[Translation]
Consolidated Business Results for the Third Quarter of the Fiscal Year Ending March 31, 2016
[U.S. GAAP]
January 29, 2016
Listed Company: Wacoal Holdings Corp.
Code Number: 3591
(URL: http://www.wacoalholdings.jp/)
Representative: Position: President and Representative Director
Name: Yoshikata Tsukamoto
For Inquiries: Position: General Manager of Corporate Planning
Name: Akira Miyagi

Stock Exchange: Tokyo

Tel: +81 (075) 682-1010

Scheduled quarterly report submission date:February 12, 2016
Scheduled dividend payment start date:
Supplementary materials regarding quarterly business results:
None
Explanatory meeting regarding quarterly business results:
None(Amounts less than 1 million yen have been rounded)1.

Third Quarter of the Fiscal Year Ending March 31, 2016 (April 1, 2015 – December 31, 2015)(1)

Consolidated Business Results(% indicates increase (decrease) from the corresponding period of the previous fiscal year)

Net Sales

Millions of Yen%

Third Quarter ended
154,017
7.0
December 31, 2015
Third Quarter ended
143,980 (1.3)
December 31, 2014
(Note)
Quarterly comprehensive income:Third Quarter ended
December 31, 2015
Third Quarter ended
December 31, 2014
(2)

Operating Income

Income Before
Income Taxes andEquity in Net Incomeof AffiliatedCompanies

Net Income
Attributable to
Wacoal Holdings
Corp.

Millions of Yen

Millions of Yen

Millions of Yen

12,692%109.9

6,047 (55.4)

14,213%

66.4

8,542 (42.2)

10,027%78.1

5,631 (39.7)

10,138 million yen (decrease of 48.3%) for the third quarter ended
December 31, 2015
19,619 million yen (decrease of 13.4%) for the third quarter ended
December 31, 2014

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

71.19

70.99

39.98

39.88

Consolidated Financial Condition

As of December 31, 2015
As of the end of Fiscal
Year (March 31, 2015)

Total Assets

Total Equity(Net Assets)

Total
Shareholders’EquityTotal
Shareholders’Equity Ratio

Shareholders’Equity Per Share

Millions of Yen

Millions of Yen

Millions of Yen%

Yen

304,561

237,540

234,55277.0

1,665.33

300,272

231,568

228,85776.2

1,624.93

2.

Status of Dividends

End of First
Quarter
Fiscal Year Ended March 31, 2015
Fiscal Year Ending March 31, 2016
Fiscal Year Ending March 31, 2016
(Estimates)(Note)
3.

Annual Dividend
End of Second End of Third
Quarter
QuarterYear-End

Total

Yen

Yen

Yen

Yen

Yen

–
–

–
–

–
–

30.00

30.00

33.00

33.00

Revision of estimated dividends announced during the latest quarter: No
Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2016 (April 1, 2015 - March 31,
2016)(% indicates increase from the previous fiscal year)

Annual(Note)Net Sales

Operating
IncomeMillions of Yen %Millions of Yen %205,000

6.9

14,00097.7

Income Before
Income Taxes
Net Income
Net Income
and Equity in Net Attributable toAttributable to
Income of
Wacoal Holdings Wacoal Holdings
AffiliatedCorp.
Corp. Per Share
Companies
Millions of Yen %14,50027.8

Millions of Yen %Yen

10,000

71.00

18.4

Revision of forecast of consolidated business results announced during the latest quarter: No

Notes(1)

Changes in significant subsidiaries in the consolidated cumulative third quarter of the current fiscal year (i.e.
changes in specified subsidiaries (tokutei kogaisha) which involve change in scope of consolidation): None

(2)

Application of simplified accounting methods and specific accounting methods: None

(3)

Changes in accounting principles:(i) Changes due to modifications in accounting standards, etc.: None(ii) Changes other than (i) above: None(4)

Number of Issued Shares (Common Stock)
Third Quarter ended
December 31, 2015
(i)
(ii)
(iii)

Number of issued shares (including
treasury stock) as of the end of:
Number of shares held as treasury
stock as of the end of:
Average number of shares duringconsolidated third quarter (third
quarter ended December 31):

Fiscal Year ended
March 31, 2015

143,378,085 shares

143,378,085 shares

2,534,181 shares

2,537,276 shares

140,839,694 shares

140,838,338 shares*Notes on Implementation of Quarterly Review ProceduresThis summary of quarterly financial results is not subject to the quarterly review procedures based on the Financial
Instruments and Exchange Law. The review procedures for the quarterly financial statements based on the Financial
Instruments and Exchange Law had not been completed at the time of disclosure of this summary of quarterly financial
results.

*Cautionary Statement regarding Forecast of Business Results

The forecast of business results is based on reasonable information we obtained as of the date hereof and, due to various
risks, uncertainties and other factors arising in the future, actual results in the future may differ largely from the estimates
set out in this document.
These risks, uncertainties and other factors include: the impact of the ongoing global economic downturn on our sales andprofitability in Japan and our other markets; the impact on our business of anticipated continued weakness of department
stores and other general retailers in Japan; our ability to successfully develop, manufacture, and market products in Japanand our other markets that meet the changing tastes and needs of consumers and to deliver high quality products; the highly
competitive nature of our business and the strength of our competitors; our ability to successfully expand our network of
our own specialty retail stores and achieve profitable operations at these stores; our ability to further develop our Internet
sales capabilities; our ability to effectively manage our inventory levels; our ability to reduce costs; our ability to attract
and retain highly qualified personnel; effects of irregular weather events on our business and performance; risks related to
conducting our business internationally; risks from acquisitions and other strategic transactions with third parties; risks
relating to return of investment for development of new markets; risks relating to intellectual property; risks relating to
information systems; risks relating to the protection of customer information and our ability to protect our trade secrets;risks relating to internal controls over financial reporting; the impact of weakness in the Japanese equity markets on ourholdings of Japanese equity securities; the impact of any natural disaster or epidemic on our business; and other risks
referred to from time to time in our annual report and other disclosures.

Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the Third Quarter ---------------------------- 2(1)

Qualitative Information regarding Consolidated Business Results ----------------------------------------------------- 2(2)

Qualitative Information regarding Consolidated Financial Condition -------------------------------------------------- 5(3)

Qualitative Information regarding Forecast of Consolidated Business Results --------------------------------------- 5

2.

Matters Concerning Summaries (Notes) ------------------------------------------------------------------------------------ 5(1)

Summary of Changes in Significant Subsidiaries during the Current Consolidated Cumulative Quarter ----------- 5(2)

Application of Simplified Accounting Methods and Specific Accounting Methods ---------------------------------- 5(3)

Summary of Changes in Accounting Principles --------------------------------------------------------------------------- 5

3.

Consolidated Quarterly Financial Statements ------------------------------------------------------------------------------ 6(1)

Consolidated Quarterly Balance Sheets ------------------------------------------------------------------------------------- 6(2)

Consolidated Quarterly Statements of Income ----------------------------------------------------------------------------- 8(3)

Consolidated Quarterly Statements of Comprehensive Income --------------------------------------------------------- 8(4)

Consolidated Quarterly Statements of Cash Flows ------------------------------------------------------------------------ 9(5)

Notes on Consolidated Quarterly Financial Statements ----------------------------------------------------------------- 10(Notes on Going Concern) -------------------------------------------------------------------------------------------------- 10(Notes on Significant Changes in the Amount of Total Shareholders’ Equity) -------------------------------------- 10(Segment Information) ------------------------------------------------------------------------------------------------------- 10(Material Subsequent Events) ----------------------------------------------------------------------------------------------- 11(6)

Status of Sales ---------------------------------------------------------------------------------------------------------------- 13

-1-

1.

Qualitative Information regarding Consolidated Performance during the Third Quarter(1)

Qualitative Information regarding Consolidated Business Results(i)Performance Overview of the Nine Months ended December 31, 2015

Our group entered the last year of our three-year mid-term plan (from fiscal year 2014 to fiscal year 2016), and we(primarily Wacoal Corp., our core operating entity) continued to make efforts to expand our share of sales by responding to
the diversifying domestic women’s innerwear market, establish a system for our business other than the women’s
innerwear business and strengthen growth and profitability by actively developing our overseas business.
As a result of the above, with respect to our consolidated business results for the nine months ended December 31,
2015, in domestic business, despite the fact that sales growth in our core wholesale channel slowed down as compared to
the first six months of the current fiscal year because consumer spending remained slow after the consumption tax increase,sales were supported by sales from our directly managed stores and inbound demand and exceeded the results for thecorresponding period of the previous fiscal year. Further, sales from our overseas business were inflated by thedepreciation of the yen, and as a result, overall sales exceeded the results for the corresponding period of the previous fiscal
year. In terms of profit, overall operating income largely exceeded the results for the corresponding period of the previous
fiscal year as a result of the impairment charges which we recognized in relation to Peach John Co., Ltd. during thecorresponding period of the previous fiscal year.
Net sales:

154,017 million yen(an increase of 7.0% as compared to the corresponding period of theprevious fiscal year)

Operating income:

12,692 million yen(an increase of 109.9% as compared to the corresponding period of theprevious fiscal year)

Income before income
taxes and equity in net
income of affiliatedcompanies:

14,213 million yen(an increase of 66.4% as compared to the corresponding period of theprevious fiscal year)

Net income attributable to
Wacoal Holdings Corp.:

10,027 million yen(an increase of 78.1% as compared to the corresponding period of theprevious fiscal year)(ii)

Business Overview of Our Operating Segmentsa.

Wacoal Business (Domestic)

Our business in the domestic market faced difficult operating conditions during the current third quarter (fromOctober to December) as a result of weak sales mainly at our wholesale channel caused by the temperatures in November
which remained above normal, in addition to a continuing trend among consumers towards being selective.
With respect to our Wacoal brand business, although our core winter undergarment products showed poor
performance, strong continued inbound demand at department stores in urban areas and our successful promotion of red
underwear products, in connection with an old saying that wearing red underwear in the Year of the Monkey brings goodluck, contributed to the favorable performance of overall shorts products, and as a result, overall sales remained unchanged
from the results for the corresponding period of the previous fiscal year.
With respect to our Wing brand business, while our autumn campaign bottom products showed weak performance,
overall sales of our core brassieres products performed strongly despite a large discrepancy in performance between
products that performed strongly and products that performed weakly. In addition, sales of our winter undergarment
products showed favorable performance as a result of the addition of a lineup of products having thin texture, and the
expansion of our brand products for teens also contributed to overall sales, which remained unchanged from thecorresponding period of the previous fiscal year.
In our retail business, despite the decreasing number of shop visitors, sales from our directly managed retail store,
AMPHI, the favorable performance of our collaboration products with stylists and models and our approach to sell
products in line with seasonal events and themes contributed to an increase in average spending per customer. Further,-2-

inbound consumption significantly contributed to sales with respect to our Wacoal Factory Store in outlet malls in areas
around airports, and as a result, overall sales largely exceeded the results for the corresponding period of the previous fiscal
year.
In our wellness business, with respect to our sports conditioning wear “CW-X” brand products, while sales
through existing channels, including sports specialty stores, showed weak performance, favorable performance of sales
through e-commerce websites of other companies and a launch of new products for daily use contributed to overall sales
which remained unchanged from the corresponding period of the previous fiscal year.
In our catalog sales business, sales fell below the results for the corresponding period of the previous fiscal year
due to the impact of a decreased number of orders received for our winter catalog products. With respect to sales from our
website, our internet sales performed strongly as a result of a significant increase in the number of internet users visiting
our website because we were no longer affected by the shutdown of our website that occurred in the previous year and as aresult of our strengthening of our efforts to attract visitors using smartphones. As a result, overall sales remained
unchanged from the results for the corresponding period of the previous fiscal year.
With respect to Ai Co., Ltd., our domestic subsidiary which handles the swimwear business and directly managed
underwear business, which we acquired from San-Ai group during the current fiscal year, sales from the swimwear
business were below the sales we anticipated in our plan due to unstable summer weather. In addition, sales from theunderwear business were also largely below the sales we anticipated in our plan.
In summary, overall sales attributable to our “Wacoal Business (Domestic)” segment exceeded the results for thecorresponding period of the previous fiscal year due to increased sales from Wacoal Corp., our core operating entity, andthe inclusion of sales from Ai Co., Ltd. With respect to profitability, our operating income also exceeded the results for thecorresponding period of the previous fiscal year as a result of the increased sales from Wacoal Corp.
Net sales:

92,213 million yen(an increase of 7.1% as compared to the corresponding period of theprevious fiscal year)

Operating income:

8,415 million yen(an increase of 5.4% as compared to the corresponding period of theprevious fiscal year)b.

Wacoal Business (Overseas)

With respect to Wacoal America, Inc., sales of our core Wacoal brand products in the United States, which
remained unchanged from the results for the corresponding period of the previous fiscal year, as well as favorable sales
from e-commerce websites and exports to surrounding countries and Europe contributed to overall sales which exceeded
the results for the corresponding period of the previous fiscal year. In terms of profit, operating income on a local currency
basis fell below (but operating income on a yen converted basis exceeded) the results for the corresponding period of theprevious fiscal year due to an increase in selling, general and administrative expenses which resulted from recording our
30th anniversary promotion expenses.
With respect to Wacoal Europe, sales in the United Kingdom performed well due to the expansion of our Wacoal
brand portfolio there, and sales in the United States also performed well as a result of growth in sales from e-commerce
websites of other companies. However, consumer spending in the Eurozone area did not show a recovery due to theterrorist attacks in Paris, in addition to the influence of the unstable political and economic situation in Europe. Therefore,sales in Eurozone, particularly in France, showed a substantial decrease. As a result, total sales on a local currency basis
fell below the results for the corresponding period of the previous fiscal year, but sales on a yen converted basis exceeded
the results for the corresponding period of the previous fiscal year. With regard to profit, operating income largely fell
below the results for the corresponding period of the previous fiscal year as a result of decreased sales and an increase inpurchase costs due to the appreciation of the dollar.
With respect to our business in China, while sales growth of our core Wacoal brand products slowed down whencompared to the first six months of the current fiscal year, sales in China showed favorable performance although there isincreasing concern that the economic slowdown is intensifying, and sales from e-commerce websites of other companies
and outlet malls also showed an expansion. On the other hand, while sales of LA ROSABELLE, our brand targeting the
middle-class market, showed strong performance, our existing shops performed poorly, and thus, we focused on
profit-making shops and conducted an extensive review of our shop opening plans. As a result, overall sales exceeded theresults for the corresponding period of the previous fiscal year. In terms of profit, operating income largely exceeded the-3-results for the corresponding period of the previous fiscal year as a result of the increased sales profit due to our achieving
an expansion in local procurement and a higher sales ratio in channels with a higher gross margin rate.
As a result of the above, with respect to the overall sales and operating income attributable to our “Wacoal
Business (Overseas)” segment, overall sales exceeded the results for the corresponding period of the previous fiscal year,
while operating income fell below the results for the corresponding period of the previous fiscal year.
Net sales:

39,355 million yen(an increase of 10.8% as compared to the corresponding period of theprevious fiscal year)

Operating income:

3,636 million yen(a decrease of 8.3% as compared to the corresponding period of theprevious fiscal year)c.

Peach John Business

Sales from our core mail-order catalogues largely fell below the results for the corresponding period of theprevious fiscal year due to the impact of a shortened online clearance sales period as well as the lower purchase rate,
despite the higher number of users visiting our website using smartphones. Inbound demand contributed to sales from ourdomestic direct retail stores which largely exceeded the results for the corresponding period of the previous fiscal year.
Despite the low proportion, sales through e-commerce websites of other companies are also performing strong. With
respect to our overseas business, sales on a yen converted basis exceeded the results for the corresponding period of theprevious fiscal year due to increased sales resulting from our initiatives to discontinue our underperforming shops for ourbusiness and to shift to sales through e-commerce websites of other companies in China, despite the weak performance ofshop sales in Hong Kong.
As a result of the above, overall sales from our Peach John business fell below the results for the corresponding
period of the previous fiscal year. In terms of profit, our operating income significantly improved from the corresponding
period of the previous fiscal year, during which we recorded an operating loss, as a result of our efforts to improve sales
profit by reviewing our pricing method and by holding fewer sales campaigns and reducing PR/production related costs aswell as the impairment charges which we recognized during the corresponding period of the previous fiscal year.
Net sales:

8,424 million yen(a decrease of 3.4% as compared to the corresponding period of theprevious fiscal year)

Operating income:

440 million yen(as compared to 6,140 million yen of operating loss for the corresponding
period of the previous fiscal year)

d.

Other

With respect to the business of Lecien Corporation (“Lecien”), overall sales from Lecien fell below the results forthe corresponding period of the previous fiscal year due to the weak sales from our apparel business division which felllargely below the results for the corresponding period of the previous fiscal year, although sales of our new price range
products to our major clients performed strongly in our core innerwear business division. In terms of profit, we recorded asignificant operating loss as a result of the worsening sales profit rate, which was impacted by the weak yen.
As for Nanasai Co., Ltd., while sales from the rental business remained unchanged from the results for thecorresponding period of the previous fiscal year, sales from our construction business largely exceeded the results for thecorresponding period of the previous fiscal year as a result of our receiving large-scale orders for construction of newcommercial facilities and orders from apparel brands, and our sales business also showed an expansion in the delivery of
fixtures in connection with the construction orders received. As a result, overall sales largely exceeded the results for thecorresponding period of the previous fiscal year. In terms of profit, operating income largely exceeded the results for thecorresponding period of the previous fiscal year due to increased sales.
As a result of the above, with respect to the overall sales and operating income attributable to our “Other” segment,
overall sales exceeded the results for the corresponding period of the previous fiscal year, while operating income largely
fell below the results for the corresponding period of the previous fiscal year.

-4-

(2)

Net sales:

14,025 million yen(an increase of 2.6% as compared to the corresponding period of theprevious fiscal year)

Operating income:

201 million yen(a decrease of 14.1% as compared to the corresponding period of theprevious fiscal year)

Qualitative Information regarding Consolidated Financial Condition(i)

Assets, Liabilities and Total Shareholders’ Equity

Our total assets as of the end of the current consolidated third quarter were 304,561 million yen, an increase of
4,289 million yen from the end of the previous fiscal year, due to increases in investments and construction in progress.
Our total liabilities were 67,021 million yen, a decrease of 1,683 million yen from the end of the previous fiscal
year, due to a decrease in other long-term liabilities.
Total Wacoal Holdings Corp. shareholders’ equity was 234,552 million yen, an increase of 5,695 million yen fromthe end of the previous fiscal year, due to an increase in retained earnings.
As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated third quarter
was 77.0%, an increase of 0.8% from the end of the previous fiscal year.
(ii)

Cash Flows

Cash and cash equivalents as of the end of the consolidated third quarter of the current fiscal year were 38,940
million yen, an increase of 530 million yen from the end of the previous fiscal year.
(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 12,000 million yen, a decrease of 1,928 million yen as compared tothe corresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net incomeof 10,314 million yen plus adjustments for depreciation and amortization and deferred income taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 6,011 million yen, an increase of 3,558 million yen as compared to thecorresponding period of the previous fiscal year, due to capital expenditures and payments to acquire intangible assets.
(Cash Flow Used in Financing Activities)
Cash flow used in financing activities was 5,425 million yen, a decrease of 1,208 million yen as compared to thecorresponding period of the previous fiscal year, due to cash dividend payments.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results

We have not revised our forecast of consolidated business results for the fiscal year ending March 31, 2016 since
our announcement on May 11, 2015.
2.

Matters Concerning Summaries (Notes)(1)

Summary of Changes in Significant Subsidiaries during the Current Consolidated Cumulative Quarter:Not applicable.

(2)

Application of Simplified Accounting Methods and Specific Accounting Methods:
Not applicable.

(3)

Summary of Changes in Accounting Principles:
Not applicable.

-5-

3.

Consolidated Quarterly Financial Statements(1)

Consolidated Quarterly Balance SheetsI.

Accounts

Previous Fiscal Year
as of March 31, 2015

(Assets)

Millions of Yen

Current Consolidated
Third Quarteras of December 31, 2015
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

38,41038,940530Time deposits

2,687

2,455

(232)

Marketable securities

2,387

1,747

(640)

Notes and accounts receivable
Allowance for returns anddoubtful receivables
Inventories

26,54423,879(2,665)(2,409)42,893(2,878)45,572

(469)
2,679

Deferred income taxes

5,488

3,886

(1,602)Other current assets

4,264

5,495

1,231

120,264

119,096(1,168)Land

22,00921,957(52)

Buildings and building improvements

64,03864,432394

Machinery and equipment

16,76017,232472

Total current assets
II. Property, plant and equipment:

Construction in progress

923

4,177

3,254

103,730

107,798

4,068(54,542)(56,146)(1,604)49,18851,6522,464

Investments in affiliated companies

22,052

20,481(1,571)

Investments

59,96363,167

3,204

Goodwill

18,75018,807

57

Other intangible assets

12,73912,78344

Prepaid pension expense

10,577

11,434

857

Deferred income taxes

982

984

2

Accumulated depreciation
Net property, plant and equipment
III. Other assets:

Other
Total other assets
Total assets

5,757

6,157

400

130,820

133,8132,993

300,272304,561

4,289

-6-

I.

Accounts

Previous Fiscal Year
as of March 31, 2015

(Liabilities)

Millions of Yen

Current Consolidated
Third Quarteras of December 31, 2015
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

10,03813,4543,416

Trade notes

1,031

1,732

701

Trade accounts

11,346

11,560214

Notes and accounts payable:

Other payables

6,686

4,706

(1,980)19,063

17,998(1,065)

Accrued payroll and bonuses

6,936

5,554

(1,382)

Income taxes payable

2,064

730

(1,334)

Other current liabilities

4,201

6,096

1,895

Total current liabilities

42,302

43,832

1,530

II. Long-term liabilities:
Liability for termination and retirement
benefits
Deferred income taxes

1,680

1,392

(288)

18,796

19,793

997

5,926

2,004

(3,922)

Total long-term liabilities

26,402

23,189(3,213)

Total liabilities

68,70467,021(1,683)

13,26013,260-

Other long-term liabilities(Equity)I.

Common stock

II. Additional paid-in capital

29,642

29,685

43

III. Retained earnings
IV. Accumulated other comprehensive
income:Foreign currency translation adjustments

155,264

161,066

5,802

10,831

9,332(1,499)Unrealized gain on securities

20,821

22,647

1,826

Pension liability adjustments

1,934

1,454

(480)

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(2,895)(2,892)

3

228,857

234,552

5,695

2,711

2,988

277

Total equity

231,568

237,540

5,972

Total liabilities and equity

300,272304,561

4,289

-7-

(2)

Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

Previous Consolidated
Cumulative Third Quarter(From April 1, 2014
to December 31, 2014)
Millions of Yen%

Current Consolidated
Cumulative Third Quarter(From April 1, 2015
to December 31, 2015)
Millions of Yen%

Increase/(Decrease)
Millions of Yen

143,980100.0

154,017100.0

10,037

Cost of sales

66,50046.2

71,367

46.4

4,867

Selling, general and administrative expenses
Impairment charges on goodwill and otherintangible assets
Total operating costs and expenses

65,412

45.4

69,958

45.4

4,546

6,021

4.2

-

137,933

95.8

141,325

91.8

3,392

6,047

4.2

12,692

8.2

6,645

II. Operating costs and expenses

Operating income(6,021)

III. Other income (expenses):
Interest income

95

113

18

Interest expense

(78)

(55)

23

Dividend income
Gain or loss on sales or exchange ofmarketable securities and investments - net
Valuation loss on marketable securities andinvestments
Gain on sales of paintings

892

1,017

125

1

90

89

(14)

(20)

(6)

1,059

-

(1,059)Other – net

(3)

540

376

(164)

Total other income (expenses)
Income before income taxes and equity in net
income of affiliated companies
Income taxes
Income before equity in net income of affiliatedcompanies
Equity in net income of affiliated companies

2,495

1.7

1,521

1.0

(974)

8,542

5.9

14,213

9.2

5,671

3,320

2.3

4,900

3.2

1,580

5,222

3.6

9,313

6.0

4,091

673

0.5

1,001

0.7

328

Net income
Net income attributable to noncontrollinginterests
Net income attributable to Wacoal Holdings
Corp.

5,895

4.1

10,314

6.7

4,419

(264)

(0.2)

(287)

(0.2)

(23)

5,631

3.9

10,027

6.5

4,396

Consolidated Quarterly Statements of Comprehensive Income

Accounts

I. Net income
II. Other comprehensive income (loss)- net of tax:
Foreign currency translation adjustments
Unrealized gain on securities

Previous Consolidated
Cumulative Third Quarter(From April 1, 2014
to December 31, 2014)
Millions of Yen

Current Consolidated
Cumulative Third Quarter(From April 1, 2015
to December 31, 2015)
Millions of Yen

5,895

10,314

4,419

8,111

(1,507)(9,618)

5,748

1,811

(3,937)

Increase/(Decrease)
Millions of Yen

Pension liability adjustments

(135)

(480)

(345)

Other comprehensive income

13,724(176)(13,900)

Comprehensive income
Comprehensive income attributable tononcontrolling interests
Comprehensive income attributable to
Wacoal Holdings Corp.

19,61910,138(9,481)

(350)

(264)

86

19,2699,874(9,395)-8-

(4)Consolidated Quarterly Statements of Cash Flows

Accounts

I.

Previous Consolidated Cumulative
Third Quarter(From April 1, 2014
to December 31, 2014)
Millions of Yen

Operating activities
1. Net income
2. Adjustments to reconcile net income to net cash
provided by operating activities(1) Depreciation and amortization(2) Provision for returns and doubtful receivables - net(3) Deferred income taxes(4) Gain or loss on sales or disposal of property, plant andequipment - net(5) Gain on sales of paintings(6) Impairment charges on goodwill and other intangible
assets(7) Gain or loss on sales or exchange of marketablesecurities and investments – net(8) Valuation loss on marketable securities and investments(9) Equity in net income of affiliated companies,
less dividends(10) Changes in assets and liabilities
Decrease in notes and receivables
Increase in inventories
Increase in other current assets
Increase (decrease) in notes and accounts payable
Decrease in liability for termination and retirement
benefits
Increase (decrease) in other liabilities(11) Other
Net cash provided by operating activities

II.
1.
2.
3.

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of marketablesecurities
4. Payments to acquire marketable securities
5. Proceeds from sales of paintings
6. Proceeds from sales of property, plant and equipment
7. Capital expenditures
8. Payments to acquire intangible assets
9. Proceeds from sales of investments
10. Payments to acquire investments
11. Payments to acquire additional shares of a subsidiary
12. Other
Net cash used in investing activities

III.
1.
2.
3.
4.
5.
6.

Financing activities
Net increase in short-term bank loans
Repayment of long-term debt
Repurchase of treasury stock
Dividends paid on common stock
Dividends paid to noncontrolling interests
Other
Net cash used in financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents
VI. Cash and cash equivalents, beginning of period
VII. Cash and cash equivalents, end of period-9-

Current Consolidated Cumulative
Third Quarter(From April 1, 2015
to December 31, 2015)
Millions of Yen

5,895

10,3143,765
228(1,064)

3,508
468
1,967

23

(69)

(1,059)

-

6,021

-

(1)

(90)

14

20

(18)

(246)

3,647
(2,382)
(971)
118

2,700
(1,920)(1,226)(1,258)(1,190)(1,849)764
138
13,928(493)
174
12,000(2,317)2,249
311(2,223)
2,444
1,126

1,275
163
(2,578)
(995)
14
(593)
(1)
19
(2,453)(534)
366(4,813)(1,107)
237
(522)
(985)
(6,011)(1,193)(601)(1)(4,648)(190)(6,633)

3,580(4,570)(4)(4,225)(206)
0(5,425)

1,800

(34)

6,642
30,65837,300530
38,41038,940Additional Cash Flow Information
Cash paid for:
Interest
Income taxes
Noncash investing activities
Acquisition of fixed assets by assuming payment
obligation

(5)

79
4,206

56
5,297

436

617

Notes on Consolidated Quarterly Financial Statements(Notes on Going Concern)
Not applicable.
(Notes on Significant Changes in the Amount of Total Shareholders’ Equity)
Not applicable.
(Segment Information)(i)

Operating Segment Information

Previous Consolidated Cumulative Third Quarter (From April 1, 2014 to December 31, 2014)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

86,06635,518

8,723

13,673

143,980-

143,980(2) Intersegment

1,525

6,523

476

3,863

12,387(12,387)-

Total

87,59142,041

9,199

17,536

156,367(12,387)

143,980

Operating expenses
Depreciation and amortization
on customer relationships
Impairment charges on goodwill
and other intangible assets
Total operating expenses

79,60438,0759,208

17,302

144,189(12,387)

131,802

-

-

110

-

110

-

110

-

-

6,021

-

6,021

-

6,021

79,60438,075

15,33917,302

150,320(12,387)

137,933

Operating income (loss)

7,987

3,966

(6,140)

234

6,047

-

6,047

Current Consolidated Cumulative Third Quarter (From April 1, 2015 to December 31, 2015)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

92,21339,3558,424

14,025

154,017-

154,017(2) Intersegment

1,222

6,658

575

4,554

13,009(13,009)-

Total

93,43546,013

8,999

18,579167,026(13,009)

154,017

Operating expenses

85,02042,377

8,559

18,378154,334(13,009)141,325

Operating income

8,415

3,636

440

201

12,692-

12,692(Note)

Core products of respective businesses:
Wacoal business (Domestic): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Wacoal business (Overseas): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Peach John business:
innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, and othertextile-related products, etc.
Other:
innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, othertextile-related products, mannequins, shop design and implementation, etc.

- 10 -

(ii)Segment Information by Region

Previous Consolidated Cumulative Third Quarter (From April 1, 2014 to December 31, 2014)(Millions of Yen)

Net sales
External customers
Distribution ratio

Japan

Asia/Oceania

Europe/N.A.

Consolidated

108,165
75.1%

11,996
8.3%

23,81916.6%

143,980
100.0%

2,009

1,466

2,572

6,047

Operating income

Current Consolidated Cumulative Third Quarter (From April 1, 2015 to December 31, 2015)(Millions of Yen)

Net sales
External customers
Distribution ratio

Japan

Asia/Oceania

Europe/N.A.

Consolidated

114,391
74.3%

13,5588.8%

26,06816.9%

154,017100.0%

8,899

1,607

2,186

12,692

Operating income(Note)

1.
2.

3.

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan:
Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries
Sales in respect of consolidated companies are categorized by location.

(Material Subsequent Events)(i)

Establishment of Subsidiaries and Execution of Business Transfer Agreements

Based on the Joint Venture Agreements executed on November 13, 2015, Wacoal Corp., our consolidated
subsidiary, established two subsidiaries in the Kingdom of Thailand (“Thailand”) in January 2016 as described below. On
January 27, 2016, these two subsidiaries executed the Business Transfer Agreements with Textile Prestige PublicCompany Limited and Erawan Textile Company Limited, respectively, and accordingly on February 1, 2016, we plan toassume their material manufacture businesses.
a.

Purpose of Establishing Subsidiaries and Execution of Business Transfer Agreements

We expect to achieve an improvement in the manufacturing quality and cost competitiveness of our entire
group and will aim to stably supply high value-added materials and products to our global network of the Wacoal
group and customers in the future, by building a worldwide system to supply materials and products in the
ASEAN region, which has the potential to further develop and grow.
b. Outline of Subsidiaries
Trade Name:

A Tech Textile Co., Ltd.

Location of Office:Bangkok, Thailand

Business Description:
Date of Incorporation:

Warp knitting, circular knitting and, planning, development,
manufacturing, staining and sales of embrace products, etc.
January 15, 2016

Capital Amount:

1,000 million Thai baht

Ratio of Capital Contribution:

Wacoal Corp.:
Violetta Co., Ltd.:
Toyo Senko & Co., Ltd.:
Thai Contributors:

54.2%
2.9%
2.9%
40.0%

A Tech Textile Co., Ltd. falls under the category of a specified subsidiary (tokutei kogaisha) of theCompany as the amount of contribution in this subsidiary is equal to or more than 10/100 of thecapital amount of the Company.

- 11 -

(ii)Trade Name:G Tech Material Co., Ltd.

Location of Office:Bangkok, Thailand

Business Description:

Date of Incorporation:

Mold, circular knitting and, planning,development, manufacturing and sales of wire
products, etc.
January 12, 2016

Capital Amount:

300 million Thai baht

Ratio of Capital Contribution:

Wacoal Corp.:
Cosmo Co., Ltd.:
Thai Contributors:

50.4%
9.6%
40.0%

Transfer of Fixed Assets

Our board of directors (“Board”) resolved at a meeting held on January 29, 2016 to transfer the fixed assets (land)as described below.
a.

Reason for Transfer

We have decided to transfer the subject land, the old site of our Nagoya branch, for effective use of ourmanagerial resources because it is unlikely that we would use this site for our business in the future.
b. Details of Subject Asset to be Transferred
Details of Subject Asset:
Location:
Current Status:
Book Value of Subject Asset:
Transfer Value:c.

land (1,370 m2)
15 Sakae 5-chome, Naka-ku, Nagoya-shi, Aichi
leased for parking spaces
295 million yen
4,149 million yen

Outline of Transferee
Kabushiki Kaisha Nihon Ceremonyd. Schedule of Transfer
Resolution of Board Meeting:Execution of Agreement:
Delivery of Land:e.

January 29, 2016
February 12, 2016 (scheduled)
April 28, 2016 (scheduled)

Impact on Business Results

In connection with the transfer of the subject fixed assets, we expect to record approximately 3.8 billion yen ofgain on sale of fixed assets during the consolidated first quarter of the fiscal year ending March 2017.

- 12 -

(6)Status of Sales

Type of productFoundationand lingerie
Innerwear Nightwear
Children’s
underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods andrelated products
Other
Total

Previous Consolidated Cumulative
Third Quarter(From April 1, 2014 toDecember 31, 2014)
AmountDistribution Ratio
Millions of Yen%

Current Consolidated Cumulative
Third Quarter
Increase/(Decrease)(From April 1, 2015 to
December 31, 2015)
AmountDistribution Ratio
AmountDistribution Ratio
Millions of Yen%
Millions of Yen%

107,531

74.7

114,849

74.6

7,318

6.8

7,461

5.2

7,470

4.9

9

0.1

1,128

0.8

1,086

0.7

(42)

(3.7)

116,12080.7

123,405

80.2

7,285

6.3

12,242
1,906

8.5
1.3

14,928
1,711

9.7
1.1

2,686
(195)

21.9
(10.2)

6,097

4.2

5,582

3.6

(515)

(8.4)

7,615
143,980

5.3
100.0

8,391
154,017

5.4
100.0

776
10,03710.2
7.0- 13 -