Business Results for the Third Quarter of the Year Ending December 31, 2022
[Japan GAAP] (Consolidated)
November 7, 2022

Company:
Stock code:
Representative:
Contact:

The Pack Corporation

3950
Hideaki Yamashita, President & CEO
Michihisa Fujii, Managing Director, Corporate Division
TEL: +81-6-4967-1221
Expected filing date for quarterly securities report:
November 9, 2022
Expected starting date of dividend payment:
Quarterly supplementary financial documents:
No
Quarterly results briefing:No

Listed on TSE, Prime Market
URL: https://www.thepack.co.jp(Rounded down to million yen)
1. Consolidated business results for the third quarter of the year ending December 31, 2022
(January 1, 2022 through September 30, 2022)(1)

Consolidated operational results (cumulative)(%: change from same quarter of previous year)

Net sales

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

Third quarter of year ending
December 31, 2022

60,481

10.6

3,273

59.9

3,592

60.0

2,250

48.8

Third quarter of year ended
December 31, 2021

54,692

-

2,047

29.3

2,245

25.1

1,512

35.8

(Note) Comprehensive income

Third quarter of year ending December 31, 2022:
Third quarter of year ended December 31, 2021:

Quarterly basic
earnings per share

2,646 million yen (23.7%)
2,138 million yen (-%)

Quarterly diluted
earnings per share

Yen

Yen

Third quarter of year ending December 31, 2022

118.43118.33

Third quarter of year ended December 31, 2021

79.62

79.52

(Note) The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) and related guidance have been applied since thebeginning of the first quarter of the consolidated fiscal period under review. Figures for the second quarter of the fiscal year
ended December 2021 reflect the retrospective application of these accounting standards. As such, the percentage year-on-yearchange in net sales for the second quarter of the fiscal year ended December 2021 is not mentioned.

(2)

Consolidated financial position
Total assets

Net assets

Capital adequacy ratio

Million yen

Million yen%

Third quarter of year ending December 31, 2022

87,082

63,65573.0

Year ended December 31, 2021

87,422

62,032

70.9(Reference) Owner’s equity

Third quarter of year ending December 31, 2022:
Year ended December 31, 2021:

63,596 million yen
61,955 million yen

2. Dividends
Dividend per share
End of 1Q

End of 2Q

End of 3Q

Year-end

Yen

Yen

Yen

Yen

Yen

Year ended December 31, 2021

-

25.00

-

25.00

50.00

Year ending December 31, 2022

-

30.00

30.00

60.00

Year ending December 31, 2022 (forecast)

Total(Note) Revision from most recently announced dividends forecast: None

3. Forecast of consolidated results for the year ending December 31, 2022
(January 1, 2022 through December 31, 2022)(Full year %: change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Million yen%

Million yen

Full year
83,0004,700(Note) Revision from most recently announced forecast of results: None

-

5,000

Million yen

%

Basic
Profit attributableearnings per
to owners of parent
share% Million yen

%

Yen

-

-

184.253,500*Notes(1)

Material changes in subsidiaries during this quarterly cumulative period (changes in scope of consolidations resulting
from change in subsidiaries): None

(2)

Application of special account processing in preparation of quarterly financial statements: None

(3)

Changes in accounting policies, accounting estimates, and retrospective restatement
1) Changes in accounting policies based on revisions of the accounting standard: Yes
2) Changes in accounting policies other than ones based on revisions of the accounting standard: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None(4)

Number of issued and outstanding shares (common stock)1)

Number of issued and outstanding
3Q, year ending
shares at the end of fiscal year
December 31, 2022
(including treasury shares)

19,900,000 sharesYear ended
December 31, 2021

19,900,000 shares

2)

Number of treasury shares at theend of fiscal year

3Q, year ending
December 31, 2022

890,617 sharesYear ended
December 31, 2021

904,917 shares

3)

Average number of shares(quarterly cumulative)

3Q, year ending
December 31, 2022

19,004,243 shares

3Q, year ended
December 31, 2021

18,993,368 shares* The quarterly financial summary is not subject to audits by certified public accountants or auditing firms.
* Explanation regarding appropriate use of business forecasts and other special instructions
Forward-looking statements regarding future performance are based on assumptions regarding various factors affecting
business performance and information available to the Company’s management as of the date the materials wereprepared. Actual results may differ significantly from forecasts.
Also see “Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements” on p. 3 of
the Attachments concerning forward-looking statements.

The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

Contents of Attachments
1.
(1)
(2)
(3)

Qualitative information concerning business results for the quarter under review
Description of Operational Results
Analysis of Financial Position
Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

2
2
3
3

2.
(1)
(2)
(3)

Quarterly Consolidated Financial Statements and Notes
Quarterly Consolidated Balance Sheet
Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)(Significant Changes in Shareholders’ Equity)(Changes in Accounting Policies)

4
4
6
8
8
8
8

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The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

1. Qualitative information concerning business results for the quarter under review(1)

Description of Operational Results

The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020; “Revenue Recognition
Accounting Standard” hereinafter) and related guidance have been applied since the beginning of the first quarter of theconsolidated fiscal period. Comparative analysis of the cumulative period through the same quarter of the previous
consolidated fiscal year and of the previous consolidated fiscal year reflect the retroactive application of the Revenue
Recognition Accounting Standard and related guidance. For more information, see “2. Quarterly Consolidated Financial
Statements and Notes: (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies):(Application of Accounting Standard for Revenue Recognition and Related Guidance).”During the cumulative period through the third quarter of the consolidated fiscal year under review, the rapid increase in
July in numbers of COVID-19 cases involving the omicron variant failed to affect demand or traffic at department storesand major retailers. The Japanese government did not impose restrictions on movement; there was little change in numbersof consumers venturing out for leisure and travel purposes. Additionally, shortages of chips and other materials graduallyeased, as did the impact of the earlier shortages on the automotive and home electronics industries. Nevertheless, conditions
remained uncertain in Japan's economy for various reasons, including rising inflation in Japan due to soaring resource prices
amid the prolonged Ukrainian crisis and other developments and the rapid devaluation of the yen spurred by differences in
US and Japanese monetary policy.
In the United States, consumer spending recovered, centered on services industries, and commercial activity continued to
expand. However, the Fed’s decision to continue increasing interest rates poses the risk of a future economic downturn andwarrants caution. While China’s economy got off to a strong start, economic activity has slowed due to lockdowns inShanghai under the nation’s zero-COVID policy. While a recovering trend began after the partial lifting of the lockdowns,
the extent of this recovery has been limited.
The COVID-19 pandemic also affected Group business performance. However, based on the slogan “Marking Our 70th
Anniversary with Rapid Progress,” group companies worked collectively to increase earnings by venturing into new markets,making substantial capital expenditures, and improving quality management.
As a result, during the third quarter of the consolidated fiscal year under review, net sales grew by 10.6% year on year to
60,481 million yen; operating profit rose 59.9% to 3,273 million yen; ordinary profit grew 60.0% to 3,592 million yen; andprofit attributable to owners of parent improved 48.8% to 2,250 million yen.
The business performance for each segment is reviewed below.
(Paper Products)
The paper products segment accounted for 70.5% of consolidated sales in the third quarter. Sales of paper bags, which
accounted for 28.4% of consolidated sales, grew thanks to recovering domestic consumer spending and tourism demand.
Overseas subsidiary The Pack America Corp. recorded strong performance. The Pack (Shanghai) Corporation experienced
growth accompanying the devalued yen, resulting in a 19.3% increase in net sales year on year to 17,194 million yen.
Sales of folding paper cartons, which accounted for 24.8% of consolidated sales, grew 12.7% to 14,967 million yen. Salesof cartons for takeout/delivery food products and to the e-commerce sector remained strong, while demand continued torecover for souvenirs and other items.
Continued strong sales of CC-PACK resource-conserving packages to the e-commerce sector drove sales of corrugatedboxes, which accounted for 14.7% of consolidated sales. Strong sales to the manufacturing sector also contributed to growthof 3.1% to 8,907 million yen.
Printing sales, which accounted for 2.6% of consolidated sales, rose 3.4% to 1,575 million yen, driven by strong sales at
Keihin Tokushu Printing Corp. and NIKKO PRINT CORPORATION.
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The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

Overall, sales in this segment grew 12.6% to 42,643 million yen. Operating profit rose 44.9% to 3,063 million yen.
(Film Packaging)
The film packaging segment accounted for 13.4% of consolidated sales during the period under review. Segment sales wereup 2.0% to 8,117 million yen due to a recovery in sales of shopping bags as consumer spending recovered as well as strong
sales of flexible film packaging for food products. This was despite a continuing decline in sales of disposable diaper
products. Operating profit rose by 37.9% to 316 million yen.
(Other Businesses)
Other businesses in the period under review accounted for 16.1% of consolidated sales. Sales of miscellaneous supplies todepartment stores and major retailers are recovering, as are sales of sewn product bags to specialty retail stores. This,
combined with similar strong performance by The Pack America Corp., resulted in sales growth of 9.6% to 9,719 million
yen and 25.5% growth in operating profit to 627 million yen.
(2)

Analysis of Financial Position

Assets totaled 87,082 million yen at the end of the quarter under review, down 340 million yen from the end of 2021. Major
factors included growth of 2,134 million yen in cash and deposits and 1,570 million yen in merchandise and finished goods,
offset by a decline of 4,507 million yen in notes and accounts receivable-trade.
Liabilities fell 1,963 million yen to 23,426 million yen. The primary factors were declines of 1,081 million yen in notes andaccounts payable-trade and 476 million yen in income taxes payable.
Net assets grew by 1,623 million yen to 63,655 million yen. Key factors were increases of 1,205 million yen in retained
earnings and 385 million yen in foreign currency translation adjustment.
(3)

Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

Consolidated business forecasts remain unchanged from the information announced February 7, 2022.

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The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

2. Quarterly Consolidated Financial Statements and Notes(1)

Quarterly Consolidated Balance Sheet(Million yen)Previous fiscal year
(as of December 31, 2021)

Third quarter of current fiscal year
(as of September 30, 2022)

AssetsCurrent assets
Cash and deposits

15,077

17,212

Notes and accounts receivable-trade

21,003

16,496

Securities

12,006

13,504Merchandise and finished goods

4,768

6,338

Work in process

867

1,034

Raw materials and supplies

794

977

Other

934

923

Allowance for doubtful accounts

(13)

(18)

55,43856,467

Buildings and structures, net

6,169

6,124

Machinery, equipment, and vehicles, net

6,159

5,283

348

346

Land

8,539

8,539

Construction in progress

1,441

2,541

Total property, plant, and equipment

22,65822,835643

942

Investment securities

7,405

5,416

Deferred tax assets

416

474

Other

907

999

Allowance for doubtful accounts

(48)

(52)

Total investments and other assets

8,682

6,837

31,98430,61487,42287,082

Total current assets
Non-current assets
Property, plant, and equipment

Tools, furniture, and fixtures, net

Intangible assets
Investments and other assets

Total non-current assets
Total assets-4-

The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

(Million yen)Previous fiscal year
(as of December 31, 2021)

Third quarter of current fiscal year
(as of September 30, 2022)

Liabilities
Current liabilities
Notes and accounts payable-trade

12,235

11,154

Electronically recorded obligations-operating

5,521

5,755

Current portion of long-term loans payable

25

25

Income taxes payable

991

514

Provision for bonuses

267

696

Provision for bonuses for directors (and other officers)

32

23

Other

3,206

2,424

Total current liabilities

22,27920,593Long-term loans payable

60

41

Deferred tax liabilities

440

418

2,434

2,245

176

128

3,110

2,833

25,39023,426

Capital stock

2,553

2,553

Capital surplus

3,164

3,160

Retained earnings

57,64058,846

Treasury shares(2,704)(2,661)

Total shareholders’ equity

60,654

61,899

1,212

1,218

0

16

Foreign currency translation adjustment

(98)

287

Remeasurements of defined benefit plans

185

174

1,300

1,696

Share acquisition rights

63

46

Non-controlling interests

13

12

62,032

63,65587,42287,082

Non-current liabilities

Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total accumulated other comprehensive income

Total net assets
Total liabilities and net assets-5-

The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

(2)

Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

Quarterly Consolidated Statement of Income
Cumulative period through third quarter
Cumulative period through third
quarter of previous fiscal year
(from January 1, 2021 toSeptember 30, 2021)(Million yen)
Cumulative period through third
quarter of current fiscal year
(from January 1, 2022 toSeptember 30, 2022)

54,692
41,882
12,81060,48146,015
14,465

2,663
2,782
318
4
340
24
207
282
1,943
2,195
10,763
2,047

2,839
2,826
315
8
364
20
187
284
2,055
2,289
11,192
3,273

79
60
40
14
25
220

93
76
36
65
21
44
336

1
6
13
22
2,245

1
6
8
17
3,592

5
5
11

0
1
1

5
5
2,251
862
(119)
742
1,509
(3)
1,512

0
21
23
64
188
298
3,296
1,133
(86)
1,047
2,248
(1)
2,250

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Freightage and packing expenses
Salaries and allowances
Directors' compensation
Provision of allowance for doubtful accounts
Provision for bonuses
Provision for directors' bonuses
Retirement benefit expenses
Depreciation
Rent expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Compensation income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cost of lease revenue
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales on non-current assets
Loss on retirement of non-current assets
Loss on valuation of investment securities
Loss on sales of investment securities
Impairment loss
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-6-

The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

Quarterly Consolidated Statement of Comprehensive Income
Cumulative period through second quarter
Cumulative period through third
quarter of previous fiscal year
(from January 1, 2021
to September 30, 2021)(Million yen)
Cumulative period through third
quarter of current fiscal year
(from January 1, 2022
to September 30, 2022)

1,509

2,248

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

469

6

0

15

Foreign currency translation adjustment

147

386

Remeasurements of defined benefit plans, net of tax

12

(11)

Total other comprehensive income

629

397

2,138

2,646

Comprehensive income attributable to owners of parent

2,140

2,647

Comprehensive income attributable to non-controllinginterests

(1)

(0)

Comprehensive income(Comprehensive income attributable to)-7-

The Pack Corporation (3950) Financial Report for the Third Quarter of 2022

(3)

Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable(Significant Changes in Shareholders’ Equity)
Not applicable(Changes in Accounting Policies)(Application of Accounting Standard for Revenue Recognition and related guidance)
The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and the Implementation
Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, March 26, 2021) (“AccountingStandard for Revenue Recognition and related guidance” hereinafter) have been applied since the beginning of the firstquarter of the consolidated fiscal period under review. Accordingly, revenue is now recognized in the amount expected
to be received in exchange for goods or services at the point in time at which control of promised goods or services
shifts to the customer.
Before, in transactions in which the Group functioned as an agent (i.e., supplying products to customers), all payments
received from the customer were recognized as revenues. Now, following this change, revenues are recognized as the
net amount after deducting the amount to be paid to our supplier from payments made by the customer.
In principle, the quarterly consolidated financial statements and annual consolidated financial statements herein reflect
the retroactive application of this change to quarters in the previous fiscal year and to the previous consolidated fiscal
year.
Compared to previous account processing, the change has resulted in a decrease of 369 million yen in each of net sales
and cost of sales for the cumulative period through the third quarter of the previous consolidated fiscal year.
(Application of the Accounting Standard for Fair Value Measurement and related standards)
The Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019; “Accounting Standard
for Fair Value Measurement” hereinafter) and related standards have been applied since the beginning of the firstquarter of the consolidated fiscal period under review. Pursuant to the transitional handling described in Paragraph 19of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10, July 4, 2019), the new accounting policies specified in the Accounting Standard
for Fair Value Measurement and related standards will be applied to future accounts. This change does not affect thequarterly consolidated financial statements.

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