Kyoritsu Maintenance Co., Ltd.
(Securities Code: 9616)

First Quarter of the Fiscal Year Ending March 2018
Consolidated Earnings Results Update
August 20171

First Quarter of the Fiscal Year Ending March 2018 Consolidated Earnings Announcement
August 9, 2017

Company Name: Kyoritsu Maintenance Co., Ltd.
Tokyo Stock Exchange
Stock Code: 9616, URL: http://www.kyoritsugroup.co.jp/
Director: Takumi Ueda, President
Contact: Koji Nakamura, Director, General Manager of Management Planning Department; Tel: +81-3-5295-7778
Quarterly Earnings Announcement Report Filing Date (Anticipated): August 10, 2017
Dividend Payment Date (Anticipated): ―Quarterly Earnings Presentation Document (Anticipated): Yes
Quarterly Earnings Presentation Meeting (Anticipated): None
(All figures of less than one million yen are rounded down to the nearest digit)
1. First Quarter of the Fiscal Year Ending March 2018 Consolidated Earnings (April 1, 2017 to June 30, 2017)(1) Consolidated Earnings (Aggregated)(% figures show year-on-year change)
Net Sales

Operating Income

Profit Attributable to Ownersof Parent

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

34,314

5.8

2,507

1.4

2,491

9.5

1,531

27.1

32,442
12.9
2,472
33.3
2,275
39.5
1,204
1Q FY3/17(Note) Comprehensive income: ¥1,555 million (103.1% YoY) in 1Q FY3/18; ¥766 million (-23.5% YoY) in 1Q FY3/17

27.5

1Q FY3/18

EPS

Fully Diluted EPS

1Q FY3/18

Yen

Yen

39.49

36.19

31.13
28.46
1Q FY3/17(Note) The Company carried out a stock split on April 1, 2017, at a ratio of two shares per one common share. Accordingly, EPS andfully diluted EPS have been calculated presuming that this stock split was carried out at the start of the previous consolidated fiscal year.
(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Book Value Per Share

Millions of yen

Millions of yen%

Yen

180,118

65,33236.3

1,683.26

1Q FY3/18

FY3/17
173,609
64,32037.0
1,660.61(Reference) Capital: ¥65,332 million in 1Q FY3/18; ¥64,320 million in FY3/17(Note) The Company carried out a stock split on April 1, 2017, at a ratio of two shares per one common share. Accordingly, book value
per share has been calculated presuming that this stock split was carried out at the start of the previous consolidated fiscal year.
2. Dividend Conditions
Dividend Per Share
1Q-End2Q-EndYen

FY3/17―

FY3/18―3Q-EndYen
26.00

4Q-End
Yen

Total
Yen
36.00

―

Yen
62.00

FY3/18 (Projected)
18.00
―
18.00
(Note) Recent changes in dividend projections: None
(Note) The Company carried out a stock split on April 1, 2017 at a ratio of two shares per one common share. The actual dividend
amount prior to the stock split is noted here for the fiscal year ended in March 2017.

36.00

3. The Fiscal Year Ending March 2018 Consolidated Earnings Estimates (April 1, 2017 to March 31, 2018)(% figures show year-on-year change for the full year and quarter)
Net Sales

Operating Income

Profit Attributable to
Owners of Parent

Ordinary Income

EPS

Millions of yen% (YoY)

Millions of yen% (YoY)

Millions of yen% (YoY)

Millions of yen% (YoY)Yen

74,000

8.1

6,700

(6.6)

6,400

(6.7)

4,300

0.7

111.02

Full Year
148,200
9.1
12,200(Note) Recent changes in earnings estimates: None

3.3

11,700

1.6

8,000

12.1

206.54First Half

2

Notes(1) Important changes in our subsidiaries, including changes to the scope of our consolidation: None
(2) Application of special accounting procedures in the preparation of our quarterly consolidated financial statements: Applicable(Note) Please refer to “2. Quarterly Consolidated Financial Statements and Important Notes, (3) Quarterly consolidated financial
statement notes (Application of special accounting procedures in the preparation of our quarterly consolidated financial
statements)” on page 11 for more details.
(3)

Changes in the accounting policies, procedures, and changes or revisions in the display of accounting estimates:
1. Changes accompanying revisions in accounting standards:
None
2. Other changes:
None
3. Changes in accounting estimates:
None
4. Redisplay of revisions:
None

(4)

Shares Issued (Common Stocks)
1. Shares issued as of term-end (including treasury shares)
2. Treasury stock as of term-end
3. Average during the term (first three months)

1Q FY3/18
1Q FY3/18
1Q FY3/18

39,035,599
222,700
38,772,463

FY3/17
FY3/17
1QFY3/17

38,954,452
221,546
38,690,672(Note) The Company carried out a stock split on April 1, 2017, at a ratio of two shares per one common share. Accordingly, sharesissued (common stock) has been calculated presuming that this stock split was carried out at the start of the previous
consolidated fiscal year.
* The earnings announcement is exempt from quarterly review practices.
* Notes and explanations regarding the appropriate use of our earnings projections:
All earnings estimates and forward-looking statements in this document are based on the best information available and rational
decisions of management at the time of its creation, and actual earnings may diverge largely from those estimates and forward-looking
statements put forward in this document due to various unforeseen factors. Moreover, for information regarding earnings estimates
and the assumptions upon which they are based, and the usages of these earnings estimates, please refer to the section, “1. Qualitative
Information about Quarterly Earnings, (3) Explanation of future forecasts including consolidated earnings estimates” on page 6.
(Method for obtaining supplementary explanatory information on financial results)
The Company will post supplementary explanatory information on financial results on its website.

3

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement
Index
1. Qualitative Information about Quarterly Earnings

5(1) Explanation of business performance5(2) Explanation of financial position

6(3) Explanation of future forecasts including consolidated earnings estimates6

2. Quarterly Consolidated Financial Statements and Important Notes

7(1) Quarterly consolidated balance sheet

7(2) Quarterly consolidated income statement and comprehensive income statement

9

Quarterly consolidated income statement

9

Consolidated first quarter

9

Quarterly consolidated comprehensive income statements
Consolidated first quarter1010(3) Quarterly consolidated financial statement notes

10(Notes regarding going concern assumptions)11(Significant changes in shareholders’ equity notes)

11(Application of special accounting procedures in the preparation of11

our quarterly consolidated financial statements)(Segment information)

11
11

4

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement
1. Qualitative Information about Quarterly Earnings(1) Explanation of business performance
During the first quarter of the consolidated fiscal year ending March 31, 2018, growth in inbound demand, a higher
percentage of students going on to higher-level schools, and an increase in the number of foreign students improved theGroup’s business environment. However, the Group also faced skyrocketing construction costs, a labor shortage, and theentry of other industries into the dormitory business and hotel business, the Group’s core businesses. These factors made it
all the more essential that we build a solid business foundation as soon as possible to utilize our advantages even more.
In this environment, the Group established the Kyoritsu Jump Up Plan, the five-year medium-term management plan thatbegins this fiscal year, endeavoring to improve customer satisfaction and pursue advanced developments.
As a result, during the first quarter of the current fiscal year, both revenue and earnings increased. Sales rose 5.8% year on
year to ¥34,314 million, and operating income increased 1.4% to ¥2,507 million after absorbing preparation costs for hotel
openings through advance development. Ordinary income was up 9.5% to ¥2,491 million. Profit attributable to owners ofparent climbed 27.1% over the previous year to ¥1,531 million.
We provide details of our earnings by business segment as follows.
Dormitory businessOur dormitory business got off to a solid start with a 98.3% occupancy rate at the beginning of the fiscal term, the same as
the previous year, and an increase of 471 year on year in the total number of contracted residents to 35,039 residents as of theend of June. In addition, student dormitories trended favorably during the first quarter of the current fiscal year, while
corporate dormitories achieved substantial gains in the number of contracts due to an increase in the number of companies
now opting to offer employee dormitories.
Consequently, sales rose by 3.6% year on year to ¥11,960 million, while operating income increased a modest 2.0% to¥2,002 million due to a rise in preparation costs for the opening of new dormitories.
Hotel businessIn the Dormy Inn (business hotel) business, the “Myojin no Yu Dormy Inn Premium Kanda” and the “Natural Springs
Hyuga no Yu Dormy Inn Miyazaki” opened in the first quarter. Occupancy rates and Average Daily Rate exceeded levelsin the previous year at existing hotels due to a sharp increase in inbound demand and solid demand from repeat customers.
In the resort hotel business, the occupancy rate was high, exceeding overall levels in the previous year, and Average Daily
Rate trended at high levels. In addition, cost management was thorough due to flexible personnel assignments tailored tooccupancy conditions.
As a result, sales rose 15.6% year over year to ¥15,464 million and operating income increased 8.5% to ¥1,284 million,
absorbing ¥275 million in preparation costs for the opening of new hotels.
Contracted services businessIn the contracted services business, both revenues and earnings decreased year on year due to the impact of major
construction work in the same period in the previous year. As a result, sales decreased 9.4% to ¥2,998 million and operating
income fell by 24.5% year on year to ¥42 million.

Food service business
The food service business recorded higher sales due to an increase in the number of contracted hotel restaurants.
Consequently, sales increased by 1.6% to ¥1,553 million and operating loss was ¥6 million in comparison with an operating
loss of ¥16 million in the same quarter of the previous fiscal year.
Construction businessIn the construction business, revenue rose but earnings declined due to a drop in the development of built-for-salecondominiums, which have relatively high profitability. Consequently, sales rose by 5.2% to ¥5,304 million and operating
income fell 66.0% year on year to ¥79 million.

5

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement
Other business
Our other business segments are the Senior Life business (management of senior citizen housing), the PKP business(consigned services business provided to regional government bodies), single life support business and insurance agency
business, comprehensive human resource services business, and financing and administrative outsourcing services. The otherbusiness segments posted total net sales of ¥2,987 million, an increase of 6.4% year on year, and incurred an operating lossof ¥135 million, in comparison with an operating loss of ¥87 million in the same period of the previous fiscal year.
(2) Explanation of financial position(Assets)
Total consolidated assets increased by ¥6,508 million from the end of the previous fiscal year to ¥180,118 million at the end of
the first quarter. The main factors behind this increase were increases in land and construction in progress, etc.
(Liabilities)
Total consolidated liabilities increased by ¥5,496 million from the end of the previous fiscal year to ¥114,785 million at theend of the first quarter, due primarily to an increase in short-term loans payable.
(Net assets)
Net assets grew by ¥1,011 million from the end of the previous fiscal year to ¥65,332 million at the end of the first quarter,due mainly to a rise in retained earnings.
Consequently, equity ratio fell by 0.7 p.p. from the end of the previous fiscal year to 36.3% at the end of the first quarter.
(3) Explanation of future forecasts including consolidated earnings estimates
Our consolidated earnings estimates for the first six months and the full fiscal year ending March 31, 2018, as provided in the“Fiscal Year Ending March 2018 Consolidated Earnings Announcement” dated May 15, 2017, remain unchanged at this point
in time.

6

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement
2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly consolidated balance sheet
FY3/17(March 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Real estate for sale
Costs on uncompleted construction contracts
Other
Allowance for loan losses
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Lease deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

7(Unit: Millions of yen)
1Q FY3/18(June 30, 2017)15,210
8,643
920
420
7,179
(23)
32,35013,915
9,417
797
319
8,161
(26)
32,58640,251
37,77017,373
2,698
98,094
2,957

39,08540,517
20,7292,736
103,068
3,663

5,032
14,561
11,526
8,979(206)
39,892140,944313
173,609

5,170
14,552
11,8459,138(210)
40,497
147,229302
180,118

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement(Unit: Millions of yen)
1Q FY3/18(June 30, 2017)

FY3/17(March 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Advances received
Provision for bonuses
Provision for directors’ bonuses
Provision for warranties for completed construction
Provision for point card certificates
Provision for loss on disaster
Other
Total current liabilities
Non-current liabilities
Bonds payable
Convertible bond-type bonds with subscription
rights to shares
Long-term loans payable
Director retirement benefit reserve
Provision for point card certificates
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

8

6,230
17,3982,950
2,175
11,431
1,829
486
8
18
30
9,920
52,477

6,358
28,160
2,950
973
9,706
481
97
8
18
25
11,85760,63818,65017,925

20,511

20,354

11,842
287
28
1,102
4,389
56,811
109,289

9,855
285
33
1,116
4,578
54,147
114,785

7,703
12,55843,888(321)
63,829

7,781
12,63744,722(325)
64,816

834
(356)
13
491
64,320173,609

947
(443)
11
516
65,332
180,118

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement(2) Quarterly consolidated income statement and comprehensive income statement(Quarterly consolidated income statement)(Consolidated first quarter)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on investments in partnership
Other
Total non-operating income
Non-operating expense
Interest payment
Sales discounts
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Surrender value of insurance
Total extraordinary income
Extraordinary losses
Impairment loss
Provision for loss on disaster
Dismantlement costs
Other
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit attributable to owners of parent

9

1Q FY3/17(April 1, 2016 toJune 30, 2016)
32,442
25,520
6,922
4,449
2,472

(Unit: Millions of yen)
1Q FY3/18(April 1, 2017 toJune 30, 2017)34,314
26,660
7,654
5,147
2,507

18
23
－
46
87

14
26
143
32
218

163
48
72
285
2,275

133
48
52
233
2,491

–
–

25
25

89
236
－
27
353
1,921
717
1,204
1,204

－
－
115
－
115
2,402
871
1,531
1,531

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement(Quarterly consolidated comprehensive income statements)(Consolidated first quarter)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to owners of parent

10

1Q FY3/17(April 1, 2016 toJune 30, 2016)
1,204(Unit: Millions of yen)
1Q FY3/18(April 1, 2017 toJune 30, 2017)
1,531

(62)
(378)
3
(438)
766

112
(86)
(1)
24
1,555

766

1,555

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement(3) Quarterly consolidated financial statement notes(Notes regarding going concern assumptions)Not applicable(Significant changes in shareholders’ equity notes)
Not applicable(Application of special accounting procedures in the preparation of our quarterly consolidated financial statements)(Calculation of tax expense)
The Company applies the method that reasonably estimates an effective tax rate to be assessed on income before income
taxes for the year ending March 31, 2018, including this three months ended June 30, 2017, after accounting for the tax
effects, and multiplies income before income taxes during the three months ended June 30, 2017 by this estimated effective
tax rate. However, in the event that the estimate for the effective tax rate appears to lack logical rationale, then the legally
determined effective tax rate is employed.
(Segment information)
Segment information
I. First quarter of the fiscal year ended March 2017 (From April 1 to June 30, 2016)
1. Information pertaining to segment sales, profits and losses(Unit: Millions of yen)
Reporting segments
Other(Note 1)

Total

Adjustments(Note 2)

Consolidated(Note 3)

Dormitories

HotelsContracted
Services

11,48813,346

1,755

453

2,709

29,7552,687

32,442－32,442

57

32

1,553

1,075

2,333

5,051

120

5,172

(5,172)－

Total

11,546

13,379

3,309

1,529

5,042

34,806

2,808

37,615(5,172)32,442

Segment profit/loss

1,963

1,184

55

(16)

233

3,420

(87)

3,332

(860)

2,472

Food
Services

Construction

Subtotal

Sales
External sales
Inter-segment sales
and transfers(Notes) 1. Other is not considered as a reporting business segment and is comprised of the Senior Life (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life support
services, insurance agency business, comprehensive human resources, financing, administrative outsourcing services andother related services.
2. Adjustment for segment profit and loss of ¥860 million includes ¥216 million for inter-segment transaction eliminations,and ¥643 million in companywide expenses that cannot be allocated to specific reporting segments. Companywide
expenses are primarily those expenses arising from the accounting and management divisions.
3. Segment profits or losses are derived by adjusting the operating income used in the quarterly consolidated income
statement.

2. Impairment accounting losses and goodwill amortization of fixed assets by reporting segments
In the contracted services segment, the Company lowered the book value amount to the recoverable amount forrental properties whose recoverable amount decreased significantly as a result of changes in the range of use. Thisdecrease was recorded as an impairment loss under extraordinary losses.
An impairment loss of ¥89 million was posted in the first quarter of this fiscal year.

11

Kyoritsu Maintenance (9616), 1Q FYE March 2018 Earnings Announcement
II. First quarter of the fiscal year ended March 2018 (From April 1 to June 30, 2017)
1. Information pertaining to segment sales, profits and losses(Unit: Millions of yen)
Reporting segments
Other(Note 1)

Total

Adjustments(Note 2)

Consolidated(Note 3)

Dormitories

HotelsContracted
Services

External sales

11,88815,419

1,674

447

2,022

31,452

2,862

34,314－34,314

Inter-segment
sales andtransfers

71

44

1,324

1,105

3,282

5,828

125

5,954

(5,954)－

Total

11,96015,464

2,998

1,553

5,304

37,281

2,987

40,269(5,954)34,314

Segment
profit/loss

2,002

1,284

42

(6)

79

3,401

(135)

3,266

(758)

2,507

Food
Services

Construction

Subtotal

Sales(Notes) 1. Other is not considered as a reporting business segment and is comprised of the Senior Life (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life support
services, insurance agency business, comprehensive human resources, financing, administrative outsourcing services andother related services.
2. Adjustment for segment profit and loss of ¥758 million includes ¥31 million for inter-segment transaction eliminations,and ¥727 million in companywide expenses that cannot be allocated to specific reporting segments. Companywide
expenses are primarily those expenses arising from the accounting and management divisions.
3. Segment profits or losses are derived by adjusting the operating income used in the quarterly consolidated income
statements.

2. Impairment accounting losses and goodwill amortization of fixed assets by reporting segmentsNone12