Financial Results for the Six-Month Period Ended December 31, 2013
February 13, 2014
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
Date of financial report submission
February 13, 2014
Date to begin payment of dividend:
March 14, 2014
Additional materials for the financial results for 2Q FY2013
None
Briefing session for the financial results for 2Q FY2013
Yes (to the analysts)

1. Consolidated Financial Results for the Six-Month Period Ended December 31, 2013
(From July 1, 2013 to December 31, 2013)(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,
2013
Six Months
ended Dec.31,
2012

Operating income
Million yen

Ordinary income%

Million yen

Net income%

Million yen%

31,981

11.0

1,493

152.6

1,526

141.1

810

176.3

28,799

4.7

591

-45.7

632

-42.4

293

-32.3

(Note) Comprehensive income:

FY2013 Second quarter 861 million yen ( 184.6%)
FY2012 Second quarter 302 million yen ( -48.4%)
Earnings per share-basic

Earnings per share-diluted

Yen

Yen

Six Month Period Ended Dec.31, 2013

47.40

Six Month Period Ended Dec.31, 2012

17.16

17.10

(2）Consolidated Financial Position
Total assets

Net assets

Shareholders’ equity ratio

Million yen

Million yen％

Net assets per shareyen

As of Dec.31, 2013

30,742

14,11945.9826.05

As of Jun. 30, 2013

31,096

13,33342.9

780.07(Ref.)

Shareholders’ equity :As of Dec. 31, 2013: 14,119 million yen

1

As of Jun. 30, 2013: 13,333 million yen

2. Dividends
Dividend per share(Record date)

FY2012FY2013
Forecast for
FY2013At end of
1Q
Yen-

At end of
2Q
Yen
4.00
8.00

At end of
3Q
Yen-

At end of
4Q
Yen
4.40

Annual
total
Yen
8.40

-

7.80

15.80

*Revision from the latest dividend forecast: Yes

3. Consolidated Forecasts for FY2013 (July 1, 2013 through June 30, 2014)
Percentages shown below for whole FY2013 are the rates of increase or decrease compared with the previous year.

Sales
Millionyen
Whole FY2013

65,000%
7.4

Operating income

Ordinary income

MillionMillion

yen
2,600

%
62.4

yen
2,700

%
62.6

Earnings

Net income
Million

%

Yen

88.4

78.98

yen
1,350

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.): Yes
Newly obtained company:(Company’s name) World Windows Co., Ltd.

(2) Application of particular accounting methods for quarterly consolidated financial statements:(3) Changes in accounting policies, accounting estimates and restatement of corrections① Changes in accordance with the revision of accounting standards and others: N/A② Changes other than above: N/A③ Changes in accounting estimates: N/A④ 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, 2013: 17,560,242

As of June 30, 2013: 17,560,242② Number of treasury stock:

As of December 31, 2013: 467,711

As of June 30, 2013: 467,711③ Average number of shares issued during the second quarter of the fiscal year

FY2013: 17,092,531

FY2012: 17,092,576

2

N/A※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 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 2013 (referred to as the “current term”) has been at the stage of
gradual recovery from the downturn thanks to the continuous yen depreciation. Signs of positive growth cycle areshown owing to the rush demand before the consumption tax hike, in addition to the improvement of revenue mainly ofthe export-related companies and the stable consumer spending reflecting the recovery of employment and incoming
situation. On the other hand, overseas businesses have been still negatively impacted by debt problems in Europe andslowdowns in economic growth in emerging countries, resulting in the unstable revenue of the export-relatedcompanies.

In the automobile industry, the domestic new car sales in the current term have been continuously strong, resulted in
110.0 % compared to the corresponding term in the previous year (data from the Japan Automobile Manufacturers
Association).Especially the sales of second quarter, from October through December, marked 119.3 % compared to thecorresponding term in the previous year, keeping upward trend of the first quarter, from July through September.
Despite the overseas’ economic slowdown, the exporting new car sales also increased, thanks to the yen depreciation
trend and the lessened negative impact from the relationship with China, resulted in 103.6% compared to thecorresponding term in the previous year. In the used car market, the total sales of used cars increased owing to theactivated used car market by the trade-in cars increase corresponding to new car sales increase, consisting of the slightincrease, 100.3%, of registered domestic used cars and the remarkable increase, 121.8%, of exporting used cars,
compared to the corresponding term in the previous year.
Under these circumstances, in respect to our group sales of vehicle-related business in the current term, the new vehicletransportation business increased year-on-year, thanks to the higher new car sales increase of Nissan Motor Co., Ltd., ourmajor customer, than the average sales increase of whole automobile companies. The used car transportation business also
increased owing to the precisely customized transportation services in addition to regional sales promotion activities. As aresult, the sales of vehicle-related business increased year on year. On the other hand, the sales of the general cargotransportation business decreased compared to the corresponding term in the previous year, owing to the closure of
unprofitable business and eliminations and consolidations of business facilities as a result of thorough review of the3business structure in the previous term. In the human resources business, in the gradual economic recovery, sales
increased compared to the corresponding term in the previous year, thanks to steady efforts to develop new sales regions
and customers through strong sales activities and enhanced sales operations, in addition to new business implementation,such as the dispatching business to light-duty works, to newly developed areas.

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

From July 2012to Dec. 2012

From July 2013 to Dec. 2013

Year-on-year

Domestic automakers *1

2,422.,364

2,663,868

110.0%(Nissan Motor)*1(293,237)(331,242)(113.0%)123,202147,293119.6%

1,918,961

1,856,798

96.8%

1,358,869

1,431,718

105.4%

3,277,830

3,288,516

100.3%

157,274

135,855

86.4%

Export volume (in units)

From July 2012 to Dec. 2012

From July 2013 to Dec. 2013

New vehicles of domestic
automakers *1

2,314,146

2,392,313

103.4%(Nissan Motor)*1(341,502)(311,483)(91.2%)

Used passenger vehicles*5

569,852

694,319121.8%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 31,981 million yen (111.0% compared to the corresponding term in theprevious year). Operating income was 1,493 million yen (252.6% compared to the corresponding term in the previousyear). Ordinary income was 1,526 million yen (241.1% compared to the corresponding term in the previous year). Net
income totaled 810 million yen (276.3% 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, resulted in total sales of 331,242 units, 113.0%
compared to the corresponding term in the previous year, reflecting good sales of newly introduced mini-vehicles.

4Exporting vehicle volume decreased, resulting in 331,483 units, 91.2 % compared to the corresponding term in theprevious year. (Data from the Japan Automobile Manufacturers Association)
As a result, sales of the Company from Nissan new car transportation business increased. The total transportation of
non-Nissan new cars and used cars also increased compared to the corresponding term in the previous year. The
maintenance business sales increased as well owing to the capacity strengthening of heavy- truck maintenance centers.
Total sales of vehicle-related business marked 24,561 million yen (115.8% compared to the corresponding term in theprevious year). In regard to segment profit, although there was negative impact from the transportation structural shift todown-sized vehicles and the short-distance transportation increase, 1,549 million yen, 151.4% compared to thecorresponding term in the previous year, was achieved by the transportation cost reduction. Although the vehicletransportation business is likely to be under the severe circumstances owing to the vehicle sales decrease in the long run,
the Company is challenging to make stable profits which is less influenced by the market demand change through“transportation quality improvement by minimizing transportation relay points, thus reduction of delivery period andtransportation cost”.

(2) General Cargo Transportation BusinessIn this business segment, sales substantially decreased, 2,336million yen (73.8% compared with the corresponding termin the previous year) owing to the closure of unprofitable business and eliminations and consolidations of businessfacilities as a result of a thorough review of the business structure in fiscal 2012, to deal with the prolonged economic
downturn in home electronics businesses, our major customer. On the other hand, segment profit was remarkably
improved, 413 million yen (251.5% compared to the corresponding term in the previous year). The Company achieved theimprovement of revenue structure by streamlining unprofitable businesses.
(3) Human Resources BusinessIn this business segment, although there are sings of recovery in the demand of dispatching and temporary contracted
businesses reflecting the economical upward trend, the severity of business environment surroundings remains unchanged
with the request of contract price discount and reduction of working hours. Despite the difficulties, sales increased,
resulted in 5,247 million yen (115.6 % compared to the corresponding term in the previous year) thanks to steady efforts
to develop new sales regions and customers through strong sales activities and enhanced sales operations, in addition to
new business implementation, such as the dispatching business to light-duty works, to newly developed areas. The
segment profit totaled 252 million yen (127.6 % compared to the corresponding term in the previous year), which wasachieved by shifting the sales activities to higher-profitable businesses.
As for unclassifiable operating expenses (company-wide expenses of administrative departments) and the amortization of
goodwill, which are not included in the profit and loss by segment stated above, these were recorded as “elimination”,
which totaled 722 million yen.

5

2. Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of December 31,
2013

As of June 30, 2013
AssetsCurrent assets
Cash and deposits

4,872

4,466

Notes and accounts receivable

6,868

6,970

53

261

Goods
Inventories

86

84

Deferred tax assets

271

270

Others985

880

Allowance for doubtful accounts

(41)

(90)

13,096

12,844

3,302

3,197

Machinery, equipment and vehicles, net

188

179

Tools, furniture and fixtures, net

66

60

Land

8,373

8,373

Lease assets, net

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

1,409

1,413

Construction in progress-

24

Total tangible fixed assets

13,341

13,248Goodwill

1,808

1,644

Others

427

566

2,236

2,210

763

914

Intangible fixed assets

Total intangible fixed assets
Investments and other assets
Investment securities
Long-term loans receivable

105

85

Deferred tax assets

777

688

Others912

885

Allowance for doubtful accounts

(136)

(136)

Total investments and other assets

2,422

2,438

18,00017,89731,09630,742

Total fixed assets
Total assets

6

As of June 30, 2013

As of December 31,
2013

Liabilities
Current liabilities
Notes and accounts payable

3,430

Short-term loans payable

3,422

750

750

1,607

1,502

Income taxes payable

574

557

Accrued consumption taxes

272

265

Allowance for bonus

406

416

-

15

Others

2,703

2,305

Total current liabilities

9,745

9,236

Long-term loans payable

2,041

1,636

Allowance for retirement benefits

3,029

2,719

427

454

-

52

Long-term loans payable within one year

Allowance for re-lease loss

Fixed liabilities

Allowance for retirement benefits for directors
Allowance for re-lease loss
Differed tax liabilities
Re-evaluation portion of differed tax liabilities
Asset retirement obligation

76

76

1,088

1,088

41

41

Others

1,311

1,315

Total fixed liabilities

8,016

7,386

17,762

16,622

Capital stock

3,390

3,390

Capital surplus

3,204

3,204

Retained earnings

7,571

8,306

Total liabilities
Net assets
Shareholders’ equity

Treasury stock

(152)

(152)

Total shareholders’ equity

14,014

14,749

15

18

(705)

(705)

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Revaluation reserve for land
Foreign currency translation adjustment

856

Total accumulated other comprehensive
incomeTotal net assets

(681)

(630)

13,333

14,119Total liabilities and net assets

31,09630,7427

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)
First six months of
FY12 (from July 1,
2012 to Dec. 31, 2012)
28,799

Sales(Unit: million yen)First six months of
FY13 (from July 1,
2013 to Dec. 31, 2013)
31,981

Cost of sales

25,48027,400Gross profit

3,319

4,580

Selling, general and administrative expenses

2,727

3,087

591

1,493

1

1

Operating income
Non-operating income
Interest income
Dividend income

00Receivable commission

35

38

Equity in earnings of affiliates

14

7

Others43

39

Total non-operating income

95

87Interest expenses

43

38

Others916

Total non-operating expenses

53

55

632

1,526

Gain on sale of fixed assets

121

Total extraordinary income

121

Loss on sales of fixed assets

00Loss on disposal of fixed assets

110Loss on cancellation of leasing contract-

69

Others03Total extraordinary losses

1173

Net income before tax adjustments

634

1,454

Income taxes

341

644

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss

Net income before adjustment minority interests

293

810

Net income

293

810

8

(Consolidated Comprehensive Income Statement)(Unit: million yen)First Six months of
FY13 (from July 1,
2013 to Dec. 31, 2013)
810

First Six months of
FY12 (from July 1,
2012 to Dec. 31, 2012)
293

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

66

Equity of equity-method affiliate

248

Total other comprehensive income

9

50

302

861

302

861

Quarterly comprehensive income(Breakdown)
Parent company portion of comprehensive income(3) Consolidated Cash Flow Statement
First Six months of FY12
(from July 1, 2012 toDec.31, 2012)(Yen in millions)First Six months of FY13
(from July 1, 2013 toDec. 31, 2013)

Net income before tax adjustments

634

1,454

Depreciation

349

357

Depreciation of goodwill

164

164

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

(0)

48

(26)

(4)

Decrease (increase) in allowance for retirement benefits

45

(310)

Decrease (increase) in allowance for directors’ retirement
benefits
Increase in allowance for re-lease loss

20

(22)

-

68

Interest and dividends

(2)

(2)

Net cash provided by operating activities

Interest expenses

43

38

Decrease in sale of fixed assets

(1)

(1)

Decrease in equity in earnings of affiliates

(14)

(7)

Increase in notes and accounts receivable524

3

Decrease in inventories

(14)

(29)

Increase in other current assets

73

90

Decrease in notes and accounts payable

(183)

(24)

Decrease in other current liabilities

(244)

(451)

Decrease in accrued consumption taxes

(93)

(7)

2

(22)

1,278

1,344

Others, net
Subtotal

9

Interest and dividends received

1

1Interest expenses paid

(44)

(38)

Income taxes paid

(366)

(520)

Net cash provided by operating activities

870

787

(0)

(0)

Net cash used in investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

1

-

(228)

(50)

82

7

Purchase of intangible fixed assets

(111)

(187)

Purchase of investment securities

(100)

(101)

-

11

-

(175)

Payments of loans receivable

(17)

(60)

Proceeds from collection of loans receivable

62

85

Others, net

4

21

(308)

(448)

50

-

Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets

Proceeds from sale and redemption of investment insecurities
Payment for acquisition of subsidiary associated withchange of scope of consolidation

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

300

100

Repayment of long-term loans payable

(723)

(610)

Repayments of lease obligations

(117)

(158)

(0)

-

Cash dividends paid

(119)

(75)

Net cash used in by financing activities

(610)

(744)

Purchase of treasury stock

Net Decrease in cash and cash equivalents

(48)

(405)

Cash and cash equivalents at beginning of term

4,683

4,785

Cash and cash equivalents at end of term

4,635

4,379

(4) Notes to Quarterly Consolidated Financial Statements(Events and conditions which indicate there could be substantial doubt about going concern assumption)
None(Note to significant changes in shareholders' equity)
None

10

(Segment Information)
1.

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

General cargotransportation

Vehicletransportationrelated

Human
resources(Yen in millions)Elimination and Consolidated
corporate

Total

Sales
(1) Sales of21,1973,151
4,450
28,799externalcustomers(2) Internal
14
16
89
120
(120)
sales between
business segments
or transfer
Total
21,212
3,167
4,540
28,920(120)
Operating income
1,023
164
198
1,386
(794)
(Notes)
1. 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.
2. The segment profit is adjusted with the operating profit in the quarterly consolidated profit and loss.

28,799-28,799591

2. Sales and profit for each reportable segment for the first six months of FY2013 (from July 1, 2013 to December 31, 2013)

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

24,546

2,315

5,119

31,981-

31,981

14

20

127

162

(162)

-

24,561
1,549

2,336
413

5,247
252

32,144
2,216

(162)
(722)

31,981
1,493(Notes)
1. Elimination of -722 million yen includes corporate expense of -558 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.
2. The segment profit is adjusted according to the operating profit in the quarterly consolidated profit and loss
statement.
End of document11