SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the First Quarter Ended June 30, 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 First Quarter ended June 30, 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 First Quarter ended June 30, 2018
(April 1, 2018 to June 30, 2018)(1) Consolidated Operating Results(In Millions of Yen)First Quarter
From April 1 to June 30
FY2018%change

FY2017%change

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

11,733

(3.0%)

12,098

6.5%

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

103(73.8%)

396－

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

154(47.2%)

292－

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

111(46.8%)

209－

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

¥2.33

－

¥4.38

－

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

－

－

－

－

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

91(58.8%)

222－(2) Consolidated Financial Position(In Millions of Yen)
As of June 30

As of March 31
FY2017FY2018
Total Assets ···························································

28,45729,938Net Assets ····························································

4,167

4,076

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

14.5%

13.5%

Net assets per share(¥) ···········································¥86.45¥84.54(Reference) Equity Capital ·······································

4,132

4,041

2. Dividends
Quarterly Period
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Annual(Dividends per Share)
FY2017 ended March 31, 2017······························

0.00

FY2018 ended March 31, 2019······························

0.00

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

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

Full Year%change

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

24,3150.6%

50,0000.0%

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

868(526.1%)

2,190

75.7%

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

818

－

2,100

106.0%Net Income ···························································

643

－

1,610

36.4%

Net Income per Share (¥) ········································(¥13.45)¥33.68* 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
June 30, 2018

March 31, 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······························································

1,113,923

1,113,923

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

47,805,473*

47,805,715* June 30, 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 first quarter ended June 30, 2018 ..........................

2(1) Information of Consolidated Business Results .............................................................................

2(2) Information of Consolidated Financial Position ............................................................................
(3) Information on the Future Outlook,
Including the Forecasts of Consolidated Business Results ........................................................

5
5

2. Quarterly Consolidated Financial Statements and the Primary Notes for the
first quarter ended June 30, 2018 ...............................................................................................

6(1) Quarterly Consolidated Balance Sheets........................................................................................

6(2) Quarterly Consolidated Statements of Income and Comprehensive Income ..........................

8

Quarterly Consolidated Statements of Income
for the first quarter of the fiscal year ending March 31,2019 ..................................................

8

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

9(3) Notes regarding the Quarterly Consolidated Financial Statements ...........................................

10

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

10

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

10

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

11

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

12

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

12

2

1. Qualitative Information for the first quarter ended June 30, 2018(1) Information of Consolidated Business Results
In the first quarter of the fiscal year ending March 31, 2019 (April 1, 2018 to June 30, 2018),
the Japanese economy continued to follow a modest recovery path with consumer spending
showing signs of picking up, backed by improved corporate earnings and employment
conditions, despite future uncertainty remaining due to the contingency of overseas
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 promoted the further optimization of personnel through transfers from the SE
Division to the HS Division and the ES Division in the first quarter under review.
As for net sales in the first quarter under review, sales increased in the HS Division and 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 ¥11,733 million (down 3.0% 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 ¥103 million (down 73.8% year on year) and ordinary
income was ¥154 million (down 47.2% year on year). Net income attributable to the owners of
the parent company stood at ¥111 million (down 46.8% year on year).
Consolidated results of individual divisions for the first quarter were 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) in the first quarter under review, which
resulted in a situation of backward shifts overall. As a result, net sales declined significantly to¥2,779 million (down 38.2% 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 raw
material costs, and the segment posted an operating loss of ¥88 million (compared with
operating income of ¥442 million in the same period of the previous fiscal 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 for the purpose of expanding its business size. As aresult, termite extermination increased 27.0% year on year, and underfloor/ceiling ventilation
systems rose 30.6% year on year. Base repair/roof reinforcement construction increased
24.1%. As a result, the division’s sales rose to ¥2,711 million (up 16.4% year on year).
Operating income stood at ¥580 million (up 44.2% 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 104.2% year on year as a result of increasing personnel through transfers for the
purpose of expanding the business size of the Division, strengthening sales activities to theowners of buildings and condominiums and enhancing relationships with partner companies,
including management companies. As a consequence, the division’s net sales rose to ¥415
million (up 33.8% year on year).
Operating income rose to ¥52 million (up 30.7% 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
Due to a rise in the collection volume of waste plastic for fuels, plastic fuel sales increased
11.9% year on year and electricity sales rose 29.3% year on year due to the expansion of the4Power Producer and Supplier (PPS) business. As a result, net sales amounted to ¥5,826
million (up 17.5% year on year).
Operating income increased to ¥439 million (up 29.9% year on year) due to an increase inunit prices for the collection of waste plastic, an improvement in fuel quality and the reductionof costs reflecting the improved efficiency of plastic fuels, as well as higher sales in the PPS
business and the contribution of the stabilized costs of power procurement.

5(2) Information of Consolidated Financial Position
Total assets as of the end of the first quarter under review amounted to ¥28,457 million, adecrease of ¥1,480 million from the end of the previous fiscal year, which was caused chiefly
by a fall in cash and deposits of ¥1,348 million. Total liabilities stood at ¥24,289 million, adecline of ¥1,571 million from the end of the previous fiscal year, which was attributablelargely to deceases in notes and accounts payable-trade of ¥1,107 million, short-term loans
payable of ¥288 million and accounts payable-other of ¥166 million. Net assets totaled ¥4,167
million, an increase of ¥91 million from the end of the previous fiscal year. The key
contributions to the increase included the posting of net income attributable to the owners of
the parent company of ¥111 million.
Consequently, the capital-to-asset ratio for the first quarter of the fiscal year under review
came to 14.5%, 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
There is no change in the forecast of consolidated business results for the current fiscal
year ending March 31, 2019, from the forecasts announced on May 14, 2018.

6

2. Quarterly Consolidated Financial Statements and the Primary Notes forthe first quarter ended June 30, 2018
(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of March 31

As of June 30

FY2017FY2018Assets :Current Assets :Cash and deposits

5,482

4,134

Notes and accounts receivable-trade

5,485

5,084

273

238

Merchandise and finished goods
Work in process-construction

209

197

Raw materials and supplies

4,035

4,153

Other

797

1,027

Allowance for doubtful accounts

(525)

(509)

15,75914,327

Buildings and structures (net of depreciation)

2,080

2,009

Machinery, Equipment and Vehicles(net of depreciation)

1,189

1,251

Land

7,811

7,811

844

792

11,926

11,863

Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Other, net
Total Property, Plant and Equipment
Intangible Fixed Assets :Goodwill

65

37

Other

148

153

Intangible Fixed Assets

214

191

Investments and Other Assets :

2,037

2,074

Total Fixed Assets

14,17814,12929,93828,457

Total Assets

7(In Millions of Yen)

As of March 31

As of June 30

FY2017FY2018

Liabilities :Current Liabilities :Notes and accounts payable-trade

5,079

3,971

Short-term loans payable

11,685

11,397

140

129

3,069

2,902

Accrued income taxes

409

478

Allowance for resource-recycling expenses

27

20

Current portion of long-term loans payable
Accounts payable

Other

2,592

2,511

Total Current Liabilities

23,003

21,410

325

304

9

9

Non-Current Liabilities :Long-term loans payable
Provision for directors’ retirement benefits
Provision for disposal site closing expenses
Liability Related to Retirement Benefits

573

581

1,465

1,488

483

494

2,857

2,878

25,861

24,28914,041

14,0411

1Retained earnings(8,597)(8,486)

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

Total Shareholders’ Equity

3,964

4,076

Valuation difference on available-for-sale securities

76

68

Deferred gains or losses on hedges(0)－

Foreign currency translation adjustment

3(9)Adjustment for Retirement Benefits (Cumulative)

(2)

(1)

Total Other comprehensive income

76

56

35

34

Total Net Assets

4,076

4,167

Total Liabilities and Assets

29,93828,457

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

Valuation and translation adjustments :Non-controlling Interests

8(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(For the first quarter of the fiscal year ending March 31, 2019)(In Millions of Yen)First Quarter
From April 1 to June 30
FY2018FY2017

Net sales

12,098

11,733

Cost of sales

8,376

8,193

Gross profit

3,722

3,540

Selling, general and administrative expenses

3,325

3,436

396

103

2

1

Operating income (loss)
Non-operating income :Interest income
Dividends income

1

1Land and house rent revenue

15

16

-

11

20

0

-

70

Foreign exchange gains
Subsidy income
Compensation income
Other

18

6

Total non-operating expenses

58

107

Interest expenses

53

47

Foreign exchange losses

38

-

Other

69

8

Total non-operating expenses

Non-operating expenses :

161

56

Ordinary income (loss)

292

154

Income (loss) before income taxes and minority interests

292

154

Income taxes-current

84

88

Income taxes-deferred

(1)

(42)

Total income taxes

82

43

Net Income

210

111

1

(0)

209

111

Net Income (loss) attributable to the non-controlling shareholders
Net income (loss) attributable to the shareholders of the parent
company9(Quarterly Consolidated Statements of Comprehensive Income)(For the first quarter of the fiscal year ending March 31, 2019)(In Millions of Yen)First Quarter
From April 1 to June 30
FY2018FY2017
Income before minority interests

210

111

2

(8)

Other comprehensive income :Share of other comprehensive income of associates accounted forusing equity method
Deferred gains or losses on hedges-

0

Foreign currency translation adjustment

6

(13)

Retirement benefit adjustment

30

Total other comprehensive income
Comprehensive net income

12

(19)

222

91

221

91

1

(0)

Comprehensive net income attributable toComprehensive net income (loss) attributable to non-controllingshareholders
Comprehensive net income (loss) attributable to the shareholdersof the parent company

10(3) Notes regarding the Quarterly Consolidated Financial Statements(Notes regarding the Assumption of Going Concern): None(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None11(Segment Information, etc.)
Ⅰ The previous first quarter (From April 1, 2017 to June 30, 2017)
Information concerning the Amount of Net Sales and Operating Income (loss)
by Segment(In Millions of Yen)

Elimination
or Group(note 1)

Segments

Sales:
Sales to customers
Internal sales among
segments

SE

HS

ES

ERD

Total

4,500

2,329

310

4,957

12,098-12,098

-

-

-

-

-

-

-

4,500

2,329

310

4,957

12,098-12,098

442

402

40

338

1,223

(826)

396

And transfer accounts
Total
Operating income

Consolidated(note 2)

(note 1)
Negative ¥826 million for adjustments of Operating income (loss) represents corporate expenses notallocated to reportable segments. Corporate expenses are mainly general and administrative expenses
note attributable to reportable segments.
(note 2)
Operating income is adjusted to operating loss of quarterly consolidated statements of income.

Ⅱ The first quarter (From April 1, 2018 to June 30, 2018)
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)

2,779

2,711

415

5,826

11,733-

11,733

-

-

-

-

-

-

-

2,779

2,711

415

5,826

11,733-

11,733

(88)

580

52

439

984

(880)

130

Segments

Sales:
Sales to customers
Internal sales among
segments
And transfer accounts
Total
Operating income (loss)

Consolidated(note 2)

(note 1)
Negative ¥826 million for adjustments of Operating income (loss) represents corporate expenses notallocated to reportable segments. Corporate expenses are mainly general and administrative expenses
note attributable to reportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

12

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

From April 1 to June 30
FY2018FY2017
Commercial PV system
Wholesale of PV components
OthersSolar Engineering Total

Changes

4,147

2,602

(1,545)

266

114

(151)

86

62

(23)

4,500

2,779

(1,720)Termite Eradication Service

728

925

196

Under-Roof/Roof Ventilation System

315

411

96

Foundation Repairing/Home Reinforcement
System

460

571

111

825

803

(21)

Home Sanitation Division Total

2,329

2,711

382

Anti-rust equipment installation

100

206

105

Repair of building water-woks

83

75

(7)

Water proofing of building

28

34

5

Others97

98

1

OthersEstablishment Sanitation Division Total

310

415

104

1,835

2,052

217

2,318

2,996

678

460

409

(50)

Final disposal

164

203

39

OthersEnvironmental
Division Total :

179

164

(15)

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

Resources

Waste

Water

Development
4,957

5,826

868

12,098

11,733(365)(note)
Items whose quantity is difficult to grasp because of their wide variety are omitted from the statements.