Summary of Financial Statements for the Third Quarter of Fiscal Year Ending April 2014
[Japan GAAP] (Consolidated)
Name of listed company:

February 24, 2014

AIN PHARMACIEZ INC.

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

Code number:

9627

URL:

http://www.ainj.co.jp/

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Senior Managing Director and Chief Director of Administration
TEL: +81-11-814-1000
Date of filing quarterly securities report:
March 17, 2014
Start of dividend payment:–

Supplementary documents for quarterly results:

No

Quarterly results briefing:No(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the third quarter of fiscal year ending April 30, 2014 (May 1, 2013 to January 31, 2014)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Net sales
Operating income
Ordinary income
Net income
Nine months ended January 31,
2014
Nine months ended January 31,
2013(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

126,043

9.9

7,506

9.9

7,810

7.5

4,284

16.1

114,671

8.8

6,830

(7.3)

7,262

(4.3)

3,689

0.4

Nine months ended January 31, 2014: ¥4,270 million (+10.2%)
Nine months ended January 31, 2013: ¥3,875 million (+7.6%)
Net income
per share

Nine months ended January 31,
2014
Nine months ended January 31,
2013

Diluted net income
per share
Yen

Yen

268.77–231.47–(2) Consolidated financial position

As of January 31, 2014
As of April 30, 2013
(Reference) Shareholders’ equity:

Shareholders’equity ratio

Net assets

Total assets

Net assets per
share

Million yen

Million yen%

Yen

101,895

41,67040.9

2,611.50

95,83938,35640.0

2,403.43

As of January 31, 2014: ¥41,629 million

As of April 30, 2013: ¥38,312 million

2. Dividends
Record dateYear ended April 30, 2013

End of firstquarterYen–

End of second
quarter
Yen
0.00

Dividend per share
End of third
quarter
Yen
–

–
0.00
Year ending April 30, 2014
Year ending April 30, 2014
(forecast)(Note) Revision to the most recently announced dividend forecasts: No

End of year

Full year

Yen

Yen

60.00

60.00

60.00

60.00

–

3. Consolidated financial forecasts for the fiscal year ending April 30, 2014 (May 1, 2013 to April 30, 2014)(Percentage figures show year-on-year changes.)

Million yen%

Million yen%

Million yen%

Million yen%

Net income
per shareYen

172,000

11.3

11,28016.3

11,650

13.2

6,000

18.2

376.31

Net sales
Full year

Operating income

Ordinary income

Net income(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. Matters concerning summary information (notes) (2) Application of specified
accounting methods for the preparation of quarterly consolidated financial statements” on page 3 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
2014
stock):
2) Number of shares held in
As of January 31,
treasury:
20143) Average number ofNine months ended
shares outstanding:January 31, 2014

15,944,106 shares As of April 30, 201315,944,106 shares

3,416 shares As of April 30, 2013

3,366 shares

Nine months ended
January 31, 201315,940,743 shares

15,940,702 shares*Status of execution of the quarterly review of financial statements
This quarterly financial summary is not subject to the quarterly review procedure based on the Financial Instruments andExchange Act. As of the time of disclosure, this review procedure for quarterly financial statements had not been
completed.
*Statement regarding the proper use of financial forecasts and other special remarks
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 PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

Contents
1. Qualitative information on consolidated results for the period under review............................................................................ 2(1) Consolidated operating results ........................................................................................................................................... 2(2) Consolidated financial position ........................................................................................................................................... 2(3) Forecast of consolidated financial results and other forward-looking information............................................................... 3
2. Matters concerning summary information (notes) ................................................................................................................... 3(1) Major changes in subsidiaries during the period ................................................................................................................ 3(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements ............... 3(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions .................................. 3
3. Quarterly consolidated financial statements ............................................................................................................................ 4(1) Quarterly consolidated balance sheets............................................................................................................................... 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(Segment Information, etc.) .............................................................................................................................................. 8

1

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

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, 2013 to January 31, 2014), the Japanese economy
recovered steadily, albeit at a moderate pace, with corporate earnings and employment improving and capital investment
and consumer spending showings signs of a pickup.
In this economic environment, the AIN PHARMACIEZ Group (the Group) worked to expand its business and increase
earnings. Specifically, the Group opened new dispensing pharmacies and used M&A. It also pushed ahead with thecomprehensive development of medical malls and opened urban drug and cosmetic stores.
In addition, during the period under review, the Company made progress on realigning Group companies in order toimprove dispensing pharmacy operations and the Group management structure. Specifically, the Company passed a
resolution to absorb subsidiary Shizuoka Pharmacy Co., Ltd. and two other companies through mergers during the period
under review, and made a decision to absorb four small- to mid-size consolidated subsidiaries through mergers, effective
on February 24, 2014.
In the first nine months of the fiscal year, net sales rose 9.9% year on year to ¥126,043 million, operating income
increased 9.9% to ¥7,506 million, ordinary income grew 7.5% to ¥7,810 million, and net income increased 16.1% to¥4,284 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In the dispensing pharmacy business, sales at existing dispensing pharmacies increased, supported by growth inaverage sales per prescription due to an increase in longer-term prescriptions.
However, we expect the operating environment to become very challenging. Under drug price and dispensing fee
revisions in April 2014, the basic dispensing fee will be adjusted to reflect 24-hour patient dispensing service provision anddispensing services for home healthcare patients, which is likely to lead to an increase in the labor cost ratio. We also
expect drug purchasing costs to increase due to changes in the rate of consumption tax.
The Group will continue to boost economies of scale by expanding the size of its business and improve profitability at
existing dispensing pharmacies by rolling out its project to revitalize pharmacies across the whole Group network. This
project encourages dispensing pharmacy personnel to think for themselves, without being bound by existing rules, in order
to assess and rebuild all processes in dispensing pharmacy operations on a pharmacy by pharmacy basis.
As a result, for the first nine months of the fiscal year, the dispensing pharmacy business reported sales and profit growth,with sales rising 10.2% year on year to ¥112,101 million and segment income increasing 7.3% to ¥9,601 million.
During the period under review, the Group opened 41 new dispensing pharmacies, including those acquired throughM&A deals, and transferred or closed four dispensing pharmacies, resulting in a total of 597.
(Drug and cosmetic store business)
In the drug and cosmetic 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 realignmentthat also extends to other business sectors, as well as changes in the business environment for online sales of OTC
drugs.
Against this backdrop, the Group continued to open stores under its specialist, highly original drug and cosmetic store
brand, ainz & tulpe, particularly in urban areas with high customer traffic.
In ainz & tulpe, the number of customers and average spend per customer at existing stores is trending ahead of
year-earlier levels, reflecting efforts to reinforce merchandise lineups to tailor them to each retail area and location, andimprovements to sales promotion methods using communication apps such as LINE.
As a result, for the first nine months of the fiscal year, the drug and cosmetic store business reported an increase insales of 6.4% year on year to ¥13,372 million. However, segment income declined 81.1% to ¥12 million.
During the period under review, the Group opened the ainz & tulpe SANNOMIYA SANKITA-DORI (Chuo-ku, Kobe City)and closed four stores, mainly in suburban locations, resulting in a Group total of 58 stores.
(Other businesses)
Net sales and segment loss from other businesses were ¥569 million and ¥331 million, respectively.
(2) Consolidated financial position
The balance of total assets at the end of the third quarter increased by ¥6,056 million from the end of the previous fiscal
year to ¥101,895 million.
This mainly reflected an increase in inventories, other accounts receivable, property, plant and equipment such as land
2

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

and buildings and goodwill, due to the Group’s business expansion through new store openings and M&A deals.
The balance of liabilities rose ¥2,742 million to ¥60,225 million, mainly reflecting an increase in accounts payable.
The balance of long- and short- term debt decreased by ¥3,699 million to ¥11,831 million.
Total net assets increased by ¥3,313 million to ¥41,670 million and the shareholders’ equity ratio improved 0.9
percentage points to 40.9%.
(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, announced May 28, 2013, in light ofearnings trends at new stores and existing stores in the first nine months of the fiscal year and future store opening plans.

2. Matters concerning summary information (notes)(1) Major changes in subsidiaries during the period
There are no applicable matters to be reported.

(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements
Tax expenses were calculated by reasonably estimating the effective tax rate after the application of tax effectaccounting to net income before taxes for the consolidated fiscal year including the third quarter, and multiplying theestimated effective tax rate by income before income taxes for the quarter. In addition, deferred income taxes are included
in income taxes.
(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions(Change in accounting policies that may be difficult to distinguish from changes in accounting estimates)
There are no applicable matters to be reported.

3

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheets(Thousand yen)

Fiscal year endedApril 30, 2013
(As of April 30, 2013)
AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Deferred tax assets
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
Stock issuance cost
Total deferred assets
Total assets

4

Nine months ended
January 31, 2014
(As of January 31,
2014)

18,460,349
7,043,984
7,816,853
127,546955,372445,000
7,180,659
1,142,498(9,917)
43,162,346

19,023,736
5,549,103
9,903,722
130,582
1,178,406
766,024
8,408,172
1,033,498(4,433)45,988,811

8,247,806
6,030,803
3,271,425
17,550,035

9,386,239
6,859,132
3,380,025
19,625,397

19,574,539
1,031,265
20,605,804

19,799,080
1,029,079
20,828,160

2,789,730
946,439
6,985,755
4,066,340(267,829)
14,520,435
52,676,275

2,585,647
956,111
7,643,388
4,536,263(267,829)
15,453,581
55,907,138

1,296
1,296
95,839,919－－
101,895,950

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

(Thousand yen)

Fiscal year endedApril 30, 2013
(As of April 30, 2013)
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
Allowance for retirement benefits
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
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

5

Nine months ended
January 31, 2014
(As of January 31,
2014)

24,084,746
7,483,090
2,427,308
7,906,269
1,098,611
12,929315,919
2,357,917
45,686,791

31,410,516
6,417,644
1,584,709
8,120,288
554,291
19,096327,218
2,261,510
50,695,274

8,048,584
1,659,245
2,088,777
11,796,607
57,483,398

5,414,243
1,786,961
2,329,324
9,530,528
60,225,803

8,682,976
7,872,970
21,704,510(5,837)
38,254,620

8,682,976
7,872,970
25,032,404(6,047)
41,582,304

57,85557,85544,04438,356,520
95,839,919

46,851
46,851
40,991
41,670,146
101,895,950

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Nine months ended
January 31, 2013
(May 1, 2012 toJanuary 31, 2013)

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
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
Insurance income
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Losses on sales of investments in securities
Impairment losses on investments in securities
Directors’ retirement benefits
Other extraordinary losses
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in loss
Net income

6(Thousand yen)
Nine months ended
January 31, 2014
(May 1, 2013 toJanuary 31, 2014)

114,671,448
96,918,844
17,752,603
10,921,638
6,830,964

126,043,003
106,926,020
19,116,982
11,610,719
7,506,262

55,76029,10048,39071,486
106,652
364,069
675,459

56,44928,152
13,351
62,246
111,803
287,148559,152

108,890
56,887
25,11853,025
243,921
7,262,502

73,22364,17834,311
83,601
255,315
7,810,098

191
10,90250,0002,772
63,866

49,667
4,096
193,941
9,523
257,22988,901
109,796
1,750
320,000
69,636590,085
6,736,284
3,068,608
3,667,675(22,198)
3,689,874

111,515－－－
56,738168,254
7,899,073
3,617,788
4,281,284(3,053)
4,284,338

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

Quarterly consolidated statements of comprehensive income
Nine months ended
January 31, 2013
(May 1, 2012 toJanuary 31, 2013)

Income before minority interests
Other comprehensive income
Unrealized holding gains (losses) on securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to shareholders of
the parent
Comprehensive income (loss) attributable to minority
interests

7(Thousand yen)
Nine months ended
January 31, 2014
(May 1, 2013 toJanuary 31, 2014)

3,667,675

4,281,284

207,740
207,740
3,875,416(11,004)(11,004)
4,270,280

3,897,615

4,273,333(22,198)(3,053)

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

(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.
(Segment Information, etc.)
I Nine months ended January 31, 2013 (May 1, 2012 to January 31, 2013)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

101,729,833

12,567,131

374,483

114,671,448－

114,671,448(2) Intersegment sales－－

66,36866,368(66,368)－

Total sales

101,729,833

12,567,131

440,851

114,737,816(66,368)

114,671,448

Segment income (loss)

8,950,081

64,433(324,374)

8,690,141(1,427,638)

7,262,502

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,427,638) thousand to segment income (loss) includes ¥1,385,034 thousand in corporate
expenses, ¥89,509 thousand in losses that are not allocated to reportable segments, and ¥(46,906) thousand ineliminations 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]:
The dispensing pharmacy segment includes seven dispensing pharmacy companies that have been acquired by theGroup. During the first nine months of the fiscal year, the increase in goodwill related to these companies was¥2,349,689 thousand.
II Nine months ended January 31, 2014 (May 1, 2013 to January 31, 2014)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

112,101,198

13,372,693

569,111

126,043,003－

126,043,003(2) Intersegment sales－－

154,028

154,028(154,028)－

Total sales

112,101,198

13,372,693

723,139

126,197,031(154,028)

126,043,003

Segment income (loss)

9,601,761

12,205(331,878)

9,282,087(1,471,988)

7,810,098

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,471,988) thousand to segment income (loss) includes ¥1,392,808 thousand in corporate
expenses, ¥131,021 thousand in losses that are not allocated to reportable segments, and ¥(51,840) thousand ineliminations due to intersegment transactions.
8

AIN PHARMACIEZ INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2014

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]:
The dispensing pharmacy segment includes nine dispensing pharmacy companies that have been acquired by theGroup. During the first nine months of the fiscal year, the increase in goodwill related to these companies was¥1,510,250 thousand.

9