Summary of Financial Statements for the Third Quarter of Fiscal Year Ending April 2019
[Japan GAAP] (Consolidated)
March 5, 2019
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:
March 18, 2019–

Start of dividend payment:
Supplementary documents for quarterly
results:
Quarterly results briefing:

Yes (Supplementary materials for the quarterly results are disclosed on the Company’s website
appropriately as the financial statements.)

No(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the third quarter of fiscal year ending April 30, 2019 (May 1, 2018 to January 31, 2019)(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%

202,522

1.2

11,909(16.8)

12,425(15.8)

6,781(14.5)

Nine months ended January 31, 2018
200,043
9.9
14,31049.2
14,76047.3(Note) Comprehensive income:Nine months ended January 31, 2019: ¥6,713 million (-15.0%)
Nine months ended January 31, 2018: ¥7,901 million (+41.7%)

7,931

45.8

Nine months ended January 31, 2019

Earnings
per share

Diluted earnings
per share
Yen

Yen

Nine months ended January 31, 2019

191.41–

Nine months ended January 31, 2018

235.74–(2) Consolidated financial position
Net assets

Total assets
As of January 31, 2019
As of April 30, 2018
(Reference) Shareholders’ equity:

Shareholders’equity ratio

Net assets per
share

Million yen

Million yen%

Yen

183,029

101,67455.5

2,869.48

183,380

96,73352.7

2,729.44

As of January 31, 2019: ¥101,658 million

As of April 30, 2018: ¥96,697 million

2. Dividends

Year ended April 30, 2018

End of firstquarterYen–

End of second
quarter
Yen
0.00

–
0.00
Year ending April 30, 2019Year ending April 30, 2019
(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

50.00

50.00

55.00

55.00

–

3. Consolidated financial forecasts for the fiscal year ending April 30, 2019 (May 1, 2018 to April 30, 2019)(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

272,870

1.7

17,500(10.8)

18,000(10.6)

9,260(12.4)

261.38(Note) Revision to the most recently announced consolidated financial forecasts: No*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 (3) Notes on quarterly consolidated financial
statements” on page 8 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
As of January 31,
shares (including treasury
2019
stock):
2) Number of shares held in
As of January 31,
treasury:
20193) Average number ofNine months ended
shares outstanding:January 31, 201935,428,212 shares As of April 30, 201835,428,212 shares

728 shares As of April 30, 2018688 shares

Nine months ended
January 31, 2018

33,644,821 shares

35,427,502 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.
(Change in monetary unit)
Amounts for items listed in the quarterly consolidated financial statements and for other items in the statements have been shown using
thousand yen units. However, effective from the first quarter and the cumulative first quarter of the fiscal year under review, thousand yenunits have been replaced with million yen units.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019

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) Notes on quarterly consolidated financial statements ........................................................................................................ 8(Notes on the premise of a going concern) ........................................................................................................................ 8(Notes on significant changes in the amount of shareholders’ equity) ................................................................................ 8(Application of specified accounting methods for the preparation of quarterly consolidated financial statements)............. 8(Supplementary information) .............................................................................................................................................. 8(Segment Information, etc.) ................................................................................................................................................ 8

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019

1. Qualitative information on consolidated results for the period under review(1) Consolidated operating results
During the first nine months of the current fiscal year (May 1, 2018 to January 31, 2019), the Japanese economy improved
at a moderate pace amid signs of a pickup in consumer spending and improving corporate earnings and employment
conditions.
In this economic environment, the AIN HOLDINGS Group (the Group) worked to expand its business and increase
earnings. Specifically, the Group opened new dispensing pharmacies and used M&A to expand the business. It also
developed its cosmetic and drug store business.
In the first nine months of the fiscal year, net sales rose 1.2% year on year to ¥202,522 million, operating income decreased
16.8% to ¥11,909 million, ordinary income decreased 15.8% to ¥12,425 million, and profit attributable to owners of parent
decreased 14.5% to ¥6,781 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In drug price and dispensing fee revisions in April 2018, the role of pharmacies located near hospitals and pharmacies
located in the same premises was reviewed, with primary care dispensing pharmacies and pharmacists receiving a higher
evaluation as part of government efforts to drive a structural shift from dispensing focused only on dispensing drugs todispensing focused on services that contribute to local healthcare services.
To ensure our pharmacists and dispensing pharmacies fulfill their primary care role, the Group continues to build links withlocal medical service providers, strengthen pharmaceutical management and guidance based on the integrated andcontinuous management of drug information using patient medication notebooks and other means, and promote wider use
of generic drugs.
In business development, the Group pushed ahead with business expansion by opening new dispensing pharmacies andusing M&A deals. In September 2018, two companies became subsidiaries of the Group, KOM MEDICAL INC. (Sanjo,
Niigata Prefecture), and ABC PHARMACY INC. (Nagaoka, Niigata Prefecture), and in February 2019, the Company
concluded a share transfer agreement with TSUCHIYA YAKUHIN INC. (Nagano, Nagano Prefecture) to make it a subsidiary.
TSUCHIYA YAKUHIN operates a chain of 36 dispensing pharmacies in Nagano Prefecture.
As a result, for the first nine months of the fiscal year, the dispensing pharmacy business reported sales of ¥179,397
million, up 0.7% year on year, and segment income of ¥13,488 million, down 15.8%.
During the same period, the Group opened a total of 93 dispensing pharmacies, including those acquired through M&A
deals. As part of an overhaul of store operations, the Group closed 15 dispensing pharmacies and sold 24, resulting in a
total of 1,083.
(Cosmetic and drug store business)
In the cosmetic and drug store business, the market environment remained challenging due to a narrowing competitive
gap between companies in the sector and the emergence of new competitors from sector consolidation and realignment that
also extends to other business sectors.
Against this backdrop, the Group continued to open ainz & tulpe cosmetic and drug stores in the Tokyo metropolitan area
and worked to make stores more appealing by refurbishing existing stores and strengthening merchandise lineups,
particularly cosmetic and drug products. Stores opened in the previous fiscal year made a significant contribution to sales,
while sales from existing stores also increased year on year. Earnings also improved, supported by lower costs due to greaterbusiness efficiency and by an increase in the gross margin due to active efforts to develop LIPS and HIPS, cocodecica andother original brands and an overhaul of procurement activities.
As a result, for the first nine months of the fiscal year, the cosmetic and drug store business reported an increase in salesof 6.5% year on year to ¥18,927 million. And segment income increased 74.5% to ¥741 million.
During the same period, the Group opened five ainz & tulpe stores: ainz & tulpe HIGASHI IKEBUKURO (Toshima Ward,
Tokyo), ainz & tulpe olinas KINSHICHO (Sumida Ward, Tokyo), ainz & tulpe SHIBUYA KOEN DORI (Shibuya Ward, Tokyo) ,ainz & tulpe SOKA VARIE (Soka, Saitama Prefecture), and ainz & tulpe FUCHU FORIS (Fuchu, Tokyo) and closed one store,
resulting in a total of 52 cosmetic and drug stores at the end of the third quarter.
(Other businesses)
Net sales from other businesses rose 1.7% year on year to ¥4,198 million and segment loss was ¥107 million comparedwith the loss of ¥326 million a year earlier.

2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019(2) Consolidated financial position
The balance of total assets at the end of the third quarter declined by ¥350 million from the end of the previous fiscal yearto ¥183,029 million. That mainly reflected a decline in cash on hand and in banks due to the repayment of loans and income
taxes paid, which outweighed an increase in fixed assets such as inventories, land and buildings, as well as goodwill, due
to new store openings and M&A.
The balance of liabilities decreased ¥5,292 million to ¥81,354 million.
The balance of short- term and long-term debts decreased by ¥4,273 million to ¥13,955 million.
Total net assets increased by ¥4,941 million to ¥101,674 million and the shareholders’ equity ratio increased 2.8
percentage points to 55.5%.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has made no change to its earnings forecasts for the full fiscal year ending April 30, 2019, announced on June
5, 2018.

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019

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

Fiscal year endedApril 30, 2018
(As of April 30, 2018)

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)
Nine months ended
January 31, 2019
(As of January 31, 2019)

63,77910,466
9,372
208
641
7,751
2,470
(131)
94,55753,494
11,172
12,524
201
672
7,843
2,486
(2)
88,391

14,934
10,041
2,878
27,853

15,97810,3683,313
29,66038,011
2,121
40,13240,1382,21442,352

2,375
3,772
11,3393,785(540)
20,732
88,718103
183,380

2,267
3,989
12,832
5,260(1,796)22,553
94,56770
183,029

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019

Fiscal year endedApril 30, 2018
(As of April 30, 2018)

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
Provision for sales returns
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 gains on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5(Million yen)
Nine months ended
January 31, 2019
(As of January 31, 2019)

38,728
6,717
4,947
12,675
1,911
16
420
6
4,525
69,95043,016
6,935
1,690
12,573
868
7
444
3,700
69,235

11,511
2,625
2,560
16,696
86,646

7,020
2,739
2,359
12,11881,354

21,89420,50054,268(1)
96,662

21,89420,50059,278(2)
101,672

84
(50)
34
36
96,733
183,380

31
(45)
(13)
16
101,674
183,029

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Nine months ended
January 31, 2018
(May 1, 2017 toJanuary 31, 2018)

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
Fiduciary obligation fee
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 investments in securities
Gains on sales of fixed assets
Gains of transfer of businessInsurance income
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Impairment losses on investments in securities
Other extraordinary losses
Total extraordinary losses
Income before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

6(Million yen)
Nine months ended
January 31, 2019
(May 1, 2018 toJanuary 31, 2019)

200,043
164,849
35,193
20,883
14,310202,522
168,768
33,753
21,844
11,909

49
34
51
162
154
266
719

55
38
19
242
119
344
819

91
52
73
52
269
14,760

109
52
64
76
303
12,425

8
28
23
31
29
121

2
11
247
14
0
278

442
177
259
878
14,003
6,090
7,912
(18)
7,931

386
95
352
834
11,868
5,107
6,761
(19)
6,781

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019

Quarterly consolidated statements of comprehensive income
Nine months ended
January 31, 2018
(May 1, 2017 toJanuary 31, 2018)

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

7(Million yen)
Nine months ended
January 31, 2019
(May 1, 2018 toJanuary 31, 2019)

7,912

6,761

22
(33)
(11)
7,901
7,920

(53)
5
(47)
6,713
6,733

(18)

(19)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019(3) 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 income before income taxes for the consolidated fiscal year after theapplication of tax effect accounting is reasonably estimated and the estimated rate is applied to income before income taxes
for the quarterly period.
(Supplementary information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”)
Effective from the first quarter of the current fiscal year, the Company has applied “Partial Amendments to AccountingStandard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018). As a result, the Company now classifies
deferred tax assets as investments and other assets, and deferred tax liabilities as non-current liabilities.
(Segment Information, etc.)
I Nine months ended January 31, 2018 (May 1, 2017 to January 31, 2018)
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(1) Sales to third parties

178,136

17,7794,127

200,043-

200,043(2) Intersegment sales

-

-

231

231

(231)

-

Total sales

178,136

17,7794,359

200,275(231)

200,043

Segment income (loss)

16,013425(326)

16,112(1,352)

14,760Other
business

Total

Sales

Notes:

1. The adjustment of ¥(1,352) million to segment income (loss) includes ¥2,670 million in corporate expenses,¥(1,294) million in (income) losses that are not allocated to reportable segments, and ¥(23) million in eliminations
due to intersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
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]:
In the dispensing pharmacy business segment, the Company acquired 4 dispensing pharmacy companies. During thefirst nine months of the fiscal year, the increase in goodwill related to these companies was ¥569 million.

8

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2019

II Nine months ended January 31, 2019 (May 1, 2018 to January 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(1) Sales to third parties

179,397

18,927

4,198

202,522-202,522(2) Intersegment sales

-

-

97

97

(97)

-

Total sales

179,397

18,927

4,295

202,620(97)

202,522

Segment income (loss)

13,488741(107)

14,122(1,697)

12,425

Other
business

Total

Sales

Notes:

1. The adjustment of ¥(1,697) million to segment income (loss) includes ¥3,077 million in corporate expenses,¥(1,357) million in (income) losses that are not allocated to reportable segments, and ¥(22) million in eliminations
due to intersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
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]:
In the dispensing pharmacy business segment, the Company acquired 7 dispensing pharmacy companies. During thefirst nine months of the fiscal year, the increase in goodwill related to these companies was ¥5,059 million.

9