Summary of Consolidated Financial Statements
for the First Quarter of the Term Ending March 31, 2019(Japan GAAP)
August 2, 2018
Exchange: Tokyo Stock Exchange
URL:
http://www.tsumura.co.jp
Name: Terukazu Kato
Name: Yosuke Tsuchiya

Name of Listed Company: TSUMURA & CO.
Code:
4540
Representative:
President & Representative Director
Contact:
Head of Corporate Communications Dept.
Telephone: 81-3-6361-7100
Scheduled date of submission: August 3, 2018
Scheduled date of dividend payment commencement: Preparation of supplementary materials for the quarterly financial statements: Yes
Holding of the quarterly results briefing: No(Figures are rounded down to the nearest one million yen.)

1.

Consolidated business results for the first quarter of the term ending March 31, 2019
(From April 1, 2018 to June 30, 2018)(1) Financial results (year to date)(Figures in percentages denote the year-on-year change.)

Net sales
Three-month period
ended June 30, 2018
Three-month period
ended June 30, 2017

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

29,776

2.4

4,559

2.6

4,917

7.4

3,516

10.1

29,068

1.3

4,441

(1.1)

4,579

9.9

3,194

8.2

(Note) Comprehensive income: Three- month period ended June 30, 2018: 3,573 million yen(7.9%)
Three- month period ended June 30, 2017: 3,312 million yen(‐%)

Profit per share

Fully diluted profit per share

Three-month period
ended June 30, 2018
Three-month period
ended June 30, 2017

Yen

Yen

46.00

－

46.45

－

(2) Consolidated financial conditions
Total assets

Million yen%

279,181292,379

197,659
196,533

69.8
66.2

As of June 30, 2018
As of March 31, 2018

(Reference) Shareholders’ equity: As of June 30, 2018: 194,745 million yen

2.

Shareholders’ equity ratio

Net assets

Million yen

As of March 31, 2018: 193,599million yen

Dividends
Dividend per share
End of Q1

End of Q2

End of Q3

End of FY

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2018

－

32.00

－

32.00

64.00

Year ending March 31, 2019

－
32.00

－

32.00

64.00

Year ending March 31, 2019
(Projection)(Note)Revisions to dividends projection published most recently: No

3.

Projections of consolidated business results for the term ending March 31, 2019
(From April 1, 2018 to March 31, 2019)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year
and from the second quarter of the previous fiscal year for second quarter (aggregate).)Net sales
Million yen

Second quarter(aggregate)
Full-year

Operating profit

Profit attributable toowners of parent

Ordinary profit% Million yen% Million yen

58,900

1.1

9,100

1.3

9,100

(1.6)

120,500

2.2

17,5002.6

18,0000.5(Note)Revisions to dividends projection published most recently: No% Million yen

Profit per share

%

Yen

6,800

2.8

88.94

12,800(11.8)

167.41

Notes(1) Important changes of subsidiaries during the term(change of specified subsidiaries that lead to a change in the scope of consolidation): No(2) Application of special accounting practices in consolidated quarterly financial statements preparation: Yes(3) Changes in accounting principles and procedures and the method for indication, etc.
1) Changes associated with the revision of accounting principles, etc.: No
2) Change other than 1):
No3) Accounting estimate change:
No4) Retrospective restatement:No(4) Number of shares issued (common stock)1) Number of shares issued at the end of theterm(including treasury stock) (shares)

FY 3/2019 1Q

76,758,362

FY 3/201876,758,362

2) Number of treasury stock at the end of theterm(shares)

FY 3/2019 1Q

300,382

FY 3/2018

300,382

3) Average number of shares during the term
(shares)

FY 3/2019 1Q

76,457,980

FY 3/2018 1Q

68,782,380* This Summary of Consolidated Quarterly Financial Statements is exempt from quarterly review procedures.
* Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
In these materials, earnings forecasts and other statements about the future are forward-looking statements based on the information
currently available and certain assumptions that the company regards as reasonable. Accordingly, the Company cannot makepromises to achieve such forecasts. Actual financial results may differ materially from these forecasts depending on a number ofimportant factors. Please see “1.Qualitative information on quarterly results (3) Description of projections of consolidated businessresults” on page 2 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials

1.Qualitative information on quarterly results ···························································································

2(1) Description of operating results ··································································································

2(2) Description of financial condition ·······························································································

2(3) Description of projections of consolidated business results ···································································

2

2.Quarterly Consolidated Financial Statements and Key Notes ·······································································

3(1) Quarterly Consolidated Balance Sheets ·························································································

3(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ····

5

Quarterly Consolidated Statements of Income
For the First Quarter Consolidated Accumulative Term ······································································

5

Quarterly Consolidated Statements of Comprehensive Income
For the First Quarter Consolidated Accumulative Term ······································································

6(3) Quarterly Consolidated Statements of Cash Flows ·············································································

7(4) Notes to the Quarterly Consolidated Financial Statements ····································································

9(Notes on premise of a going concern) ··························································································

9(Notes on case of extreme change in shareholder's equity amount) ··························································

9(Application of specific accounting treatment to the preparation of quarterly financial statements) ······················

9(Additional information) ········································································································

91

1. Qualitative information on quarterly results(1) Description of operating results
In the first quarter of the consolidated fiscal year (from April 1 to June 30, 2018), net sales increased 2.4% year on year to 29,776
million yen, despite the effects of the revisions of drug prices undertaken in April 2018.
Looking at profit, operating profit was 4,559 million yen (up 2.6% year on year), ordinary profit was 4,917 million yen (up 7.4%
year on year) and profit attributable to owners of parent was 3,516 million yen (up 10.1% year on year). The cost-to-sales ratio fell
0.8 percentage points year on year, due mainly to reduced costs related to crude drugs, which outweighed the cost increase arisingfrom the drug price revisions. On the other hand, the cost-to-SGA ratio rose 0.8 percentage points year on year. As a result, theoperating profit margin was 15.3%, on a par with the year-ago level.
Net sales of overall prescription Kampo products grew 2.5% year on year. With diversifying needs for Kampo medicine among
healthcare professionals, the Company conducts activities for providing appropriate information on evidence in basic and clinicalmedicine, medical practice guidelines in which Kampo is described and various uses for Kampo medicine prescriptions mainly
through meetings with doctors, presentations for medical institutions and Kampo medicine seminars.
The Company will continue to collect and provide more information on Kampo medicine and Kampo products and work to expand
the market for Kampo in the three key segments of geriatric, cancer (supportive care) and gynecology, tapping into the large
potential market.
(2) Description of financial condition
The financial position at the end of the first quarter under review was as follows:
Accompanying the application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.
28, February 16, 2018), etc. in the first quarter of the fiscal year under review, the Company made comparisons and analysis withthe previous fiscal year in the details about financial position described below, using figures after adopting these revised standards
retrospectively.

Total assets shrank 13,198 million yen from the end of the previous fiscal year, mainly due to a decrease in cash and deposits as aresult of the repayment of the current portion of long-term loans payable, to 279,181 million yen.
Liabilities decreased 14,325 million yen chiefly due to repayment of the current portion of long-term loans payable, to 81,521
million yen.
Net assets rose 1,126 million yen from the end of the previous fiscal year, to 197,659 million yen.
As a result, the equity ratio rose 3.6 percentage points, to 69.8%.
Cash flows in the first quarter under review were as follows:
Cash flow provided by operating activities was 5,185 million yen. In comparison to the first quarter of the previous fiscal year, cash
inflow decreased 3,445 million yen, due largely to a decline in inventories and a rise in income taxes paid.
Cash provided by investing activities was 1,103 million yen. In comparison to the first quarter of the previous fiscal year, cash
inflow increased 2,322 million yen, due largely to an increase in time deposits.
Cash used in financing activities was 17,351 million yen. In comparison to the first quarter of the previous fiscal year, cash inflow
decreased 42,788 million yen, due largely to a decline in cash inflow resulting from bond issuance and a rise in expenditure
resulting from repayment of the current portion of long-term loans payable.
As a result, cash and cash equivalents at the end of the first quarter under review decreased 11,425 million yen from the end of theprevious fiscal year, to 66,888 million yen.
(3) Description of projections of consolidated business results
The projections of consolidated business results for the fiscal year ending March 31, 2019 published on May 10, 2018 remainunchanged.

2

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Unit:Million yen)
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Other
Accumulated depreciation
Total property, plant and equipment
Intangible assets
Investment and other assets
Investment securities
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investment and other assets
Total non-current assets
Total assets

3

As of June 30, 201883,52042,906
3,500
8,008
12,797
29,188
10,971(4)

79,45942,2233,500
8,187
11,75829,765
11,538(4)

190,888

186,428

64,77882,327(75,776)

64,633
83,682(76,989)

71,32971,326526

600

14,1791,908
13,547(0)

15,277
2,023
3,523
(0)

29,634

20,825

101,491

92,752

292,379

279,181

(Unit:Million yen)
As of March 31, 2018
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

As of June 30, 2018

5,999
10,314Current portion of long-term loans payable

5,507
10,31415,000

Income taxes payable
Provision for sales returns
Other

3,538
10
14,396

1,815
11
16,666

Total current liabilities

48,76634,806

Non-current liabilities
Bonds payable
Long-term loans payable
Net defined benefit liability
Other

30,000
9,376
88
7,616

30,000
9,376
86
7,252

Total non-current liabilities

47,08046,714

Total liabilities

95,846

81,521

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

30,142
14,027140,040(814)

30,142
14,027141,110(814)

183,396

184,466

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

4,748
323
2,673
2,301
157

5,308
662
2,673
1,460
174

Total accumulated other comprehensive income

10,203

10,278

2,933

2,914

196,533

197,659

292,379

279,181

Total shareholders’ equity

Non-controlling interests
Total net assets
Total liabilities and net assets4－(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the First Quarter Consolidated Accumulative Term
(Unit:Million yen)Three-month period ended
June 30, 2017
(From April 1, 2017
to June 30, 2017)

Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

Net sales
Cost of sales

29,06812,366

29,776
12,421Gross profit

16,701

17,354

Selling, general and administrative expenses

12,25912,795

Operating profit

4,441

4,559

14
184

68
118

18

－

14
95

168
104

326

459

39
143

48

Share of loss of entities accounted for using equity
method
Other

－

43

5

8

Total non-operating expenses

188

101

4,579

4,917

Gain on sales of non-current assets

2－

Total extraordinary income

2－

Loss on sales of non-current assets
Loss on retirement of non-current assets

5
15

－
25

Total extraordinary losses

20

25

Profit before income taxes

4,561

4,892

Income taxes

1,288

1,317

Profit

3,272

3,574

77

57

3,194

3,516

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Bond issuance cost

Ordinary profit
Extraordinary income－

Extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent

5

Quarterly Consolidated Statements of Comprehensive Income / For the First Quarter Consolidated Accumulative Term
(Unit:Million yen)Three-month period ended
June 30, 2017
(From April 1, 2017
to June 30, 2017)
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)

Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

3,272

3,574

768
23
(784)
47

560
339
(899)
16

(14)

(17)

39

(1)

Comprehensive income

3,312

3,573

Comprehensive income attributable to
Owners of parent
Non-controlling interests

3,328
(16)

3,592
(18)

6

(3) Quarterly Consolidated Statements of Cash Flows(Unit:Million yen)Three-month period ended
June 30, 2017
(From April 1, 2017
to June 30, 2017)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses

Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

4,561
1,503
(0)
(198)
39
143

4,892
1,560
(0)
(187)
48

(18)

43

18

25

(31)
1,379
(120)
(93)
(24)
2,915

662
(9)
545
(96)
3
694

Subtotal

10,074

8,184

Interest and dividend income received
Interest expenses paid
Income taxes paid

197
(32)
(1,607)234(70)(3,162)

Net cash provided by (used in) operating activities

8,631

5,185

(1,134)
3(988)

Bond issuance cost
Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Other

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales and redemption of short-term and longterm investment securities
Payments of loans receivableCollection of loans receivable
Decrease (increase) in time deposits
Other
Net cash provided by (used in) investing activities

7

－

(64)
(2)

－
(93)
(3,802)

－

3,500

(1)
0
(8)
(11)

(1)
0
2,507
(20)

(1,219)1,103

(Unit:Million yen)Three-month period ended
June 30, 2017
(From April 1, 2017
to June 30, 2017)

Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

Cash flows from financing activities
Decrease in short-term loans payable
Repayments of long-term loans payable(2,267)－－(15,000)

Proceeds from issuance of bonds

29,856－

Cash dividends paid
Other

(2,143)(10)(2,341)(10)

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

25,436(245)(17,351)(362)

Net increase (decrease) in cash and cash equivalents

32,603(11,425)

Cash and cash equivalents at beginning of period

29,901

78,313

Cash and cash equivalents at end of period

62,504

66,8888

(4) Notes to the Quaterly Consolidated Financial Statements(Notes on premise of a going concern)
No relevant items.
(Notes on case of extreme change in shareholder's equity amount)
No relevant items.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of the costaccounting period, which is, therefore, deferred as “current liabilities (other).”(Additional information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February
16, 2018), etc. at the beginning of the first quarter under review. Accordingly, “deferred tax assets” is now included in “investment
and other assets,” and “deferred tax liabilities” is now included in “non-current liabilities.”

9