SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the Third Quarter Ended December 31, 2018
[Japanese Standards]

The financial figures in this document are based on Japanese Accounting Standards and accompanying laws. Amounts arerounded off to 1 decimal place. This document is an English translation of the Japanese-language original.

Consolidated Financial Statements for the Third Quarter ended December 31, 2018
SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

https://sanix.jp

President and CEO:

Hiroshi Munemasa

Contact:

Kozo Inoue, Director, Management Corporate Officer,
General Manager of Corporate Planning Division, Administration Division andManagement & Planning Division

1. Business Results – Operating results for the Third Quarter ended December 31,
2018 (April 1, 2018 to December 31, 2018)(1) Consolidated Operating Results(In Millions of Yen)
Third Quarter
From April 1 to December 31
FY2018Net Sales······························································FY2017%change

37,037%change

36,571

1.3%(0.2%)

Operating Income ··················································

978

26.5%

773

14.6%

Ordinary Income ····················································

938

68.2%

558

23.3%

Net Income ···························································

193(43.5%)

341

562.7%Net Income per Share (¥) ········································

¥4.04

－

¥7.15

－

Net Income per Share, Diluted(¥)······························

－

－

－

－

(Note) Comprehensive Income ································

140(66.7%)

421－(2) Consolidated Financial Position(In Millions of Yen)
As of December 31

As of March 31

FY2018FY2017

Total Assets ···························································

29,86529,938Net Assets ····························································

4,216

4,076

Shareholders’ Equity Ratio (%) ·······························

14.0%

13.5%

Net assets per share(¥) ···········································¥87.51¥84.54(Reference) Equity Capital ·······································

4,183

4,041

2. Dividends
End of Quarterly Period
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter
0.00

0.00

0.00

0.00

Annual(Dividends per Share)
FY2017 ended March 31, 2018 (¥) ·························

0.00

0.00

0.00

FY2018 ended March 31, 2019 (¥) ·························

0.00

0.00

0.00

FY2018 ended March 31, 2019 (¥) (Forecast) ··········(Note) Revision from the most recently announced dividend forecast: None

0.00

3. Forecasts for Consolidated Business Results (April 1, 2018 to March 31, 2019)(In Millions of Yen)
Fiscal Year 2018
Full Year%change

Net Sales······························································

49,434

Operating Income ··················································

1,338

7.3%

Ordinary Income ····················································

1,290

26.6%

Net Income ···························································

534(54.7%)Net Income per Share (¥) ········································¥11.19

(1.1%)(Note) Revision from the most recently announced forecast of consolidated business results: None

* Notes(1) Changes in significant subsidiaries during the period(Change in scope of consolidations resulting from change in subsidiaries): None
Number of subsidiaries newly consolidated－
Name of subsidiaries newly consolidated－
Number of subsidiaries excluded from consolidation－
Name of subsidiaries excluded from consolidation－(2) Adoption of special quarterly accounting methods: None
(3) Changes in accounting policies and accounting estimates retrospective restatementⅰ) Changes in accounting policies based on revisions of accounting standard: Noneⅱ) Changes in accounting policies other than ones based on revisions of accounting standard: Noneⅲ) Changes in accounting estimates: Noneⅳ) Retrospective restatement: None
(4) Number of Issued and Outstanding Shares (Common Stock)(Shares)
End of term
December 31,

March 31,

2018

2018

Number of issued and outstanding shares ,end of period (including treasury stock)48,919,396

48,919,396

Number of treasury stock ,end of period······························································

1,114,073

1,113,923

Average number of shares during the fiscal term ··················································

47,805,458*

47,805,638* December 31, 2017

* This summary of financial statements is exempt from audit procedure required by Financial instruments and Exchange Act.
* Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may
differ significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change ineconomical conditions. For details of these assumptions, prospects and plans, and for notes appropriate use of forecasts for thebusiness results, please see page 2 of the Attachment.

Index of the attachment
1. Qualitative Information for the Third Quarter ended December 31, 2018 ..............
(1) Information of Consolidated Business Results .............................................................................
(2) Information of Consolidated Financial Position ............................................................................

224(3) Information on the Future Outlook,
Including the Forecasts of Consolidated Business Results ........................................................

4

2. Quarterly Consolidated Financial Statements and the Primary Notes for theThird Quarter ended December 31, 2018.................................................................................

5(1) Quarterly Consolidated Balance Sheets........................................................................................

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income ..........................

7

Quarterly Consolidated Statements of Income
for the Third Quarter of the fiscal year ending March 31,2019...............................................

7

Quarterly Consolidated Statements of Comprehensive Income
for the Third Quarter of the fiscal year ending March 31,2019...............................................

8(3) Notes regarding the Quarterly Consolidated Financial Statements ...........................................

9Note to the Assumption of a Going Concern...........................................................................

9Notes to Remarkable Changes in the amount of Shareholders’ Equity ..............................

9

Segment Information, etc. ........................................................................................................

10

3. Others ....................................................................................................................................................

11

Consolidated Net Sales by Division ................................................................................................

11

2

1. Qualitative Information for the Third Quarter ended December 31, 2018(1) Information of Consolidated Business Results
In the third quarter of the fiscal year ending March 31, 2019 (April 1, 2018 to December 31,2018), the Japanese economy continued to follow a modest recovery path with consumer
spending showing signs of picking up, backed by improved corporate earnings andemployment conditions, despite future uncertainty remaining due to the contingency ofoverseas economies and unstable political situations in Japan and overseas.
Under these circumstances, the Group promoted fundamental management rationalizationin line with the medium-term business plan (fiscal 2016 – fiscal 2018) that was preparedbased on the business environment surrounding the solar electric power market. In theprevious consolidated fiscal year, the Group established the “SE/HS/ES Business
Headquarters” to make the shift to a structure for more effective sales activities and more
efficient construction work through mutual cooperation among the three businesses of SE, HS
and ES and transferred personnel from the SE Division to the HS Division and the ES
Division in the first quarter of the current fiscal year to promote the further optimization of
personnel.
The Tomakomai Power Plant (Tomakomai, Hokkaido) suspended power generation becauseof the effects of the Hokkaido Eastern Iburi earthquake that occurred on September 6 during
the first three quarters under review, and the Group is proceeding with the detailed inspectionof stricken sections and recovery work. The Group expects the operation to resume in early
March 2019 and will work hard to resume the operation as soon as possible.
As for net sales in the first three quarters under review, sales increased in the HS Divisionand the ES Division as a result of promoting the expansion of the business size by allocating
management resources including personnel, and sales also increased in the Environmental
Resources Development Business Division as a result of expanding electricity sales in thePower Producer and Supplier (PPS) business. However, sales declined significantly in the SE
Division due to the impact of the contraction of the solar electric power market. As a result,net sales of the entire Group stood at ¥37,037 million (up 1.3% year on year).
Profit increased in the HS Division, the ES Division and the Environmental Resources
Development Business Division on the back of higher sales. However, profit declined
significantly in the SE Division, where sales decreased substantially. As a result, for the entire
Group, operating income came to ¥978 million (up 26.5% year on year) and ordinary income
was ¥938 million (up 68.2% year on year). Net income attributable to the owners of the parent
company stood at ¥193 million (down 43.5% year on year) as a result of posting ¥427 million,
the expected amount of expenses for restoring the facilities at the Tomakomai Power Plant
stricken by the Hokkaido Eastern Iburi earthquake, as a loss caused by the disaster under
extraordinary losses.
Operating results by segment for the first three quarters under review are as follows.

3a. SE (Solar Engineering) Division
Sales declined in solar electric power systems. In addition to the impact of the contracted
size of the solar electric power market, there was a longer-than-expected delay in theapproval of business plans of Feed-in-Tariffs (FIT), which resulted in a situation of backward
shifts overall. As a result, net sales declined significantly to ¥9,664 million (down 24.8% year
on year).
Operating income decreased substantially due to lower sales, despite segment efforts to
reduce expenses through the transfer of personnel to the HS Division and reduce material
costs, and the segment posted operating income of ¥513 million (down 61.9% year on year).
b. HS (Home Sanitation) Division
The HS Division strengthened the sales and construction systems so that the Division would
be able to make carefully crafted proposals for the maintenance of ordinary houses by
increasing personnel through transfers and recruitment for the purpose of expanding its
business size. As a result, termite extermination increased 33.1% year on year, andunderfloor/ceiling ventilation systems rose 40.4% year on year. Base repair/roof
reinforcement construction increased 12.1%. As a result, the division’s sales rose to ¥8,074
million (up 19.4% year on year).
Operating income stood at ¥1,704 million (up 54.5% year on year) mainly thanks to thesignificant increase in sales, an improvement in construction efficiency and a fall in
subcontract expenses, despite a rise in costs such as personnel expenses due to theincrease in personnel.
c. ES (Establishment Sanitation) Division
Sales of anti-rust equipment installation (brand name: Daelman Shock), our main product,
increased 85.3% year on year as a result of increasing personnel through transfers andrecruitment for the purpose of expanding the business size of the Division, strengthening
sales activities to the owners of buildings and condominiums and enhancing relationships
with partner companies, including management companies. As a consequence, the division’s
net sales rose to ¥1,385 million (up 32.5% year on year).
Operating income rose to ¥196 million (up 50.4% year on year) mainly due to the significant
increase in sales, an improvement in construction efficiency and a fall in subcontract
expenses, despite a rise in costs such as personnel expenses due to the increase inpersonnel.
d. Environmental Resources Development (ERD) Division
Plastic fuel sales increased 12.9% year on year because the Division placed emphasis on
the quality of plastic fuels and proceeded with careful examinations of accepted articles, andthe acceptance volume also remained stable. Although the suspension of the TomakomaiPower Plant caused by the Hokkaido Eastern Iburi earthquake was the factor for a decrease

4

in revenue, electricity sales rose 14.2% year on year due to higher volume in the Power
Producer and Supplier (PPS) business. As a result, net sales amounted to ¥17,913 million(up 12.6% year on year).
Operating income increased to ¥1,088 million (up 116.8% year on year) due to cost
reductions through improved profitability by focusing on the quality of plastic fuels, as well as
higher sales in the PPS business and the contribution of measures to stabilize power
procurement costs, although the suspension of the Tomakomai Power Plant was the factor
for a decrease in profit.

(2) Information of Consolidated Financial Positiona. Information on the status of Assets, of Liabilities, and of Net Assets
Total assets as of the end of the third quarter under review amounted to ¥29,865 million, adecrease of ¥72 million from the end of the previous consolidated fiscal year, which wascaused chiefly by a decrease in cash and deposits of ¥1,016 million and a decrease in notes
and accounts receivable-trade of ¥214 million, despite an increase in merchandise andfinished goods of ¥920 million and an increase in machinery, equipment and vehicles of ¥141
million.
Total liabilities stood at ¥25,649 million, a decline of ¥212 million from the end of the previous
consolidated fiscal year, which was attributable largely to a decrease in notes and accounts
payable-trade of ¥1,260 million, while short-term loans payable increased by ¥958 million.
Net assets totaled ¥4,216 million, an increase of ¥139 million from the end of the previous
consolidated fiscal year, mainly due to the posting of net income attributable to the owners of
the parent company of ¥193 million.
Consequently, the shareholders’ equity ratio at the end of the third quarter of the fiscal year
under review came to 14.0%, an increase from 13.5% at the end of the previous fiscal year.

(3) Information on the Future Outlook, Including the Forecasts of Consolidated BusinessResults
The forecasts of consolidated business results for the current fiscal year ending March 31,
2019 have not changed from those announced on November 13, 2018.

5

2. Quarterly Consolidated Financial Statements and the Primary Notes for theThird Quarter ended December 31, 2018
(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of Mar. 31

As of Dec. 31

FY2017FY2018Assets :Current Assets :Cash and deposits

5,482

4,466

Notes and accounts receivable-trade

5,485

5,270

273

1,194

Merchandise and finished goods
Work in process-construction

209

125

Raw materials and supplies

4,035

4,088

Other

797

910

Allowance for doubtful accounts

(525)

(340)

15,75915,714

Buildings and structures (net of depreciation)

2,080

1,954

Machinery, Equipment and Vehicles(net of depreciation)

1,189

1,330

Land

7,811

7,811

844

770

11,926

11,867

Goodwill

65

－

Other

148

238

Intangible Fixed Assets

214

238

Investments and Other Assets :

2,037

2,045

Total Fixed Assets

14,17814,151

29,93829,865

Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Other (net of depreciation)
Total Property, Plant and Equipment
Intangible Fixed Assets :Total Assets

6(In Millions of Yen)

As of Mar. 31

As of Dec. 31

FY2017FY2018

Liabilities :Current Liabilities :Notes and accounts payable-trade

5,079

3,818

Short-term loans payable

11,685

12,644

140

132

3,069

2,888

Accrued income taxes

409

209

Allowance for resource-recycling expenses

27

25

Current portion of long-term loans payable
Accounts payable

-

357

Other

2,592

2,502

Total Current Liabilities

23,003

22,580325

254

Allowance for disaster loss

Non-Current Liabilities :Long-term loans payable
Provision for directors’ retirement benefits

99Provision for disposal site closing expenses

573

594

1,465

1,533

483

676

Liability related to retirement benefits
Other

2,857

3,069

25,86125,64914,041

14,0411

1Retained earnings(8,597)(8,404)

Treasury stock(1,481)(1,481)

Total Shareholders’ Equity

3,964

4,158

Valuation difference on available-for-sale securities

76

61

Deferred gains or losses on hedges(0)-

Foreign currency translation adjustment

3

(35)

Adjustment for retirement benefits (cumulative)

(2)

(1)

Total Accumulated other comprehensive income

7625

Total Non-Current Liabilities
Total Liabilities
Net Assets :Shareholders’ Equity :Capital stock
Capital surplus

Accumulated other comprehensive income :35

33

Total Net Assets

4,076

4,216

Total Liabilities and Assets

29,93829,865

Non-controlling Interests

7(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(for Third Quarter of the fiscal year ending March 31, 2019)(In Millions of Yen)

Third Quarter
From April 1 to December 31
FY2018FY201736,57137,037

Cost of sales

26,151

25,839Gross profit

10,42011,197

Selling, general and administrative expenses

9,646

10,219

773

978

11

7

Net sales

Operating income
Non-operating income :Interest income
Dividends income22Land and house rent revenue

47

48

-

10

26

8

-

70

Foreign exchange gains
Subsidy income
Compensation income
Other

50

28

Total non-operating income

137

176

161

176

Non-operating expenses :Interest expenses
Foreign exchange losses

23

-

Other

166

39

Total non-operating expenses

352

216

558

938

Loss on disaster-

427

Total extraordinary loss-

427

Ordinary income (loss)
Extra ordinary loss :Income (loss) before income taxes and minority interests

558

511

Income taxes-current

213

322

1

(1)

Total income taxes

214

320

Net Income (loss)

343

191

Net Income (loss) belonging to the non-controlling shareholders

1
341

(1)
193

Income taxes-deferred

Net income (loss) belonging to the shareholders of the parent company

8(Quarterly Consolidated Statements of Comprehensive Income)(for Third Quarter of the fiscal year ending March 31, 2019)(In Millions of Yen)

Third Quarter
From April 1 to December 31
FY2018FY2017Net Income (loss)

343

191

Other comprehensive income :Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

13
2

(14)
0

Foreign currency translation adjustment

51

(38)

Adjustment for retirement benefit adjustment

10

1

Total other comprehensive income
Comprehensive net income

77

(51)

421

140

419

141

1

(1)

(Breakdown)Comprehensive income belonging to the shareholders of the parent
company
Comprehensive income belonging to non-controlling shareholders

9(3) Notes regarding the Quarterly Consolidated Financial Statements(Notes to the Assumption of a Going Concern): None(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None10(Segment Information, etc.)
Ⅰ The previous third Quarter (From April 1, 2017 to December 31, 2017)ⅰ) Information concerning the Amount of Net Sales and Operating Income (loss)
by Segment(In Millions of Yen)

Elimination
or Group(note 1)

Segments

Consolidated(note 2)

SE

HS

ES

ERD

Total

12,846

6,765

1,045

15,91436,571-

36,571

-

-

-

-

-

-

-

Total

12,846

6,765

1,045

15,91436,571-

36,571

Operating income (loss)

1,347

1,103

130

502

3,083

(2,310)773

Sales:
Sales to customers
Internal sales among
segments and transfer
accounts(note 1)
Negative ¥2,310 million for adjustments of Operating income (loss) represents corporate expenses not allocatedto reportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

Ⅱ The Third Quarter (From April 1, 2018 to December 31, 2018)ⅰ) Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

SE

HS

ES

ERD

Total

Elimination
or Group(note 1)

9,664

8,074

1,385

17,91337,037-37,037

-

-

-

-

-

-

-

9,664

8,074

1,385

17,91337,037-37,037

513

1,704

196

1,088

3,502

(2,524)

978

Segments

Consolidated(note 2)

Sales:
Sales to customers
Internal sales among
segments and transfer
accounts
Total
Operating income (loss)(note 1)
Negative ¥2,524 million for adjustments of Operating income (loss) represents corporate expenses not allocatedto reportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

11

3. Others
Consolidated Net Sales by Division(In Millions of Yen)

From April 1 to December 31
FY2018FY2017
Commercial PV system
Wholesale of PV components

Changes

11,8589,142(2,716)

816

400

(416)

171

121

(49)

Solar Engineering Division Total

12,846

9,664(3,182)

Termite Eradication Service

1,970

2,623

652

946

1,328

382

Foundation Repairing/Home Reinforcement
System

1,428

1,600

172

OthersOthersUnder-Floor/Roof Ventilation System

2,419

2,521

102

Home Sanitation Division Total

6,765

8,074

1,309

Anti-rust equipment installation

360

667

307

Repair of building water-woks

316

326

10

Water proofing of building

94

114

20

Others

274

276

2

Establishment Sanitation Division Total

1,045

1,385

339

5,712

6,451

738

7,830

8,939

1,109

1,332

1,413

81

Final disposal

519

595

76

OthersEnvironmental
Division Total :

518

512

(6)

15,914

17,913

1,999

36,57137,037

465

Plastic fuelGeneration of electricity
Industrial waste (Organic
Recycle)Total Net Sales

Resources

Waste

Water

Development