Financial Results for the Six-Month Period Ended December 31, 2012
February 14, 2013
Company name: ZERO CO., LTD.
Tokyo Stock Exchange (Second Section)
Code No.: 9028
(URL: http://www.zero-group.co.jp/)
Representative:
Yoshi Iwashita, President and CEO
Contact for inquiries:
Takeo Kitamura, Director,
Tel: 044-520-0106
General Manager, Corporate Planning Department
Date of financial report submission
February 14, 2013
Date to begin payment of dividend:
March 15, 2013
Additional materials for the financial results for 2Q FY2012
None
Briefing session for the financial results for 2Q FY2012
None

1. Consolidated Financial Results for the Six-Month Period Ended December 31, 2012
(From July 1, 2012 to December 31, 2012)(1) Consolidated Results(Figures less than one million yen are rounded down.)

Percentages shown below are the rates of increase or decrease compared with the same period of the previous year.
Sales
Million yen
Six Months
ended Dec.31,
2012
Six Months
ended Dec.31,
2011(Note)

Operating income%

Million yen

Ordinary income%

Million yen

Net income%%

28,799

4.7

591

-45.7

632

-42.4

293

-32.3

27,496

2.9

1,088

63.8

1,099

50.3

433

92.0

Comprehensive income:

FY2012 Second quarter 302 million yen ( -48.4%)
FY2011 Second quarter 586 million yen (163.5%)
Earnings per share-basic

Earnings per share-diluted

Yen

Yen

Six Month Period Ended Dec.31, 2012

17.16

-

Six Month Period Ended Dec.31, 2011

25.34

-

(2）Consolidated Financial Position
Total assets

Net assets

Shareholders’ equity ratio

Million yen

Million yen％

As of Dec.31, 2012

29,711

12,944

43.6

As of Jun. 30, 2012

30,203

12,761

42.3(Ref.)

Million yen

Shareholders’ equity :As of Dec. 31, 2012: 12,944 million yen

1

As of Jun. 30, 2012: 12,761 million yen

2. Dividends
Dividend per share(Record date)

FY2011FY2012
Forecast for
FY2012At end of
1Q
Yen-

At end of
2Q
Yen
4.00
4.00

At end of
3Q
Yen-

At end of
4Q
Yen
7.00

Annual
total
Yen
11.00

-

6.50

10.50

*Revision from the latest dividend forecast: Yes

3. Consolidated Forecasts for FY2012 (July 1, 2012 through June 30, 2013)
Percentages shown below for whole FY2012 are the rates of increase or decrease compared with the previous year.

Sales
Millionyen
Whole FY2012

59,000%2.8

Operating income

Ordinary income

MillionMillion

yen
1,700

%
-27.0

yen
1,800

%
-23.3

Earnings

Net income
Million

%

Yen

-4.3

52.65

yen
900

per share -basic(Note) Revision to the latest consolidated forecasts: Yes

4. Others(1) Changes in important subsidiaries during period (Transfer of particular subsidiary which involves the change of scopeof consolidation.): N/A(2) Application of particular accounting methods for quarterly consolidated financial statements:

N/A(3) Changes in accounting policies, accounting estimates and restatement of corrections① Changes in accordance with the revision of accounting standards and others: Yes② Changes other than above: N/A③ Changes in accounting estimates: Yes④ Restatement of corrections: N/A(4) Number of issued shares (common shares)① Number of issued shares (including treasury stock) at the end of each period:
As of December 31, 2012: 17,560,242

As of June 30, 2012: 17,560,242② Number of treasury stock:
As of December 31, 2012: 467,711

As of June 30, 2012: 467,656③ Average number of shares issued during the second quarter of the fiscal year
FY2012: 17,092,576

FY2011: 17,092,629※Implementation status review procedure
This financial report is exempt from the review procedure based upon the Financial Instruments and Exchange Act. The
financial statements are under the review procedure at the time of disclosure of this report.

2

※Explanation regarding appropriate use of forecasts
Statements in this report relating to future matters such as earnings forecasts are based on information presently available.
Actual results may differ from those forecasts depending on various factors.

1. Qualitative Information(1) Qualitative Information Regarding Consolidated Business Performance
The Japanese economy during the first half of fiscal 2012 (referred to as the “current term”) has gradually recovered
mainly by the demand increase for the restoration from the Great East Japan Earthquake. However, nationwide
production activities are still in the severe economical circumstances owing to prolonged strong yen, sluggish personal
consumption and worsening employment situation, in addition to negative impacts from overseas such as debt problems
in Europe, economical growth slowdown in emerging countries and worsening ties between Japan and China due to the
Senkaku islands issues.

In the automobile industry, the demand of domestic new car continued to grow steadily until September, 2012 thanks
to subsidies on purchasing environmentally friendly new cars. However as a result of counter action, from October it
has diminished, resulting in 105.7% compared to the corresponding term in the previous year, (data from the Japan
Automobile Manufacturers Association), showing 97.0% from October through December reversing upward trend of
114.2% from July through September. In regard to exports, new car exports substantially decreased, 88.1% compared tothe corresponding term in the previous year, owing to the production transfer to overseas facilities in accordance withprolonged strong yen, sluggish overseas economy and the impact of worsening ties with China. In the used car market,
the total sales of used cars increased owing to the activated used car market by the trade-in cars increase corresponding
to new car sales increase, resulted in 107.1% compared to the corresponding term in the previous year.
Under these circumstances, our group sales of vehicle-related business, the Company’s major business segment, new cartransportation business decreased due to the decrease of domestic new car sales of Nissan Motor Co., Ltd., our major
customer. However whole vehicle-related business increased year on year, owing to the used car transportation businessincrease pursuing the precisely customized transportation-related services in addition to the continuing regional sales
promotion activities. In the general cargo transportation business where the circumstances surrounding home electronics
stores, our major customer, became severer, the sales decreased year on year. In the human resources business where themarket situation is uncertain, sales increased year on year thanks to steady efforts to develop new markets and customers.

3

【Trends in automobile domestic sales】
Domestic sales volume (in units)

From July 2011to Dec. 2011

From July 2012 to Dec. 2012

Year-on-year

Domestic automakers *1

2,290,974

2,422.,365

105.7%(Nissan Motor)*1(311,751)(293,237)(94.1%)

144,364

165,325114.5%

1,817,651

1,918,961

105.6%

1,241,485

1,358,869

109.5%

3,059,156

3,277,830

107.1%

164,792

157,274

95.4%

Export volume (in units)

From July 2011 to Dec. 2011

From July 2012 to Dec. 2012

New vehicles of domestic
automakers *1

2,624,249

2,313,216

88.1%(Nissan Motor)*1(437,421)(341,502)(78.1%)

Used passenger vehicles*5

459,627

569,852

124.0%New vehicles

Foreign automakers*2
Used vehicles
Passenger vehicles *3
Mini vehicles*4
Total of used vehicles
De-registered vehicles*3

Year-on-year*1: Figures calculated from the statistical data of the Japan Automobile Manufacturers Association*2: Figures calculated from the statistical data of the Japan Automobile Importers' Association*3: Figures calculated from the statistical data of the Japan Automobile Dealers Association*4: Figures calculated from the statistical data of the Japan Mini Vehicles Association*5: Figures calculated from the statistical data of de-registration units for exportation of the Japan Automobile Dealers Association

As a result, sales in the current term were 28,799 million yen (104.7% compared to the corresponding term in theprevious year). Operating income was 591 million yen (54.3% compared to the corresponding term in the previous year),owing to the structural change of transportation model-mix, increases of short-distance transportation and the cost increase
for the enhancement of car-carriers and drivers. Non-operating profit was 41 million yen (384.8% compared to thecorresponding term in the previous year) owing to reduction of interest expense. As a result, ordinary income was 632
million yen (57.6% compared to the corresponding term in the previous year). Net income totaled 293 million yen (67.7%
compared to the corresponding term in the previous year).

(2) Business Performances by Each Segment(1) Vehicle-Related Business
Domestic new car sales of Nissan Motor Co., Ltd., our major customer, was slow especially in the second quarter of
FY2012, resulting in total sales of 293,237 units, 94.1% compared to the corresponding term in the previous year. Export
new car sales of Nissan Motor Co., Ltd. decreased substantially owing to negative impacts from overseas’ economic

4

deceleration, resulting in total sales of 341,502 units, 78.1% compared to the corresponding term in the previous year.
(Data from the Japan Automobile Manufacturers Association)
As a result, revenue of the Company from Nissan new car transportation business decreased. However, thanks to thesevere sales status management at sales branches and the enhanced sales and marketing promotion activities such as
online ordering system and fulfillment of other transportation-related services aiming for the better customer satisfaction,in addition to an increase of non-Nissan new car transportation business, the total transportation business for new cars andused cars increased, resulted in 21,212 million yen, 104.4% compared to the corresponding term in the previous year.
However, due to the structural change of transportation model-mix, the short-distance transportation increase and the cost
increase for the enhancement of car-carriers and drivers, segment profit resulted in 1,023 million yen, 76.2% compared tothe corresponding term in the previous year. The vehicle transportation business is under the severe circumstances due toa downward trend of vehicle sales. However, the Company is challenging to make stable profit which is less influenced by
the market demand by pursuing “transportation quality improvement, shorter delivery period and transportation costdecrease by reducing transportation relay points” and “outsourcing-cost decrease by improving operating ratio of in-housetrailers”.

(2) General Cargo Transportation BusinessIn this business segment, severity of circumstances surrounding home electronics stores, our major customer, remains
unchanged. The coal-cargo handling business was also affected by the decrease of demand owing to the customer’sfacility trouble. As a result, sales in this segment totaled 3,167 million yen (93.7 % compared with the corresponding termin the previous year) and segment profit totaled 164 million yen (51.3% compared to the corresponding term in theprevious year). The Company is reviewing unprofitable businesses, followed by the improvement of revenue structure
through new customer development in the new business model pursuing management structural downsizing andreviewing workflows.
(3) Human Resources BusinessDespite the severe business environment surrounding of this segment that resulted in contract price discount requests,
reduction of working hours request and the cancellation of contract renewals reflecting the unpredictable economic
situation, sales increased compared to the corresponding term of the previous year, 4,540 million yen (118.1% comparedto the corresponding term in the previous year) thanks to the new business implementation such as the dispatchingbusiness to light-duty works and other business expansion activities such as launching new branches and strengthening
sales operations. The segment profit totaled 198 million yen (115.2% compared to the corresponding term in the previousyear), achieved by pursuing profitable businesses.

As for unclassifiable operating expenses (company-wide expenses of administrative departments) and the amortizationof goodwill, which are not included in the profit and loss by segment stated above, these were recorded as “elimination”,
which totaled 794 million yen.

5

2. Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of December 31,
2012

As of June 30, 2012
AssetsCurrent assets
Cash and deposits

4,772

4,723

Notes and accounts receivable

6,575

6,050

Inventories

73

87

Deferred tax assets

341

205

Others966

865

Allowance for doubtful accounts

(39)

(39)

12,68911,892

3,514

3,395

Machinery, equipment and vehicles, net

183

261

Tools, furniture and fixtures, net

56

60

8,389

8,389

Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures, net

Land
Lease assets, net

798

1,130

Construction in progress-0

Total tangible fixed assets

12,943

13,239

2,137

1,972

Intangible fixed assets
Goodwill
Others

286

330

2,423

2,303

Investment securities

563

690

Long-term loans receivable

104

95

Deferred tax assets

742

775

Others874

852

Allowance for doubtful accounts

(137)

(137)

Total investments and other assets

2,147

2,277

17,514

17,81930,20329,711

Total intangible fixed assets
Investments and other assets

Total fixed assets
Total assets

6

As of June 30, 2012

As of December 31,
2012

Liabilities
Current liabilities
Notes and accounts payable

3,221

Short-term loans payable

3,038

700

750

1,357

1,365

Income taxes payable

380

259

Accrued consumption taxes

281

187

Allowance for bonus

409

382

Others

2,303

2,090

Total current liabilities

8,654

8,073

Long-term loans payable

3,424

2,993

Allowance for retirement benefits

2,992

3,038

379

400

Long-term loans payable within one year

Fixed liabilities

Allowance for retirement benefits for directors
Differed tax liabilities

76

76

1,086

1,088

Asset retirement obligation

41

41

Others

784

1,054

8,787

8,694

17,442

16,767

Capital stock

3,390

3,390

Capital surplus

3,204

3,204

Retained earnings

7,043

7,217

Treasury stock

(152)

(152)

Total shareholders’ equity

13,485

13,659Re-evaluation portion of differed tax liabilities

Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Revaluation reserve for land

(5)

0

(705)

(705)

Foreign currency translation adjustment

(13)

(10)

Total accumulated other comprehensive
incomeTotal net assets

(724)

(715)

12,761

12,944

Total liabilities and net assets

30,20329,711

7

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)
First six months of
FY11 (from July 1,
2011 to Dec. 31, 2011)27,496

Sales(Unit: million yen)First six months of
FY12 (from July 1,
2012 to Dec. 31, 2012)
28,799

Cost of sales

23,84625,480Gross profit

3,649

3,319

Selling, general and administrative expenses

2,561

2,727

Operating income

1,088

591

2

1

Non-operating income
Interest income
Dividend income

00Receivable commission

26

35

Equity in earnings of affiliates

9

14

Others34

43

Total non-operating income

73

95

Interest expenses

57

43

Others5

9Total non-operating expenses

63

53

1,099

632

Gain on sale of fixed assets

1

12

Total extraordinary income

112Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss
Loss on sales of fixed assets

00Loss on disposal of fixed assets

6

11

Loss on cancellation of leasing contract

3-

Others10Total extraordinary losses

11

11

Net income before tax adjustments

1,090

634

Income taxes

656

341

Net income before adjustment minority interests

433

293

Net income

433

293

8

(Consolidated Comprehensive Income Statement)(Unit: million yen)First Six months of
FY12 (from July 1,
2012 to Dec. 31, 2012)
293

First Six months of
FY11 (from July 1,
2011 to Dec. 31, 2011)
433

Net income before adjustment minority interests
Other comprehensive income
Valuation difference on available-for-sale securities(3)

6Land revaluation difference

158-

Equity of equity-method affiliate(1)

2

Total other comprehensive income (loss)

153

9

586

302

586

302

Quarterly comprehensive income(Breakdown)
Parent company portion of comprehensive income(3) Consolidated Cash Flow Statement
First Six months of FY11
(from July 1, 2011 toDec.31, 2011)(Yen in millions)First Six months of FY12
from July 1, 2012 to Dec.
31, 2012)

1,090

634

Depreciation

292

349

Depreciation of goodwill

164

164

Increase (decrease) in allowancefor doubtful accounts
Decrease in allowance for bonuses

23

(0)

(5)

(26)

Decrease (increase) in allowance for retirement benefits

(45)

45

Increase in allowance for directors’ retirement benefits

17

20

Decrease in allowance for disaster loss

(28)

-

Interest and dividends income

(2)

(2)

Interest expenses

57

43

Net cash provided by operating activities
Net income before tax adjustments

Increase (decrease) in sale of fixed assets

4(1)

Decrease in equity in earnings of affiliates

(9)

(14)

(158)

524

Decrease in inventories

(0)

(14)

Increase in other current assets

573

Increase (decrease) in notes and accounts payable

42

(183)

Increase (decrease) in other current liabilities

48

(244)

Decrease in accrued consumption taxes

(22)

(93)

Others, net(3)2

Decrease (increase) in notes and accounts receivable9Subtotal

1,467Interest and dividends received

1,278

2

1

Interest expenses paid

(56)

(44)

Income taxes paid

(72)

(366)

Net cash provided by operating activities

1,340

870

Payments into time deposits

(7)

(0)

Proceeds from withdrawal of time deposits

1

1

(116)

(228)

Net cash used in investing activities

Purchase of tangible fixed assets

3

82

Purchase of intangible fixed assets

Proceeds from sale of tangible fixed assets

(12)

(111)

Purchase of investment securities

-

(100)

Proceeds from sale and redemption of investment insecurities

2-

Payments of loans receivable

(89)

(17)

Proceeds from collection of loans receivable

101

62

Others, net
Net cash used in investing activities

6

4

(109)

(308)

200

50

Net cash used in financing activities
Increase in short-term loans payable
Proceeds from long-term loans payable

100

300

Repayment of long-term loans payable(1,119)

(723)

(64)

(117)

Repayments of lease obligations
Purchase of treasury stock

(0)

(0)

Cash dividends paid

(68)

(119)

Net cash used in by financing activities

(952)

(610)

Net increase (decrease) in cash and cash equivalents

278

(48)

Cash and cash equivalents at beginning of term

4,729

4,683

Cash and cash equivalents at end of term

5,007

4,635

(4) Going concern assumption
None

10

(5) Segment Information
1.

Sales and profit for each reportable segment for the first six months of FY2011 (from July 1, 2011 to December 31, 2011)

Vehicletransportationrelated

General cargotransportation

Human
resources(Yen in millions)Elimination and Consolidated
corporate

Total

Sales
(1) Sales of
20,301
3,371
3,823
27,49627,496
externalcustomers(2) Internal
21
8
21
51
(51)
sales between
business segments
or transfer
Total
20,322
3,380
3,845
27,548(51)
27,496
Operating income
1,342
320
171
1,834
(746)
1,088
(Notes)
1. Elimination of -746 million yen includes corporate expense of -581million yen, goodwill amortization of -164
million yen and elimination among the segments of 0 million yen. The corporate expense is the expense of theadministrative departments which do not belong to any reported segment.
The segment profit is adjusted according to the operating profit in the quarterly consolidated profit and loss statement

2.

Sales and profit for each reportable segment for the first six months of FY2012 (from July 1, 2012 to December 31, 2012)

Vehicletransportationrelated
Sales(1) Sales forexternalcustomers(2) Internalsales between
business segments
or transfer
Total
Operating income

General cargotransportation

Human
resources(Yen in millions)Elimination and Consolidated
Corporate(Note 2)
(Note 1)

Total

21,197

3,151

4,450

28,799-28,799

14

16

89

120

(120)

-

21,212
1,023

3,167
164

4,540
198

28,920
1,386

(120)
(794)

28,799591(Notes)
2. Elimination of -794 million yen includes corporate expense of -630 million yen, goodwill amortization of -164
million yen and elimination among the segments of 0 million yen. The corporate expense is the expense of theadministrative departments which do not belong to any reported segment.
3. The segment profit is adjusted according to the operating profit in the quarterly consolidated profit and loss
statement.

(6) Note for material changes in shareholders’ equity
Not applicableEnd of document11