SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the First Quarter Ended June 30, 2019
[Japanese Standards]

The financial figures in this document are based on Japanese Accounting Standards and accompanying laws. Amounts arerounded off to 1 decimal place. This document is an English translation of the Japanese-language original.

Consolidated Financial Statements for the First Quarter ended June 30, 2019
SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

https://sanix.jp

President and CEO:

Hiroshi Munemasa

Contact:

Kozo Inoue, Director, Management Corporate Officer,
General Manager of Corporate Planning Division, Administration Division andManagement & Planning Division

1. Business Results – Operating results for the First Quarter ended June 30, 2019
(April 1, 2019 to June 30, 2019)(1) Consolidated Operating Results(In Millions of Yen)First Quarter
From April 1 to June 30
FY2019%change

FY2018%change

Net Sales······························································

11,603(1.1%)

11,733

(3.0%)

Operating Income ··················································

623

499.7％

103(73.8%)

Ordinary Income ····················································

600

287.8％

154(47.2%)Net Income ···························································

436

291.5％

111(46.8%)Net Income per Share (¥) ········································

¥9.12

－

¥2.33

－

Net Income per Share, Diluted(¥)······························

－

－

－

－

(Note) Comprehensive Income ································

399

336.1％

91(58.8%)(2) Consolidated Financial Position(In Millions of Yen)
As of June 30

As of March 31
FY2018FY2019Total Assets ···························································

30,00331,009Net Assets ····························································

4,593

4,193

Shareholders’ Equity Ratio (%) ·······························

15.2%

13.4%

Net assets per share(¥) ···········································¥95.47¥87.08(Reference) Equity Capital ·······································

4,563

4,162

2. Dividends
Quarterly Period
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Annual(Dividends per Share)
FY2018 ended March 31, 2019································

0.00

FY2019 ended March 31, 2020································

0.00

FY2019 ended March 31, 2020(Forecast)··················

3. Forecasts for Consolidated Business Results (April 1, 2019 to March 31, 2020)(In Millions of Yen)
Fiscal Year 2019
From April 1 to March 31
First Half%change

Full Year%change

Net Sales······························································

24,4640.1%

50,9000.4%

Operating Income ··················································

988

43.5%

1,910

55.9%

Ordinary Income ····················································

935

35.7%

1,810

53.0%

Net Income ···························································

745

283.7%

1,370

470.5%Net Income per Share (¥) ········································¥15.58¥28.66* Notes(1) Changes in significant subsidiaries during the period(Change in scope of consolidations resulting from change in subsidiaries): None
Number of subsidiaries newly consolidated－
Name of subsidiaries newly consolidated－
Number of subsidiaries excluded from consolidation－
Name of subsidiaries excluded from consolidation－(2) Adoption of special quarterly accounting methods: None
(3) Changes in accounting policies and accounting estimates retrospective restatementⅰ) Changes in accounting policies based on revisions of accounting standard: Noneⅱ) Changes in accounting policies other than ones based on revisions of accounting standard: Noneⅲ) Changes in accounting estimates: Noneⅳ) Retrospective restatement: None
(4) Number of Issued and Outstanding Shares (Common Stock)(Shares)
End of term
June 30, 2019

March 31, 2019

Number of issued and outstanding shares ,end of period (including treasury stock)48,919,396

48,919,396

Number of treasury stock ,end of period··································································

1,114,173

1,114,173

Average number of shares during the fiscal term ······················································

47,805,223*

47,805,473* June 30, 2018

* This summary of financial statements is exempt from audit procedure required by Financial instruments and Exchange Act.
* Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may
differ significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change ineconomical conditions. For details of these assumptions, prospects and plans, and for notes appropriate use of forecasts for thebusiness results, please see page 2 of the Attachment.

Index of the attachment
1. Qualitative Information for the first quarter ended June 30, 2019.........................

2(1) Information of Consolidated Business Results .............................................................................

2(2) Information of Consolidated Financial Position ............................................................................
(3) Information on the Future Outlook,
Including the Forecasts of Consolidated Business Results ........................................................

5
5

2. Quarterly Consolidated Financial Statements and the Primary Notes for the
first quarter ended June 30, 2019 ...............................................................................................

6(1) Quarterly Consolidated Balance Sheets ........................................................................................

6(2) Quarterly Consolidated Statements of Income and Comprehensive Income ..........................

8

Quarterly Consolidated Statements of Income
for the first quarter of the fiscal year ending March 31,2020 ..................................................

8

Quarterly Consolidated Statements of Comprehensive Income
for the first quarter of the fiscal year ending March 31,2020 ..................................................

9(3) Notes regarding the Quarterly Consolidated Financial Statements ...........................................

10

Notes regarding to the Assumption of a Going Concern .......................................................

10

Notes to Remarkable Changes in the amount of Shareholders’ Equity ..............................

10

Segment Information, etc. ........................................................................................................

11

3. Others ....................................................................................................................................................

13

Consolidated Net Sales by Division ................................................................................................

13

2

1. Qualitative Information for the first quarter ended June 30, 2019(1) Information of Consolidated Business Results
In the first quarter of the fiscal year ending March 31, 2020 (April 1, 2019 to June 30, 2019),
the Japanese economy continued to follow a modest recovery path with consumer spending
showing an upward trend, backed by a steady improvement in employment and income
conditions on the back of favorable corporate earnings, despite the effect of a slowdown inoverseas economies.
Under these circumstances, the Group made an organizational change, in which it set up
the Energy Business Division and established a structure consisting of five business divisions,to expand the range of its businesses and worked to establish a stable earnings base in eachbusiness under the Medium-Term Management Plan (FY2019-FY2021), which puts priority on
establishing a stable profit structure based on existing businesses and at the same time aims
to achieve further growth by developing new businesses and services.
Sales increased in the HS Division and in the ES Division as a result of a review of theallocation of management resources, including human resources, to expand the businesssize in the previous Medium-Term Management Plan. Sales rose also in the Environment
Resources Development Business Division, reflecting the thorough acceptance inspection ofwaste plastic articles. Meanwhile, sales declined in the SE Division due to a revision of sales
prices of solar electric power systems associated with a FIT price cut. Sales fell also in the
Energy Business Division, chiefly due to a decrease in high-voltage power supply
destinations. As a result, net sales of the entire Group stood at ¥11,603 million (down 1.1%
year on year).
Profit increased in the HS Division and in the Environment Resources Development
Business Division, reflecting the increase in sales. Profit rose also in the SE Division, where
sales dropped, due to cost cutting, particularly a reduction in materials cost. As a result, forthe entire Group, operating income came to ¥623 million (up 499.7% year on year) andordinary income was ¥600 million (up 287.8% year on year). Net income attributable toowners of the parent company stood at ¥436 million (up 291.5% year on year).
Consolidated results of individual divisions for the first quarter were as follows:
The reportable segments have changed, and from the first quarter under review, theEnergy Business Division, which was part of the Environment Resources Development
Business Division, is a separate segment. The year-on-year figures are based on figures in
the new reportable segments.

3

a. SE (Solar Engineering) Division
Although declines in the solar market are gradually getting smaller, sales from solar electric
power systems fell due to the effect of a sales price revision associated with a FIT price cut.
As a result, net sales fell to ¥2,355 million (down 15.3% year on year).
Despite the significant effect of lower sales, the segment posted operating income of ¥20
million (an operating loss of ¥88 million in the same period of the previous fiscal year) due tocost cutting mainly through the transfer of staff to the HS Division and cuts in materials costs.
b. HS (Home Sanitation) Division
HS Division strengthened the sales and construction systems so that the Division would be
able to make carefully crafted proposals for the maintenance of ordinary houses by increasing
personnel through transfers and recruitment for the purpose of expanding the size of its
business. Termite extermination increased 10.8% year on year, and underfloor/ceiling
ventilation systems rose 35.4% year on year. As a result, the division’s sales rose to ¥2,948
million (up 8.7% year on year).
Operating income stood at ¥655 million (up 13.0% year on year) mainly thanks to thesignificant increase in sales, an improvement in construction efficiency and a fall in
subcontract expenses, despite a rise in costs, including a rise in personnel expensed due toan increase in staff.
c. ES (Establishment Sanitation) Division
ES Division increased personnel through transfers and recruitment for the purpose of
expanding its business size and strengthened its relationships with the owners of buildings
and condominiums and partner companies, including management companies. Sales ofanti-rust equipment installation (brand name: Daelman Shock), our main product, increased
21.6% year on year, and sales of repair of building water-works rose 42.5% year on year. As
a consequence, the division’s net sales rose to ¥487 million (up 17.4% year on year).
Operating income fell to ¥40 million (down 22.5% year on year) due to an increase in costs
such as a rise in personnel expenses associated with an increase in staff, which more thanoffset the effect of the increase in sales.
d. ERD (Environmental Resources Development) Division
Plastic fuel sales increased 15.3% year on year due to the thorough acceptance inspectionof waste plastic articles although the acceptance volume declined. Organic waste water
recycle sales rose 16.1% year on year, reflecting an increase in the acceptance volume. As aresult, net sales amounted to ¥4,093 million (up 12.2% year on year).
Operating income stood at ¥867 million (up 150.4% year on year), chiefly reflecting thoroughacceptance inspection in the waste plastic and organic waste water recycle businesses and a4

reduction in costs through the examination of costs.
e. Energy Business Division
Net sales stood at ¥2,342 million yen (down 14.4% year on year), reflecting a decline inretail sales of electric power chiefly due to a fall in the number of high-voltage power
contracts.
An operating loss of ¥41 million (operating income of ¥93 million in the same period of theprevious fiscal year) was posted due to the significant effect of the decrease in net sales.

5(2) Information of Consolidated Financial Position
Total assets as of the end of the first quarter under review amounted to ¥30,003 million, adecrease of ¥1,005 million from the end of the previous fiscal year, which was caused chiefly
by a fall in cash and deposits of ¥528 million and a decrease in notes and accounts
receivable-trade of ¥1,039 million yen. Total liabilities stood at ¥25,410 million, a decline of¥1,405 million from the end of the previous fiscal year, which was attributable largely todecreases in notes and accounts payable-trade of ¥392 million, short-term loans payable of¥843 million and accounts payable-other of ¥758 million. Net assets totaled ¥4,593 million, an
increase of ¥399 million from the end of the previous fiscal year. The key contributions to theincrease included the posting of net income attributable to the owners of the parent companyof ¥436 million.
Consequently, the capital-to-asset ratio for the first quarter of the fiscal year under review
came to 15.2%, an increase from 13.4% at the end of the previous fiscal year.

(3) Information on the Future Outlook, Including the Forecasts of Consolidated BusinessResults
There is no change in the forecast of consolidated business results for the current fiscal
year ending March 31, 2020, from the forecasts announced on May 14, 2019.

6

2. Quarterly Consolidated Financial Statements and the Primary Notes for the
first quarter ended June 30, 2020
(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of March 31

As of June 30

FY2017FY2018Assets :Current Assets :Cash and deposits

5,238

4,709

Notes and accounts receivable-trade

6,010

4,970

Merchandise and finished goods

1,019

450

Work in process-construction

122

209

Raw materials and supplies

3,546

3,691

975

1,027

Other

(299)

(287)

16,613

14,773

Buildings and structures (net of depreciation)

1,901

1,854

Machinery, Equipment and Vehicles(net of depreciation)

1,355

1,513

Land

7,811

7,828

Allowance for doubtful accounts
Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Other, net
Total Property, Plant and Equipment

989

1,739

12,057

12,936262

267

Investments and Other Assets :

2,074

2,026

Total Fixed Assets

14,395

15,23031,00930,003

Intangible Fixed Assets

Total Assets

7(In Millions of Yen)

As of March 31

As of June 30

FY2017FY2018

Liabilities :Current Liabilities :Notes and accounts payable-trade

4,188

3,795

Short-term loans payable

12,297

11,454

143

143

3,930

3,172

462

625

Provision for bonuses

494

Allowance for resource-recycling expenses

12

11

Current portion of long-term loans payable
Accounts payable
Accrued income taxes

Other
Total Current Liabilities

2,488

2,666

23,52921,964

210

177

9

9

Non-Current Liabilities :Long-term loans payable
Provision for directors’ retirement benefits
Provision for disposal site closing expenses
Liability Related to Retirement Benefits

603

607

1,642

1,653

819

998

3,285

3,446

26,81525,41014,041

14,0411

1Retained earnings(8,357)(7,921)

Treasury stock(1,481)(1,481)

Total Shareholders’ Equity

4,204

4,641

Other
Total Non-Current Liabilities
Total Liabilities
Net Assets :Shareholders’ Equity :Capital stock
Capital surplus

Valuation and translation adjustments :Valuation difference on available-for-sale securities

60

50

Foreign currency translation adjustment

(17)

(63)

Adjustment for Retirement Benefits (Cumulative)

(85)

(64)

Total Other comprehensive income

(42)

(77)

31

29

Non-controlling Interests
Total Net Assets

4,193

4,593

Total Liabilities and Assets

31,00930,003

8(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(For the first quarter of the fiscal year ending March 31, 2020)(In Millions of Yen)First Quarter
From April 1 to June 30
FY2018FY2017

Net sales

11,733

11,603

Cost of sales

8,193

7,339

Gross profit

3,540

4,263

Selling, general and administrative expenses

3,436

3,640

103

623

Interest income

1

3

Dividends income

1

1Land and house rent revenue

16

15

Foreign exchange gains

11

1

Subsidy income

0-Compensation income

70

-

Other

6

12

107

33

Interest expenses

47

50

Other

8

5

Operating income (loss)
Non-operating income :Total non-operating expenses
Non-operating expenses :56

56

Ordinary income (loss)

154

600

Income (loss) before income taxes and minority interests

154

600

Income taxes-current

88

136

Income taxes-deferred

(42)

29

Total income taxes

43

165

Net Income

111

434

Net Income (loss) attributable to the non-controlling shareholders
Net income (loss) attributable to the shareholders of the parent
company

(0)

(1)

111

436

Total non-operating expenses

9(Quarterly Consolidated Statements of Comprehensive Income)(For the first quarter of the fiscal year ending March 31, 2020)(In Millions of Yen)First Quarter
From April 1 to June 30
FY2018FY2017111

434

Share of other comprehensive income of associates accounted forusing equity method

(8)

(10)

Deferred gains or losses on hedges

0

-

(13)

(46)

Income before minority interests
Other comprehensive income :Foreign currency translation adjustment
Retirement benefit adjustment
Total other comprehensive income
Comprehensive net income

0

21

(19)

(34)

91

399

91

401

(0)

(1)

Comprehensive net income attributable toComprehensive net income (loss) attributable to non-controllingshareholders
Comprehensive net income (loss) attributable to the shareholdersof the parent company

10(3) Notes regarding the Quarterly Consolidated Financial Statements(Notes regarding the Assumption of Going Concern): None(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None11(Segment Information, etc.)
Ⅰ The previous first quarter (From April 1, 2018 to June 30, 2018)
Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

Segments

Sales:
Sales to customers
Internal sales among
segments

Operating income

Consolidated(note 2)

SE

HS

ES

ERD

Energy

Total

2,779

2,711

415

3,091

2,735

11,733-

11,733

-

-

-

556

-

556

(556)

-

2,779

2,711

415

3,647

2,735

12,289(556)

11,733

(88)

580

52

346

93

984

(880)

103

And transfer accounts
Total

Elimination
or Group(note 1)

(note 1)
Negative ¥880 million for adjustments of Operating income (loss) represents corporate expenses not allocated toreportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income is adjusted to operating loss of quarterly consolidated statements of income.

Ⅱ The first quarter (From April 1, 2019 to June 30, 2019)
1.Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

SE

HS

ES

ERD

EnergyTotal

Elimination
or Group(note 1)

2,355

2,948

487

3,469

2,342

11,603-

11,603

-

-

-

(624)

-

(624)

(624)

-

2,355

2,948

487

4,093

2,342

12,227(624)

11,603

20

655

40

867

(41)

1,542

(919)

623

Segments

Sales:
Sales to customers
Internal sales among
segments
And transfer accounts
Total
Operating income (loss)

Consolidated(note 2)

(note 1)
Negative ¥919 million for adjustments of Operating income (loss) represents corporate expenses not allocated toreportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

12

2. Change in Reportable Segments
The reportable segments have been changed in association with an organizational change made on April 1,
2019. From the first quarter under review, the Power Producer and Supplier (PPS) business, which was includedin the Environmental Resources Development (ERD) Division, and the energy business development department,
which was established on April 1, 2019, are presented as the Energy Business Division. The segment information
for the first quarter of the previous fiscal year is prepared based on the reportable segments after theorganizational change.

13

3. OtherConsolidated Net Sales by Division(In Millions of Yen)

From April 1 to June 30

Changes

FY2018FY2017
2,602

2,262

(339)

Wholesale of PV components

114

61

(52)

Others

62

31

(31)

Commercial PV system

Solar Engineering Total

2,779

2,355

(424)

Termite Eradication Service

925

1,024

99

Under-Roof/Roof Ventilation System

411

557

145

Foundation Repairing/Home Reinforcement
System

571

517

(54)

Others

803

848

45

Home Sanitation Division Total

2,711

2,948

236

Anti-rust equipment installation

206

250

44

Repair of building water-woks

75

108

32

Water proofing of building

34

32

(2)

98

96

(2)

415

487

72

2,052

2,367

315

817

868

50

409

475

65

203

248

44

164

134

(30)

3,647

4,093

446

2,735

2,338

(396)

-

3

3

Energy Business Division Total:

2,735

2,342

(393)

Adjustment of inter-segment sales

(556)

(624)

(67)

Total Net Sales

11,733

11,603(130)

OthersEstablishment Sanitation Division Total
Plastic fuelPower Stations
Industrial waste
Recycle)(Organic

Waste

Water

Final disposal
OthersEnvironmental
Division Total :Resources

Electricity sales
OthersDevelopment(note)
Items whose quantity is difficult to grasp because of their wide variety are omitted from the statements.