Financial Results for the Nine-Month Period Ended March 31, 2016
May 13, 2016
Company name: ZERO CO., LTD.
Code No: 9028
Tokyo Stock Exchange (Second Section)(URL http://www.zero-group.co.jp/)
Representative:
Takeo Kitamura, President and COO
Contact for inquiries:
Toshihiro Takahashi, Corporate Officer
Tel: 044-520-0106
General Manager, Corporate Planning Department
Date of financial report submission
Date to begin payment of dividend:

May 16, 2016--

Additional materials for the financial results for 3Q FY2015
Briefing session for the financial results for 3Q FY2015

None
No

1. Consolidated Financial Results for the Nine-Month Period Ended March 31, 2016
(From July 1, 2015 to March 31, 2016)(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.
Net income attributable toSales
Operating income
Ordinary income
owners of parent company
Million yen
Nine Months
period ended
March 31,2016
Nine Months
period ended
March 31,
2015%

Million yen%

Million yen%

Million yen

59,235

6.6

4,388

90.6

4,647

91.6

2,904

107.4

55,589

10.2

2,302

-2.9

2,425

-0.1

1,400

3.6

(Note) Comprehensive income:

Q3 FY2015
Q3 FY2014

2,803 million yen (83.2%)
1,530 million yen (8.3%)

Earnings per share-basic

Earnings per share-diluted

Yen

Yen

Nine Month Period Ended March 31, 2016

174.30-Nine Month Period Ended March 31, 2015

81.95

-

(2）Consolidated Financial Position
Total assets

Net assets

Million yen

Million yen

Shareholders’ equity ratio Net assets per share%

Yen

As of March 31, 2016

36,89318,44650.0

1,111.71

As of June 30, 2015

35,145

16,60547.2

971.51(Ref.)%

Shareholders’ equity:

As of March 31, 2016: 18,446 million yen-1-

As of June 30, 2015: 16,605 million yen

2. Dividends
Dividend per share(Record date)At end of
1Q
Yen-

At end of
2Q
Yen
8.00
13.00

At end of3Q
Yen-

FY2014FY2015
Forecast for
FY2015(Note) Revision from the latest dividend forecast: N/A

At end of
4Q
Yen
19.50

Annual
total
Yen
27.50

30.40

43.40

3. Consolidated Forecasts for FY2015 (From July 1, 2015 to June 30, 2016)
Percentages shown below for whole FY2015 are the rates of increase or decrease compared with the previous year.

Sales

Operating income

Ordinary income

Net income

Earnings

attributable toper share -basic

owners of parent
company

Millionyen%

Millionyen

Whole FY2015
77,8000.7
4,750(Note) Revision from the latest dividend forecast: N/A%
29.7

Million
yen
5,000

%
32.6

Million
yen
2,900

%

Yen

54.4

174.01*Remarks(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, procedure or notation method for documenting consolidated financial statements①Changes in accordance with the revision of accounting standards and others: Yes②Changes other than above: N/A③Changes in accounting estimates: N/A④Restatement of corrections: N/A(4) Number of issued shares (common shares)①Number of issued shares (including treasury stock) at the end of each period:
As of March 31, 2016: 17,560,242
As of June 30, 2015: 17,560,242②Number of treasury stock:
As of March 31, 2016: 967,732
As of June 30, 2015: 467,732③Average number of issued shares issued during the fiscal year (excluding treasury stock)
3Q FY2015: 16,665,237
3Q FY2014: 17,092,518※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.
※Explanation regarding appropriate use of forecasts
Statements in this report relating to future matters such as earnings forecasts are based on the information presently
available. Actual results may differ from those forecasts depending on various factors.

Table of Contents of Attachments
1. Qualitative Information ….…………..……………..……………..……………..………………….....

2(1) Analysis of business performance ……………..……………..……………..……………..……………...

2(2) Analysis of the financial condition ……………..……………..……………..……………..……………..

3-2-

(3) Forecast for the next consolidated fiscal year ...............................................................................................

4

2. Summary Information (Notes) ……………..……………..……………..……………..……………..

4(1) Changes in important subsidiaries during period ...................................................................................................

4(2) Application of particular accounting methods for quarterly consolidated financial statements…..…………….

4(3) Changes in accounting policies, accounting estimates and restatement of corrections……………………………

4(4) Additional information……………………………………………………………….……………………………

4

3. Consolidated Financial Statements .……………..……………..………………..…………………….

6(1) Consolidated Balance Sheet .……………..…………..……………..……………………………………

6(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement ………………………..

8(Consolidated Income Statement)
First nine months …...…………………..……………..………………………….………..…………. 8(Consolidated Comprehensive Income Statement)
First nine months …..……………………..…………………………………………………………… 9(3) Notes to Consolidated Financial Statements ……………………………………………………………….. 10(Note for the assumption of going concern) …………………………………………………………….….. 10(Note concerning major changes in shareholders’ equity) ………………………………………………………… 10(Segment Information) ……………………………………………………………………………………………... 10-3-

1. Qualitative Information(1) Analysis of business performance
While affected by the economic downturn in emerging countries, the nation’s economy during the first nine monthsof fiscal 2015 (referred to as the “current term”) continues to improve gradually On the other hand, against the
backdrop of a sluggish growth in individual consumption, consumer confidence continues to remain weakened. Withpressure on labor supply and demand, the nation’s business environment remains severe.
In the automobile industry, Japanese automakers’ new vehicle sales in the domestic market turned out to be 92.7% ofthat in the corresponding quarter from the previous year (hereinafter referred as “year-on-year”) (Japan Automobile
Manufacturers Association’s statistical data), being affected by the hike in vehicle taxes on mini-cars. On the other
hand, with the yen continued to be weak the situation remained favorable to exports to overseas markets, recording a
year-on-year increase.
Whereas the used car market as a general had been showing signs of recovery on a year-on-year basis from the term
ended September 30, 2015, mini-cars are exhibiting sluggishness in the domestic market and the export of used cars
is also weakening.
Under these circumstances, our Group promoted strategic sales activities matching the changes in the market
environment in each of its segments, created higher added-value services by strengthening the group synergy of its
three businesses, and worked to strengthen cost reduction and other profit administration systems.
Our Group’s financial results for the first nine-month of fiscal 2015 recorded sales of 59,235 million yen (106.6%
year-on-year) and operating income of 4,388 million yen (190.6% year-on-year), thus posting year-on-year increasein sales and operating income. Upon taking non-operating gains and losses into account, ordinary income was 4,647
million yen (191.6% year-on-year), and net income attributable to owners of parent company was 2,904 million yen(207.4% year-on-year).
【No. of Motor Vehicles Related to Domestic Distribution】
Domestic Sales
New Vehicles

July 2014-March 2015

Unit：Units
July 2015-March 2016

Year-on-year Change (%)

Domestic automakers*13,909,394

3,622,203

92.7%（Nissan Motor Co. only）*1(489,551)(452,115)(92.4%)

Foreign automakers*2

226,568

217,777

96.1%

Passenger cars

*3

2,799,9782,831,462

101.1%

Mini-cars*4

2,336,176

2,295,992

98.3%

5,136,154

5,127,454

99.8%

199,546

170,18185.3%

Used Cars

Total used cars
Deregistered vehicles*3

Exports

July 2014-March 2015

Domestic automakers’ newvehicles*1

Used passenger cars

*5

3,402,287

July 2015-March 2016
3,509,411

Year-on-year Change (%)
103.1%

1,134,230
1,082,430
95.4%*1: Calculated using the Japan Automobile Manufacturers Association’s statistics*2: Calculated using the Japan Automobile Importers Association’s statistics*3: Calculated using the Japan Automobile Dealers Association’s statistics*4: Calculated using the Japan Light Motor Vehicle and Motorcycle Association’s statistics*5: Calculated using the number of deregistered used cars for export listed in the Japan Automobile Dealers Association’s statistics-4- Automobile-related BusinessIn this business segment, domestic sales of Nissan Motor Company, our major customer, was affected by adownturn in consumer confidence, and posted sales of 452,115 units (92.4% year-on-year) of new vehicles inJapan (Japan Automobile Manufacturers Association’s statistical data). Due to the above reasons, sales from
Nissan's new cars transportation and maintenance decreased. However, efforts were made to increase used car
exports and transportation of non-Nissan new cars, and by the effect from higher added-value transportationrelated business and rate revision, the automobile-related business posted an overall increase year on year as aresult.
As a result, this segment’s sales rose to 45,690 million yen (105.8% year-on-year) and profit was 4,909 million
yen (181.3% year-on-year) Human Resources Business
Though the economy is on a recovery trend in this segment, the situation of labor supply and demand has been
continuously tight. As a result, a shortage of truck drivers in major metropolitan areas became chronic and theirlabor costs elevated. Under these circumstances, including our corporate clients’ severe situation to be very strictin terms of employee dispatch and labor costs, we actively worked on developing new customers throughstrategic sales activities and enhanced sales operations, and posted sales of 10,070 million yen (110.8% year onyear) but due to increase in future looking management costs and recruitment costs, etc., profits in this segment
were 347 million yen (91.6% year-on-year).
 General Cargo Transportation Business
Sales of 3,890 million yen (102.8% year-on-year) was recorded in this business segment, the growth being
attributable to steady movement in the port cargo handling and other businesses. As a result of improvements inthe business efficiency from the cost aspect, this segment posted profit of 638 million yen (116.3% year-on-year).
Incidentally, concerning unclassifiable group-wide expenses (expenses concerning the company’s administrative
departments) and the amortization of goodwill, etc., which are not included in the above profit and loss by segment,
they are recognized as “Adjustments” items as listed in “Segment Information” in “3. “Consolidated Financial
Statements” and amounted to 1,507 million yen.
(2) Analysis of the financial condition(Assets)
Compared to the end of the previous term, current assets increased by 1,602 million yen (9.5%) to 18,492 million yen.
This is chiefly due, despite the decrease of cash and deposits by 320 million yen, to the increase of notes and accounts
receivable - trade by 1,862 million yen.
Compared to the end of the previous term, fixed assets increased by 144 million yen (0.8%) to 18,400 million yen.
This is chiefly due, despite the decrease of goodwill by 260 million yen, to the increase of intangible assets by 103
million yen, buildings and structures by 102 million yen, and investment securities by 90 million yen.
As a result of the foregoing, compared to the end of the previous term, total assets increased by 1,747 million yen(5.0%) to 36,893 million yen.
(Liabilities)
Compared to the end of the previous term, current liabilities increased by 753 million yen (6.8%) to 11,859 million
yen. This is chiefly due to the increase of notes and accounts payable by 855 million yen.
Compared to the end of the previous term, long-term liabilities decreased by 846 million yen (11.4%) to 6,587
million yen. This is chiefly due to the decrease of long-term loans payable by 826 million yen.
As a result of the foregoing, compared to the end of the previous term, total liabilities increased by 92 million yen(0.5%) to 18,447 million yen.

-5-

(Net Assets)
Compared to the end of the previous term, net assets increased by 1,840 million yen (11.1%) to 18,446 million yen.
This is chiefly due, despite the increase of treasury stock by 701 million yen, to the increase of retained earnings by
2,351 million yen.
(3) Forecast for the next consolidated fiscal year
The forecast has not changed from the consolidated forecast published on February 12, 2016.
2. Summary Information (Notes)(1) Changes in important subsidiaries during period: 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 corrections(Application of the ASBJ Statement)
The Company has applied “Revised Accounting Standard for Business Combinations (ASBJ Statement No. 21,
September 13, 2013) (hereinafter referred to as the “Business Combinations Accounting Standard”), “Revised
Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, September 13, 2013) hereinafterreferred to as the “Consolidation Accounting Standard”), “Revised Accounting Standard for Business Divestitures”(ASBJ Statement No. 7, September 13, 2013) (hereinafter referred to as the “Business Divestitures AccountingStandard” ) and other standards from the term ended September 30, 2015. Accordingly, the accounting methods havebeen changed to record the difference arising from changes in equity in subsidiaries which the Company continues tocontrol as capital surplus, and to record business acquisition costs as expenses for the fiscal year in which incurred. In
addition, regarding business combinations occurring on or after the start of the term ended September 30, 2015, theaccounting method has been changed to retroactively reflect adjustments to the amount allocated to acquisition costs
arising from the finalization of the provisional accounting treatment on the consolidated financial statements of theperiod in which the business combination occurs. Furthermore, presentation of Net income has been changed. In orderto reflect the changes in presentation of financial statements, reclassification was made accordingly in the quarterly
consolidated financial statements for the nine months ended March 31, 2015 and the consolidated financial statements
for the previous fiscal year.
The Business Combinations Accounting Standard and other standards have been applied from the start of the term
ended September 30, 2015 in accordance with the transitional treatment set forth in Article 58-2 (4) of the Business
Combinations Accounting Standard, Article 44-5 (4) of the Consolidation Accounting Standard and Article 57-4 (4) of
the Business Divestitures Accounting Standard. Incidentally, there is no effect on the profits and losses in the quarterly
consolidated financial statements for the current term and on the capital surplus at the end of the current accounting
period.
(4) Additional Information(Abolition of Retirement Benefits for Directors)
At the ordinary general meeting of shareholders convened on September 29, 2015, a resolution was passed to makefinal payment pursuant to abolition of the directorate retirement benefits system. Pursuant to the foregoing, theCompany reversed the full amount of “Provision for retirement benefits for directors” and included the outstandingbalance under “Others” of Long-term liabilities as long-term accounts payable in order to continue to be prepared to
pay retirement benefits for directors.
Incidentally, in some of the consolidated subsidiaries, in order to prepare for payment of retirement benefits todirectors, the amounts to be paid based on internal regulations have been recognized under “Provision for retirement
benefits for directors”.
(Introduction of a Performance-based Stock Compensation Program)At the ordinary general meeting of shareholders convened on September 29, 2015, a resolution was passed to newly
introduce a new stock compensation program ‘Board Benefit Trust (BBT)’ (hereinafter referred to as the “Program”)-6-for the Company’s directors, auditors and executive officers (excluding those serving concurrently as officers of theCompany’s parent company, outside directors and outside auditors) (hereinafter referred to as the “Directors andOthers”), with the purpose of increasing the awareness of the Directors and Others of their contribution to improving
medium to long-term performance and increasing corporate value.
The Trust is accounted according to “Practical Solution on Transactions of Delivering the Company's Own Stock to
Employees etc. through Trusts” (Practical Issue Task Force No. 30, March 26, 2015).
(1) Overview of the transaction
This is a performance-based stock compensation program whereby shares of the Company are acquired by theTrust using money contributed as funds by the Company, and distributed by the Trust in accordance with theRules on Distributions of Board Benefits based on points given to each of the Directors and Others in view of
their positions and performance. Incidentally, the shares of the Company shall be distributed to the Directors
and Others as a general rule when they leave their positions.
(2) Treasury stock remaining in the Trust
Stock remaining in the Trust is recognized as treasury stock under assets section of the quarterly consolidatedbalance sheet by book value of the Trust (excluding ancillary expenses). The book value of the relevant
treasury shares was 499 million yet at the end of the current term. The number of shares at the end of the term
was 357,100 shares at the end of the current term.
(Effect of changes in corporation tax rates, etc.)
The Act on Partial Revision of the Income Tax Act, etc. (Act No. 15 of 2016) and the Act on Partial Revision of the
Local Tax Act, etc.” (Act No. 13 of 2016) were promulgated on March 31, 2016, and corporation tax rates, etc. are to
be lowered from the consolidated fiscal periods commencing on and after April 1, 2016. Pursuant to the foregoing,
the normal effective statutory tax rate used in the calculation of deferred tax assets and deferred tax liabilities would
be changed from 32.0% to 30.9%with respect to the temporary difference expected to be eliminated in the
consolidated fiscal year commencing on and after July 1, 2016, and from 32.0% to 30.7%with respect to thetemporary difference expected to be eliminated in the consolidated fiscal year commencing on and after July 1, 2018.
Incidentally, this change has no material effect on quarterly consolidated financial statements.

-7-3. Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of June 30, 2015

As of March 31, 2016

6,051

5,730

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

8,448

10,310

Merchandise
812

911

82

86

262

273

Supplies
Deferred tax assets
Others

1,320

Allowance for doubtful accounts

(87)

1,253
(74)

16,89018,492

3,288

3,390

Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net

218

271

Tools, furniture and fixtures, net
67

66

7,939

7,881

2,059

2,128

73

32

13,647

13,771

1,227

966

Land
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Others535

639

Total intangible assets
1,763

1,606

1,468

1,559

85

93

406

375

Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets-8-Others
1,004
(120)

Allowance for doubtful accounts
Total investments and other assets

2,844

1,074
(79)

3,022

Total fixed assets
18,255

18,40035,14536,893

Total assets-9-As of June 30, 2015

As of March 31, 2016

3,212

4,067

880

1,045

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable

1,335

1,250

Income taxes payable948

Accrued consumption taxes

649

1,071
482

Allowance for bonuses
435

Allowance for sub-lease loss

15

262
15

Others
3,629

3,664

11,106

11,859

1,823

997

Total current liabilities
Long-term liabilities
Long-term loans payable
Provision for retirement benefits for directors

496

Provision for stock contribution－

Allowance for sub-lease loss

28

105
36
17

Provision for retirement benefits
2,155

2,036

14

5

987

946

84

84

Deferred tax liabilities
Deferred tax liabilities for land revaluation
Asset retirement obligation
Others1,842

Total long-term liabilities

7,433

2,359
6,587

Total liabilities
18,54018,447

3,390

3,390

3,204

3,497

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings

10,317

12,668Treasury stock(152)- 10 -(854)

Total shareholders’ equity

16,75918,702

Accumulated other comprehensive income
Unrealized gains (losses) on securities
54

101

(603)

(562)

147

75

Revaluation reserve for land
Foreign currency translation adjustment
Accumulated retirement benefits adjustment

247

Total accumulated other comprehensive income(154)

Total net assets

16,605129(256)

18,446

Total liabilities and net assets
35,145- 11 -

36,893

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(First nine months)(Unit: million yen)First nine months of FY14
(from July 1, 2014
to March 31, 2015)

First nine months of FY15
(from July 1, 2015
to March 31, 2016)

55,58959,23548,07849,244

7,510

9,990

5,208

5,602

2,302

4,388

2

2

1

1

45

47

35

102

95

163

180

317

53

51

3

6

57

58

2,425

4,647

Sales

Cost of sales

Gross profit

Selling, general and administrative expenses

Operating income

Non-operating income

Interest income

Dividend income

Commission fee

Equity in earnings of affiliates

OthersTotal non-operating income

Non-operating expenses

Interest expenses

OthersTotal non-operating expenses

Ordinary income- 12 -

Extraordinary income

Gain on sale of fixed assets
1

2

62

－

－

17

64

20

0

2

Compensation receivable

Gain on sales of investments in securities

Total extraordinary income

Extraordinary loss

Loss on sales of fixed assets

Loss on disposal of fixed assets
425

Total extraordinary losses
5

28

2,485

4,640

1,084

1,735

1,400

2,904

1,400

2,904

Net income before tax adjustments

Income taxes

Income before minority interests

Net income attributable to owners of parent company- 13 -

(Consolidated Comprehensive Income Statement)(First nine months)(Unit: million yen)First nine months of FY14
(from July 1, 2014 toMarch 31, 2015)
Net income

First nine months of FY15
(from July 1, 2015 toMarch 31, 2016)

1,400

2,904

22

46

(59)

(118)

64

(71)

101

41

129

(101)

1,530

2,803

1,530

2,803

Other comprehensive income

Unrealized gains (losses) on securities

Accumulated retirement benefits adjustment

Equity of equity-method affiliate

Land revaluation difference

Total other comprehensive income (loss)

Comprehensive income(Breakdown)

Parent company portion of comprehensive income- 14 -

(3) Notes to Consolidated Financial Statements(Note for the assumption of going concern)
None.
(Note concerning major changes in shareholders’ equity)
None.
Segment Information
1. Sales and profit for each reportable segment for the first nine months of FY2014 (from July 1, 2014 toMarch 31, 2015)(Unit: million yen)
Automobiletransportationrelated

Human
resources

Generalcargotransport
ation

Total

Elimination andcorporate(Note 1)

Consolidated(Note 2)Sales

(1) Sales ofexternalcustomers

43,136

8,737

3,714

55,589－55,589

45

350

70

466

(466)

－

43,182

9,088

56,055(466)

55,589

2,707

378

3,635

(1,333)2,302(2) Internalsales between
business segments
or transfer
Total

3,785

Operating income
549(Notes)
1. Elimination of -1,333 million yen includes corporate expense of -1,079 million yen, goodwill
amortization of -256 million yen and elimination among the segments of 2 million yen. The corporate
expense is the expense of the administrative departments which do not belong to any reported segment.
2. The segment profit is adjusted according to the operating profit in the quarterly consolidated profit andloss statement.
2. Sales and profit for each reportable segment for the first nine months of FY2015 (from July 1, 2015 toMarch 31, 2016)(Unit: million yen)
Automobiletransportationrelated

Human
resources

General cargotransportation

Total

Elimination andcorporate(Note 1)

Consolidated(Note 2)Sales

(1) Sales forexternalcustomers

45,641

9,768

3,824

- 15 -

59,235－59,235

(2) Internalsales between
business segments
or transfer
Total

48

301

65

415

(415)

－

45,69010,0703,890

59,651(415)

59,235

4,909

347

638

5,895

(1,507)

4,388

Operating income(Notes)
1. Elimination of -1,507 million yen includes corporate expense of -1,246 million yen, goodwill
amortization of -260 million yen and elimination among the segments of 0 million yen. The corporate
expense is the expense of the administrative departments which do not belong to any reported segment.
2. The segment profit is adjusted according to the operating profit in the quarterly consolidated profit andloss statement.

- 16 -