Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Six Months Ended August 31, 2014
(Based on Japanese GAAP)

October 10, 2014

Company name:
Gulliver International Co., Ltd.
Stock exchange listing: Tokyo
Stock code:
Representative:

7599
Chairman

URL

http://221616.com

Kenichi Hatori

Inquiries:
Accounting and Finance Section Manager
Scheduled date to file Quarterly Securities Report:

Masayuki Matsumoto
October 15, 2014

Holding of quarterly financial results meeting:Yes

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:

TEL

03-5208-5503

November 10, 2014
Yes

(for analysts and institutional investors)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the six months ended August 31, 2014 (from March 1, 2014 to August 31, 2014)(1) Consolidated financial results (cumulative)

Six months ended August 31, 2014
Six months ended August 31, 2013

Net sales

Millions of yen
74,631
83,401

Operating income

Yen
16.23
22.67

Six months ended August 31, 2014
Six months ended August 31, 2013
Total assets

Year ended February 28, 2014
Year ending February 28, 2015

Year ending February 28, 2015 (Forecast)Yen––Yen
16.23
22.67

Millions of yen
33,71632,846

2. Cash dividends
1st quarter-end

Diluted net income per share

Net assets

Millions of yen
50,46052,779As of August 31, 2014
As of February 28, 2014

Net income% Millions of yen% Millions of yen% Millions of yen%(10.5)
2,727 (23.3)
2,758 (24.6)
1,645 (28.4)
17.0
3,557 123.8
3,658 112.9
2,298 164.5

Net income per share(2) Consolidated financial position

Percentages indicate year-on-year changes

Ordinary income

Equity ratio

Net assets per share

%
66.8
62.2

Yen
332.48323.99Annual dividends per share

2nd quarter-end

Yen
5.00
7.50

3rd quarter-end

Yen––

Fiscal year-end

Yen
8.00

12.50

3. Forecast of consolidated financial results for the year ending February 28, 2015 (from March 1, 2014 to February 28, 2015)
Net sales
Full year

Millions of yen
173,000

Total

Yen
13.00
20.00

Percentages indicate year-on-year changes
Net income
Operating income
Ordinary income
Net income
per share% Millions of yen% Millions of yen% Millions of yen%
Yen
2.1
8,500
19.8
8,500
18.0
5,100
17.0
50.31

1

4. Notes(1) Changes in significant subsidiaries during the six months ended August 31, 2014(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

No(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

Changes in accounting estimates:
Restatement of prior period financial statements:

No
No

Yes
No

(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of August 31, 2014

106,888,000 shares As of February 28, 2014

106,888,000 shares

As of August 31, 2014

5,480,160 shares As of February 28, 2014

5,520,070 shares

Number of treasury shares at the end of the period

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended August 31, 2014

101,375,026 shares Six months ended August 31, 20132

101,368,210 shares

1.

Qualitative information on settlement of accounts for the second quarter(1) Qualitative information on consolidated operating results
In the first half of the fiscal year under review (March 1 to August 31, 2014), the number of cars purchased at directly managed stores declined
year on year as the number of visitors to stores decreased due to the temporary impact of conservative consumer spending caused by theconsumption tax rate hike.
The impact of the decline due to conservative consumer spending was somewhat greater than initially assumed; however, from July 2014
onward, the effect ended, and the number of visitors to stores rebounded rapidly.
On the other hand, the number of retail car sales at directly managed stores maintained a level approximately the same as the previous fiscal year
despite lower numbers of store visitors, thanks to the effect of opening new display sales stores.
The net number of directly managed stores increased by 12 from the end of the previous fiscal year, taking the total to 316. New openings
including new-format display sales stores such as SNAP HOUSE, which deals primarily in minivans, and Gulliver HYBRID, which deals mainlyin hybrid vehicles.
Selling, general and administrative (SG&A) expenses saw an increase in expenses related to store operations, accompanying an increased
number of Gulliver-directly operated stores and Advertising expenses.
Due to the above, consolidated business results for the second quarter were as follows: consolidated net sales were 74,631 million yen (down
10.5% from the same term last year), operating income was 2,727 million yen (down 23.3% from the same term last year), ordinary income was2,758 million yen (down 24.6% from the same term last year) and net income was 1,645 million yen (down 28.4% from the same term last year).
(2) Qualitative information on consolidated financial position
AssetsTotal assets as of August 31, 2014 were 50,460 million yen, an decrease of 4.4% from February 28, 2014.
Current assets were 29,319 million yen, down 12.4% from the same date. The primary contributing factor was a 1,868 million yen decrease in
cash and deposits, a 505 million yen increase in merchandise and a 2,532 million yen decrease in notes and accounts receivable-trade.
Of the total amount of accounts receivable-trade, the accounts receivable (financial credit) of consolidated subsidiary G-One Financial ServicesCo., Ltd. stood at 2,126 million yen
Total noncurrent assets at Aug 31, 2014 increased by 9.4% from February 28, 2014, to 21,141 million yen. This mainly reflected a 688 millionyen increase in buildings and structures and a 893 million yen increase in construction in progress.
Liabilities
Total liabilities at Aug 31, 2014 decreased by 16.0% from February 28, 2014 to 16,744 million yen.
Current liabilities at Aug 31, 2014 increased by 5.5% from February 28, 2014 to 14,272 million yen. The primary contributing factor was a 12
million yen increase in deposits received, and a 1,281 million yen decrease in income taxes payable,Total noncurrent liabilities at Aug 31, 2014 decreased by 61.4% from February 28, 2014 to 2,472 million yen.
Net assets
Net assets at Aug 31, 2014 increased by 2.6% from February 28, 2014 to 33,716 million yen, mainly due to a 848 million yen increase in retained
earnings accompanying the posting of net income.
(3) Outlook for the fiscal year ending February 28, 2015
There have been no changes to the full-year consolidated results forecasts for the fiscal year ending February 28, 2015, which were announcedwith the Consolidated Results, First Quarter of the Fiscal Year Ending February 28, 2015 (Japanese GAAP; Consolidated) issued on July 11,
2014.
2.

Summary Information (Notes)

Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error

corrections
In order to account for losses on repairs to vehicles with warrantees, the warranty estimate value for the warranty term was recorded based on
past results. However, having accumulating a sufficient amount of actual data related to repairs, we changed the method of calculating estimates
due to our ability to generate more precise estimates.
As a result, compared to the previous method, costs of sales for second quarter of the fiscal year under review decreased by 637 million yen andoperating income, ordinary income, and income before income taxes and minority interests all increased by the equivalent amount.

3

Quarterly consolidated financial statements
Consolidated balance sheets
AssetsCurrent assets(Millions of yen)

As of February 28, 2014

As of August 31, 2014

Cash and deposits
Notes and accounts receivable - trade

14,688
7,163

12,8194,631

Other
Allowance for doubtful accounts

1,046(59)

1,145
(53)

Merchandise
Deferred tax assets

9,414
1,210

Total current assets

9,919
856

33,46329,319Buildings and structures
Accumulated depreciation

15,586(5,605)

16,582(5,912)

VehiclesAccumulated depreciation

215(185)

57(53)

Non-current assets
Property, plant and equipment

Buildings and structures, net

9,981

Vehicles, net

30

Tools, furniture and fixtures
Accumulated depreciation

Tools, furniture and fixtures, net

Total property, plant and equipment

Intangible assets
SoftwareOther

2,780(2,206)

218
184

218
1,077

Total intangible assets

Investment securities
Shares of subsidiaries and associates
Long-term loans receivable
Lease and guarantee deposits

Construction assistance fund receivables
Deferred tax assets

12,544

993

1,111

1,011

1,284

3435

3
46

Total investments and other assets

250
3,449

302
(62)

335
(62)

7,315

Total non-current assets

19,316

Total assets

52,779

4

172

251
3,319
2,812
253

Other
Allowance for doubtful accounts

573

10,98917

Investments and other assets3

2,740(2,165)575

LandConstruction in progress

10,670

3,040
251

7,313

21,14150,460Liabilities(Millions of yen)

As of February 28, 2014

As of August 31, 2014

Current liabilities
Accounts payable - trade

2,852

2,999

Income taxes payable
Deposits received

2,116
98

834
111

Short-term loans payable
Accounts payable - other

1,721

4,005
1,232

Provision for bonuses
Provision for merchandise warranties

440
1,817

536
1,268

Total current liabilities

13,525

14,272Long-term loans payable
Long-term guarantee deposited

4,000741

51713

Total non-current liabilities

6,407

Other

4,478

Non-current liabilities

Provision for directors' retirement benefits
Asset retirement obligations
Total liabilities

Net assets
Shareholders' equity
Capital stock
Capital surplus

Retained earnings
Treasury shares

Total shareholders' equity

474
1,191

490
1,217

19,933

16,744

4,157
4,032

4,157
4,032

Total accumulated other comprehensive income

29,397(3,947)

80

76

80

Subscription rights to shares

4

Total net assets

32,846

Total liabilities and net assets

52,7795

2,472

28,548(3,975)32,761

Accumulated other comprehensive income
Foreign currency translation adjustment

3,283

33,63976-

33,71650,460Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)Six months ended
August 31, 2013

Net sales
Cost of sales

83,401
65,637Gross profit

17,763

Selling, general and administrative expenses

14,206

Operating income

3,557

Non-operating income

Six months ended
August 31, 2014

74,631
55,82818,802
16,0752,727Interest incomeCompensation income

56-812

Insurance income
Other

527

1021422051

22

Foreign exchange gains
Reversal of allowance for doubtful accounts

1052

Total non-operating income

152

Non-operating expenses
Interest expenses
Other

8

Total non-operating expenses

Ordinary income

1053

2

3,658

2,758

Reversal of provision for loss on business of subsidiaries andassociates

50-

Total extraordinary income-500Loss on retirement of non-current assets
Lease contract cancellation penalty

28-29
24

Total extraordinary losses

2854

Extraordinary income

OtherExtraordinary losses

Other-

01

Income before income taxes and minority interests

3,679

2,704

Total income taxes

1,381

1,058

2,298

1,645

Income taxes - current
Income taxes - deferred

1,535
(153)

Income before minority interests

2,298

Net income

6702
356

1,645

Consolidated statements of comprehensive income (cumulative)
Six months ended
August 31, 2013

Income before minority interests
Other comprehensive income

Foreign currency translation adjustment
Total other comprehensive income(Millions of yen)

2,298

Comprehensive income attributable toComprehensive income attributable to owners of parent

71,645

9(3)

2,307

1,642

2,307

1,642

9

Comprehensive income

Six months ended
August 31, 2014(3)

Consolidated statements of cash flows(Millions of yen)Six months ended
August 31, 2013

Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Increase in provision for merchandise warranties
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss on retirement of non-current assets
Lease contract cancellation penalty
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in accrued consumption taxes
Increase (decrease) in notes and accounts payable - trade
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipmentPurchase of intangible assets
Payments for asset retirement obligations
Purchase of shares of subsidiaries and associates
Payments of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Payments of construction assistance fund receivables
Collection of construction assistance fund receivables
Payments into time deposits
Proceeds from withdrawal of time deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payableRepayments of long-term loans payable
Proceeds from exercise of share options
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated
subsidiary
Cash and cash equivalents at end of period

8

Six months ended
August 31, 2014
3,679
601(51)
71

2,704
736
4(5)
96(35)

16193(56)
42(10)
28
415
2,745369(960)
(556)
6,477
56
(42)
(505)
5,985(548)
(8)
20(1)
29
24
1,325(318)
(107)
135
(367)
3,735
8
(20)
(1,965)
1,757(541)
(137)
(6)
(31)
(20)
639
(167)
48
(113)
118
0
(212)

(2,067)
(336)
(9)
(10)
1(183)
38(374)124(4)39
1(2,780)

5,000(5,000)
(475)
(0)
(475)
5
5,303
6,836

(134)
(16)
12(809)
(0)
(948)
(2)
(1,973)
14,661-103

12,14012,791