Summary(Translation)

FIELDS CORPORATION
Summary of Financial Information and Consolidated Business Results
for the First Quarter of the Year Ending March 31, 2019 (Japan GAAP)

Company Name:

August 9, 2018
Listed on: TSE 1st

FIELDS CORPORATION(URL: http://www.fields.biz/)2767
Hidetoshi Yamamoto
Chairman, President and Group CEO
Hideaki Hatanaka
Corporate Officer+81-3-5784-2111

Stock code:
Representative Director:
Inquiries:
Tel:

Planned date for submission of the quarterly report:
Planned date for start of dividend payment:
Quarterly earnings supplementary explanatory materials:
Quarterly earnings presentation:

August 10, 2018―No
Yes (For institutional investors and security analysts)(Rounded down to the nearest million)

1. Consolidated business results for the first quarter of the year ending March 31, 2019 (April 1, 2018 to June 30, 2018)(1) Operating results (cumulative total)(Percentage figures denote YoY changes)
Net sales

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

8,930

(28.2)(2,733)―(2,755)―(2,957)―

12,446(18.6)(2,902)―(3,055)―(2,752)―First quarter, year ending
March 31, 2019
First quarter, year ended
March 31, 2018
(Note) Comprehensive income

Operating profit

First quarter of the year ending March 31, 2019: ¥ (2,663) million (―%)
First quarter of the year ended March 31, 2018: ¥ (2,398) million (―%)

Profit per shareFirst quarter, year ending
March 31, 2019
First quarter, year ended
March 31, 2018

Diluted profit per share
Yen

Yen

(89.11)―(82.96)―(2) Financial position
Total assets

Net assets

Shareholders’ equity ratio

Millions of yen

Millions of yen%

First quarter, year ending
March 31, 201967,102

32,67948.0

Year ended March 31, 201872,33635,50948.4(Reference) Shareholders’ equity

First quarter of the year ending March 31, 2019: ¥ 32,193 million
Year ended March 31, 2018: ¥ 35,008 million(Note) The Company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018) and other standards
from the beginning of the first quarter of the fiscal year ending March 31, 2019. Regarding the figures of FY 3/2018, the Company has applied the accounting standard
and modified the figures retroactively.

2. Dividends
Q1-endAnnual dividends
Q3-endQ2-endYear-end

Annual

Yen

Yen

Yen

Yen

Yen

―
―

25.00

―

5.00

30.00

0.00

―

10.00

10.00

Year ended March 31, 2018Year ending March 31, 2019Year ending March 31, 2019
(Forecast)(Note) Revision of the most recently released dividend forecasts: No

3. Forecast of consolidated earnings for the fiscal year ending March 31, 2019 (April 1, 2018 to March 31, 2019)
Net sales
Full-year

Operating profit(Percentage figures denote YoY changes)
Profit attributable toProfitper shareowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

95,000

55.6

2,000

―

2,500

―

1,500

―

45.20

(Note) Revision of the most recently released performance forecasts: No
FIELDS CORPORATION discloses a full-year business forecast, as it manages its business performance on an annual basis.

1

*Notes(1) Transfer of important subsidiaries during the year under review (Transfer of specific subsidiaries that results in a change in thescope of consolidation): No(2) Application of the accounting method specific to quarterly consolidated financial statements: Yes(3) Changes in accounting principles, accounting procedures, presentation method and other factors
1) Changes due to the revision to the accounting standards, etc.: No
2) Changes due to any reason other than those in 1) above: No
3) Changes in accounting estimates: No4) Revisions/restatements: No(4) Number of shares issued (common shares)
1) Number of shares issued at end of year (including treasury shares)
First quarter of the year ending March 31, 201934,700,000 sharesYear ended March 31, 201834,700,000 shares
2) Number of shares of treasury shares at end of year
First quarter of the year ending March 31, 2019
1,516,300 sharesYear ended March 31, 2018
1,516,300 shares
3) Average number of shares outstanding (quarterly consolidated cumulative period)First quarter of the year ending March 31, 201933,183,700 sharesFirst quarter of the year ended March 31, 201833,183,700 shares* This quarterly earnings report is not subject to review procedures based upon the Financial Instruments and Exchange Act.
* Explanation of the appropriate usage of forecast earnings and other specific matters# The above forecast relies on judgments and assumptions based on information available as of the date of announcement of thismaterial, and is subject to changes in risks, uncertainties, and economy, and other factors that could cause actual results to bematerially different from expectations. Please refer to“(3) Summary of forecasts for consolidated earnings and others” under“1. Qualitative information on the quarterly financial results” on page 4 of the attached documents for the assumptions on which theforecast relies.
# The Company is planning to hold a results briefing for analysts and institutional investors on Friday, August 10, 2018.
Materials distributed at that briefing will be posted on the Company’s website after the briefing as soon as possible.

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019

Table of contents of Attached Document
1. Qualitative information on the quarterly financial results···································································· 2(1) Analysis of operating results ................................................................................................................................2(2) Analysis of financial position...............................................................................................................................3(3) Summary of forecasts for consolidated earnings and others ................................................................................4
2. Quarterly consolidated balance sheets and important notes ································································· 5(1) Quarterly consolidated balance sheets .................................................................................................................5(2) Quarterly consolidated statements of income and consolidated statements of comprehensive income................7(3) Quarterly consolidated statements of cash flows .................................................................................................9(4) Note regarding the quarterly consolidated financial statements .........................................................................10(Note regarding the operation of the company as a going concern) .................................................................... 10(Note regarding occurrence of significant change in amount of shareholders’ equity) ........................................ 10(Application of the accounting method specific to quarterly consolidated financial statements) ........................ 10(Additional information) ..................................................................................................................................... 10(Significant subsequent events) ........................................................................................................................... 101

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019

1. Qualitative information on the quarterly financial results(1) Analysis of operating results[Overview of operations for the three months ended June 30, 2018 (April 1, 2018 to June 30, 2018)]
In the first three months of the fiscal year under review, the Japanese economy as a whole remained on gradual recovery path,
supported by sustained improvement in the employment and income environments.
Following a succession of tightening regulations since 2014, the pachinko and pachislot (hereafter, PS) industry regainedsome stability with the Amendment of the Regulation for Enforcement of the Amusement Businesses Law*1, which enforced
February 1, 2018. PS machines manufacturers are actively developing machines as they seek to rapidly launch new regulation
machines with novel gaming functions into the market. These machines are expected to be successively rolled out into themarket from the second quarter (pachinko) or the second half (pachislot) of the current fiscal year. While the new regulation
machines will mitigate excessive gambling appeal, they are also expected to increase the entertainment factor, and pachinkohalls hope for an expansion of player. Because the first three months of the fiscal year under review coincided with a transition
period in which customers were awaiting the introduction of new regulation-compliant machines, supply-demand conditions
for PS machines were sluggish. As a result, the Company estimates total sales of PS machines in the industry amounted to447,000 units (down 124,000 units YoY; 342,000 pachinko machines [down 47,000 units YoY] and 105,000 pachislot
machines [down 76,000 units YoY]).
In this market environment, the Company reverted to its position as a distribution company between pachinko halls and PS
machines manufacturers, and focused on further strengthening functions of distribution foundations. In the first three months of
the fiscal year under review, the Company sold 23,000 new PS machines (down 3,000 units YoY), comprising one pachinkotitle and two pachislot titles. At the same time, it moved forward with a range of marketing measures to support sales of new
regulation machines and other products scheduled for the second half of the year onward. In addition, it worked on thedevelopment and sales of various solutions that target the total PS market*2.
In the US, Tsuburaya Productions Co., Ltd. received a favorable ruling in its copyright-related lawsuit in April 2018.
Accordingly, it intends to pursue global development of creative works and merchandise based on Ultraman character.
To improve management efficiency, the Company has continued to implement various measures to reduce costs. It also
started a review of its medium-term management business plan for realizing a stable management structure by enhancing
profitability for operations other than new PS machines sales.
As a result of the above, in the first three months of the fiscal year under review, the Company posted net sales of ¥8,930
million (-28.2% YoY), an operating loss of ¥2,733 million (an improvement of ¥169 million from the same period of theprevious year), and an ordinary loss of ¥2,755 million (an improvement of ¥300 million from the same period of the previousyear). It also posted a loss attributable to owners of parent of ¥2,957 million (a loss increase of ¥204 million from the same
period of the previous year) that reflected an extraordinary income of ¥380 million on gains on sales of investment securities
and other factors, and an extraordinary loss of ¥561 million on a restructuring loss and other factors.
These results reflected progress in line with initial forecasts, and the Company has therefore made no changes to its full-year
forecasts for the fiscal year ending March 31, 2019 announced on May 11, 2018.
*1: Regulation Partially Amending the Ordinance for Enforcement of the Act on Control and Improvement of Amusement Business. and the Regulations for the
Verification of Licenses, Formats and Other Aspects of Pachinko and Pachislot Machines, which enforced on February 1, 2018.
*2: The total PS market covering expenses required for managing pachinko halls such as costs to purchase PS machines and advertisement and promotion costs.
Note: The product names included in this report are the trademarks or registered trademarks of the respective companies.

2

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019(2) Analysis of financial position(Assets)
Current assets amounted to ¥37,606 million, down ¥4,569 million from the end of the previous fiscal year. The principal
factor behind this was a decrease in cash and deposits.
Property, plant and equipment amounted to ¥5,012 million, down ¥266 million from the end of the previous fiscal year. The
principal factor behind this was a decrease in land.
Intangible assets amounted to ¥1,083 million, down ¥301 million from the end of the previous fiscal year. The principal
factor behind this was a decrease in software.
Investments and other assets amounted to ¥23,399 million, down ¥96 million from the end of the previous fiscal year. Thiswas mainly due to a decrease in investment securities.
As a result of the above, total assets amounted to ¥67,102 million, down ¥5,234 million from the end of the previous fiscal
year.
(Liabilities)
Current liabilities amounted to ¥20,861 million, down ¥1,618 million from the end of the previous fiscal year. The principal
factor behind this was a decrease in notes and accounts payable-trade.
Non-current liabilities amounted to ¥13,560 million, down ¥785 million from the end of the previous fiscal year. The
principal factor behind this was a decrease in long-term loans payable.
As a result of the above, total liabilities amounted to ¥34,422 million, down ¥2,404 million from the end of the previous
fiscal year.
(Net assets)
Net assets amounted to ¥32,679 million, down ¥2,829 million from the end of the previous fiscal year. This primarilyreflected a decrease in retained earnings.
(Analysis of cash flows)
During the first quarter of the fiscal year under review, cash and cash equivalents (hereinafter referred to as “cash”)
decreased by ¥3,339 million from the end of the previous fiscal year, amounting to ¥21,034 million.
(Cash flows from operating activities)
Net cash used in operating activities amounted to ¥2,742 million (¥915 million of expenditure for the same period of theprevious fiscal year). This was mainly due to a loss before income taxes of ¥2,936 million, a decrease in notes and accounts
receivable-trade of ¥1,818 million, a decrease in notes and accounts payable-trade of ¥2,352 million.
(Cash flows from investing activities)
Net cash provided in investing activities amounted to ¥124 million (¥4,995 million of revenue for the same period of theprevious fiscal year). This was mainly due to purchase of non-current assets of ¥158 million and proceeds from sales ofinvestment securities totaling ¥528 million.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥721 million (¥397 million of revenue for the same period of the previous
fiscal year). This was mainly attributable to proceeds from short-term loans payable totaling ¥90 million, repayment oflong-term loans payable totaling ¥645 million, and dividends paid totaling ¥161 million.

3

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019(3) Summary of forecasts for consolidated earnings and others
As stated in (1) Analysis of operating results, the Company made no revisions to its full-year earnings forecasts included in
the financial results for the fiscal year ended March 31, 2018, which was announced on May 11, 2018.
However, the event outlined in “Significant subsequent events” below may have an impact on profit attributable to ownersof parent.
(Significant subsequent events)
The Company and Universal Entertainment Corporation concluded a shareholders’ agreement with the purpose of managing
a PS machines-related joint venture through MIZUHO CORP. However, following negotiations, the two companies agreed toterminate the agreement amicably.
As a result of selling all its shares in MIZUHO CORP. and liquidating the joint venture following the termination, theCompany will record an extraordinary income of ¥1,348 million in the second quarter of the fiscal year under review. The
Company is currently reviewing possible impacts of this event on full-year earnings forecasts, and will announce as soon as itreaches a conclusion.

4

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019

2. Quarterly consolidated balance sheets and important notes(1) Quarterly consolidated balance sheets
Fiscal year ended
March 31, 2018(as of March 31, 2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims-operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts(Unit: Millions of yen)Three months ended
June 30, 2018(as of June 30, 2018)24,473
7,019
1,097
1,206
2,804
83
5,553
(61)

21,134
6,197
856
1,499
2,674
79
5,214
(51)

42,17537,606

1,873

1,773

Other

3,406

3,239

Total property, plant and equipment

5,279

5,012

662
723

584
499

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

Intangible assets
Goodwill
Other

1,385

1,083

Investments and other assets
Investment securities
Long-term loans receivable
Other
Allowance for doubtful accounts

Total intangible assets

6,773
11,781
5,497
(556)

6,573
11,8195,563(557)

Total investments and other assets

23,49523,39930,16029,49572,336

67,102

11,358
4,151
2,580
171
288
9
6
3,914

8,983
4,241
2,560
74
127

Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Provision for sales returns
Other

－
6
4,867

Total current liabilities

22,48020,861

Non-current liabilities
Long-term loans payable
Net defined benefit liability
Asset retirement obligation
Other

9,427
660
879
3,378

8,802
655
855
3,246

Total non-current liabilities

14,346

13,56036,82734,422

Total liabilities

5Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019

Fiscal year ended
March 31, 2018(as of March 31, 2018)
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interest
Total net assets
Total liabilities and net assets

6(Unit: Millions of yen)Three months ended
June 30, 2018(as of June 30, 2018)

7,948
7,579
20,684(1,821)

7,948
7,579
17,561(1,821)

34,391

31,268

669

966

0
(53)

0
(42)

617

924

500

486

35,50932,67972,336

67,102

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019(2) Quarterly consolidated statements of income and consolidated statements of comprehensive income
Quarterly consolidated statements of income
First quarter of the year ending March 31, 2019

Net sales
Cost of sales

Three months ended
June 30, 2017
(April 1, 2017–June 30, 2017)12,446
10,484(Unit: Millions of yen)Three months ended
June 30, 2018
(April 1, 2018–June 30, 2018)
8,930
7,509

Gross profit

1,961

1,421

Selling, general and administrative expenses

4,864

4,155

Operating profit (loss)(2,902)(2,733)Non-operating income
Interest income
Dividend income
Purchase discounts
Other

29
74
67
76

27
74
5
47

248

155

20

19

305

145

69
6

0
11

400

177

(3,055)(2,755)

555

18
361

Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodAmortization of equity investment
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Other

－
0

Total extraordinary income

555

Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Restructuring loss
Loss on litigation
Other
Total extraordinary losses
Profit (loss) before income taxes

－
380

58

15

－
－
106
3

147
365
29
3

168

561

(2,668)(2,936)

Income taxes

70

37

Profit (loss)(2,739)(2,974)

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

7

13

(17)

(2,752)(2,957)

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019

Quarterly consolidated statements of comprehensive income
First quarter of the year ending March 31, 2019

Loss
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

Three months ended
June 30, 2017
(April 1, 2017–June 30, 2017)(2,739)(Unit: Millions of yen)Three months ended
June 30, 2018
(April 1, 2018–June 30, 2018)(2,974)

329
0
11

299
(0)
10

340

310

Comprehensive income

Total other comprehensive income(2,398)(2,663)Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable tonon-controlling interests(2,413)(2,649)

14

(14)

8

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019(3) Quarterly consolidated statements of cash flows

Three months ended
June 30, 2017
(April 1, 2017–June 30, 2017)
Cash flows from operating activities
Loss before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in net defined benefit liability
Interest and dividend income
Share of (profit) loss of entities accounted for using
equity method
Interest expenses
Decrease (increase) in notes and accounts receivable-tradeDecrease (increase) in inventories(2,668)324(Unit: Millions of yen)Three months ended
June 30, 2018
(April 1, 2018–June 30, 2018)

－
81
(2)
(190)
25
24
(103)

(2,936)
287
147
77
(9)
(161)
(9)
5
(102)

305

145

20

19

8,942

1,818

(476)

(115)

68

19

(7,571)(2,352)812

464

Subtotal(407)(2,701)

Interest and dividend income received
Interest expenses paid
Income taxes (paid) refund

119
(20)
(607)

102
(19)
(124)

Net cash provided by (used in) operating activities(915)(2,742)

(428)
5,254
(117)

(124)
119
(34)
528

Decrease (increase) in merchandising right advances
Increase (decrease) in notes and accounts payable-tradeOther, net

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from sales of shares of subsidiaries andassociates
Payments of loans receivableCollection of loans receivable
Other, net

2,201

－

(2,350)
588
(142)

(50)
17
(330)

Net cash provided by (used in) investing activities

4,995

124

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Other, net

1,856
(650)
(802)
(5)

90
(645)
(161)
(5)

397

(721)

－
(10)

－

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

1

0

4,479

(3,339)Cash and cash equivalents at beginning of period

23,09024,373

Cash and cash equivalents at end of period

27,57021,0349

Summary of Financial Information and Consolidated Business Results for the First Quarter of the Year Ending March 31, 2019(4) Note regarding the quarterly consolidated financial statements(Note regarding the operation of the company as a going concern)
No relevant items(Note regarding occurrence of significant change in amount of shareholders’ equity)
No relevant items(Application of the accounting method specific to quarterly consolidated financial statements)
Assessment of tax expenses
The Company makes a reasonable estimate of the effective tax rate after the application of tax effect accounting on profit
before income taxes for the year ending March 31, 2019, including the three months ended June 30, 2018, and calculates tax
expenses by multiplying profit before income taxes during the three months ended June 30, 2018 by the estimated effective tax
rate.
(Additional information)
Effective from the beginning of the first quarter of the fiscal year ending March 31, 2019, the Company has applied “Partial
Amendments to Accounting Standard for Tax Effect Accounting.” (ASBJ Statement No. 28, February 16, 2018) and otherstandards. Accordingly deferred tax assets are presented under investments and other assets, deferred tax liabilities arepresented under non-current liabilities.

(Significant subsequent events)(Termination of significant agreement)
On July 13, 2018, the Company and Universal Entertainment Corporation agreed to terminate a shareholders’ agreement
related to the management of joint venture MIZUHO CORP. and exercise of corresponding rights.
1.

Reason for termination of agreement
Following deliberation on the future management policy for MIZUHO CORP., the two parties agreed to terminate theshareholders’ agreement originally entered into to set up a joint venture related to PS machines supplied by MIZUHO
CORP.

2.

Name of agreement counterparty
Universal Entertainment Corporation

3.

Agreement termination dateJuly 13, 2018

4.

Contents of agreement
Shareholders’ agreement on the management of joint venture MIZUHO CORP. and exercise of corresponding rights

5.

Impact of termination of agreement
In connection with the termination of the agreement, the Company will record a ¥1,348 million extraordinary income inthe second quarter of the fiscal year under review, reflecting the transfer of all shares held by the Company in MIZUHOCORP. and Japan Amusement Broadcasting Corp. As a result of the share transfer, MIZUHO CORP. and Japan
Amusement Broadcasting Corp. will no longer be equity-method affiliates of the Company.

10