significant Changes in Shareholders’ Equity

9-1-The Pack Corporation (3950) Financial Report for the Second Quarter of 2020

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of 2020, the spread of the COVID-19 pandemic seriously affected people’s lives, employment,
and corporate activities, resulting in a very difficult operating environment in Japan. Although economicactivities have now resumed following the complete lifting of the government ’s emergency declaration, theoutlook remains uncertain.
The U.S. economy has been recovering thanks to the resumption of economic activity. However, in some states
and regions where the number of new cases of new coronavirus infections is increasing, the pace of recovery has
been sluggish as the authorities in these regions have ordered temporary suspension of the reopening ofbusinesses and tightened regulations. The GDP growth rate of the Chinese economy recovered in the period from
April to June, quickly exiting the worst period of the COVID-19 crisis. Although consumption remains sluggish,it is on a gradual recovery path led by increase in capital investments.
In the first half 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 forced our main customers to close their businesses, which h as consequently affected
our business performance.
Net sales decreased 18.6% year-on-year to 36,046 million yen, operating profit decreased 52.6% to 1,229 million
yen, ordinary profit decreased 50.1% to 1,375 million yen, and profit attributable to owners of parent decreased
52.1% to 863 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 63.6% of consolidated sales in the first half of 2020. Sales of paperbags, which accounted for 26.4% of consolidated sales, decreased 30.2% to 9,512 million yen. The main reason
was a big decrease in sales because people were asked to stay home as much as possible and stores wererequested to close. The impact of the spread of COVID-19 also brought down paper bag sales of overseas
subsidiaries.
Sales of paper folding cartons, which accounted for 20.7% of consolidated sales, decreased 10.1% to 7,470
million yen. This was the result of lower sales to specialty retail stores in Japan despite firm sales of cartons forfood products and to the e-commerce sector.
Sales of corrugated boxes, which accounted for 13.7% of consolidated sales, decreased 2.6% to 4,919 million yen.
This decrease was attributable to lower sales to large manufacturers although sales of boxes t o the e-commerce
sector were strong.
Printing sales, which accounted for 2.8% of consolidated sales, decreased 1.8% to 1,021 million yen. Sales atNIKKO PRINT CORPORATION were weak.
Overall, sales in this segment decreased 18.2% to 22,923 million yen, and operating profit decreased 41.1% to1,194 million yen.
(Film Packaging)
The film packaging segment accounted for 19.6% of consolidated sales in the first half of 2020. Due to adecrease in orders for products for disposable diapers and lower sales to specialty retail stores in Japan, segment
sales decreased 23.0% to 7,074 million yen. Operating profit was down 40.1% to 246 million yen.
(Other Businesses)
Other businesses accounted for 16.8% of consolidated sales in the first half of 2020. Sales decreased 14.5% to6,048 million yen due to a decrease in sales of miscellaneous supplies to large retailers. Operating profit
decreased 55.5% to 260 million yen.

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

(2) Explanation of Financial Position
1) Balance sheet position
Assets totaled 81,031 million yen at the end of the second quarter of 2020, down 7,415 million yen from the endof 2019. The main factors were increases of 1,275 million yen in merchandise and finished goods, 518 million
yen in machinery, equipment and vehicles and 360 million yen in cash and deposits, and a decrease of 9,796
million yen in notes and accounts receivable-trade.
Liabilities decreased 7,115 million yen to 22,835 million yen. The main factors were decreases of 5,084 million
yen in notes and accounts payable-trade, 1,240 million yen in electronically recorded obligations-operating and
719 million yen in income taxes payable.
Net assets decreased 299 million yen to 58,195 million yen. The main factors were an increase of 294 million yen
in retained earnings and a decrease of 606 million yen in valuation difference on available-for-sale securities.
2) Cash flow position
The balance of cash and cash equivalents at the end of the second quarter of 2020 decreased 968 million yen, or4.8% from the end of the second quarter of 2019 to 19,168 million yen.
Cash flows from operating activities
Operating activities provided net cash of 2,903 million yen (net cash provided of 4,775 million yen in the firsthalf of 2019). The principal factors were profit before income taxes of 1,305 million yen and a decrease of 9,778
million yen in trade receivables, while there was a decrease of 6,314 million yen in trade payables and anincrease of 1,146 million yen in inventories.
Cash flows from investing activities
Investing activities used net cash of 1,414 million yen (net cash used of 1,014 million yen in the first half of2019). The principal factors were outlays of 3,500 million yen for the purchase of securities and 1,456 million
yen for the purchase of property, plant and equipment, while there we re proceeds from sales of securities of
4,500 million yen.
Cash flows from financing activities
Financing activities used net cash of 608 million yen (net cash used of 2,790 million yen in the first half of 2019).
This was mainly due to 568 million yen for the cash dividends paid.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
At this point, it is difficult to reasonably forecast the consolidated financial results for the fiscal year ending
December 31, 2020 as the COVID-19 pandemic will affect our business performance. There is no unified view on
the outlook for the spread of the COVID-19 pandemic or the timing of a return to normality. It is therefore difficult
to make any reliable forecast for the effects of such factors at present. Consequently, we are temporarily
withdrawing the forecast announced on February 7, 2020. It will be disclosed once it becomes possible todetermine a reliable forecast.

-3-The Pack Corporation (3950) Financial Report for the Second 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)
Second quarter ofthe current fiscal year
(As of June 30, 2020)

AssetsCurrent assets
Cash and deposits

14,317

14,678Notes and accounts receivable-trade

24,717

14,921

Securities

10,0009,499

Merchandise and finished goods

5,675

6,951

Work in process

931

889

Raw materials and supplies

887

796

Other

501

566

Allowance for doubtful accounts

(13)

(10)

57,017

48,292

Buildings and structures, net

6,523

6,383

Machinery, equipment and vehicles, net

5,468

5,986

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

Tools, furniture and fixtures, net
LandConstruction in progress

164

172

8,397

8,397

226

1,020

20,781

21,960169

150

Investment securities

8,842

8,917

Deferred tax assets

774

862

Other

911907

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

Allowance for doubtful accounts

(50)

(59)

Total investments and other assets

10,478

10,62831,42932,73988,44681,031

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

(Million yen)
Second quarter ofthe current fiscal year
(As of June 30, 2020)

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

15,005

9,920

Electronically recorded obligations-operating

5,763

4,523

Current portion of long-term borrowings
Income taxes payable

48

46

1,055

336

283

272

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

43

20

3,449

3,694

Total current liabilities

25,64818,81430

3Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

504

475

3,648

3,468

118

73

4,302

4,021

29,951

22,835

2,553

2,553

Net assets
Shareholders’ equity
Share capitalCapital surplus

3,164

3,164

Retained earnings

54,60754,902

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

Total shareholders’ equity

57,56057,902

1,462

856

00

Foreign currency translation adjustment

(283)

(321)

Remeasurements of defined benefit plans

(367)

(329)

811

205

Share acquisition rights

9365

Non-controlling interests

29

23

58,49558,19588,44681,031

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 Second Quarter of 2020

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

Net sales
Cost of sales

First six months ofthe previous fiscal year
(from January 1, 2019
to June 30, 2019)44,28433,767(Million yen)First six months ofthe current fiscal year
(from January 1, 2020
to June 30, 2020)
36,04627,549Gross profit

10,516

8,496

2,271
1,992
257
4
143

1,864
1,939
220
12121

1919141182
1,359
1,548
7,920

142
171
1,376
1,396
7,266

2,595

1,229

54
51
27
24
19

51
51
27
15
20

176

165

24
2
80
4
2
11

Selling, general and administrative expenses
Freight 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
Other
Total non-operating expenses

1819

2,754

1,375

083

15-

84

15

123
164

29055
-

Total extraordinary losses

179

86

Profit before income taxes

2,658

1,305

Income taxes-current
Income taxes-deferred

869
(15)

307
135

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assetsLoss on sales of non-current assets
Loss on valuation of investment securities
Impairment loss

Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent-6-854

443

1,804861(0)(2)

1,804863

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

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)

ProfitFirst six months ofthe previous fiscal year
(from January 1, 2019
to June 30, 2019)
1,804(Million yen)First six months ofthe current fiscal year
(from January 1, 2020
to June 30, 2020)
861

Other comprehensive income
Valuation difference on available-for-sale securities

(117)

(606)

Deferred gains or losses on hedges

(0)

(0)

Foreign currency translation adjustment

(46)

(38)

25

38

(139)

(607)

1,664

254

1,668

257

(3)

(2)

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
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 Second Quarter of 2020

(3) Quarterly Consolidated Statement of Cash Flows(Million yen)First six months ofthe current fiscal year
(from January 1, 2020
to June 30, 2020)

First six months ofthe previous fiscal year
(from January 1, 2019
to June 30, 2019)
Cash flows from operating activities
Profit before income taxes

2,658

1,305

Depreciation

821

830

Impairment loss

164

-Increase (decrease) in allowance for doubtful accounts

15

Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors(and other officers)
Increase (decrease) in retirement benefit liability29(10)

(21)

(23)

(110)

(126)

Interest and dividend income(105)

(103)

20

Loss (gain) on sales of non-current assets2(15)Loss on retirement of non-current assets

1229

Loss (gain) on valuation of investment securities-55

Interest expenses

Decrease (increase) in trade receivables

5,842

9,778

Decrease (increase) in inventories(289)(1,146)

Increase (decrease) in trade payables(3,336)(6,314)

Other, net

62(463)

Subtotal

5,733

3,804

104

102

Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

(2)

(0)

(1,060)(1,002)

4,775

2,903

(66)

-

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of securities
Proceeds from sales of securities
Collection of loans receivable
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

66-(2,500)(3,500)

2,000

4,500

82(389)(1,456)028

Purchase of intangible assets

(43)

(4)

Purchase of investment securities(114)(1,014)

Payments of leasehold and guarantee deposits

(13)

(13)

38

43

(1,014)(1,414)

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

(66)

-

Repayments of long-term borrowings

(144)

(28)

Dividends paid
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Purchase of treasury shares

(490)

(568)

(28)

(4)

(2,049)-Other, net

(10)

(6)

(2,790)(608)

Effect of exchange rate change on cash and cash equivalents

(16)

(20)

Net increase (decrease) in cash and cash equivalents

955

860

Cash and cash equivalents at beginning of period

19,181

18,307

Cash and cash equivalents at end of period

20,136

19,168Net cash provided by (used in) financing activities-8-The Pack Corporation (3950) Financial Report for the Second Quarter of 2020

(4) 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.

-9-