Financial Results for the Three-Month Period Ended September 30, 2015
November 12, 2015
Company name: ZERO CO., LTD.
Tokyo Stock Exchange (Second Section)
Code No.: 9028
(URL: http://www.zero-group.co.jp/)
Representative:
Takeo Kitamura, President and CEO
Contact for inquiries:
Toshihiro Takahashi,
Corporate Officer, General Manager of Corporate Planning Department
Date of financial report submission:
Date to begin payment of dividend:
Additional materials for the financial results for 1Q FY2015:
Briefing session for the financial results for 1Q FY2015:

Tel: 044-520-0106

November 13, 2015
–
None
None

1. Consolidated Financial Results for the Three-Month Period Ended September 30, 2015
(From July 1, 2015 to September 30, 2015)(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
Three-Month Period
Ended Sep. 30, 2015

19,311

Operating income%
12.8

Three-Month Period
17,125
9.3
Ended Sep. 30, 2014
(Note) Comprehensive income: 1Q FY2015
1Q FY2014

Million yen

Ordinary income%

Million yen

Net income attributable toowners of parent company
Million yen
%

%

1,293

210.7

1,403

207.3

878

241.1

416

-37.8

456

-32.5

257

-30.6

830 million yen (279.0%)
219 million yen (-46.3%)
Earnings per share-basic

Earnings per share-diluted

Yen
52.28
15.08

Three-Month Period Ended Sep. 30, 2015
Three-Month Period Ended Sep. 30, 2014

Yen-(2) Consolidated Financial Position
Total assets

As of Sep. 30, 2015
As of June 30, 2015
(Ref.) Shareholders’ equity:

Million yen
33,66435,145
As of Sep. 30, 2015: 16,693 million yen

Shareholders’ equity
ratio

Net assets per
share

Million yen%
16,69349.6
16,60547.2
As of June 30, 2015: 16,605 million yen

Yen
1,006.11
971.51

Net assets

2. Dividends
At end of
1Q

Dividend per share
At end of
3Q
Yen-

At end of
2Q
Yen
8.00

Yen
FY2014FY2015
Forecast for
10.00
FY2015(Note) Revision from the latest dividend forecast: None

At end of
4Q
Yen
19.50

-

Annual
total

23.60

Yen
27.50
33.60

3. Consolidated Forecasts for FY2015 (From July 1, 2015 to June 30, 2016)
Percentages shown below for whole FY2014 are the rates of increase or decrease compared with the previous year.
Sales

Operating income

Million yen%
Million yen
Whole FY
76,400
-1.1
3,850
2015
(Note) Revision to the latest consolidated forecasts: None%
5.1

Ordinary income
Million yen
3,930

%
4.2

Net income
attributable to ownersof parent company
Million yen
%
2,300
22.4

Earnings
per share basic
Yen
134.56

4. Others
(1)
(2)
(3)

(4)

Changes in important subsidiaries during period (Transfer of particular subsidiary which involves the change of scope of
consolidation.): N/A
Application of particular accounting methods for quarterly consolidated financial statements: N/A
Changes in accounting policies, accounting estimates and restatement of corrections
 Changes in accordance with the revision of accounting standards and others: Yes
 Changes other than above: N/A
 Changes in accounting estimates: N/A Restatement of corrections: N/A
Number of issued shares (common shares)
 Number of issued shares (including treasury stock) at the end of each period:
As of September 30, 2015: 17,560,242
As of June 30, 2015: 17,560,242
 Number of treasury stock at the end of each period:
As of September 30, 2015: 967,732
As of June 30, 2015: 467,732
 Average number of issued shares during the first quarter of the fiscal year (excluding treasury shares)
1Q FY 2015: 16,809,901
1Q FY 2014: 17,092,531

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.

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

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

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

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

3

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 .……………..……………..………………..…………………….

5(1) Consolidated Balance Sheet .……………..…………..……………..……………………………………

5(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement ………………………..

7(Consolidated Income Statement)
First three months …...…………………..……………..………………………….………………….

7(Consolidated Comprehensive Income Statement) …...……………..………………………………………
First three months …..……………………..…………………………………………………………

8(3) Notes to Consolidated Financial Statements ………………………………………………………………..

9(Note for the assumption of going concern) …………………………………………………………….….. 9(Note concerning major changes in shareholders’ equity) ………………………………………………………… 9(Segment Information) ……………………………………………………………………………………………... 9-1-

1. Qualitative Information(1) Analysis of business performance
While affected by the economic downturn in China and Eastern Asian countries, the nation’s economy during thefirst three months of fiscal 2015 (referred to as the “current term”) continues its progress to recovery due toimprovements in corporate earnings and employment situation. On the other hand, with the global economic
increasingly showing signs of a slowdown against the backdrop of a slowdown in the Chinese economy, the nation’s
economic prospect remains unclear.
In the automobile industry, new vehicle sales in the domestic market turned out to be 93.2% of that in thecorresponding quarter from the previous year (hereinafter referred as “year-on-year”) (Japan Automobile
Manufacturers Association’s statistical data), with performance being affected by the hike in vehicle taxes on minicars. On the other hand, with the yen continuing to be weak the situation has remained favorable to exports tooverseas markets, recording a year-on-year increase.
The used car market is in a downturn due to a weakening in consumer confidence, but in the latest quarter showedsigns of recovery on a year-on-year basis. While the export of used cars dropped in the latest quarter, it still
demonstrates healthy movement.
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 three month of fiscal year 2015 recorded sales of 19,311 million yen(112.8% year-on-year) and operating income of 1,293 million yen (310.7% year-on-year), thus posting year-on-yearincrease in sales and income. Upon taking non-operating gains and losses into account, ordinary income was 1,403
million yen (307.3% year-on-year), and net income attributable to owners of parent company was 878 million yen(341.1% year-on-year).
【No. of Motor Vehicles Related to Domestic Distribution】
Domestic Sales
New Vehicles
Domestic automakers（Nissan Motor Co. only）
Foreign automakers
Used Cars
Passenger cars
Mini-cars
Total used cars
Deregistered vehicles

July 2014-September 2014

Unit：Units
July 2015-September 2015

Year-on-year Change (%)

*1
*1
*2

1,242,962(157,066)
69,545

1,158,921(144,314)
72,59593.2%（91.9%)
104.4%*3*4

858,339
676,185
1,534,524
59,396864,692
673,010
1,537,702
51,134100.7%
99.5%
100.2%
86.1%*3

Exports
July 2014-September 2014
July 2015-September 2015
Year-on-year Change (%)
Domestic automakers’ new*1
1,147,292
1,157,234
100.9%
vehiclesUsed passenger cars
*5
366,908
354,70996.7%*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-2- 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 144,314units (91.9% year-on-year) of new vehicles inJapan (Japan Automobile Manufacturers Association’s statistical data).
Due to the above reasons, the sales of Nissan's new cars transportation decreased. However, efforts were made toincrease used car export, transportation for new customers and effects of value added contingent work, revision of
charge; as a result, the automobile-related business posted an overall increase year on year.
As a result, this segment’s sales rose to 14,833 million yen (112.6% year-on-year) and profit was 1,438 million
yen (215.8% year-on-year).
 Human Resources BusinessIn this segment, while companies seeking human resources are on the increase as the nation’s economy is on arecovery trend, our corporate clients continue to be very strict in terms of dispatch and contract work fees. Under
these circumstances, we were able to increase sales in this segment, thanks to steady efforts to develop new sales
regions and customers through strong sales activities and enhanced sales operations in the employee dispatch
business.
As a result, this segment posted sales of 3,266 million yen (112.0% year on year) but due to increase inrecruitment costs, etc., profits were 107 million yen (98.1% year-on-year).
 General Cargo Transportation Business
Sales of 1,335 million yen (117.1% year-on-year) was recorded in this business segment. The main business of
port cargo handling showed steady performance, and as there were improvements in the business efficiency fromthe cost aspect, this segment posted profit of 254 million yen (323.5% 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 507 million yen.
(2) Analysis of the financial condition(Assets)
Compared to the end of the previous term, current assets decreased by 1,492 million yen (8.8%) to 15,398 million yen.
This is chiefly due, despite the increase of notes and accounts receivable-trade by 381 million yen, to the decrease of
cash and deposits by 1,628 million yen. Compared to the end of the previous term, fixed assets increased by 11
million yen (0.1%) to 18,266 million yen. This is chiefly due, despite the increase of construction in progress by 63
million yen, and machinery, to the decrease of goodwill by 86 million yen.
As a result of the foregoing, compared to the end of the previous term, total assets decreased by 1,480 million yen(4.2%) to 33,664 million yen.
(Liabilities)
Compared to the end of the previous term, current liabilities decreased by 1,302 million yen (11.7%) to 9,804 million
yen. This is chiefly due to the decrease in allowance for bonus by 174 million yen, income taxes payable by 399
million yen and accrued consumption taxes by 207 million yen.
Compared to the end of the previous term, long-term liabilities decreased by 267 million yen (3.6%) to 7,166 million
yen. As a result of the foregoing, compared to the end of the previous term, total liabilities decreased by 1,569 million
yen (8.5%) to 16,970 million yen.

-3-

(Net Assets)
Compared to the end of the previous term, net assets increased by 88 million yen (0.5%) to 16,693 million yen. Thisis chiefly due, despite acquisition of treasury stock, etc., to posting of net income attributable to owners of parent
company which increased retained earnings.

(3) Forecast for the next consolidated fiscal year
The forecast has not changed from the consolidated forecast published on August 7, 2015.

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 current term. Accordingly, the accounting methods have been changed torecord the difference arising from changes in equity in subsidiaries which the Company continues to control as capitalsurplus, 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 current term, the accounting method has been changed toretroactively reflect adjustments to the amount allocated to acquisition costs arising from the finalization of theprovisional accounting treatment on the consolidated financial statements of the period in which the businesscombination occurs. Furthermore, presentation of Net income has been changed. In order to reflect the changes inpresentation of financial statements, reclassification was made accordingly in the quarterly consolidated financial
statements for the three months ended September 30, 2014.
The Business Combinations Accounting Standard and other standards have been applied from the start of the current
term 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 director” 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”)
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 and-4-Others”). The purpose of the Program is to make clearer the link between compensation of the Directors and Others
and the Company’s performance and stock prices, and by having the Directors and Others share not only the merits ofan increase in stock prices but the risks of a drop in stock prices, increase the awareness of the Directors and Others of
their contribution to improving medium to long-term performance and increasing corporate value.
This is a performance-based stock compensation program whereby shares of the Company are acquired by the Trustusing money contributed as funds by the Company, and distributed by the Trust in accordance with the Rules onDistributions 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 generalrule when they leave their positions.
Outline of the Trust
(i)
(ii)
(iii)
(iv)

Designation: Board Benefit Trust (BBT)
Trustor: The Company
Trustee: Mizuho Trust & Banking Co., Ltd.
Beneficiaries: Those who have left the position of director, auditor, or executive officer, and who satisfy
the requirements for benefits set forth in the Rules on Distributions of Board Benefits(v) Trust administrator: A third party with no interests in the Company is scheduled to be selected(vi) Type of trust: Trust of money other than cash trust (third-party trust)(vii) Date of conclusion of the Trust Agreement: December 2015 (tentative)(viii) Date of entrustment of money: December 2015 (tentative)(ix) Period of the trust: From December 2015 (tentative) to expiration of the trust (the trust shall not have adefinite expiration date, but shall continue as long as the Program exists)(x) Maximum amount of money to be contributed: 500 million yen (subject period shall be the five fiscal
years from the fiscal year ending on June 30, 2016 to the fiscal year ending on June 30, 2020)(xi) Method of Acquisition of the Company’s Shares: Either through acquisition from the stock market, or
subscription to disposition of treasury stock-5-

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

As of September 30, 2015

AssetsCurrent assets
Cash and deposits

6,051

4,422

Notes and accounts receivable - trade

8,448

8,829

Merchandise

812

786

Supplies

82

83

Deferred tax assets
Others

262

262

1,320

1,100

Allowance for doubtful accounts
Total current assets

(87)

(87)

16,89015,398Fixed assets
Property, plant and equipment
Buildings and structures, net

3,288

3,240

Machinery, equipment and vehicles, net

218

226

Tools, furniture and fixtures, net

67

66

Land

7,939

7,939

Lease assets, net

2,059

1,985

73

136

13,647

13,596

1,227

1,140

535

542

1,763

1,683

1,468

1,487

85

106

Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Others

406

431

1,004

1,067

(120)

(105)

2,844

2,986

18,255

18,26635,14533,664

Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-6-

As of June 30, 2015

As of September 30, 2015

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

3,212

3,322

880

860

1,335

1,278

Income taxes payable

948

549

Accrued consumption taxes

649

441

Allowance for bonus

435

260

Allowance for sub-lease loss

15

15

Others

3,629

3,075

Total current liabilities

11,106

9,804

1,823

1,575

Long-term liabilities
Long-term loans payable
Deferred tax liabilities

14

10

Deferred tax liabilities for land revaluation

987

987

Provision for retirement benefits for directors

496

105

Allowance for sub-lease loss

28

24

Provision for retirement benefits

2,155

2,116

Asset retirement obligation

84

84

Others

1,842

2,261

Total long-term liabilities

7,433

7,166

18,54016,970Capital stock

3,390

3,390

Capital surplus

3,204

3,204

Retained earnings

10,317

10,862

Total liabilities
Net assets
Shareholders’ equity

Treasury stock(152)

Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains (losses) on securities
Revaluation reserve for land
Foreign currency translation adjustment(561)

16,75916,896

54

38

(603)

(603)

147

155

Accumulated retirement allowance adjustment

247

208

Total accumulated other comprehensive income
Total net assets

(154)

(202)

16,605

16,693

Total liabilities and net assets

35,14533,664-7-

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(First three months)(Unit: million yen)First three months of FY14
(from July 1, 2014)
to Sep. 30, 2014)

First three months of FY15
(from July 1, 2015)
to Sep. 30, 2015)

Sales

17,125

19,311

Cost of sales

14,987

16,146Gross profit

2,138

3,164

Selling, general and administrative expenses

1,722

1,871

416

1,293

Interest income

00Dividend income

10Commission fee

15

16

Equity in earnings of affiliates

935

Others

39

77

Total non-operating income

66

130

Operating income
Non-operating income

Non-operating expenses
Interest expenses

16

18

Loss on disposal of supplies

7－

Others1

1

Total non-operating expenses

25

19

456

1,403

Gain on sale of fixed assets

01

Total extraordinary income

01

Loss on disposal of fixed assets

1

1

Total extraordinary losses

1

1

Net income before tax adjustments

Ordinary income
Extraordinary income

Extraordinary loss

455

1,404

Income taxes

197

525

Net income

257

878

Net income attributable to owners of parent company

257

878

-8-

(Consolidated Comprehensive Income Statement)(First three months)(Unit: million yen)First three months of FY14
(from July 1, 2014 toSep. 30, 2014)
Income before minority interests
Other comprehensive income
Unrealized gains (losses) on securities

First three months of FY15
(from July 1, 2015 to
Sep. 30, 2015)

257

878

5

(15)

(22)

(39)

Accumulated retirement allowance adjustment
Equity of equity-method affiliate(22)

7

Total other comprehensive income (loss)
Comprehensive income

(38)

(48)

219

830

219

830

(Breakdown)
Parent company portion of comprehensive income-9-(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 three months of FY2014 (from July 1, 2014 toSeptember 30, 2014)(Unit: million yen)
Automobiletransportationrelated
Sales(1) Sales ofexternalcustomers(2) Internalsales between
business segments
or transfer
Total

Human
resources

General cargotransportation

Total

Elimination andcorporate

Consolidated

13,158

2,845

1,121

17,125-

17,125

15

70

18

104

(104)

-

13,173

2,915

1,140

17,229

666

109

78

854

Operating income

17,125

(104)

416

(438)

(Notes)
1. Elimination of -438 million yen includes corporate expense of -357 million yen, goodwill amortization of -82
million yen and elimination among the segments of 1 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.
2. Sales and profit for each reportable segment for the first three months of FY2015 (from July 1, 2015 to
September 30, 2015)(Unit: million yen)
Automobiletransportationrelated
Sales(1) Sales forexternalcustomers(2) Internalsales between
business segments
or transfer
Total
Operating income

Human
resources

General cargotransportation

Total

Elimination andCorporate (Note1)

14,817

3,178

1,315

19,311

16

87

20

124

14,833

3,266

1,335

19,435

1,438

107

254

1,800

Consolidated(Note 2)

－

(124)

(124)
(507)

(Notes)
1. Elimination of -507 million yen includes corporate expense of -420 million yen, goodwill amortization of -86
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.

- 10 -

19,311－

19,311
1,293