Consolidated Financial Results for the Third Quarter Ended December 31, 2015
Asahi Holdings, Inc.
February 1, 2016
Stock code:

5857

Shares listed:Tokyo Stock Exchange (First Section)

U R L:

http://www.asahiholdings.com

Representative

Mitsuharu Terayama, President and CEO
Katsuya Murashima, Corporate Planning & Communications

For further information please contact:

Department Manager(Phone) +81-3-6270-1833

Filing date of Quarterly Report:

February 12, 2016

Scheduled date of start of dividend payment:−
Supplementary materials for the financial results: No
Investor conference for the financial results: No(Rounded down to the nearest million yen)
1. Results of the nine months ended December 31, 2015 (From April 1, 2015 to December 31, 2015)(1) Results of operations (cumulative)(Percentage changes relative to previous corresponding period)
Net sales
The nine months ended
December 31, 2015
December 31, 2014
(Note) Comprehensive income

Millions of yen％

Operating income

Ordinary income

Millions of yen

Millions of yen％

90,830 13.2
7,105
(4.2)
80,224 13.5
7,413
(0.7)
The nine months ended December 31, 2015
The nine months ended December 31, 2014
Net income per share

The nine months ended
December 31, 2015
December 31, 2014

Profit attributable toowners of parent％

Millions of yen

7,009 (6.5)
4,115
7,497 (2.6)
4,564
3,557 million yen (21.5％)
4,531 million yen (10.3%)

％

(9.9)
(2.4)

Diluted net income per shareYen
125.44139.94

Yen−−(2) Financial Position
Shareholders’ equity
ratio
As of
Millions of yen
Millions of yen％
December 31, 2015
101,795
52,642
51.3
March 31, 2015
104,877
50,95848.2(Reference) Shareholders’ equity
As of December 31, 2015
52,242 million yen
As of March 31, 2015
50,504 million yen
Total assets

Net assets

2. Dividend payments

Year ended March 31, 2015
Year ending March 31, 2016
Year ending March 31, 2016
(Forecast)

Dividends per share
Second quarter
Third quarter
Yen
Yen
30.00
−
30.00
−

First quarter
Yen−−

Year-end
Yen
30.00

Annual
Yen
60.00

30.00

60.00

(Note) Revisions in dividend forecast in the current quarter : No
3. Forecast (From April 1, 2015 to March 31, 2016)(Percentage changes relative to previous corresponding period)
Profit attributable to
Net income
Operating income
Ordinary income
owners of parent
per share

Net salesYear ending March 31, 2016

Millions of Yen％

Millions of Yen

115,000

3.2

9,000

％

(14.1)

Millions of Yen

8,900

％

(15.7)

Yen

Millions of Yen ％5,100(11.7)

155.63(Note) Revisions in forecast in the current quarter : Yes
For details, please refer to “Notice of Revision of Financial Results Forecast” made public on February 1, 2016.

*Notes(1) Changes in important subsidiaries during the current quarter: No(2) Application of special accounting methods for quarterly consolidated financial statements: No(3) Changes in accounting policies, accounting estimates and restatement(i) Changes in accounting policies resulting from the revision of the accounting standards and otherregulations: Yes(ii) Changes other than (i) above: Yes(iii) Changes in accounting estimates: Yes(iv) Restatement: No
For details, please refer to “(3) Changes in Accounting Policies, accounting estimates and restatement”
under “2. Notes Regarding Summary Information” on page 3.
(4) Number of issued shares (common stock)(i) Number of issued shares at the quarter end (including treasury shares)
As of December 31, 2015
36,254,344 shares
As of March 31, 2015
36,254,344 shares(ii) Number of treasury shares at the quarter end
As of December 31, 2015
3,432,607 shares
As of March 31, 2015
3,519,057 shares(iii) Averaged number of shares during the period (quarterly cumulative period)
Nine months ended December 31, 2015
32,803,707 shares
Nine months ended December 31, 2014
32,620,397 shares*Indication regarding the situation of quarterly review procedures
These financial results are not subject to the quarterly review procedures pursuant to the Financial
Instruments and Exchange Act. As of the disclosure of the financial results, the procedures for reviewing
quarterly financial statements pursuant to the Financial Instruments and Exchange Act are in progress.
*Statement regarding the proper use of financial forecasts and other special remarks
These forecast performance figures are based on the information currently available to the Company’s
management and certain assumptions judged rational. Accordingly, these might be cases in which actual
results materially differ from forecasts of this report. Please refer to page 3“1. Qualitative Information (3)Consolidated Performance Forecasts”.

【Appendix】

Table of contents of the appendix

1. Qualitative Information .......................................................................................................................... 2(1) Consolidated Business Performance....................................................................................................... 2(2) Consolidated Financial Position ............................................................................................................. 2(3) Consolidated Performance Forecasts...................................................................................................... 3
2. Notes Regarding Summary Information ................................................................................................ 3(1) Changes in important subsidiaries during the current quarter ...................................................... 3(2) Application of special accounting methods for quarterly consolidated financial statements ........ 3(3) Changes in accounting policies, accounting estimates and restatement ........................................ 3
3. Consolidated Financial Statements ........................................................................................................ 5(1) Consolidated Balance Sheets ............................................................................................................. 5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income.... 7
Consolidated Statements of Income for the nine months ended December 31, 2015 ......................................... 7
Consolidated Statements of Comprehensive Income for the nine months ended December 31, 2015 ............. 7(3) Notes on Consolidated Financial Statements ................................................................................... 8(Notes on Assumptions for Going Concern) ........................................................................................................ 8(Notes in case of Significant Changes to Shareholders’ Equity) ........................................................................ 8(Segment Information, etc.) ................................................................................................................................. 8

11. Qualitative Information(1) Consolidated Business Performance
In the Japanese economy during the first three quarters of the current fiscal year (April 1 throughDecember 31, 2015), improvements were seen in corporate earnings and the environment of employment andpersonal income, and there was a tone of modest recovery. However, with the exception of inbound demand,
personal consumption and production activities still lacked vigor. Furthermore, concerns about such as
slowing economic growth in China and other emerging countries, global destabilization of financial markets
and the actualization of geopolitical risks have increased downside risk for the future of the economies to ahigh level both in Japan and abroad.
Under these economic conditions, the Group's results in each business segment were as follows.
Precious metal business
Volume of collection in the precious metals recycling business was as follows. In the electronics sector,
contraction of the Japanese market continues, but by expanding market share in the E-scrap and precision
cleaning businesses, the Group increased the volume of collection of gold from that of the same period a year
earlier. In the dental sector, with the volume of precious metals used as dental materials declining, thevolume of collection of gold and palladium decreased compared to the same period last year. In the jewelry
sector, increasing transactions with customers in the jewelry purchasing business led to a higher year-on-year
volume of collection of gold and platinum. In the automotive catalyst sector, the number of scrapped vehicles
in Japan continued to decline, leading to a lower volume of collection of palladium and platinum compared tothe same period a year earlier.
The average sale prices of gold and palladium were higher than that of the same period a year before, andthe average sale prices of silver and platinum were lower compared with the same period last year.
In the gold and silver refining business in North America, amidst stagnant precious metals prices and aslowdown in global mining activities, both processing volume and unit price continued to decline forcommissioned refining business. Under these circumstances, we are working to strengthen Asahi Refining's
business infrastructure by working on technical themes with an aim to enhance productivity and efficiency,
as well as expanding sales capabilities.
Environmental preservation business
Reflecting the state of production activity in domestic businesses, the volume of collection of industrial
waste continued to decline. Under these circumstances, through work on initiatives such as new contractdevelopment and collaboration among Group companies to expand sales channels, performance for thesegment as a whole was solid.
Life & health businessIn the healthcare equipment sector, amidst lacking recovery of personal consumption, the Group is focusing
on measures to expand sales including the introduction of new products for women and a full model change ofthe massage chair lineup, on top of working on cost reduction.
In construction-related markets, the business environment remains difficult. Therefore, in addition to cost
reduction, the Group is working on promotion of replacement purchases by existing customers, launching new
products such as far-infrared personal heaters, and so on.
As a result of the above, sales during the third cumulative quarter of the current fiscal year were 90,830
million yen, a year-on-year increase of 10,606 million yen (+13.2 percent). Operating income was 7,105 million
yen, a decrease of 308 million yen (-4.2 percent) year-on-year. Ordinary income was 7,009 million yen, a
year-on-year decrease of 488 million yen (-6.5 percent). Profit attributable to owners of parent for the period
was therefore 4,115 million yen, a decrease of 449 million yen (-9.9 percent) year-on-year. By segment, sales
in the precious metal business were 61,476 million yen, a year-on-year increase of 5,297 million yen (+9.4
percent). In the environmental preservation business, sales were 11,451 million yen, and increase of 157
million yen (+1.4 percent) year-on-year. Sales in the life & health business were 17,902 million yen, up 5,151
million yen (+40.4 percent) year-on-year.

(2) Consolidated Financial Position
As of December 31, 2015, total assets amounted to 101,795 million yen, down 3,082 million yen from theprevious fiscal year end. This was due mainly to the decrease of 1,235 million yen in property, plant andequipment and the decrease of 1,173 million yen in goodwill.
Total liabilities amounted to 49,153 million yen, down 4,766 million yen from the previous fiscal year end.
This was due mainly to the decrease of 1,250 million yen in income taxes payable.
Net assets totaled 52,642 million yen, up 1,684 million yen from the previous fiscal year end. This was due
mainly to the increase in retained earnings resulting from the recording of 4,115 million yen in profit
attributable to owners of parent.
As a result, the shareholders’ equity ratio changed to 51.3%, from 48.2% at the end of the previous fiscal
year.

2

(3) Consolidated Performance Forecasts
In the precious metal business segment, the forecasted volume of collection in the precious metal recycling
business is generally in line with initial plans, but a downward trend in market price of precious metals
became clear last autumn, and they are expected to remain well below what was estimated at the beginningof the term. In the gold and silver refining business in North America, amidst stagnant precious metals prices
and a slowdown in global mining activities, both processing volume and unit price fell below initial estimates.
Plans were revised based on consolidated results for the first three quarters and the business environment
including trends in precious metal prices, and the consolidated earnings forecast for the whole term has beenadjusted accordingly.

Revision of consolidated results forecast for the fiscal year ending March 2016
（April 1, 2015 to March 31, 2016）（Millions of YEN, ％）Net Sales

Operating
IncomeOrdinary
IncomeProfit attributable toowners of parent

Net Income
per SharePrevious Forecast (A)(Announced on May 11, 2015)

129,000

11,00010,8006,500

198.56

Revised Forecast (B)115,000

9,000

8,900

5,100

155.63

Change (B－A)(14,000)(2,000)(1,900)(1,400)−Change (%)(10.9)(18.2)(17.6)(21.5)−

111,417

10,48010,561

5,774

176.89（Ref.）the fiscal year ended
March 31, 2015

2. Notes Regarding Summary Information(1) Changes in important subsidiaries during the current quarter
Not applicable(2) Application of special accounting methods for quarterly consolidated financial statements
Not applicable(3) Changes in accounting policies, accounting estimates and restatement
Changes in accounting policies(Application of “Accounting Standard for Business Combinations,” etc.)
The Company has applied the “Accounting Standard for Business Combinations” (ASBJ Statement No.
21, September 13, 2013), “ Accounting Standard for Consolidated Financial Statements ” (ASBJ
Statement No. 22, September 13, 2013), “ Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, September 13, 2013), etc. effective from the first quarter under review. As a result, themethod of recording the amount of difference caused by changes in the Company’s ownership interests in
subsidiaries in the case of subsidiaries under ongoing control of the Company was changed to one in which
it is recorded as capital surplus, and the method of recording acquisition-related costs was changed to one
in which they are recognized as expenses for the fiscal year in which they are incurred. Furthermore, forbusiness combinations carried out on or after the beginning of the first quarter under review, theaccounting method was changed to one in which the reviewed acquisition cost allocation resulting from thefinalization of the tentative accounting treatment is reflected in the quarterly consolidated financial
statements for the quarterly period in which the business combination occurs.
Additionally the presentation method of net income was amended and the reference to “Minority
interests” was changed to “Non-controlling interests”. To reflect these changes in presentation, thequarterly consolidated financial statements and consolidated financial statements in the previous fiscal
year have been reclassified.
Application of the Accounting Standard for Business Combinations, etc. is in line with the transitional
measures provided in Paragraph 58-2 (4) of the Accounting Standard for Business Combinations,Paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and Paragraph 57-4
(4) of the Accounting Standard for Business Divestitures. Accordingly, these changes are effective from the
beginning of the first quarter under review.
Those changes had no impact on operating income, ordinary income and income before income taxes forthe third quarter under review. Also those changes had no impact on capital surplus for the end of thethird quarter period.

3

(Change in the depreciation method of property, plant and equipment)
The Company and its domestic consolidated subsidiaries had formerly depreciated property, plant andequipment other than leased assets using the declining-balance method (with the exception of buildings
acquired on or after April 1, 1998, which are depreciated using the straight-line method). However,starting from the fiscal year ending March 31, 2016, the Company and its domestic consolidated
subsidiaries have changed the depreciation method to the straight-line method.
This change in the depreciation method is due to the determination that depreciation using thestraight-line method would better reflect the actual condition of usage of property, plant and equipment ina nod to the result of surveys on the actual status of the usage of property, plant and equipment and futurebusiness deployment which is planned in the “Seventh Medium-Term Management Plan”.
As a result, operating income, ordinary income and income before income taxes increased by 149 million
yen, respectively, as compared with the figures calculated using the previous method.

43. Consolidated Financial Statements(1) Consolidated Balance Sheets
As ofMarch 31,
2015

As of
December 31,
2015

Millions of yen

Millions of yen

As ofDecember 31,
2015
Thousands of
U.S. dollars

ASSETS
Current assets
Cash and deposits

11,046

14,830122,962

Notes and accounts receivable - trade

15,146

12,944

107,326

Merchandise and finished goods

4,855

4,194

34,779Work in process

9,141

8,470

70,234

Raw materials and supplies

1,633

1,332

11,044

Other

6,773

6,257

51,882

(40)

(26)

(223)

48,55648,003

398,005

Buildings and structures, net

12,298

11,534

95,636

Land

14,56814,369119,143

Other, net

5,467

5,194

43,068

Total property, plant and equipment

32,33431,099257,848

Goodwill

21,737

20,564

170,504

Other

906

976

8,100

Total intangible assets

22,643

21,541

178,604

Investments and other assets

1,343

1,151

9,546

Total non-current assets

56,32153,791445,998

Total assets

104,877

101,795

844,002

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Intangible assets

U.S. dollar amounts represent translations using the approximate exchange rate on December 30, 2015 ofYen120.61=US$1, and are included solely for the convenience of readers.

5As ofMarch 31,
2015

As of
December 31,
2015

Millions of yen

Millions of yen

As ofDecember 31,
2015
Thousands of
U.S. dollars

LIABILITIESCurrent liabilities
Notes and accounts payable - trade

6,161

6,678

55,373

Short-term loans payable

26,171

5,649

46,839270

5,270

43,695

Income taxes payable

2,111

861

7,141

Provision for bonuses

747

390

3,241

Provision for directors' bonuses

36

−

−

Provision for repairs

106

60

497

Current portion of long-term loans payable

Provision for product warranties

85

86

718

Provision for sales rebates

371

461

3,824

Provision for sales returns

13

22

183

Other

9,526

5,632

46,699Total current liabilities

45,60325,112

208,211Long-term loans payable

6,550

21,584

178,962

Net defined benefit liability

126

138

1,152

Other

1,639

2,317

19,213

Total non-current liabilities

8,316

24,040199,326

Total liabilities

53,91949,153

407,537

Capital stock

4,480

4,480

37,151

Capital surplus

6,038

6,112

50,683Retained earnings

44,45946,607

386,434

Treasury stock(5,159)(5,033)(41,730)

Total shareholders' equity

49,81952,168432,538

Valuation difference on available-for-sale securities

33

46

386

Deferred gains or losses on hedges

313

318

2,642

Foreign currency translation adjustment

338

(291)

(2,414)

Total accumulated other comprehensive income

685

73

613

Subscription rights to shares

77

−

−

Non-controlling interests

375

399

3,314

50,95852,642436,465

104,877

101,795

844,002

Non-current liabilities

NET ASSETS
Shareholders' equity

Accumulated other comprehensive income

Total net assets

TOTAL LIABILITIES AND NET ASSETS

U.S. dollar amounts represent translations using the approximate exchange rate on December 30, 2015 ofYen120.61=US$1, and are included solely for the convenience of readers.

6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income for the nine months ended December 31, 2015
The nine months
ended December 31,
2014

The nine months
ended December 31,
2015

Millions of yen

Millions of yen

Net sales

80,224

90,830753,095

Cost of sales

63,98571,078589,329

Gross profit

16,23819,751

163,766

Selling, general and administrative expenses

8,825

12,646

104,856

Operating income

7,413

7,105

58,910Non-operating income

139

75

623

Non-operating expenses

55

171

1,421

7,497

7,009

Extraordinary income

18

107

58,113891

Extraordinary loss

91

316

2,624

Income before income taxes

7,424

6,799

56,379

Income taxes-current

2,425

2,384

19,772

Income taxes-deferred

398

239

1,982

Total income taxes

2,823

2,623

21,754

Profit

4,601

4,176

34,625

Profit attributable to non-controlling

36

61

506

Profit attributable to owners of parent

4,564

4,115

34,119Ordinary income

The nine months
ended December 31,
2015
Thousands of
U.S. dollars

Consolidated Statements of Comprehensive Income for the nine months ended December 31, 2015
The nine months
ended December 31,
2014

The nine months
ended December 31,
2015

Millions of yen

Millions of yen

Profit

The nine months
ended December 31,
2015
Thousands of
U.S. dollars

4,601

4,176

34,625

6

13

115

Deferred gains or losses on hedges

(182)

5

43

Foreign currency translation adjustment

129

(637)

(5,287)

Share of other comprehensive income of associates
accounted for using equity method

(23)

−

−

Total other comprehensive income

(69)

(618)

(5,129)

4,531

3,557

29,496Comprehensive income attributable to owners of parent

4,493

3,503

29,050Comprehensive income attributable to non-controlling interests

38

53

446

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

Comprehensive income

U.S. dollar amounts represent translations using the approximate exchange rate on December 30, 2015 ofYen120.61=US$1, and are included solely for the convenience of readers.

7(3) Notes on Consolidated Financial Statements(Notes on Assumptions for Going Concern)
Not applicable(Notes in case of Significant Changes to Shareholders’ Equity)
Not applicable(Segment Information, etc.)[Segment information]
Ⅰ For the nine months ended December 31, 2014(From April 1, 2014 to December 31, 2014)
1. Information on sales and income (loss) by reporting segment
Preciousmetalbusiness

Environmental
preservation businessLife & healthbusiness(Millions of Yen)
Total

Net sales
2) Intersegment

1) Customers

56,179−11,293−12,750−80,224−

Total

56,17911,29312,75080,224

5,733

1,367

313

7,413

Segment income(Note) Total segment income matches operating income recorded on the consolidated statements of income.
2. Impairment losses on non-current assets, goodwill, etc. by reporting segment(Material impairment loss on noncurrent assets)
Resulting from the plan to sale a part of land and buildings, their book value was reduced to therecoverable amount, and the reduced amount was posted as impairment losses under extraordinary losses.
Consequently, impairment losses were recorded in the amount of 34 million yen in the precious metal
segment.

Ⅱ For the nine months ended December 31, 2015(From April 1, 2015 to December 31, 2015)
1. Information on sales and income (loss) by reporting segment
Preciousmetalbusiness

Environmental
preservation businessLife & healthbusiness(Millions of Yen)
Total

Net sales
1) Customers
2) Intersegment
Total
Segment income

61,476

11,451

17,902

90,830−−−−61,476

11,451

17,902

90,830

5,095

1,636

373

7,105

(Note) Total segment income matches operating income recorded on the consolidated statements of income.
2. Changes in reporting segments(Changes in name of reporting segment)
The segment which was previously stated as “Precious metal recycling business” has been changed to“Precious metal business” from April 1, 2015 for more accurate business description. This change in thesegment name does not affect the segment information.
An retroactively adjusted version of ”Segment information” presented in the earnings report for theprevious fiscal year has been published to reflect the change in reporting segments.
3. Impairment losses on non-current assets, goodwill, etc. by reporting segment(Material impairment loss on non-current assets)
Resulting from the plan to sale a part of land and buildings held by a subsidiary, their book value was
reduced to the recoverable amount, and the reduced amount and demolition costs were posted as
impairment losses under extraordinary losses.
Consequently, impairment losses were recorded in the amount of 71 million yen in the Environmental
preservation business segment.
.

8