Summary of Financial Statements for the Second Quarter of Fiscal Year Ending April 2021
[Japan GAAP] (Consolidated)

December 3, 2020

Name of listed company:

AIN HOLDINGS INC.

Exchange listed on:First Section of Tokyo Stock Exchange and Sapporo Securities Exchange

Code number:

9627

URL:

https://www.ainj.co.jp/

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Representative Senior Managing Director
TEL: +81-11-814-1000
Date of filing quarterly securities report:
December 15, 2020–

Start of dividend payment:

Yes (Supplementary materials for the quarterly results are disclosed on the

Supplementary documents for quarterly results:

Company’s website appropriately as the financial statements.)

Quarterly results briefing:

Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the second quarter of fiscal year ending April 30, 2021 (May 1, 2020 to October 31, 2020)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Million yen% Million yen% Million yen% Million yen%
Six months ended October 31, 2020
Six months ended October 31, 2019
(Note) Comprehensive income:

145,352(0.3)(48.4)

2,630(43.1)

145,851
10.7
8,354
24.1
8,762
24.9
Six months ended October 31, 2020: ¥2,664 million (-42.2%)
Six months ended October 31, 2019: ¥4,607 million (+28.9%)

4,622

27.0

Earnings
per share

3,927(53.0)

4,517

Diluted earnings
per share
Yen

Yen

Six months ended October 31, 2020

74.24

-

Six months ended October 31, 2019130.47-(2) Consolidated financial position
Total assets

Net assets

Million yen
As of October 31, 2020

199,521
193,451

As of April 30, 2020

(Reference) Shareholders’ equity: As of October 31, 2020: ¥111,650 million

Million yen
111,719

Shareholders’ equity ratio%
56.0

111,003

57.3

As of April 30, 2020: ¥110,915 million

2. Dividends

Year ended April 30, 2020

End of firstquarterYen-

End of second
quarter
Yen
0.00

0.00
Year ending April 30, 2021
Year ending April 30, 2021
(forecast)(Note) Revision to the most recently announced dividend forecasts: No

Dividend per share
End of third
quarterYen-

End of year

Full year

Yen

Yen

55.00

55.00

55.00

55.00

3. Consolidated financial forecasts for the fiscal year ending April 30, 2021 (May 1, 2020 to April 30, 2021)(Percentage figures show year-on-year changes.)
Profit attributable toEarnings
Net sales
Operating income
Ordinary income
owners of parent
per share
Million yen%
Million yen%
Million yen%
Million yen%
Yen
Full year

300,000

2.5

9,200

(42.7)

10,000(40.6)

5,000(45.5)

141.13(Note) Revision to the most recently announced consolidated financial forecasts: Yes
For more details about the revisions, please refer to today’s release (December 3, 2020), “Notice on the Revisions ofConsolidated Financial Forecasts.”*Notes(1) Major changes in subsidiaries during the period (changes in specified subsidiaries resulting from changes in scope of
consolidation): No
Newly consolidated: –Excluded: –(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements: Yes(Note) For detail, please refer to “2. Quarterly consolidated financial statements and major notes (4) Notes on quarterly consolidated
financial statements” on page 10 of the Attachment.

(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions
1) Changes in accounting principles as a result of revisions to accounting standards, etc.:
No2) Changes in accounting principles other than 1):
No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of outstanding shares (common stock)1) Number of outstanding
shares (including treasury
As of October 31, 2020
stock):
2) Number of shares held in
As of October 31, 2020
treasury:
3) Average number ofSix months ended
shares outstanding:
October 31, 2020

35,428,212 shares As of April 30, 2020

35,428,212 shares

816 shares As of April 30, 2020

728 shares

Six months ended
October 31, 201935,427,484 shares

35,427,442 shares*This Summary of Financial Statements is outside the scope of quarterly review procedures.
*Statement regarding the proper use of financial forecasts and other special remarks(Caution concerning forward-looking statements)
The above forecasts are calculated based on the information available as of the publication date of this material, and actual
financial results may vary due to change in future economic conditions and others.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

Contents of the Attachment
1. Qualitative information on consolidated results for the period under review .................................................................. 2(1) Consolidated operating results .............................................................................................................................. 2(2) Consolidated financial position .............................................................................................................................. 3(3) Forecast of consolidated financial results and other forward-looking information ..................................................... 3
2. Quarterly consolidated financial statements and major notes ...................................................................................... 4(1) Quarterly consolidated balance sheet .................................................................................................................... 4(2) Quarterly consolidated statements of income and comprehensive income .............................................................. 6
Quarterly consolidated statements of income ........................................................................................................... 6
Quarterly consolidated statements of comprehensive income ................................................................................... 7(3) Quarterly consolidated statements of cash flows .................................................................................................... 8(4) Notes on quarterly consolidated financial statements ........................................................................................... 10(Notes on the premise of a going concern) ............................................................................................................. 10(Notes on significant changes in the amount of shareholders’ equity) ...................................................................... 10(Application of specified accounting methods for the preparation of quarterly consolidated financial statements) ...... 10(Segment information, etc.).................................................................................................................................... 10

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

1. Qualitative information on consolidated results for the period under review(1) Consolidated operating results
During the first six months of the current fiscal year (May 1, 2020 to October 31, 2020), the Japanese economy continued
to face challenging conditions amid a prolonged impact from the COVID-19 pandemic. However, there were signs of a pickup
in the economy on the back of policy effects and other factors.
In this economic environment, the AIN HOLDINGS Group (the Group) worked to expand its business and increase
earnings by opening new dispensing pharmacies and cosmetic and drug stores and by reviewing its cost structure.
In addition, the Group took thorough steps to prevent infection in pharmacies and stores to reassure patients andcustomers, and worked to ensure the continued provision of healthcare and retail services by implementing strict measures
to protect employees from infection.
In the first six months of the fiscal year, net sales decreased 0.3% year on year to ¥145,352 million, operating income
decreased 53.0% to ¥3,927 million, ordinary income decreased 48.4% to ¥4,517 million, and profit attributable to owners ofparent decreased 43.1% to ¥2,630 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
Under partial revisions to the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals andMedical Devices (Revised Pharmaceuticals and Medical Devices Act), which is being implemented incrementally, dispensing
pharmacists are required as necessary from September 2020 to ascertain drug treatment and provide guidance at times
other than the point of prescription, and online drug treatment guidance are permitted nationwide in accordance with certain
rules.
To ensure our pharmacists and dispensing pharmacies fulfill their primary care role, the Group continues to implement
pharmaceutical management based on the integrated and continuous management of drug-related information throughcooperation with local medical service providers, the use of patient medication notebooks and other means. The Group alsoenhanced drug treatment guidance and created a system that enables all dispensing pharmacies to provide online drug
guidance so that every patient can easily access medical services in their local community.
In July 2020, the Group conducted Japan’s first-ever trial of prescription drug deliveries using drones, which were linked
to online medical examination and online drug guidance systems. The trial is aimed at ensuring people in regional
communities who have trouble visiting hospital have continued access to healthcare services in the future.
In business development, the Group is pushing ahead with further business expansion and measures to improve theefficiency of pharmacy operations, including actively opening large pharmacies and tightening the criteria for M&A deals, aswell as using its pharmacy opening strategy to withdraw from small-scale locations.
During the COVID-19 outbreak, the duration of prescriptions has increased, which has led to a rise in the average unit
price per prescription but a decline in the number of prescriptions. Together with the closure and the business transfer of 64
pharmacies in the previous fiscal year to improve the efficiency of pharmacy operations, that resulted in lower sales andprofits year on year. The number of prescriptions is now recovering at a moderate pace.
As a result, for the first six months of the fiscal year, the dispensing pharmacy business reported sales of ¥128,029 million,
down 1.9% year on year, and segment income of ¥8,370 million, down 17.8%.
During the period under review, the Group opened 10 new dispensing pharmacies, including those acquired through M&A
deals, and closed 6 pharmacies and transferred 22 pharmacies, resulting in a total of 1,070 pharmacies.
(Cosmetic and drug store business)
The cosmetic and drug store business continued to face a challenging market environment due to factors such as theimpact of the COVID-19 outbreak.
Against that backdrop, the Group continued to open ainz & tulpe cosmetic and drug stores in major metropolitan areas,
while also shifting its focus in store opening strategy to areas around terminus stations in commuter towns, where demandis strong. The Group also strategically developed retail displays tailored to the characteristics of each store. In addition, theGroup launched the official AINZ & TULPE WEBSTORE to improve convenience and service levels for customers.
As a result, for the first six months of the fiscal year, the cosmetic and drug store business reported a decrease in salesof 28.3% year on year to ¥9,388 million, and segment loss was ¥1,014 million compared with the income of ¥442 million ayear earlier.
During the same period, the Group opened five ainz & tulpe cosmetic and drug stores and closed five stores, resulting ina total of 63 cosmetic and drug stores at the end of the second quarter.
(Other businesses)
Net sales from other businesses increased 245.9% year on year to ¥7,987 million, mainly reflecting the acquisition of retailshop business in March 2020, and segment loss was ¥435 million compared with the loss of ¥133 million a year earlier.
2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

(2) Consolidated financial position
The balance of total assets at the end of the second quarter increased by ¥6,070 million from the end of the previous fiscal
year to ¥199,521 million. That mainly reflected a decline in notes and accounts receivable, outweighed by an increase in
cash on hand and in banks.
The balance of liabilities increased ¥5,354 million to ¥87,802 million.
The balance of short- term and long-term debts increased by ¥7,784 million to ¥13,859 million.
Total net assets increased by ¥715 million to ¥111,719 million and the shareholders’ equity ratio decreased 1.3 percentage
points to 56.0%.
(Cash flows)
In the first six months of the fiscal year, cash and cash equivalents (“cash”) increased by ¥8,385 million from the previous
fiscal year end to ¥54,316 million.
Cash flows from each activity and their relevant factors are as follows.
During the first six months of the fiscal year, net cash provided by operating activities was ¥6,441 million, compared with
¥6,024 million provided in the same period a year earlier. The main cash inflows were profit before income taxes of ¥4,524
million, depreciation and amortization of ¥2,024 million and amortization of goodwill of ¥2,225 million. The main cash outflow
was income taxes paid of ¥3,446 million.
Net cash used in investing activities amounted to ¥3,759 million, compared with ¥4,361 million used in the same period ayear earlier. The main use of cash was ¥2,974 million for purchases of property, plant and equipment and intangible assets.
Net cash provided by financing activities totaled ¥5,702 million, compared with ¥5,100 million used in the same period ayear earlier. The main source of cash was net proceeds of ¥7,780 million from short-term and long-term debt repayment andproceeds, while the main use of cash was ¥1,948 million for cash dividends paid.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has revised its consolidated financial forecasts for the fiscal year ending April 30, 2021, which were announced
on June 4, 2020. For more details, please refer to today’s release (December 3, 2020), “Notice on the Revisions ofConsolidated Financial Forecasts.”

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet

Fiscal year endedApril 30, 2020
(As of April 30, 2020)

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Short-term loans
Other accounts receivable
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Land
Other property, plant and equipment, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investments in securities
Deferred tax assets
Deposits and guarantees
Other investments and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Deferred assets
Total assets

4(Million yen)Six months ended
October 31, 2020
(As of October 31, 2020)

46,321
13,653
15,035
286
208
8,997
3,299
(1)
87,802

54,616
11,953
14,518
277
136
9,998
2,505
(0)
94,006

16,60910,9603,304
30,874

16,225
10,4093,534
30,16942,123
2,792
44,91640,563
3,152
43,7152,295
4,211
19,144
5,834(1,644)29,841
105,632
15
193,451

2,335
4,315
19,493
7,013(1,528)31,629105,514
199,521

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

Fiscal year endedApril 30, 2020
(As of April 30, 2020)

Liabilities
Current liabilities
Accounts payable
Short-term debt
Accrued income taxes
Deposits received
Allowance for bonuses to employees
Allowance for bonuses to directors
Reserve for reward obligations
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Net defined benefit liability
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding losses on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive loss
Non-controlling interests
Total net assets
Total liabilities and net assets

5(Million yen)Six months ended
October 31, 2020
(As of October 31, 2020)

47,187
3,642
3,356
13,094
2,338
16
463
4,600
74,70045,6194,694
1,868
13,795
2,888
20
492
3,896
73,275

2,432
3,124
2,189
7,747
82,447

9,165
3,236
2,125
14,52687,802

21,89420,50068,758(2)
111,151

21,89420,50069,439(2)
111,832

(77)
(159)
(236)
88
111,003
193,451

(48)
(133)
(181)
68
111,719
199,521

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commissions received
Real estate rental revenue
Consignment income
Subsidies for employment adjustment
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Losses on sales of accounts receivables
Real estate rental expenses
Other non-operating expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sales of fixed assets
Gain on transfer of business
Gain on sales of shares of subsidiaries and affiliates
Surrender value of insurance
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Impairment losses on fixed assets
Loss on sales of shares of subsidiaries and affiliates
Loss on temporary store closures
Other extraordinary losses
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

6(Million yen)Six months ended
October 31, 2020
(May 1, 2020 to
October 31, 2020)

145,851
122,191
23,66015,305
8,354

145,352
123,917
21,43517,508
3,927

30
20
10
259
90
180
590

21
26
7
87
89
201
335
770

37
31
68
45
182
8,762

24
38
78
39
180
4,517

10
201
0
0
212

16
165
111
8
14
316

372
26
34
102
536
8,439
3,814
4,624
2
4,622

146
10
52
100
309
4,524
1,913
2,610
(19)
2,630

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

Quarterly consolidated statements of comprehensive income(Million yen)Six months ended
October 31, 2020
(May 1, 2020 to
October 31, 2020)

Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

ProfitOther comprehensive income
Unrealized holding gains (losses) on securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income (loss) attributable tonon-controlling interests

7

4,624

2,610

(26)
9
(17)
4,607
4,604

29
25
54
2,664
2,684

2

(19)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

(3) Quarterly consolidated statements of cash flows(Million yen)Six months ended
October 31, 2020
(May 1, 2020 to
October 31, 2020)

Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Amortization of goodwill
Impairment losses on fixed assets
Decrease in allowance for doubtful accounts
Increase in reserve for reward obligations
Loss (gain) on sales of shares of subsidiaries andaffiliates
Increase in net defined benefit liability
Gains on sale of businesses
Increase in allowance for bonuses to employees
Increase in allowance for bonuses to directors
Interest and dividend income
Interest expenses
Gains on investments in partnerships
Gains on donation of property, plant and equipment
Gain on sales of investment securities
Loss on valuation of investments in securities
Losses on disposal and sales of fixed assets
Decrease (increase) in accounts receivable
Decrease (increase) in inventories
Decrease in other assets(Increase) decrease in other accounts receivable(Decrease) increase in accounts payables
Increase (decrease) in other liabilities
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

8

8,439
1,928
2,182
26
(1)
15

4,524
2,024
2,225
10
(1)
29

34

(111)

136
(126)
391
2
(50)
37
(2)
(14)
362
(2,104)(1,530)813
336
765(2,809)
8,831
52
(37)
(2,821)
6,024

158
(155)
548
3
(48)
24
(4)
(16)
(3)
2
129
1,818
567
837
(992)
(1,668)
(40)
9,859
52
(24)
(3,446)
6,441

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

Six months ended
October 31, 2019
(May 1, 2019 to
October 31, 2019)

Cash flows from investing activities
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant andequipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Purchases of subsidiaries’ shares resulting in obtaining
controls
Payments for loans receivable
Proceeds from collections of loans receivable
Payments for investments in capital
Proceeds from returns of investments in capital
Payments for purchases of intangible fixed assets
Proceeds from sales of intangible assets
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee
deposits
Increase in other investments
Proceeds from withdrawal of time deposits
Payments for time deposits
Other, net
Net cash used in investing activities
Cash flows from financing activities
Net repayments from short-term debts
Proceeds from long-term debts
Repayments of long-term debts
Repayments of lease obligations
Payments for purchase of treasury stock
Cash dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period

9

Six months ended
October 31, 2020
(May 1, 2020 to
October 31, 2020)(2,786)(1,785)

388

573

(300)
29

(39)
67

(148)

(257)

(29)
826
0
(661)
125
(713)

(10)
662
(0)
0
(1,189)
4
(930)

339

609

(1,641)
314
(101)
(4)
(4,361)(1,525)
100
(5)
(34)
(3,759)(3)(2,950)(197)(1,948)(5,100)(3,436)47,49544,059(3)
11,625(3,841)(128)(0)(1,948)5,702
8,385
45,931
54,316AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

(4) Notes on quarterly consolidated financial statements(Notes on the premise of a going concern)
There are no applicable matters to be reported.

(Notes on significant changes in the amount of shareholders’ equity)
There are no applicable matters to be reported.
(Application of specified accounting methods for the preparation of quarterly consolidated financial statements)
To calculate tax expenses, the effective tax rate on profit before income taxes for the consolidated fiscal year after theapplication of tax effect accounting is reasonably estimated and the estimated rate is applied to profit before income taxes
for the quarterly period.
(Segment information, etc.)
I Six months ended October 31, 2019 (May 1, 2019 to October 31, 2019)
1. Net sales and income (loss) by reportable segment(Million yen)
Carried onquarterly
consolidated
statements ofincome(Note) 2

Reportable segments
Adjustments(Note) 1

Dispensing
pharmacybusiness

Cosmetic anddrug store
business

Otherbusinesses(1) Sales to third parties

130,499

13,0992,251

145,851-

145,851(2) Intersegment sales

-

-

57

57

(57)

-

Total sales

130,499

13,0992,309

145,908(57)

145,851

Segment income (loss)

10,185442(133)

10,494(1,731)

8,762

Total

Sales

Notes:

1. The adjustment of ¥(1,731) million to segment income (loss) includes ¥2,693 million in corporate expenses,¥(1,011) million in income that are not allocated to reportable segments, and ¥49 million in eliminations due tointersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions and the system
logistics division of the parent company.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.

2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
There are no applicable matters to be reported.

10

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending April 30, 2021

II Six months ended October 31, 2020 (May 1, 2020 to October 31, 2020)
1. Net sales and income (loss) by reportable segment(Million yen)
Carried onquarterly
consolidated
statements ofincome(Note) 2

Reportable segments
Adjustments(Note) 1

Dispensing
pharmacybusiness

Cosmetic anddrug store
business

Otherbusinesses(1) Sales to third parties

128,029

9,388

7,934

145,352-

145,352(2) Intersegment sales

-

-

52

52

(52)

-

Total sales

128,029

9,388

7,987

145,405(52)

145,352

Segment income (loss)

8,370(1,014)

(435)

6,920

(2,403)

4,517

Total

Sales

Notes:

1. The adjustment of ¥(2,403) million to segment income (loss) includes ¥2,944 million in corporate expenses, ¥(586)
million in income that are not allocated to reportable segments, and ¥45 million in eliminations due to intersegment
transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions and the system
logistics division of the parent company.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.

2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
There are no applicable matters to be reported.

11