Summary of Consolidated Financial Results for Six Months Ended July 31, 2005
Company name:

September 12, 2005
Listings: Tokyo Stock Exchange (First Section)

Pigeon Corporation

Stock code:7956(URL http://www.pigeon.co.jp)
President:
Seiichi Matsumura
Contact:
Katsumi Ooyabu, Managing Officer
BOD meeting for approving interim financial results: September 12, 2005
U.S. accounting standards:
Not applicable

Headquarters: Tokyo

TEL +81-3-3252-4113

１. Consolidated Financial Results (Six months ended July 31, 2005 and 2004)(¥ millions, rounded down)(1) Performance (Six months ended July 31)
Net sales

Operating income

Change (%)

2005
2004
Year ended
January 31,21,100 (19,754 (6.8)
14.1)

40,719Ordinary income

Change (%)

1,339
1,321((1.4)-0.1)

2,714

1,309 (
1,317 (-0.5)
6.5)

2,621

Net income per share (¥)

Net income

Change (%)

Net income per share (fullydiluted) (\)

Change (%)

2005
2004
Year ended
January 31,798 (
846 (-5.7 )31.7 )

1,494

40.22
42.15

40.21
42.05

74.22

74.10

Notes: 1. Equity in earnings of affiliates:
2. Average shares outstanding (cons.):¥22 million (July 2005); ¥21 million (July 2004); ¥44 million (Jan. 2005)
19,847,330 (6 months ended July 2005); 20,073,396 (6 months ended July 2004);
20,138,055 (Year ended Jan. 2005)
3. Changes in accounting principles:
Not applicable
4. Figures in parentheses represent year-on-year percentage change.

(2) Financial Position (at July 31)
Total assets

2005
2004

35,49636,263(¥ millions, rounded down)
Shareholders' equity

19,682
19,424Equity-assets ratio (%)

55.4
53.6

Equity per share (¥)

997.43962.30At January 31,
34,382
19,99758.2
989.43
2005
Note: Shares outstanding at term-end (consolidated): 19,732,925 (July 2005); 20,185,789 (July 2004); 20,211,283 (Jan. 2005)(3) Cash Flows (year ended July 31)
Cash flows fromoperating activities(¥ millions, rounded down)
Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at year-end

2005
2004

317
1,987

(790)
(2,302)

(161)
335

2,146
3,240

Year ended
January 31, 2005

4,286(2,850)(1,881)

2,768(4) Scope of Consolidation and Equity-Method Application
Consolidated subsidiaries: 13; Nonconsolidated subsidiaries (equity method): 0; Affiliates (equity method): 2(5) Changes in Scope of Consolidation and Equity-Method Application
Consolidated: 0 (newly included); 0 (excluded)
Equity method application: 0 (newly included); 0 (excluded)
２. Forecast for Fiscal Year Ending January 31, 2006(¥ millions, rounded down)

Net sales

Net income

Full year

42,700Ordinary income

3,000(Reference) Forecast net income per share (full year): ¥83.61-1-1,650

Consolidated Interim Balance Sheets(Figures rounded down to nearest thousand yen)
At July 31, 2004

At July 31, 2005

At January 31, 2005

Thousands of yen % of total Thousands of yen % of total Thousands of yen % of total
ASSETS％％％Ⅰ Current Assets
Cash and time deposits

3,240,369

2,146,280

2,768,291

Notes and accounts receivable

9,379,573

9,529,666

8,597,127

Inventories

3,653,692

3,964,666

3,427,581

Deferred tax assets

667,564

590,478

579,327

Other receivables

243,997

273,870

231,868

Other current assets

204,121

225,698

158,154

Allowance for doubtful accounts
Total Current Assets(9,497)
17,379,821(11,528)47.9

16,719,132(17,432)47.1

15,744,917

45.8

Ⅱ Fixed Assets
1. Tangible Fixed Assets
Buildings and structures

4,530,745

4,357,879

4,480,395

Machinery and transportation equipment

2,145,997

2,188,549

2,123,616

578,741

641,883

540,045

6,101,231

6,102,501

6,102,501

Tools, furniture and fixtures
Land
Construction in progress

83,944

125,843

52,582

13,440,660

13,416,656

13,299,140

2,408,211

2,197,411

2,351,346

Software694,678

933,147

764,345

Other intangible fixed assets

57,92653,67055,140Total Intangible Fixed Assets

3,160,815

3,184,229

3,170,832

Total Tangible Fixed Assets
2. Intangible Fixed Assets
Consolidation adjustment accounts

3.Investments and Other Assets
Investment securities

1,058,578

1,091,364

1,067,568

Insurance reserve

648,578

516,181499,891

Deferred tax assets

188,233

260,579

248,730

Others977,231

331,153

974,565

Allowance for doubtful accounts(590,839)(22,720)(623,123)

Total Investments and Other Assets

2,281,782

2,176,558

2,167,631

Total Fixed Assets

18,883,258

52.1

18,777,444

52.9

18,637,604

54.2

Total Assets

36,263,080

100.0

35,496,577

100.0

34,382,522

100.0-2-

Consolidated Interim Balance Sheets(Figures rounded down to nearest thousand yen)
At January 31, 2005

At July 31, 2005

At July 31, 2004

Thousands of yen % of total Thousands of yen % of total Thousands of yen % of total
LIABILITIES％％％Ⅰ Current Liabilities
Notes and accounts payable

6,723,577

6,602,930

6,160,627

Short-term borrowings

1,841,697

2,224,094

859,903

Current portion of long-term debt

909,172

1,556,182

657,946

1,115,472

1,210,540

1,258,967

Income taxes payable

528,785

343,222753,861

Accrued bonuses to employees

464,048

513,990

517,332

Accrued account payable

Returned goods adjustment reserve

34,90034,30031,200

Other current liabilities

1,049,197

1,254,926

879,589

Total Current Liabilities

12,666,849

34.9

13,740,187

38.7

11,119,426

32.3

Ⅱ Long-Term Liabilities
Long-term borrowings

2,317,646

206,264

1,473,212

Deferred tax liabilities

375,023566,994

401,531

Employees' retirement benefits

159,459

176,007

167,152

Retirement benefits for directors andcorporate auditors

360,572

330,980

329,339

Other long-term liabilities

606,188

Total Long-Term Liabilities

3,818,889

10.5

1,687,492

407,2464.8

2,878,977

507,742
8.4

Total Liabilities

16,485,739

45.4

15,427,680

43.5

13,998,404

40.7

352,399

1.0

386,5071.1

386,383

1.1

Capital stock

5,199,597

14.3

5,199,597

14.6

5,199,597

15.1

Additional paid-in capital

5,144,329

14.2

5,146,690

14.5

5,145,608

15.0

Consolidated retained earnings

9,662,784

26.7

10,705,687

30.2

10,149,781

29.5(3,470)(0.0)(6,052)(0.0)(5,159)(0.0)

Foreign currency translation adjustment(493,256)(1.4)(444,294)(1.3)(431,795)(1.2)

Treasury stock, at cost

(85,042)(0.2)(919,238)(2.6)(60,296)(0.2)

Total Shareholders' Equity

19,424,941

53.6

19,682,389

55.4

19,997,734

58.2

Total Liabilities, Minority Interests andShareholders' Equity

36,263,080

100.0

35,496,577

100.0

34,382,522

100.0

MINORITY INTERESTS
Minority Interests
SHAREHOLDERS' EQUITY

Net unrealized gains (losses) on securities-3-Consolidated Interim Statements of Income
Six months ended July 31,
2004(Figures rounded down to nearest thousand yen)Six months ended July 31,
Year ended January 31, 2005
2005

Thousands of yen % of total

Thousands of yen % of total

Thousands of yen % of total％％％Ⅰ Net Sales

19,754,887

100.0

21,100,511

100.0

40,719,607

Ⅱ Cost of Sales

12,153,770

61.5

13,110,274

62.1

25,047,114

61.5

Gross profit

7,601,116

38.5

7,990,23637.9

15,672,492

38.5

Reversal of reserve for returned products

30,95531,200Transfer to reserve for returned products

34,90034,300Adjusted gross profit
Ⅲ Selling, General and Administrative Expenses

100.0

30,95531,2007,597,172

38.5

7,987,136

37.9

15,672,248

38.5

6,275,387

31.8

6,647,211

31.5

12,957,900

31.8

Operating Income

1,321,784

6.7

1,339,925

6.4

2,714,348

6.7

Ⅳ Nonoperating Income

195,4621.0

156,4180.7

339,3770.8Interest income

2,258

2,318

4,853
10,189Dividend income

1,177

932

Foreign exchange gain25,954

17,193－

Rental income

76,331

71,184

149,106

Equity in earnings of nonconsolidated
subsidiaries and affiliates

21,131

22,54844,098Others68,60742,240200,163Interest expenses

47,061

27,29486,899

Sales discounts

91,61899,271

204,525

Rental income-related costs

57,40952,150115,317

Others1.0

4,073

186,463

131,129

Ⅴ Nonoperating Expenses

0.9

7,747

431,898

1.1

25,156

Ordinary Income

1,317,082

6.7

1,309,879

6.2

2,621,827

6.4

Ⅵ Extraordinary Income

170,225

0.8

52,5560.2

168,5190.4Gain on sales of investment securities
Reversal of allowance for doubtful accounts
Others
Ⅶ Extraordinary Loss
Loss on sales of fixed assets

8,829

－

8,829

158,843

51,316

158,774

2,552
36,942

1,239
0.2

47,654916
0.2

177,145

－

5,518

3,324

26,38537,684

100,076－－

56,380

Amortization of difference arising from changein accounting for retirement benefits

4,452

－

8,904

Retirement benefit system modification expense

5,678

－

5,678

Loss on disposal of fixed assets
Loss on business adjustment

OthersIncome before Income Taxes

427
1,450,365

4,452

0.4

2,781

7.3

1,314,781

6.2

2,613,202

6.4

Income Taxes

563,4272.9

337,352

1.6

980,197

2.4

Adjustment for Corporate Tax(3,168)(0.0)

151,2140.7

46,8290.1

Less: Minority Interest in Net Income ofConsolidated Subsidiaries

43,8350.2

27,7730.1

91,436

0.2

Net Income

846,2714.3

798,4413.8

1,494,738

3.7-4-Consolidated Interim Statements of Cash Flows(Figures rounded down to nearest thousand yen)Six months ended
July 31, 2004

Six months ended
July 31, 2005

Year ended January31, 2005

Thousands of yen

Thousands of yen

Thousands of yen

1,450,365
640,491

1,314,781
616,959

2,613,202
1,316,123

94,981

187,191

282,591(158,883)
114,600(7,924)(606,969)(3,792)
8,854(117,997)
167,934
(231)

4,666

1,641

(26,567)Interest and dividend income(Gain) loss on sales of securities(3,435)(10,781)(3,251)－(15,042)(10,418)

Equity in (earnings) losses of nonconsolidated
subsidiaries and affiliates(21,131)(22,548)(44,098)

47,061(8,829)－26,385(877,505)(253,904)
1,111,357
47,832
108,417(127,847)
32,5632,208,481
3,063(42,653)(180,930)
1,987,960

27,294－
5,518
37,684(887,215)(509,901)
414,874(126,118)
626,427(96,616)
130,710
1,115,523
4,452(26,641)(775,902)
317,431

86,899(8,829)3,324
100,076(109,475)(37,843)554,984
106,166
110,393(246,549)
2,786
4,727,430
14,535(83,122)(372,555)
4,286,288

393,607(499,296)
2,904(139,377)(4,990)71,391(40,304)
97,508－(2,195,936)(10,352)
11,876
31,849(21,373)(2,302,493)－(386,972)
4,972(378,184)－－(25,166)
10,003(28,115)
－
(492)
2,958
13,288(3,191)(790,897)

393,607(843,796)
13,476(383,209)(4,990)71,391(82,201)
246,773(97,400)(2,195,936)(11,134)
37,181
36,746(31,134)(2,850,626)

3,383,270(3,363,371)
1,300,000(987,136)(162,981)(31,495)
199,562(2,023)335,824(4,625)
16,6653,223,703
3,240,369

5,924,816(4,583,852)－(368,712)(243,120)(32,695)
22,748(880,607)(161,422)
12,876(622,011)
2,768,291
2,146,280

5,873,296(6,839,181)
1,300,000(2,082,796)(325,238)(31,495)
226,446(2,883)(1,881,853)(9,219)(455,411)
3,223,703
2,768,291

Ⅰ．Cash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of difference between investment
costs and equity in net assets acquired
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in accrued bonuses to employees
Increase (decrease) in employees' retirement benefits
Increase (decrease) in reserve for retirement
benefits to directors and corporate auditors

Interest expenses
Gain on sales of investment securities
Loss on sales of fixed assets
Loss on disposal of fixed assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories(Decrease) increase in trade payables
Decrease (increase) in consumption tax payable(Increase) decrease in bankruptcy claims
Increase in employees’accrued retirement benefits
OthersSubtotalInterest and dividends received
Interest paidIncome taxes paid
Net Cash Provided by (Used in) Operating Activities
Ⅱ．Cash Flows from investing Activities
Proceeds from reversal of time deposits
Acquisition of fixed assets
Proceeds from sales of fixed assets
Acquisition of intangible assets
Acquisition of investment securities
Proceeds from sales of investment securities
Payment to life insurance fund for directors
Proceeds due to maturity/cancellation of insurance reserve
Acquisition of shares in subsidiaries
Acquisition of newly consolidated subsidiary
Loans advanced
Collection of loan receivables
Proceeds from recovery of lease deposits
OthersNet Cash Provided by (Used in) Investing Activities
Ⅲ．Cash Flows from Financing Activities
Net increase in short-term bank loans
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Payment of cash dividends
Payment of cash dividends to minority shareholders
Proceeds from sales of treasury stock
Acquisition of treasury stock
Net Cash Provided by (Used in) Financing Activities
Ⅳ．Translation Gain (Loss) Related to Cash and Cash Equivalents
Ⅴ．Net Change in Cash and Cash Equivalents
Ⅵ．Cash and Cash Equivalents at Beginning of Year
Ⅶ. Cash and Cash Equivalents at End of Year-5 -