Financial Results for the Nine-Month Period Ended March 31, 2015
May 14, 2015
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:
Mamoru Yoshida, Director,
Tel: 044-520-0106
General Manager, Corporate Planning Department
Date of financial report submission
Date to begin payment of dividend:

May 15, 2015--

Additional materials for the financial results for 3Q FY2014
Briefing session for the financial results for 3Q FY2014

None
None

1. Consolidated Financial Results for the Nine-Month Period Ended March 31, 2015
(From July 1, 2014 to March 31, 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
Nine Months
ended March
31, 2015
Nine Months
ended March
31, 2014(Note)

Operating income%

Million yen

Ordinary income%

Million yen

Net income%

Million yen%

55,589

10.2

2,302

-2.9

2,425

-0.1

1,400

3.6

50,420

13.1

2,372

115.8

2,428

110.5

1,351

142.8

Comprehensive income:  FY2014 Third quarter
FY2013 Third quarter

1,530 million yen (8.3%)
1,413 million yen (144.7%)

Earnings per share-basic

Earnings per share-diluted

Yen

Yen

Nine Month Period Ended March 31, 2015

81.95

-

Nine Month Period Ended March 31, 2014

79.10

-

(2Consolidated Financial Position                      
Total assets

Net assets

Shareholders’ equity ratio Net assets per share

Million yen

Million yen%

Yen

As of March 31, 201535,12916,02145.6

937.37

As of June 30, 2014

32,107

14,92646.5

873.28(Ref.) Shareholders’ equity:

As of March 31, 2015: 16,021 million yen1

As of June 30, 2014: 14,926 million yen

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

At end of
2Q
Yen
8.00
8.00

At end of3Q
Yen-

FY2013
FY2014
Forecast for
FY2014(Note) Revision from the latest dividend forecast: N/A

At end of
4Q
Yen
14.10

Annual
total
Yen
22.10

15.00

23.00

3. Consolidated Forecasts for FY2014 (From July 1, 2014 to June 30, 2015)
Percentages shown below for whole FY2014 are the rates of increase or decrease compared with the previous year.

Sales
Millionyen
Whole FY2014%

Operating income

Ordinary income

MillionMillionyen

69,5002.8
2,900(Note) Revision from the latest dividend forecast: N/A

%
1.6

yen
2,950

%
0.4

Earnings

Net income
Millionyen
1,570

per share -basic
%

Yen

3.9

91.85

*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 statements
Changes in accordance with the revision of accounting standards and others: Yes
Changes other than above: Yes
Changes in accounting estimates: N/ARestatement of corrections: N/A(4) Number of issued shares (common shares)
Number of issued shares (including treasury stock) at the end of each period:
As of March 31, 2015: 17,560,242
As of June 30, 2014: 17,560,242
Number of treasury stock:
As of March 31, 2015: 467,732
As of June 30, 2014: 467,711
Average number of issued shares during the fiscal year (excluding treasury shares)
FY2014: 17,092,518
FY2013: 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 the information presently
available. Actual results may differ from those forecasts depending on various factors.

2

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 ...............................................................................................

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

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) ……………………………………………………………………………………………... 10-1-

1. Qualitative Information(1) Analysis of business performance
The nation’s economy during the first nine months of fiscal 2014 (referred to as the “current term”) maintained aweaker yen and higher stock prices against the backdrop of the government’s economic policy and the Bank ofJapan’s quantitative and qualitative easy monetary policy, and also as a result of oil prices fluctuating at a lower
range, continues to show improvements in corporate earnings and employment situation. On the other hand, while theeffect of the backlash of the last-minute rise in demand that occurred before the consumption tax rate hike isdecreasing, the progress of that recovery is slow for individual consumption, being affected by concerns over increasein commodity prices from the weaker yen. As such, the economic prospect remains unclear.
In the automobile industry, Japanese automakers’ new vehicle sales in the domestic market turned out to be 91.5% ofthat in the corresponding quarter from the previous year (hereinafter referred as “year-on-year”) (Japan Automobile
Manufacturers Association’s statistical data), as performance continued to be affected by the decline in consumer
spending from the consumption tax rate hike. In terms of vehicle models, whereas compact cars maintained a highlevel unchanged from the previous year in the face of a hike in compact car taxes in April of this year, the number ofregistrations in the mainline vehicles stayed weak, and the drop in the current term became sharper as a result ofsluggishness in new orders caused by backlash of the last-minute rise in demand that occurred before theconsumption tax rate hike. Exports to overseas markets upturned as the stronger yen was depreciated further, but
recorded 98.0% year-on-year, strongly affected by the decrease of exports to North America, the largest market. Used
car market also displayed a downward trend due to the decline in consumer spending. The breakdown indicates adownward trend in the registration of used cars which recorded a 94.2% year-on-year. On the other hand, the exportof used cars continued to grow, recording 104.7% year-on-year.
Under these circumstances, in the vehicle-related business, our Group’s major segment, sales from transportation
business related to Nissan Motor Co., Ltd., our major customer, fell due to a drop in sales of new cars by Nissan
Motor. However, we were successful in capturing new transportation demand and the overall sales of the vehiclerelated business increased year-on-year. In the human resources business, thanks to steady efforts to develop newsales regions and customers through strong sales activities and enhanced sales operations, sales increased year-onyear. Sales also increased year-on-year in the general cargo transportation business.
No. of Motor Vehicles Related to Domestic Distribution

UnitUnits

Domestic Sales
July 2013-March 2014
July 2014-March 2015
Year-on-year Change (%)
New VehiclesDomestic automakers*14,272,465
3,909,392
91.5%
Nissan Motor Co. only*1(584,583)(489,551)(83.7%)
Foreign automakers*2236,060
226,56896.0%
Used Cars
Passenger cars
*3
2,996,403
2,799,97893.4%
Mini-cars*4
2,453,338
2,336,176
95.2%
Total used cars
5,449,741
5,136,154
94.2%
Deregistered vehicles*3
244,434
199,546
81.6%

Exports
July 2013-March 2014
July 2014-March 2015
Year-on-year Change (%)
Domestic automakers’ new*1
3,471,702
3,402,287
98.0%
vehiclesNissan Motor
*1(418,492)(389,962)(93.2%)
Used passenger cars
*5
1,083,425
1,134,230
104.7%*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

As a result of these measures, our group’s financial results for the current fiscal year to March 31, 2015 recorded salesof 55,589 million yen (110.2% year-on-year) and operating income of 2,302 million yen (97.1% year-on-year), thus
posting year-on-year increase in sales but year-on-year decrease in operating income. Upon taking non-operating gains
and losses into account, ordinary income was 2,425million yen (99.9% year-on-year), and net income was 1,400
million yen (103.6% year-on-year).

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! Automobile-related BusinessIn this business segment, domestic sales of Nissan Motor Company, our major customer, continued to be affectedby the backlash of the last-minute rise in demand that occurred before the consumption tax rate hike, and posted
sales of 489,551 units (83.7% year-on-year) of new vehicles in Japan. Exports also fell, and recorded 389,962
units (93.2% year-on-year) (Japan Automobile Manufacturers Association’s statistical data). The effect of theforegoing was lower sales from transportation of new Nissan Motor cars, but on the other hand, transportation of
new and used cars other than new cars of Nissan Motor, and other transportation-related business increased yearon-year, and we increased the overall sale from our automobile-related businesses.
As a result, this segment’s sales rose to 43,182 million yen (110.8% year-on-year) and profit was managed torecord 2,707 million yen (110.5% year-on-year). The vehicle transportation business faces serious challenges,
with future demand being uncertain with the domestic automobile market having reached maturity, and thenumber of young job applicants is shrinking, reflecting the falling birthrate and the rapid aging of the population.
In pursuit of higher profitability, we continue our effort to become a corporate group capable of steadily
generating revenue by winning the trust of our customers and to maintain and increase sales by improving thequality of transportation, and in addition by strengthening and carrying out measures to reduce transportation
costs.
" 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, and posted sales of 9,088 million yen (112.7% year on year) but due to increase in recruitment costs,
etc., profits in this segment were 378 million yen (93.9% year-on-year).
# General Cargo Transportation Business
Strong sales of 3,785 million yen (101.4% year-on-year) was recorded in this business segment. However, due toincrease of outsourced work as a result of changes in the sales composition of port cargo handling, and increase in
the cost of using owner-operator vehicles, this segment posted profit of 549 million yen (89.1% 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 1,333 million yen.
(2) Analysis of the financial condition(Assets)
Compared to the end of the previous term, current assets increased by 2,136 million yen (14.9%) to 16,489 million
yen. This is chiefly due, despite the decrease of cash and deposits by 741 million yen, to the increase of notes andaccounts receivable - trade by 1,847 million yen.
Compared to the end of the previous term, fixed assets increased by 884 million yen (5.0%) to 18,639 million yen.
This is chiefly due, despite the decrease of goodwill by 160 million yen, to the increase of investment securities by
513 million yen, and buildings and structures by 269 million yen.
As a result of the foregoing, compared to the end of the previous term, total assets increased by 3,021million yen(9.4%) to 35,129 million yen.
(Liabilities)
Compared to the end of the previous term, current liabilities increased by 1,495 million yen (14.9%) to 11,562
million yen. This is chiefly due, despite the decrease of income taxes payable by 308 million yen, to the increase ofnotes and accounts payable by 819 million yen and short-term loans payable by 300 million yen.

-3-

Compared to the end of the previous term, long-term liabilities increased by 430 million yen (6.1%) to 7,544 million
yen. This is chiefly due to the increase of long-term loans payable by 210 million yen and provision for retirement
benefits by 166 million yen.
As a result of the foregoing, compared to the end of the previous term, total liabilities increased by 1,926 million yen(11.2%) to 19,107 million yen.
(Net Assets)
Compared to the end of the previous term, net assets increased by 1,095 million yen (7.3%) to 16,021 million yen.
This is chiefly due the increase of retained earnings by 968 million yen.
(3) Forecast for the next consolidated fiscal year
The forecast has not changed from the consolidated forecast published on August 8, 2014.
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)
Provisions set forth in Section 35 of the ASBJ Statement No. 26 of May 17, 2012 (hereinafter referred to as the“Accounting Standard”) and provisions set forth in Article 67 of the Guidance were applied from the current term.
The calculation method of the retirement benefit obligation cost was reviewed and the method of attributing expected
benefit to periods was also changed from straight-line attribution to benefit formula basis. In addition, the method ofdetermination of discount rate was changed from the method based on the period approximate to the expected
average remaining working lives of employees, to the method using a single weighted average discount rate reflecting
the estimated timing and amount of benefit payment.
Based on the transitional treatment prescribed in Section 37 of the Accounting Standard, in applying the Standards,
adjustments in retirement benefit obligation and service cost pursuant to changes in the calculation method have beenposted as gains/losses in retained earnings.

As a result, liabilities concerning retirement benefits at the start of the current term increased by 240 million yen, andretained earnings decreased by 155 million yen. This has no material effect on operating profits, ordinary profits andincome taxes – deferred of the current term.
(Changes in depreciation method of fixed assets)
The depreciation method that has been used in the past by our company and our domestic consolidated subsidiaries
was straight-line method, except for buildings acquired on and after April 1, 1998 (excluding building-related
equipment) and lease assets. This has been changed to declining-balance method from the previous term.
On May 15, 2014, our company concluded a capital and business alliance agreement with Tan Chong International
Limited to enter into full-scale business in the market of ASEAN countries, and in the future we expect to engage infull-scale overseas investment, including establishment of new logistics centers.
Taking the opportunity of such changes in the business environment, the depreciation method of tangible fixed assets
was reviewed to unify accounting principles within our group, both domestic and overseas, and maintaincomparability of periodic earnings. As the tangible fixed assets of our company and our domestic subsidiaries arewithin their useful lives and running stably, we have determined to change the depreciation to declining-balancemethod to expense at a constant rate over the useful life in order to more appropriately reflect the actual business
operation.
This change has no material effect on operating profits, ordinary profits and income taxes – deferred of the current
term.

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(Effect of changes in corporation tax rates, etc.)
The Act on Partial Revision of the Income Tax Act, etc. (Act No. 9 of 2015) and the Act on Partial Revision of the
Local Tax Act, etc.” (Act No. 2 of 2015) were promulgated on March 31, 2015, and corporation tax rates, etc. are to
be lowered from the consolidated fiscal periods commencing on and after April 1, 2015. 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 the previous rate of 35.3% to 32.8% with respect to the temporary difference expected to beeliminated in the consolidated fiscal year commencing on July 1, 2015, and to 32.0% with respect to the temporary
difference expected to be eliminated in the consolidated fiscal year commencing on and after July 1, 2016.
Incidentally, this change has no material effect on quarterly consolidated financial statements.

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3. Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of June 30, 2014

As of March 31, 2015

AssetsCurrent assets
Cash and deposits

5,236

4,494

Notes and accounts receivable - trade

7,492

9,340

Merchandise

324

1,043

Supplies

100

87

Deferred tax assets

269

258

Others

1,012

1,363

Allowance for doubtful accounts

(83)

(97)

14,353

16,489

3,083

3,353

172

258

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

71

67

Land

8,279

8,288

Lease assets, net

1,592

1,841

25

12

13,224

13,822

Goodwill

1,479

1,319

Others

566

532

2,045

1,851
1,503

Construction in progress
Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets
Investment securities

989

Long-term loans receivable

75

90

Deferred tax assets

523

442

Others

1,031

1,048

Allowance for doubtful accounts

(136)

(119)

Total investments and other assets

2,483

2,965

17,754

18,63932,10735,129Total fixed assets
Total assets-6-

As of June 30, 2014

As of March 31, 2015

Liabilities
Current liabilities
Notes and accounts payable - trade

3,478

4,298

610

910

1,193

1,365

Income taxes payable

792

484

Accrued consumption taxes

441

562

Allowance for bonuses

410

233

Short-term loans payable
Current portion of long-term loans payable

15

15

Others

3,125

3,692

Total current liabilities

10,067

11,562

1,663

1,874

422

479

Allowance for sub-lease loss

Long-term liabilities
Long-term loans payable
Provision for retirement benefits for directors
Allowance for sub-lease loss

44

32

2,182

2,349

193

93

1,088

987

38

83

Others

1,480

1,644

Total long-term liabilities

7,113

7,544

17,181

19,107

Capital stock

3,390

3,390

Capital surplus

3,204

3,204

Retained earnings

8,870

9,839

Treasury stock

(152)

(152)

15,313

16,282

27

50

(705)

(603)

Foreign currency translation adjustment

88

150

Accumulated retirement benefits adjustment

202

143

Total accumulated other comprehensive income

(386)

(260)

Total net assets

14,926

16,021

Total liabilities and net assets

32,10735,129Provision for retirement benefits
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Asset retirement obligation

Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains (losses) on securities
Revaluation reserve for land-7-(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(First nine months)(Unit: million yen)First nine months of FY13
(from July 1, 2013
to March 31, 2014)

First nine months of FY14
(from July 1, 2014
to March 31, 2015)

Sales

50,42055,589

Cost of sales

43,371

48,078Gross profit

7,049

7,510

Selling, general and administrative expenses

4,677

5,208

Operating income

2,372

2,302

Interest income

22

Dividend income

01Commission fee

52

45

Equity in earnings of affiliates

12

35

Others74

95

Total non-operating income

143

180

Non-operating income

Non-operating expenses
Interest expenses

56

53

Others30

3Total non-operating expenses

87

57

2,428

2,425

Gain on sale of fixed assets

66

1

Compensation receivable

62

Total extraordinary income

66

64

Loss on sales of fixed assets

00Loss on disposal of fixed assets

2

4

Loss on cancellation of leasing contract69



Others3Ordinary income
Extraordinary income

Extraordinary loss

Total extraordinary losses

75

5

Net income before tax adjustments

2,419

2,485

Income taxes

1,067

1,084

Income before minority interests

1,351

1,400

Net income

1,351

1,400

-8-

(Consolidated Comprehensive Income Statement)(First nine months)(Unit: million yen)First nine months of FY13
(from July 1, 2013 toMarch 31, 2014)
Income before minority interests

First nine months of FY14
(from July 1, 2014 toMarch 31, 2015)

1,351

1,400

Unrealized gains (losses) on securities
Accumulated retirement benefits adjustment

11


22
(59)

Equity of equity-method affiliate

4964Land revaluation difference101

Total other comprehensive income (loss)

61

129

1,413

1,530

1,413

1,530

Other comprehensive income

Comprehensive income(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 nine months of FY2013 (from July 1, 2013 toMarch 31, 2014)(Unit: million yen)
Automobiletransportationrelated
Sales(1) Sales ofexternalcustomers(2) Internalsales between
business segments
or transfer
Total
Operating income

Human
resources

General cargotransportation

Total

Elimination andcorporate(Note 1)

Consolidated(Note 2)

38,958

7,760

3,701

50,420

50,420

31

302

31

365

(365)



38,989
2,449

8,063
403

3,733
616

50,7863,469(365)(1,097)50,4202,372(Notes)
1. Elimination of -1,097 million yen includes corporate expense of -852 million yen, goodwill amortization of 247 million yen and elimination among the segments of 1 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 and loss
statement.
2. 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
Sales(1) Sales forexternalcustomers(2) Internalsales between
business segments
or transfer
Total
Operating income

Human
resources

General cargotransportation

Total

Elimination andcorporate(Note 1)

Consolidated(Note 2)

43,136

8,737

3,714

55,589

55,589

45

350

70

466

(466)



43,182
2,707

9,088
378

3,785
549

56,055
3,635(466)(1,333)55,5892,302(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 expenseof 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 and loss
statement.

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