Business Results for the First Quarter of the Year Ending December 31, 2021
[Japan GAAP] (Consolidated)
May 7, 2021

Company:
Stock code:
Representative:
Contact:

The Pack Corporation

3950
Mitsuo Inada, President & CEO
Michihisa Fujii, Managing Director, Corporate Division
TEL: +81-6-4967-1221
Expected filing date for quarterly securities report:
May 11, 2021
Expected starting date of dividend payment:
Quarterly supplementary financial documents:
None
Quarterly results briefing:
None

Listed on TSE, First Section
URL: https://www.thepack.co.jp(Rounded down to million yen)
1. Consolidated business results for the first quarter of the year ending December 31, 2021
(January 1, 2021 through December 31, 2021)(1)

Consolidated operational results (cumulative)(% change from same quarter of previous year)

Net sales

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%First quarter of year ending
December 31, 2021

17,971(8.2)

785(17.8)

837(16.3)568(8.1)

First quarter of year ended
December 31, 2020

19,565(7.1)

955(12.1)

1,001(12.9)

618(13.0)(Note) Comprehensive income

First quarter of year ending December 31, 2021:
First quarter of year ended December 31, 2020:

Quarterly basic
earnings per share

980 million yen (-%)
(15) million yen (-%)

Quarterly diluted
earnings per share

YenYenFirst quarter of year ending December 31, 2021

29.92

29.88

First quarter of year ended December 31, 2020

32.59

32.54

(2)

Consolidated financial position
Total assets

Net assets

Capital adequacy ratio

Million yen

Million yen%First quarter of year ending December 31, 2021

82,06760,14973.2

Year ended December 31, 2020

83,55659,73971.4(Reference) Owner’s equity

First quarter of year ending December 31, 2021:
Year ended December 31, 2020:

60,062 million yen
59,651 million yen

2. Dividends
Dividend per share
End of 1Q

End of 2Q

End of 3Q

Yen

Yen

Yen

Yen

Yen

Year ended December 31, 2020

-30.00

-

30.00

60.00

Year ending December 31, 2021

25.00

-25.0050.00

Year ending December 31, 2021 (forecast)(Note) Revision from most recently announced dividends forecast: None

Year-endTotal3. Forecast of consolidated results for the year ending December 31, 2021
(January 1, 2021 through December 31, 2021)(% change from the previous corresponding period)
Net sales

BasicProfit attributableearnings perto owners of parentshare

Operating profit

Ordinary profit%

Million yen%

Million yen

36,500 1.3

1,400

13.8

1,600 16.3

1,100

27.3

57.92

Full year
81,000 3.3
3,800 16.0(Note) Revision from most recently announced forecast of results: None

4,000 10.9

2,700

12.9

142.17

Million yen
Second half (accumulated)% Million yen%

Yen

*Notes(1)

Material changes in subsidiaries during this quarterly cumulative period (changes in scope of consolidations resulting
from change in subsidiaries): None(2)Application of special account processing in preparation of quarterly financial statements: None

(3)

Changes in accounting policies, accounting estimates, and retrospective restatement
1) Changes in accounting policies based on revisions of the accounting standard: None
2) Changes in accounting policies other than ones based on revisions of the 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
1Q, year ending
shares at the end of fiscal year
December 31, 2021
(including treasury shares)

19,900,000 sharesYear ended
December 31, 2020

19,900,000 shares

2)

Number of treasury shares at theend of fiscal year

1Q, year ending
December 31, 2021

909,197 sharesYear ended
December 31, 2020

909,347 shares

3)

Average number of shares(quarterly cumulative)

1Q, year ending
December 31, 2021

18,990,765 shares

1Q, year ended
December 31, 2020

18,977,703 shares* The quarterly financial summary is not subject to audits by certified public accountants or auditing firms.
* Explanation regarding appropriate use of business forecasts and other special instructions
Forward-looking statements regarding future performance are based on assumptions regarding various factors affecting
business performance and information available to the Company’s management as of the date the materials wereprepared. Actual results may differ significantly from forecasts.
Also see “Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements” on p. 3 ofthe Attachments concerning forward-looking statements.

The Pack Corporation (3950) Financial Report for the First Quarter of 2021

Contents of Attachments
1.
(1)
(2)
(3)

Overview of Operational Results
Quarterly Operational Results
Quarterly Financial Position
Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

2233

2.
(1)
(2)
(3)

Quarterly Consolidated Financial Statements and Notes
Quarterly Consolidated Balance Sheet
Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive IncomeNotes to Quarterly Consolidated Financial Statements(Going Concern Assumption)(Significant Changes in Shareholders’ Equity)

446888-1-The Pack Corporation (3950) Financial Report for the First Quarter of 2021

1. Overview of Operational Results(1)

Quarterly Operational Results

Japan’s economy in the first quarter of the consolidated fiscal year under review was marked by extreme challenges
associated with the COVID-19 pandemic. While economic activity gradually resumed, subsequent waves of infections led
to a continuing market polarization between sectors such as the food service industry and travel industry which sufferedpronounced downturns and those serving consumers at home, which continued to experience upturns.
In the United States, due to steady progress with COVID-19 vaccination, further recovery in occasions to go out for citizens
from March, and the passage of additional economic stimulus measures totaling $1.9 trillion, the economy is expected toshow steady movement toward normal economic activity. China’s economy continued to experience a steady recovery inconsumer spending and continually improving conditions, driven largely by domestic demand and exports, founded on thecountry’s success in containing COVID-19.
Under the slogan “Refreshed and Moving Forward,” group companies worked collectively to increase earnings by venturing
into new markets, making substantial capital expenditures, and improving quality management. Nevertheless, the continuing
COVID-19 pandemic affected business performance.
During the quarter under review, net sales fell 8.2% year on year to ¥17,971 million; operating profit fell 17.8% to ¥785
million; ordinary profit fell 16.3% to ¥837 million; and profit attributable to owners of parent fell 8.1% to ¥568 million.
The business performance for each segment is given below.
(Paper Products)
The paper products segment accounted for 68.7% of consolidated sales in the first quarter. Sales of paper bags, which
accounted for 26.9% of consolidated sales, declined due to slowing consumer spending attributable to the COVID-19
pandemic and the decision by certain customers to begin charging fees for bags. While the overseas subsidiaries The Pack
America Corp. and The Pack (Shanghai) Corporation recorded strong performance, slow performance of domestic
subsidiaries led to a 12.4% decline in paper bag net sales year on year to ¥4,825 million.
Sales of folding paper cartons, which accounted for 23.3% of consolidated sales, grew 1.8% to 4,193 million yen. Sales ofcartons for takeout/delivery food products and to the e-commerce sector remained firm.
Sales of corrugated boxes, which accounted for 15.6% of consolidated sales, grew 13.9% to 2,809 million yen, driven byfirm sales to the e-commerce sector.
Printing sales, which accounted for 2.9% of consolidated sales, fell 4.1% to 514 million due to lower sales at Keihin Tokushu
Printing Corp. and NIKKO PRINT CORPORATION.
Overall, sales in this segment fell 2.3% to 12,343 million yen. Operating profit fell 10.5% to 743 million yen.
(Film Packaging)
The film packaging segment accounted for 14.3% of consolidated sales in the quarter under review. Segment sales fell 31.1%
to 2,577 million yen due to declining sales of disposable diaper products, lower sales to specialty retail stores in Japan due
to COVID-19, and the impact of mandatory fees for plastic shopping bags that went into effect on July 1 last year. Operating
profit fell 39.6% to 98 million yen.
(Other Businesses)
Other businesses accounted for 17.0% of consolidated sales in the quarter under review. Sales fell 4.4% to 3,050 million yen
due to lower sales of miscellaneous supplies to large retailers, while operating profit rose 18.7% to 179 million yen due topurchase price adjustment.

-2-The Pack Corporation (3950) Financial Report for the First Quarter of 2021

(2)

Quarterly Financial Position

Assets totaled 82,067 million yen at the end of the quarter under review, down 1,488 million yen from the end of 2020.
Major factors included a decline of 1,954 million yen in cash and deposits, an increase of 505 million yen in securities, anincrease of 430 million yen in investment securities, and a decline of 4,723 million yen in notes and accounts receivabletrade.
Liabilities fell 1,898 million yen to 21,917 million yen. The primary factor was a decline of 1,696 million yen in notes andaccounts payable-trade.
Net assets grew by 410 million yen to 60,149 million yen. The key factors were an increase of 298 million yen in valuationdifference on available-for-sale securities and an increase of 107 million yen in foreign currency translation adjustment.
(3)

Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

Consolidated business forecasts remain unchanged from the information announced February 5, 2021.

-3-

The Pack Corporation (3950) Financial Report for the First Quarter of 2021

2. Quarterly Consolidated Financial Statements and Notes(1)

Quarterly Consolidated Balance Sheet(Million yen)Previous fiscal year
(As of December 31, 2020)

First quarter of this fiscal year
(As of March 31, 2021)

AssetsCurrent assets
Cash and deposits

13,234

15,189Notes and accounts receivable-trade

20,731

16,007

Securities

9,099

9,605

Merchandise and finished goods

4,958

5,083

Work in process

763

799

Raw materials and supplies

830

847

Other

555

600

Allowance for doubtful accounts

(13)

(14)

50,16048,119Buildings and structures, net

6,284

6,195

Machinery, equipment, and vehicles, net

6,989

6,792

355

384

8,302

8,302

616

816

22,54722,490190

484

Investment securities

9,104

9,534

Deferred tax assets

583

541

Other

1,022

947

Allowance for doubtful accounts

(53)

(51)

Total investments and other assets

10,657

10,97333,39533,94883,55682,067

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

Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets

Total non-current assets
Total assets-4-The Pack Corporation (3950) Financial Report for the First Quarter of 2021

(Million yen)Previous fiscal year
(As of December 31, 2020)

First quarter of this fiscal year
(As of March 31, 2021)

Liabilities
Current liabilities
Notes and accounts payable-trade

11,183

9,487

Electronically recorded obligations-operating

5,330

5,556

Current portion of long-term loans payable30

14Income taxes payable

55

401

Provision for bonuses

230

583

Provision for bonuses for directors (and other officers)

18

11

Other

3,506

2,486

Total current liabilities

20,356

18,540

485

484

2,758

2,693

214

199

3,459

3,376

23,816

21,917

Capital stock

2,553

2,553

Capital surplus

3,164

3,164

Retained earnings

55,86055,859Treasury shares(2,717)(2,716)

Total shareholders’ equity

58,861

58,860987

1,28501

Foreign currency translation adjustment

(310)

(202)

Remeasurements of defined benefit plans

112

117

Total accumulated other comprehensive income

790

1,202

Share acquisition rights

65

63

Non-controlling interests

22

23

59,73960,14983,55682,067

Non-current liabilities
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

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

Total net assets
Total liabilities and net assets-5-The Pack Corporation (3950) Financial Report for the First Quarter of 2021

(2)

Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

Quarterly Consolidated Statement of Income
Cumulative period through first quarter
Cumulative period through firstquarter of previous fiscal year
(from January 1, 2020
to March 31, 2020)(Million yen)
Cumulative period through firstquarter of this fiscal year
(from January 1, 2021to March 31, 2021)

Net sales

19,565

17,971

Cost of sales

14,836

13,717Gross profit

4,728

4,253

Selling, general and administrative expenses
Freightage and packing expenses

1,022

882

Salaries and allowances

859

829

Director compensation

112

106

10

214

168

Provision of allowance for doubtful accounts
Provision for bonuses
Provision for director bonuses

97

Retirement benefit expenses

73

69

Depreciation

8588

Rent expenses

685

622

Other
Total selling, general and administrative expenses
Operating profit

709

691

3,773

3,468

955

785

27

25

Non-operating income
Interest income
Dividend income

00Rent income1313

Foreign exchange gains

46

Other

610

Total non-operating income

5257

Interest expenses

00

Cost of lease revenue

22

Sales discounts

11

Other

20

Non-operating expenses

Total non-operating expenses
Ordinary profit

641,001

837

Extraordinary income
Extraordinary losses
Loss on sales on non-current assets

0-Loss on retirement of non-current assets

03

Loss on valuation of investment securities

55-

Total extraordinary losses

56

3Profit before income taxes

944

834

Income taxes-current

402

359

Income taxes-deferred(75)(92)

Total income taxes

326

266

Profit617

567

Profit (loss) attributable to non-controlling interests

(1)

(0)

Profit attributable to owners of parent

618

568

-6-The Pack Corporation (3950) Financial Report for the First Quarter of 2021

Quarterly Consolidated Statement of Comprehensive Income
Cumulative period through first quarter
Cumulative period through firstquarter of previous fiscal year
(from January 1, 2020
to March 31, 2020)(Million yen)
Cumulative period through firstquarter of this fiscal year
(from January 1, 2021
to March 31, 2021)

617

567(627)

298

1

1

Foreign currency translation adjustment

(26)

108

Remeasurements of defined benefit plans, net of tax

194(633)

412

(15)

980

Comprehensive income attributable to owners of parent

(13)

980

Comprehensive income attributable to non-controllinginterests(1)0ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)-7-The Pack Corporation (3950) Financial Report for the First Quarter of 2021

(3)

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

-8-