[Translation]
Consolidated Business Results for the Second Quarter of the Fiscal Year Ending March 31, 2020
[U.S. GAAP]
October 31, 2019
Listed Company: Wacoal Holdings Corp.
Code Number: 3591
(URL: https://www.wacoalholdings.jp/)
Representative: Position: Representative Director and President
Name: Hironobu Yasuhara
For Inquiries: Position: Managing Director, General Manager of Corporate Planning
Name: Akira Miyagi

Stock Exchange: Tokyo

Tel: +81 (075) 682-1010

Scheduled quarterly report submission date:November 12, 2019
Scheduled dividend payment start date:
December 3, 2019
Supplementary materials regarding quarterly business results: Yes
Explanatory meeting regarding quarterly business results:
Yes(Amounts less than 1 million yen have been rounded )1.

Second Quarter of the Fiscal Year Ending March 31, 2020 (April 1, 2019 – September 30, 2019)(1)

Consolidated Business Results(% indicates increase (decrease) from the corresponding period of the previous fiscal year)

Net Sales

Millions of Yen

Operating Income%

Second Quarter ended
101,450 (0.4)
September 30, 2019
Second Quarter ended
101,815 (0.2)
September 30, 2018
(Note)
Quarterly comprehensive income:Second Quarter ended
September 30, 2019
Second Quarter ended
September 30, 2018(2)

Millions of Yen%

Income Before
Income Taxes andEquity in Net Incomeof AffiliatedCompanies
Millions of Yen%

Net Income
Attributable to
Wacoal Holdings
Corp.
Millions of Yen

%

9,495

5.6

9,326

(42.8)

6,668(41.5)

8,994

(5.4)

16,311

48.2

11,391

53.2

3,979 million yen ((66.2) %) for the second quarter ended
September 30, 201911,759 million yen ((7.1) %) for the second quarter ended
September 30, 2018

Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Diluted Net Income
Attributable to
Wacoal Holdings
Corp. Per Share

Yen

Yen

103.07102.67170.35169.73

Consolidated Financial Condition

As of September 30, 2019
As of the end of Fiscal
Year (March 31, 2019)

Total Assets

Total Equity(Net Assets)

Total
Shareholders’EquityTotal
Shareholders’Equity Ratio

Millions of Yen

Millions of Yen

Millions of Yen%

296,674

219,128

214,45472.3

3,350.39

281,767

221,144

216,49476.8

3,321.57

Shareholders’Equity Per Share
Yen

2.

Status of Dividends

End of First
Quarter

Annual Dividend
End of Second End of Third
Quarter
Quarter

Yen

Yen

Yen

Fiscal Year Ended March 31, 2019
–
36.00
–
Fiscal Year Ending March 31, 2020–
40.00
Fiscal Year Ending March 31, 2020–
(Estimates)(Note) Revision of estimated dividends announced during the latest quarter: None
(Note)

3.

Year-End

Total

Yen

Yen

36.00

72.00

40.00

80.00

Breakdown of the end of second quarter cash dividend per share for the fiscal year ending March 31, 2020:
Ordinary dividend: 36.00 yen
Special anniversary dividend: 4.00 yen
Breakdown of the year-end cash dividend per share for the fiscal year ending March 31, 2020 (Estimates):
Ordinary dividend: 36.00 yen
Special anniversary dividend: 4.00 yen
Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2020 (April 1, 2019 - March 31,
2020)(% indicates increase (decrease) from the previous fiscal year)

Net Sales

Millions of Yen %Operating
IncomeIncome Before
Income Taxes
Net Income
Net Income
and Equity in Net Attributable toAttributable to
Income of
Wacoal Holdings Wacoal Holdings
AffiliatedCorp.
Corp. Per Share
Companies

Millions of Yen % Millions of Yen %Millions of Yen %YenAnnual
200,000 3.0 11,000 125.5
12,000 444.7
9,000
139.12(Note) Revision of forecast of consolidated business results announced during the latest quarter: None

Notes(1)

Changes in significant subsidiaries in the consolidated cumulative second quarter of the current fiscal year (i.e.
changes in specified subsidiaries (tokutei kogaisha) which involve change in scope of consolidation): None

(2)

Application of simplified accounting methods and specific accounting methods: None

(3)

Changes in accounting principles:(i) Changes due to modifications in accounting standards, etc.: Yes(ii) Changes other than (i) above: None
(Note) For details, please see “2. Consolidated Quarterly Financial Statements and Accompanying Notes (5)Notes to Consolidated Quarterly Financial Statements (Changes in Accounting Policy).”(4)

Number of Issued Shares (Common Stock)
Second Quarter ended
September 30, 2019
(i)
(ii)
(iii)

Number of issued shares (including
treasury stock) as of the end of:
Number of shares held as treasury
stock as of the end of:
Average number of shares duringconsolidated second quarter (second
quarter ended September 30):

Fiscal Year ended
March 31, 2019

68,589,042 shares

70,689,042 shares

4,580,395 shares

5,510,891 shares

64,694,162 shares

66,866,299 shares*These quarterly financial statements are exempt from the review procedures.

*Cautionary Statement regarding Forecast of Business Results(Cautionary note on forward-looking statements)
The forecast of business results is based on reasonable information we obtained as of the date hereof and, due to various
risks, uncertainties and other factors arising in the future, actual results in the future may differ largely from the estimates
set out in this document.

Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the Second Quarter -------------------------- 2(1)

Qualitative Information regarding Consolidated Business Results ------------------------------------------------------ 2(2)

Qualitative Information regarding Consolidated Financial Condition --------------------------------------------------- 6(3)

Qualitative Information regarding Forecast of Consolidated Business Results ---------------------------------------- 7

2.

Consolidated Quarterly Financial Statements and Accompanying Notes ----------------------------------------------- 8(1)

Consolidated Quarterly Balance Sheets -------------------------------------------------------------------------------------- 8(2)

Consolidated Quarterly Statements of Income ---------------------------------------------------------------------------- 10(3)

Consolidated Quarterly Statements of Comprehensive Income -------------------------------------------------------- 10(4)

Consolidated Quarterly Statements of Cash Flows ----------------------------------------------------------------------- 11(5)

Notes to Consolidated Quarterly Financial Statements ------------------------------------------------------------------ 12(Notes on Going Concern) -------------------------------------------------------------------------------------------------- 12(Notes on Significant Changes in the Amount of Total Shareholders’ Equity) -------------------------------------- 12(Changes in Accounting Policy) -------------------------------------------------------------------------------------------- 12(Segment Information) ------------------------------------------------------------------------------------------------------- 13(6)

Status of Sales ----------------------------------------------------------------------------------------------------------------- 14

-1-

1.

Qualitative Information regarding Consolidated Performance during the Second Quarter(1)

Qualitative Information regarding Consolidated Business Results(i)Performance Overview of the Six Months ended September 30, 2019

Net sales
Cost of sales
Sales profit
Selling, general and administrative expenses
Operating income
Other income (expenses)
A: Valuation gain (loss) on marketable securities andinvestments – net
Income before income taxes and equity in net incomeof affiliated companies
Net income attributable to Wacoal Holdings Corp.
Reference figure: Income before income taxes and equity
in net income of affiliated companies not taking into
account A

Previous Cumulative
Second Quarter(From April 1, 2018 toSeptember, 2018)
Amount101,815
46,33055,48546,491
8,994
1,657
5,660

Current Cumulative
Second Quarter(From April 1, 2019 to
September 30, 2019)
Amount101,450
44,99256,45846,963
9,495
789
(958)

(Millions of Yen)
Increased/(Decreased) fromprevious cumulative second
quarter
Amount(365)(1,338)
+973
+472
+501
(868)
(6,618)

%
(0.4)
(2.9)
+1.8
+1.0
+5.6
(52.4)-

16,311

9,326(6,985)(42.8)

11,391

6,668(4,723)(41.5)

10,651

10,284

(367)

(3.4)

Our group entered the first year of our mid-term business plan. In order for our business to return to growth,
Wacoal Corp. has focused on rebuilding relationships with customers through innovation, including opening of innerwear
shops for the next generation that have introduced 3D body scanning and AI (artificial intelligence), and on further
improving profitability. In the overseas markets, we have made efforts to create growth opportunities and to strengthen ourcompetitiveness in e-commerce in each country. As a part of such initiative, we acquired all of the issued and outstanding
shares of Intimates Online, Inc. (“Intimates Online”), a women’s innerwear design and sales company in the U.S. under its
LIVELY brand, at the end of July 2019, making Intimates Online our wholly-owned subsidiary. On the other hand, ourdomestic subsidiaries have shifted toward a business framework that can generate stable earnings by being selective about
and concentrating its businesses.
The operating results of our acquired subsidiary, Intimates Online, have been included in our consolidated resultsfrom the current second quarter and are disclosed along with Wacoal International Corp. (the United States) under the“Wacoal Business (Overseas)” segment.
Consolidated sales for the six months ended September 30, 2019 (April 1, 2019 – September 30, 2019) remained atabout the same level as such sales for the corresponding period of the previous fiscal year. Revenue from our domestic
business increased due to positive factors including the last-minute demand before the consumption tax increase. Despite
the positive impact of the consolidation of Intimates Online results, revenue from our overseas business decreased due tothe negative impact of exchange rate fluctuation, in addition to the weak sales from our existing business in the UnitedStates and our raw materials factory in Thailand. Revenue from Peach John business remained at about the same level assuch revenue for the corresponding period of the previous fiscal year, while revenue from our other business segment
decreased.
Consolidated operating income increased by 6% from such operating income for the corresponding period of theprevious fiscal year. In our domestic business, we recorded an increase in profit due to increased revenue. Our overseas
business saw a profit decrease due to the impact of the inclusion of operating loss for Intimates Online, and the recognitionof non-recurring expenses incurred for the acquisition, in addition to decreased revenue from our existing business in the
United States. While we recorded a decrease in revenue for Peach John business due to weak sales from our business in
China, revenue from our other business segment increased as a result of reduction in the amount of operating loss at Lecien
Corporation.
Consolidated income before income taxes and equity in net income of affiliated companies fell by 43% from suchconsolidated income for the corresponding period of the previous fiscal year. This was impacted by the recognition ofvaluation loss on marketable securities and investments of 0.96 billion yen for the current second quarter, while we-2-

recorded valuation gain of 5.66 billion yen on marketable securities and investments for the corresponding period of theprevious fiscal year (under A in the table above: 6.62 billion yen decreased from previous second quarter). (We have beenusing U.S. accounting standards, under which the equity securities held by the Company and consolidated subsidiaries aremeasured at fair value, and any change from the beginning of the period are recognized in other income (expenses).)
The key exchange rates used for the current consolidated second quarter (previous second quarter) were: 108.63
yen (110.26 yen) to the U.S. dollar; 136.73 yen (146.91 yen) to the Sterling pound; and 16.20 yen (17.09 yen) to theChinese yuan.

-3-

(ii)

Business Overview of Our Operating Segments(Millions of Yen)
Previous Cumulative
Second Quarter(from April 1, 2018 toSeptember 30, 2018)
AmountTotal Net Sales
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

Operating Income
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

101,815
58,58528,821
5,470
8,939

Current Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)

Distribution
Ratio (%)
100.0
57.5
28.3
5.4
8.8

Amount101,450
60,36027,2535,466
8,371

Distribution
Ratio (%)
100.0
59.5
26.9
5.4
8.2

Increased/(Decreased) fromprevious cumulative
second quarter
Amount%(365)+1,775(1,568)
(4)
(568)

(0.4)
+3.0
(5.4)
(0.1)
(6.4)

Previous Cumulative
Second Quarter(from April 1, 2018 toSeptember 30, 2018)

Current Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)

Increased/(Decreased) fromprevious cumulative
second quarter

Amount% to Sales

Amount% to Sales

Amount

%

8.8
8.5
13.3
3.3
0.1

9,495
6,288
3,023
96
88

9.4
10.4
11.1
1.8
1.1

+501
+1,324
(818)
(86)
+81

+5.6
+26.7
(21.3)(47.3)
-

8,994
4,964
3,841
182
7

(Reference) Net Sales and Operating Income of Major Subsidiaries(Millions of Yen)

Net Sales

Previous Cumulative
Second Quarter(from April 1, 2018 toSeptember 30, 2018)

52,5803,098
10,565Distribution
Ratio (%)
51.6
3.0
10.4

7,398
6,250
5,470
3,223
4,967

7.3
6.1
5.4
3.2
4.9

AmountWacoal Corp.
Ai Co., Ltd.
Wacoal International Corp.
(U.S)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.
*Sales to external customers only

Operating Income/(Loss)

Wacoal Corp.
Ai Co., Ltd.
Wacoal International Corp.
(U.S.)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

Current Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)

55,366
2,598
10,228Distribution
Ratio (%)
54.6
2.6
10.1

6,993
6,084
5,466
2,985
4,594

6.9
6.0
5.4
2.9
4.5

AmountIncreased/(Decreased) fromprevious cumulative
second quarter
Amount%+2,786
(500)
(337)

+5.3
(16.1)
(3.2)

(405)
(166)
(4)
(238)
(373)

(5.5)
(2.7)
(0.1)
(7.4)
(7.5)

Previous Cumulative
Second Quarter(from April 1, 2018 toSeptember 30, 2018)

Current Cumulative
Second Quarter(from April 1, 2019 to
September 30, 2019)

Increased/(Decreased) fromprevious cumulative
second quarter

Amount% to Sales

Amount% to Sales

Amount

%

3,989
(58)
1,896

7.6
17.9

4,991
19
1,147

9.0
0.7
11.2

+1,002
+77
(749)

+25.1
(39.5)

789
874
182
(199)
204

10.7
14.0
3.3
4.1

668
752
96
(128)
187

9.6
12.4
1.8
4.1

(121)
(122)
(86)
+71
(17)

(15.3)(14.0)(47.3)
(8.3)

-4-

a.

Wacoal Business (Domestic)

Sales and operating income attributable to our “Wacoal Business (Domestic)” segment increased by 3% and 27%,
respectively as compared to such sales and operating income for the corresponding period of the previous fiscal year,
resulting from the last-minute demand before the consumption tax increase.
[Wacoal Corp.]
Sales from Wacoal Corp. increased by 5% as compared to such sales for the corresponding period of the previous
fiscal year. On a quarterly basis, while sales for the consolidated three months ended June 30, 2019 only increased by 1%
as compared to such sales for the corresponding period of the previous fiscal year, sales for the consolidated six months
ended September 30, 2019 increased by 9% due to positive factors including the last-minute demand before theconsumption tax increase, despite the challenges we faced in July from the effects of abnormal weather. Revenue
increased in our wholesale business due to strong sales of “Night Up Wireless Sleep Bra” products under the Wacoal brandand “Synchro Bra” products under the Wing brand sold at general merchandise stores, in addition to an expansion indemand for our regular products. Similarly, revenue in our retail business also increased due to strong sales of ourbrassieres with better design “Grama-Rich”, as well as an increase in the number of shop visitors. In our website business,
we also achieved an increase in revenue as a result of strong sales from our e-commerce website. Operating income
increased by 25% as compared to such operating income for the corresponding period of the previous fiscal year.
Although IT related expenses incurred for the implementation of our omni-channel strategies increased, we recorded a
substantial increase in profit by postponing a part of advertising spending after the current third quarter, in addition to theimpact of increased revenue at core business divisions and an improvement in gross profit rate.
b.

Wacoal Business (Overseas)

Sales attributable to our “Wacoal Business (Overseas)” segment on a Japanese yen basis decreased by 5% ascompared to such sales for the corresponding period of the previous fiscal year due to the impact of exchange rate
fluctuations, as well as the weak sales from our existing business in the United States and raw materials factory in Thailand.
Operating income decreased by 21% as compared to such operating income for the corresponding period of the previous
fiscal year due to the impact of decreased revenue from the following three major subsidiaries.
[Wacoal International Corp. (U.S.)]
Sales from Wacoal International Corp. (U.S.) on a local currency basis decreased by 2% as compared to such sales
for the corresponding period of the previous fiscal year, while sales on a Japanese yen basis decreased by 3% due to theimpact of exchange rate fluctuations. Revenue decreased due to weak sales from our existing business which were
impacted by the inventory adjustments at certain department stores (physical stores), despite the positive impact of sales of
0.35 billion yen in and after August from Intimates Online, which was newly consolidated in our business results.
Operating income significantly decreased, by 40%, as compared to such operating income for the corresponding period of
the previous fiscal year due to the recognition of operating loss ((0.2) billion yen) recorded for Intimates Online andnon-recurring expenses incurred for the acquisition, in addition to the impact of decreased revenue from our existing
business.
[Wacoal Europe Ltd.]Sales from Wacoal Europe Ltd. on a local currency basis increased by 2% as compared to such sales for thecorresponding period of the previous fiscal year, while sales on a Japanese yen basis decreased by 6% due to the impact of
exchange rate fluctuations. As a result of focusing on strengthening the sales of products sold under each of the “Fantasie,”“elomi” and “Freya” brands meeting various size requirements, sales expanded for the current consolidated second quarterat department stores, specialty stores and third-party e-commerce websites. Operating income decreased by 15% ascompared to such operating income for the corresponding period of the previous fiscal year due to the advertising
campaign that we are undertaking on our own e-commerce website for expansion of sales, in addition to increases in laborcosts as a result of strengthening the sales framework in Spain.
[Wacoal China Co., Ltd.]Sales from Wacoal China Co., Ltd. on a local currency basis increased by 3% as compared to such sales for thecorresponding period of the previous fiscal year, while sales on a Japanese yen basis decreased by 3% due to the impact of
exchange rate fluctuations. Although we maintained high growth from our e-commerce sales by strengthening our alliancewith the online mall providers and promoting sales during the high demand season, the closing of certain department stores
affected sales. Operating income decreased by 14% due to increases in advertising expenses and recognition of-5-

non-recurring expenses incurred for relocation of a warehouse, despite improvement in the gross profit rate resulting froma higher percentage of e-commerce sales.
c.

Peach John BusinessOverall sales attributable to our “Peach John Business” segment remained at about the same level as such sales forthe corresponding period of the previous fiscal year. In effort to improve business efficiency, we closed certain
underperforming stores in Japan, while reducing the amount of sales subject to discounts. As a result, although revenue
from mail-order business decreased, revenue from retail stores increased as a result of an increase in the number ofcustomers visiting our retail stores.
Operating income decreased by 47% as compared to such operating income for the corresponding period of theprevious fiscal year due to the impact of operating loss recorded from our Chinese business, although we achieved
improvement in the gross profit rate resulting by reducing the percentage of sales subject to discounts in Japan and selling,
general and administrative expenses.
d.

Other

Overall sales attributable to our “Other” business segment decreased by 6% as compared to such sales for thecorresponding period of the previous fiscal year, while operating income increased as compared to such operating income
for the corresponding period of the previous fiscal year.
[Lecien Corporation]
Sales from Lecien Corporation decreased by 7% as compared to such sales for the corresponding period of theprevious fiscal year. While we recorded decreased revenue in our material business due to reassessment of the business ofclothing fabrics and laces to emphasize profitability, we recorded an increase in revenue in our product business as a resultof recovery in sales of our private products handled at core general merchandise stores. We achieved reduction in theamount of operating loss as compared to such operating loss for the corresponding period of the previous fiscal year due toour efforts including reduction of selling, general and administrative expenses.
[Nanasai Co., Ltd.]
Nanasai Co., Ltd. recorded an 8% decrease in revenue as compared to such revenue for the corresponding periodof the previous fiscal year due to the absence of the one-time increase in revenue (large-scale construction for renovation of
department stores) in the corresponding period of the previous fiscal year. Operating income decreased by 8% ascompared to such operating income for the corresponding period of the previous fiscal year due to decreased revenue.
(2)

Qualitative Information regarding Consolidated Financial Condition(i)

Assets, Liabilities and Total Shareholders’ Equity

Our total assets as of the end of the current consolidated second quarter were 296,674 million yen, an increase of
14,907 million yen from the end of the previous fiscal year, mainly due to the recognition of operating leases right-of-use
assets following the changes in the accounting policy.
Our total liabilities were 77,546 million yen, an increase of 16,923 million yen from the end of the previous fiscal
year, mainly due to similar factor as the assets section, the recognition of operating lease liabilities following the changes in
the accounting policy, as well as increases in contingent consideration liability and other current liabilities.
Total Wacoal Holdings Corp. shareholders’ equity was 214,454 million yen, a decrease of 2,040 million yen fromthe end of the previous fiscal year, due to decreases in retained earnings and foreign currency translation adjustments.
As a result of the above, our total shareholders’ equity ratio as of the end of the current consolidated second quarter
was 72.3%, a decrease of 4.5% from the end of the previous fiscal year.
(ii)

Cash Flows

Cash and cash equivalents as of the end of the consolidated second quarter of the current fiscal year were 25,539
million yen, a decrease of 4,594 million yen from the end of the previous fiscal year.

-6-(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 7,738 million yen, a decrease of 236 million yen as compared to thecorresponding period of the previous fiscal year, after adjustments for changes in assets and liabilities to our net income of
6,749 million yen plus adjustments for depreciation, amortization and deferred income taxes.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 6,003 million yen, an increase of 3,300 million yen as compared to thecorresponding period of the previous fiscal year, due to acquisition of subsidiaries (net of cash acquired) as well as capital
expenditures and payments to acquire tangible and intangible assets, despite a decrease in time deposits and proceeds fromsales and redemption of equity securities.
(Cash Flow Used in Financing Activities)
Cash flow used in financing activities was 5,777 million yen, a decrease of 201 million yen as compared to thecorresponding period of the previous fiscal year, due to repurchase of treasury stock and cash dividend payments.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results

We have not revised our forecast of consolidated business results for the fiscal year ending March 31, 2020 since
our announcement on May 15, 2019. Also, the impact of any change in valuation gain or loss on equity securities has notbeen reflected in our forecast of consolidated business results.

-7-

2.

Consolidated Quarterly Financial Statements and Accompanying Notes(1)

Consolidated Quarterly Balance SheetsI.

Accounts

Previous Fiscal Year
as of March 31, 2019

(Assets)

Millions of Yen

Current Consolidated
Second Quarteras of September 30, 2019
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current assets:
Cash and cash equivalents

30,13325,539(4,594)

Time deposits

4,004

686

(3,318)Marketable securities

446

542

96

Notes and accounts receivable

24,98927,3902,401

Allowance for doubtful receivables
Inventories(229)
42,508(234)
42,259(5)(249)

Return assets

1,180

1,501

321

Other current assets

4,985

4,746

(239)

108,016

102,429(5,587)

Land

21,54921,447(102)

Buildings and structures

74,03374,05219

Machinery and equipment

18,914

18,590(324)

Total current assets
II. Property, plant and equipment:

Construction in progress

478

999

521

114,974

115,088

114(61,704)(62,200)(496)

53,27052,888(382)

Operating leases right-of-use assets-

13,425

13,425Investments in affiliated companies

21,85921,203(656)

Investments

63,37258,943(4,429)Goodwill

11,954

24,37912,425

Other intangible assets

12,297

12,443146

Prepaid pension expense

3,990

4,097

107

Deferred income taxes

1,362

1,325

(37)

Other

5,647

5,542

(105)

120,481

141,357

20,876

281,767

296,674

14,907

Accumulated depreciation
Net property, plant and equipment
III. Other assets:

Total other assets
Total assets

-8-

I.

Accounts

Previous Fiscal Year
as of March 31, 2019

(Liabilities)

Millions of Yen

Current Consolidated
Second Quarteras of September 30, 2019
Millions of Yen

Increase/(Decrease)
Millions of Yen

Current liabilities:
Short-term bank loans

8,116

7,752

(364)

Trade notes payable

1,155

1,254

99

Trade accounts payable

10,638

10,333(305)

Notes and accounts payable:

Other payables

6,548

4,356

(2,192)

18,341

15,943(2,398)

Accrued payroll and bonuses

7,209

6,881

(328)

Income taxes payable

2,759

4,001

1,242

Refund liability

3,482

4,079

597

Short-term operating lease liabilities

-

4,447

4,447

Contingent consideration (short-term)

-

1,079

1,079

3,955

4,971

1,016

Total current liabilities

43,862

49,153

5,291

II. Long-term liabilities:
Liability for termination and retirement
benefits
Deferred income taxes

1,828

1,869

41

12,567

11,760

(807)

-

9,114

9,114

Other current liabilities

Long-term operating lease liabilities
Contingent consideration(long-term)

-

3,292

3,292

2,366

2,358

(8)

Total long-term liabilities

16,761

28,393

11,632

Total liabilities

60,62377,546

16,923

13,26013,260-

Other long-term liabilities(Equity)I.

Common stock

II. Additional paid-in capital

29,807

29,828

21

III. Retained earnings
IV. Accumulated other comprehensive (loss)
income:Foreign currency translation adjustments

193,139

191,006(2,133)

1,551(1,641)(3,192)

Pension liability adjustments(5,679)(5,268)411

V. Treasury stock, at cost
Total Wacoal Holdings Corp.
shareholders’ equity
VI. Noncontrolling interests(15,584)(12,731)2,853

216,494

214,454(2,040)

4,650

4,674

24

Total equity

221,144

219,128(2,016)

Total liabilities and equity

281,767

296,674

14,907-9-

(2)Consolidated Quarterly Statements of Income

Accounts

I.

Net Sales

Previous Consolidated
Cumulative Second Quarter(From April 1, 2018
to September 30, 2018)
Millions of Yen%

Current Consolidated
Cumulative Second Quarter(From April 1, 2019
to September 30, 2019)
Millions of Yen%

Increase/(Decrease)
Millions of Yen

101,815100.0

101,450

100.0

(365)

Cost of sales

46,33045.5

44,99244.3(1,338)Selling, general and administrative expenses

46,491

45.7

46,963

46.3

472

Total operating costs and expenses

92,821

91.2

91,955

90.6

(866)

Operating income

8,994

8.8

9,495

9.4

501

II. Operating costs and expenses:

III. Other income (expenses):
Interest income

125

136

11

Interest expense

(10)

(13)

(3)

Dividend income
Gain or loss on sales or exchange ofmarketable securities and investments - net
Valuation loss on marketable securities andinvestments - net
Other – net

811

865

54

140

-

(140)

5,660

(958)

(6,618)

591

(199)

(790)

Total other (expenses) income
Income before income taxes and equity in net
income of affiliated companies
Income taxes
Income before equity in net income of affiliatedcompanies
Equity in net income of affiliated companies
Net income
Net income attributable to noncontrollinginterests
Net income attributable to Wacoal Holdings
Corp.

(3)

7,317

7.2

(169)

(0.2)

(7,486)

16,311

16.0

9,326

9.2

(6,985)

5,185

5.1

2,922

2.9

(2,263)

11,126

10.9

6,404

6.3

(4,722)

346

0.4

345

0.4

(1)

11,472

11.3

6,749

6.7

(4,723)

(81)

(0.1)

(81)

(0.1)

0

11,391

11.2

6,668

6.6

(4,723)

Consolidated Quarterly Statements of Comprehensive Income

Accounts

I. Net income
II. Other comprehensive income (loss)- net of tax:
Foreign currency translation adjustments

Previous Consolidated
Cumulative Second Quarter(From April 1, 2018
to September 30, 2018)
Millions of Yen

Current Consolidated
Cumulative Second Quarter(From April 1, 2019
to September 30, 2019)
Millions of Yen

Increase/(Decrease)
Millions of Yen

11,472

6,749(4,723)389(3,181)(3,570)

Unrealized loss on securities

(104)

-

104

Pension liability adjustments

2

411

409

Other comprehensive loss
Comprehensive (loss) income
Comprehensive (income) loss attributable tononcontrolling interests
Comprehensive (loss) income attributable to
Wacoal Holdings Corp.

287(2,770)(3,057)

11,7593,979(7,780)

0

(92)

(92)

11,7593,887(7,872)- 10 -

(4)Consolidated Quarterly Statements of Cash Flows

Accounts

Previous Consolidated Cumulative
Second Quarter(From April 1, 2018
to September 30, 2018)
Millions of Yen

I. Operating activities
1. Net income
2. Adjustments to reconcile net income to net cash provided
by operating activities(1) Depreciation and amortization(2) Allowance for returns and doubtful receivables - net(3) Deferred income taxes(4) Loss (gain) on sales or disposal of property, plant andequipment - net(5) Gain on sales or exchange of marketable securities andinvestments – net(6) Valuation loss (gain) on marketable securities andinvestments – net(7) Equity in net income of affiliated companies,
less dividends received(8) Changes in assets and liabilities
Increase in notes and receivable
Decrease (increase) in inventories
Increase in return assets
Decrease (increase) in other current assets
Decrease in notes and accounts payable
Increase in refund liability
Increase (decrease) in liability for termination andretirement benefits
Increase in other liabilities(9) Other
Net cash provided by operating activities
II.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Investing activities
Increase in time deposits
Decrease in time deposits
Proceeds from sales and redemption of equity securities
Payments to acquire equity securities
Proceeds from redemption of debt securities
Payments to acquire debt securities
Proceeds from sales of property, plant and equipment
Capital expenditures
Payments to acquire intangible assets
Acquisition of subsidiaries (net of cash acquired)
Other
Net cash used in investing activities

III. Financing activities
1. Net increase in short-term bank loans with original
maturities of three months or less
2. Repayment of long-term debt
3. Repurchase of treasury stock
4. Dividends paid on common stock
5. Dividends paid to noncontrolling interests
6. Proceeds from stock issuance to noncontrolling interests
Net cash used in financing activities
IV. Effect of exchange rate changes on cash and cash
equivalents
V. Net decrease in cash and cash equivalents
VI. Cash and cash equivalents, beginning of period
VII. Cash and cash equivalents, end of period- 11 -

Current Consolidated Cumulative
Second Quarter(From April 1, 2019
to September 30, 2019)
Millions of Yen

11,472

6,749

2,752
(2,278)
1,642

2,829
46
(1,346)

(1)

17

(140)

-

(5,660)

958

136

174

(1,064)373(1,363)(891)(2,445)
3,758(2,699)
(95)
(321)
266
(2,252)
597

(263)

533

1,988
(42)
7,974

2,023
259
7,738

(4,094)
2,986
882
(12)
341
(333)
33
(1,036)(1,480)10(2,703)

(297)
3,533
3,259
(260)
326
39
(1,622)(1,748)(9,243)10(6,003)

163

(233)

(25)
(3,500)(2,425)(191)(5,978)(28)(3,102)(2,346)(184)
116(5,777)

656

(552)

(51)
29,48729,436(4,594)30,13325,539

Additional Cash Flow Information

Accounts

Previous Consolidated Cumulative
Second Quarter(From April 1, 2018
to September 30, 2018)

Cash paid for:
Interest
Income taxes
Noncash investing activities
Acquisition of subsidiaries (contingent
consideration)
Acquisition of fixed assets by assuming payment
obligation(5)

Current Consolidated Cumulative
Second Quarter(From April 1, 2019
to September 30, 2019)

10
2,615

14
2,398

-

4,400

397

802

Notes to Consolidated Quarterly Financial Statements(Notes on Going Concern)
Not applicable.
(Notes on Significant Changes in the Amount of Total Shareholders’ Equity)
Not applicable.
(Changes in Accounting Policy)
LeasesThe new accounting guidance related to leases (ASU2016-02, 2018-01, 2018-11) has been adopted starting withthe current consolidated fiscal year. This guidance requires an entity to recognize right-to-use assets and lease liabilities on
the balance sheet for those leases classified as operating leases under the previous U.S. GAAP with a few exceptions. Ourgroup has adopted the modified retrospective approach, electing to apply the transition requirements at the effective datewith a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, and prior periods
were not restated. Our group elected to apply the package of practical expedients permitted under the transition guidance
which does not require to reassess whether any expired or existing contracts are leases, lease classification and initial direct
costs. Our group also elected to apply the practical expedient not to assess whether existing or expired land easements thatwere not previously accounted for as leases are leases. As a result of this adoption, operating leases right-of-use assets andoperating leases liabilities of 14,550 million yen were recorded in the consolidated balance sheet as of April 1, 2019. In
addition, the application of deferred tax accounting resulted in the recording of deferred tax liabilities of 515 million yen
and the decreasing of the opening balance of retained earnings as a cumulative-effect adjustment in the same amount. The
adoption of this guidance is not expected to have a material impact on our group’s cash flows.

- 12 -

(Segment Information)(i)

Operating Segment Information

Previous Consolidated Cumulative Second Quarter (From April 1, 2018 to September 30, 2018)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales(1) External customers

58,58528,821

5,470

8,939

101,815-

101,815(2) Intersegment

473

5,377

665

2,595

9,110

(9,110)-Total

59,05834,1986,135

11,534110,925(9,110)101,815

Operating income

4,964

3,841

182

7

8,994

-

8,994

Current Consolidated Cumulative Second Quarter (From April 1, 2019 to September 30, 2019)(Millions of Yen)
Wacoal
Wacoal businessbusiness(Domestic)(Overseas)

Peach Johnbusiness

Other

Total

Elimination

Consolidated

Net sales
60,36027,253

5,466

8,371

101,450-

101,450(2) Intersegment

461

5,787

385

2,624

9,257

(9,257)-

Total

60,821

33,0405,851

10,995

110,707(9,257)

101,450

Operating income

6,288

3,023

96

88

9,495

-

9,495

(1) External customers(Note)(ii)

1.

Core products of respective businesses:
Wacoal business (Domestic): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
hosiery, etc.
Wacoal business (Overseas): innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, sportswear,
other textile-related products, etc.
Peach John business:
innerwear (foundation, lingerie, and nightwear), outerwear, and other textile-related products,
etc.
Other:
innerwear (foundation, lingerie, nightwear and children’s innerwear), outerwear, othertextile-related products, mannequins, construction of stores and interior design, etc.

2.

Information on assets by operating segment:
Assets attributable to our “Wacoal Business (Overseas)” segment increased by 8,322 million yen from the end of the previous
fiscal year as a result of making Intimates Online our consolidated subsidiary during the current consolidated second quarter.
Accordingly, assets attributable to our “Wacoal Business (Overseas)” segment as of the end of the current consolidated second
quarter were 87,234 million yen.

Segment Information by Region

Previous Consolidated Cumulative Second Quarter (From April 1, 2018 to September 30, 2018)(Millions of Yen)Japan

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

72,61971.3%

11,77911.6%

17,41717.1%

101,815100.0%

Operating income

5,185

1,164

2,645

8,994

Current Consolidated Cumulative Second Quarter (From April 1, 2019 to September 30, 2019)(Millions of Yen)Japan

Asia/Oceania

Europe/N.A.

Consolidated

Net sales
External customers
Distribution ratio

73,665
72.6%

11,058
10.9%

16,72716.5%

101,450
100.0%

Operating income

6,555

1,207

1,733

9,495

(Note)

1.
2.

Countries or areas are classified according to geographical proximity.
Main countries and areas belonging to classifications other than Japan:- 13 -

3.

(6)

Asia/Oceania: various countries of East Asia, Southeast Asia and West Asia, and Australia
Europe/N.A.: North America and European countries
Sales in respect of consolidated companies are categorized by location.

Status of Sales

Type of productFoundationand lingerie
Innerwear Nightwear
Children’s
underwear
Subtotal
Outerwear/Sportswear
Hosiery
Other textile goods andrelated products
Other
Total

Previous Consolidated Cumulative
Second Quarter(From April 1, 2018 toSeptember 30, 2018)
AmountDistribution Ratio
Millions of Yen%

Current Consolidated Cumulative
Second Quarter
Increase/(Decrease)(From April 1, 2019 to
September 30, 2019)
AmountDistribution Ratio
AmountRatio
Millions of Yen%
Millions of Yen%

77,052

75.7

78,545

77.4

1,493

1.9

4,216

4.1

3,941

3.9

(275)

(6.5)

676

0.7

594

0.6

(82)

(12.1)

81,944

80.5

83,080

81.9

1,136

1.4

8,181
895

8.0
0.9

7,415
879

7.3
0.9

(766)
(16)

(9.4)
(1.8)

4,705

4.6

4,241

4.2

(464)

(9.9)

6,090
101,815

6.0
100.0

5,835
101,450

5.7
100.0

(255)
(365)

(4.2)
(0.4)

- 14 -