Business Results for the Second Quarter of the Year Ending December 31, 2021
[Japan GAAP] (Consolidated)
Company:
Stock code:
Representative:
Contact:

August 5, 2021

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:
August 11, 2021
Expected starting date of dividend payment:
September 2, 2021
Quarterly supplementary financial documents:
Yes
Quarterly results briefing:
Yes

Listed on TSE, First Section
URL: https://www.thepack.co.jp(Rounded down to million yen)
1. Consolidated business results for the second quarter of the year ending December 31, 2021
(January 1, 2021 through June 30, 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%

Second quarter of year ending
December 31, 2021

36,844

2.2

1,459

18.7

1,600

16.4

1,069

23.8

Second quarter of year ended
December 31, 2020

36,046(18.6)

1,229(52.6)

1,375(50.1)

863(52.1)(Note) Comprehensive income

Second quarter of year ending December 31, 2021: 1,421 million yen (457.8%)
Second quarter of year ended December 31, 2020: 254 million yen (-84.7%)
Quarterly basic
earnings per share

Quarterly diluted
earnings per share

Yen

Yen

Second quarter of year ending December 31, 2021

56.31

56.24

Second quarter of year ended December 31, 2020

45.51

45.45

(2)

Consolidated financial position
Total assets

Net assets

Capital adequacy ratio

Million yen

Million yen%

Second quarter of year ending December 31, 2021

82,46960,603

73.4

Year ended December 31, 2020

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

Second quarter of year ending December 31, 2021: 60,517 million yen
Year ended December 31, 2020:
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
－

25.00

50.00

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 year)
Net sales
Million yen%

Operating profit

Ordinary profit

Million yen

Million yen%

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

Basic
Profit attributableearnings per
to owners of parent
share% Million yen

4,000 10.9

2,700

%

Yen

12.9

142.17

*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
2Q, year ending
shares at the end of fiscal year
December 31, 2021
(including treasury shares)2)

Number of treasury shares at theend of fiscal year

3)

Average number of shares(quarterly cumulative)

19,900,000 sharesYear ended
December 31, 2020

19,900,000 shares

2Q, year ending
December 31, 2021

904,897 sharesYear ended
December 31, 2020

909,347 shares

2Q, year ending
December 31, 2021

18,992,624 shares

2Q, year ended
December 31, 2020

18,982,396 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 of
the Attachments concerning forward-looking statements.

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

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

Qualitative Summary of Business Results for the Period Under Review
Description of Operational Results
Description of Financial Position
Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

2
2
3
3

2.
(1)
(2)
(3)
(4)

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

4
4
6
8
9
9
9

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

1. Qualitative Summary of Business Results for the Period Under Review(1)

Description of Operational Results

In the cumulative period through the second quarter of the consolidated fiscal year under review, the Japanese economy
experienced sustained, albeit gradual, recovery in personal consumption, even as the COVID-19 pandemic reheated with the
spread of variants of the virus. A look at retail sales shows improvements in supermarket sales and slowing in the decline ofcustomers visiting convenience stores, along with improving department store sales. The pattern of market polarization
remained in place, with delayed recovery in the food service and leisure industries alongside strong demand for businesses
serving homebound consumers.
Business activity continues to strengthen in the United States. Progress with COVID-19 vaccinations has boosted both
opportunities for consumers to venture out and recovery in personal consumption, centered on service industries. China’s
economy maintained a steady overall recovery, founded on the country’s success in containing COVID-19; however, retailrecovery has been modest, and recovery in travel, leisure, and other service sectors has been delayed.
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 grew 2.2% year on year to ¥36,844 million; operating profit rose by 18.7% to¥1,459 million; ordinary profit was up 16.4% to ¥1,600 million; and profit attributable to owners of parent rose by 23.8% to¥1,069 million.
The business performance for each segment is given below.
(Paper Products)
The paper products segment accounted for 68.8% of consolidated sales in the second quarter. Sales of paper bags, which
accounted for 26.3% 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 paper bags. The Pack (Shanghai) Corporation and
The Pack America Corp., both overseas subsidiaries, recorded strong performance, with paper bag net sales year on year
growing 1.8% to ¥9,684 million.
Sales of folding paper cartons, which accounted for 23.9% of consolidated sales, grew 17.9% to 8,806 million yen. Sales ofcartons for takeout/delivery food products remained firm.
Sales of corrugated boxes, which accounted for 15.7% of consolidated sales, grew 17.4% to 5,778 million yen, driven byfirm sales to manufacturers and the e-commerce sector.
Printing sales, which accounted for 2.9% of consolidated sales, rose by 3.7% to 1,058 million. Both Keihin Tokushu Printing
Corp. and NIKKO PRINT CORPORATION recorded strong sales.
Overall, sales in this segment rose by 10.5% to 25,327 million yen. Operating profit grew by 18.6% to 1,416 million yen.
(Film Packaging)
The film packaging segment accounted for 14.4% of consolidated sales in the period under review. Segment sales fell 24.7%
to 5,323 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 33.5% to 163 million yen.

-2-

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

(Other Businesses)
Other businesses accounted for 16.8% of consolidated sales in the period under review. Sales grew 2.4% to 6,192 million
yen, with signs of recovery in sales of miscellaneous supplies to large retailers and strong sales by Kannaru Printing Co.,
Ltd. Operating profit for Other Businesses rose 45.4% to 378 million yen, due in part to improvements in distribution costs.
(2)

Description of Financial Position

1)

Assets, liabilities, and net assets
Assets totaled 82,469 million yen at the end of the period under review, down 1,086 million yen from the end of 2020.
Major factors included increases of 2,926 million yen in cash and deposits, 602 million yen in securities, and 348
million yen in investment securities and a decline of 5,527 million yen in notes and accounts receivable-trade.
Liabilities fell 1,949 million yen to 21,866 million yen. The primary factors were decreases of 1,734 million yen innotes and accounts payable-trade and 321 million yen in electronically recorded obligations-operating.
Net assets grew by 863 million yen to 60,603 million yen. The key factors were increases of 499 million yen in retained
earnings and 220 million yen in valuation difference on available-for-sale securities.

2)

Cash Flow
The balance of cash and cash equivalents in the cumulative period through the quarter under review was down 1,016
million yen (5.3%) from the same period of the previous year to 18,151 million yen.
Cash flow from operating activities
Cash flow from operating activities in the period under review was 6,143 million yen (vs. 2,903 million yen in thesame period of the previous year). Positive cash flow effects included 1,595 million yen in income before income taxes
and minority interests, a 2,089 million yen decrease in trade payables, and a 207 million yen increase in inventories.
Negative cash flow effects included a 5,577 million yen decrease in trade receivables and 1,007 million yen in
depreciation.
Cash flow from investment activities
Cash flow used in investment activities in the period under review was 2,764 million yen (vs. 1,414 million yen in thesame period of the previous year). The negative effects on cash flow of factors such as 5,005 million yen in the purchaseof securities and 1,801 million yen in the purchase of property, plant, and equipment outweighed the positive effectsof factors such as 4,402 million yen in proceeds from sales of securities.
Cash flow from financing activities
Cash flow used in financing activities in the period under review was 523 million yen (vs. 608 million yen in the same
period of the previous year). Contributing factors included 569 million yen in cash dividends paid.

(3)

Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

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

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The Pack Corporation (3950) Financial Report for the Second 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)

Second quarter of this fiscal year
(As of June 30, 2021)

AssetsCurrent assets
Cash and deposits

13,234

16,161

Notes and accounts receivable – trade

20,731

15,203

Securities

9,099

9,702

Merchandise and finished goods

4,958

5,122

Work in process

763

865

Raw materials and supplies

830

784

Other

555

694

Allowance for doubtful accounts

(13)

(18)

50,16048,516

Buildings and structures, net

6,284

6,310

Machinery, equipment, and vehicles, net

6,989

6,614

355

364

8,302

8,302

616

960

22,54722,552

190

593

Investment securities

9,104

9,452

Deferred tax assets

583

468

Other

1,022

935

Allowance for doubtful accounts

(53)

(49)

Total investments and other assets

10,657

10,80733,39533,95383,55682,469Total 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 Second Quarter of 2021

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

Second quarter of this fiscal year
(As of June 30, 2021)

Liabilities
Current liabilities
Notes and accounts payable – trade

11,1839,449

Electronically recorded bligations – operating

5,330

5,008

Current portion of long-term loans payable30

29

Income taxes payable

55

584

Allowance for bonuses

230

257

Allowance for bonuses for directors (and other officers)

18

17

Other

3,506

3,154

Total current liabilities

20,356

18,500Long-term loans payable-

72

Deferred tax liabilities

485

472

2,758

2,636

214

184

3,459

3,365

23,816

21,866

Capital stock

2,553

2,553

Capital surplus

3,164

3,164

Retained earnings

55,86056,360Treasury shares(2,717)(2,703)

Total shareholders’ equity

58,861

59,374

987

1,207

0

0

Foreign currency translation adjustment

(310)

(186)

Remeasurements of defined benefit plans

112

121

Total accumulated other comprehensive income

790

1,142

Share acquisition rights

65

63

Non-controlling interests

22

2259,73960,60383,55682,469Non-current 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 Second Quarter of 2021

(2)

Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Quarterly Consolidated Statement of Income
Cumulative period through second quarter(Million yen)
Cumulative period through second Cumulative period through second
quarter of previous fiscal year
quarter of this fiscal year
(from January 1, 2020 to June 30, (from January 1, 2021 to June 30,
2020)
2021)

Net sales
Cost of sales

36,04627,54936,84428,182Gross profit
Selling, general and administrative expenses
Freightage and packing expenses
Salaries and allowances
Director compensation
Provision of allowance for doubtful accounts
Provision of allowance for bonuses
Provision of allowance for bonuses for directors(and other officers)
Retirement benefit expenses
Depreciation
Rent expenses
Other

8,496

8,661

1,864
1,939
220
12
121

1,784
1,961
213
2
130

19

16

142
171
1,376
1,396

139
186
1,289
1,477

Total selling, general and administrative expenses
Operating profit

7,266
1,229

7,202
1,459

51
51
27
15
20

52
44
26
13
17

165

154

0
4
2
11

0
4
2
5

Total non-operating expenses

19

13

Ordinary profit
Extraordinary income
Gain on sales of non-current assets

1,375

1,600

15

-

15

-

0
29
55

4
-

Non-operating income
Interest income
Dividend income
Rent income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cost of lease revenue
Sales discounts
Other

Total extraordinary income
Extraordinary losses
Loss on sales on non-current assets
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses

86

4Profit before income taxes

1,305

1,595

Income taxes-current
Income taxes-deferred

307
135

524
3

Total income taxes

443

528

Profit861

1,067

Profit (loss) attributable to non-controlling interests

(2)

(2)

Profit attributable to owners of parent

863

1,069

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

Quarterly Consolidated Statement of Comprehensive Income
Cumulative period through first quarter(Million yen)
Cumulative period through second
Cumulative period throughquarter of previous fiscal year
second quarter of this fiscal year
(from January 1, 2020 to June(from January 1, 2021 to June30, 2020)
30, 2021)

Profit

861

1,067

(606)

220

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(0)0Foreign currency translation adjustment

(38)

124

Remeasurements of defined benefit plans, net of tax

38

8

(607)

353

254

1,421

Comprehensive income attributable to owners of parent

257

1,421

Comprehensive income attributable to non-controllinginterests

(2)

(0)

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)-7-

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

(3)

Consolidated Statement of Cash Flows
Cumulative period through second
quarter of previous fiscal year
(from January 1, 2020 to June 30,
2020)(Million yen)
Cumulative period throughsecond quarter of this fiscal year
(from January 1, 2021 to June 30,
2021)

1,305

1,595

830

1,007

5

0

Increase (decrease) in allowance for bonuses

(10)

26

Increase (decrease) in allowance for bonuses for directors(and other officers)

(23)

(1)

Increase (decrease) in retirement benefit liability

(126)

(110)

Interest and dividend income

(103)

(97)

0

0

Cash flow from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts

Interest expenses
Loss (gain) on sales of non-current assets

(15)

-

Loss on retirement of non-current assets

29

4Loss (gain) on valuation of investment securities

55-

Decrease (increase) in trade receivables

9,778

5,577

Decrease (increase) in inventories(1,146)(207)

Increase (decrease) in trade payables(6,314)(2,089)Other, net

(463)

357

Subtotal

3,804

6,065

Interest and dividend income received

102

92

Interest expenses paid

(0)

(0)

Income taxes paid

(1,002)(14)

Cash flow from operating activities

2,903

6,143

Purchase of securities(3,500)(5,005)

Proceeds from sales of securities

4,500

4,402

2

13

(1,456)(1,801)

28

-

(4)

(434)

(1,014)(42)

Cash flow from investing activities

Collection of loans receivable
Purchase of property, plant, and equipment
Proceeds from sales of property, plant, and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities-

7

Payments for leasehold and guarantee deposits

(13)

(11)

Other, net
Cash flow from investing activities

43

106

(1,414)(2,764)-

100

Cash flow from financing activities
Proceeds from long-term loans payable
Repayments of long-term loans payable

(28)

(28)

Cash dividends paid

(568)

(569)

(4)

-

Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Other, net
Cash flow from financing activities
Effect of exchange rate change on cash and cash equivalents

(6)

(25)

(608)

(523)

(20)

71

Net increase (decrease) in cash and cash equivalents

860

2,926

Cash and cash equivalents at beginning of period

18,307

15,224

Cash and cash equivalents at end of period

19,168)18,151-8-

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

(4)

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

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