Business Results for the Second Quarter of the Year Ending December 31, 2017
(Six Months Ended June 30, 2017)[Japan GAAP] (Consolidated)
August 7, 2017

Company:
The Pack Corporation
Listed on the TSE1
Stock code:
3950
URL: http://www.thepack.co.jp
Representative: Yoshikazu Nakao, President & CEO
Contact:
Michihisa Fujii, Director, Divisional General Manager of Administration HQ
TEL: +81-6-6972-1221
Expected date of filing of quarterly report:
August 10, 2017
Expected starting date of dividend payment:
September 6, 2017
Preparation of supplementary quarterly financial document:
Yes
Quarterly results briefing:
Yes (for institutional investors and securities analysts)(Rounded down to million yen)

1. Consolidated business results for the second quarter of the year ending December 31, 2017
(January 1, 2017 through June 30, 2017)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales
Million yen

Six months ended Jun. 30, 2017
Six months ended Jun. 30, 2016
(Note) Comprehensive income%

Operating income

Ordinary income

Million yen

Million yen

Million yen%

41,729
1.0
3,053
20.9
3,217
18.0
2,107
41,320
2.7
2,524
11.9
2,726
14.8
1,666
Six months ended Jun. 30, 2017
2,384 million yen (up 157.3%)
Six months ended Jun. 30, 2016
926 million yen (down 51.0%)

26.5
17.5

Basic earnings per
share
Six months ended Jun. 30, 2017
Six months ended Jun. 30, 2016%

Profit attributable toowners of parent%

Diluted earnings per
share

Yen

Yen

107.42
84.96

107.31
84.87(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Jun. 30, 2017
As of Dec. 31, 2016
(Reference) Owner’s equity

Capital adequacy ratio

Million yen

75,67850,521
76,291
48,603As of Jun. 30, 2017: 50,437 million yen

%

66.6
63.6
As of Dec. 31, 2016: 48,533 million yen

2. Dividends
End of 1Q

End of 2Q

Dividend per share
End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

-

25.00
25.00

-

25.00

50.00

-

25.00

50.00

Year ended Dec. 31, 2016
Year ending Dec. 31, 2017
Year ending Dec. 31, 2017
(forecasts)(Note) Revisions to the most recently announced dividend forecast: None

3. Forecast of consolidated business results for the year ending December 31, 201 7(January 1, 2017 through December 31, 2017)(% change from the previous corresponding period)
Net sales
Million yen

Operating income%

Million yen%

Profit attributable toowners of parent

Ordinary income
Million yen

Basic earnings per
share

%

Million yen%

Yen

Full year
91,000
2.0
6,700
3.3
7,000
2.6
(Note) Revisions to the most recently announced consolidated forecast: None

4,700

3.5

239.61

* Notes(1) Material changes in subsidiaries during this period (Changes in scope of consolidations resulting from change sin subsidiaries): None
(2) Applying of specific accounting of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective restatement
1) Changes in accounting policies based on revisions of accounting standard: None
2) Changes in accounting policies other than ones based on revisions of 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 shares at the end of the period (including treasury shares)
As of Jun. 30, 2017:

19,900,000 shares

As of Dec. 31, 2016:

19,900,000 shares

As of Dec. 31, 2016:

284,592 shares

2) Number of treasury shares at the end of the period
As of Jun. 30, 2017:

280,137 shares

3) Average number of shares
Six months ended Jun. 30, 2017:19,617,519 shares

Six months ended Jun. 30, 2016:

19,615,485 shares*The current quarterly financial summary is not subject to quarterly review procedures.
*Explanation regarding appropriate use of business forecasts and other special instructions
Forecasts regarding future performance in these materials are based on information that was available when this document was
released and incorporates a number of current assumptions about uncertainties that may affect future results of operations.
Therefore, actual results may differ significantly from the forecasts due to various factors. Please refer to "Explanation ofConsolidated Forecasts and Other Forward-looking Statements" on page 3 for forecast assumptions.

The Pack Corporation (3950) Financial Report for the Second Quarter of 2017

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Matters Related to Summary Information (Notes)

3(1) Material Changes in Subsidiaries during this Period

3(2) Applying of Specific Accounting of the Consolidated Quarterly Financial Statements

3(3) Changes in Accounting Policies, Accounting Estimates and Retrospective Restatement

3

3. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income6(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9-1-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2017

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of 2017, the gradual recovery of the Japanese economy continued and companies reported strong
earnings, mainly in the manufacturing sector. Although consumer sentiment is improving along with a recovery inwage income, consumer spending is still lackluster.
Overseas, economies are generally healthy despite concerns about the Chinese economy and the uncertainty of
government policies in Europe and the United States.
During the first half, there were many activities to accomplish the goals of the medium-term management planunder the slogan of “Strong Growth through Group Solidarity.” All group companies were focused on entering
new markets and selling products at adequate prices, and engaged in activities such as proactive capital
expenditures, developing new products and improving quality management in order to increase earnings.
Net sales increased 1.0% year-on-year to 41,729 million yen, operating income increased 20.9% to 3,053 million
yen, ordinary income increased 18.0% to 3,217 million yen, and profit attributable to owners of parent increased
26.5% to 2,107 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 61.8% of consolidated sales in the first half of 2017. Sales of paperbags, which accounted for 31.8% of consolidated sales, increased 1.1% to 13,316 million yen. Although domestic
sales were about the same as one year earlier, sales at Chinese subsidiaries were strong.
Sales of paper folding cartons, which accounted for 16.1% of consolidated sales, increased 7.9% to 6,700 million
yen mainly due to higher sales of cartons for food products and the success of activities aimed at sales growth.
Sales of corrugated boxes, which accounted for 11.5% of consolidated sales, increased 4.2% to 4,778 million yen.
This increase was attributable to higher sales of boxes to manufacturers and direct sale (Internet and catalog)
retail companies.
Printing sales, which accounted for 2.4% of consolidated sales, decreased 4.1% to 1,003 million yen as sales
were weak at Keihin Tokushu Printing Corp.
Overall, sales in this segment increased 3.1% to 25,799 million yen. Operating income was up 17.5% to 2,252
million yen.
(Film Packaging)
The film packaging segment accounted for 21.5% of consolidated sales in the first half of 2017. Sales tospecialty retail stores in Japan were slow but there was an increase in orders for products for disposable diapers.
As a result, sales increased 0.7% to 8,973 million yen. Operating income was up 32.0% to 507 million yen.
(Other Businesses)
Other businesses accounted for 16.7% of consolidated sales in the first half of 2017. There was a decline in salesof products used in conjunction with the Pack Assortment Service system, which is a comprehensive outsourcing
vendor system that covers everything from manufacturing and procuring packaging materials and other products
to inventory control and delivery. As a result, sales decreased 5.9% to 6,956 million yen. Operating income
increased 2.9% to 651 million yen.

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The Pack Corporation (3950) Financial Report for the Second Quarter of 2017(2) Explanation of Financial Position
1) Balance sheet position
Assets totaled 75,678 million yen at the end of the second quarter of 2017, down 613 million yen from the end of
2016. The main factors were an increase of 7,290 million yen in cash and deposits, and decreases of 5,704
million yen in notes and accounts receivable-trade and 2,600 million yen in securities.
Liabilities decreased 2,531 million yen to 25,156 million yen. The main factors were decreases of 2,939 million
yen in notes and accounts payable-trade and 176 million yen in income taxes payable.
Net assets increased 1,918 million yen to 50,521 million yen. The main factors were increases of 1,616 million
yen in retained earnings and 274 million yen in valuation difference on available-for-sale securities.
2) Cash flow position
The balance of cash and cash equivalents at the end of the second quarter of 2017 increased 7,104 million yen, or
50.8% from the end of the second quarter of 2016 to 21,091 million yen.
Cash flows from operating activities
Operating activities provided net cash of 5,498 million yen (net cash provided of 4,884 million yen in the firsthalf of 2016). The principal factors were profit before income taxes of 3,215 million yen and a decrease of 5,680
million yen in notes and accounts receivable-trade, while there was a decrease of 2,961 million yen in notes andaccounts payable-trade.
Cash flows from investing activities
Investing activities provided net cash of 3,191 million yen (net cash used of 1,776 million yen in the first half of2016). The principal factor was proceeds from sales of securities of 6,002 million yen, while there were outlaysof 279 million yen for the purchase of property, plant and equipment and 2,501 million yen for the purchase of
securities.
Cash flows from financing activities
Financing activities used net cash of 485 million yen (net cash used of 490 million yen in the first half of 2016).
This was mainly due to outlays of 490 million yen for the cash dividends paid.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
The consolidated forecasts announced on February 10, 2017 remain unchanged.
2. Matters Related to Summary Information (Notes)(1) Material Changes in Subsidiaries during this Period
Not applicable.
(2) Applying of Specific Accounting of the Consolidated Quarterly Financial Statements
Not applicable.
(3) Changes in Accounting Policies, Accounting Estimates and Retrospectiv e Restatement
Not applicable.

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The Pack Corporation (3950) Financial Report for the Second Quarter of 2017

3. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2016)(Million yen)
Second quarter ofthe current fiscal year
(As of June 30, 2017)

AssetsCurrent assets
Cash and deposits

9,695

16,985

Notes and accounts receivable-trade23,562

17,858

Securities

9,300

6,700

Merchandise and finished goods

5,149

5,438

Work in process

787

755

Raw materials and supplies

660

659

Deferred tax assets

263

242

Other

474

636

Allowance for doubtful accounts

(27)

(20)

49,86849,256

Buildings and structures, net

7,262

7,050

Machinery, equipment and vehicles, net

5,044

4,857

163

157

8,066

8,066

267

362

20,804

20,493124

167

Investment securities

4,283

4,703

Deferred tax assets

647

532

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

Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets

Other

684

645

Allowance for doubtful accounts

(120)

(120)

Total investments and other assets

5,494

5,760

26,423

26,421

76,29175,678

Total non-current assets
Total assets-4-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2017

Previous fiscal year
(As of December 31, 2016)(Million yen)
Second quarter ofthe current fiscal year
(As of June 30, 2017)

Liabilities
Current liabilities
Notes and accounts payable-trade

14,334

11,394

Electronically recorded obligations-operating

4,499

4,468

Income taxes payable

1,303

1,126

Provision for bonuses

269

281

Provision for directors’ bonuses

47

23

Other

2,664

3,197

Total current liabilities

23,11920,492

Non-current liabilities
Deferred tax liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities

314

396

4,077

4,118

177

149

4,568

4,664

27,68825,156

2,553

2,553

Net assets
Shareholders’ equity
Capital stock
Capital surplus

3,167

3,166

Retained earnings

42,65444,271

Treasury shares

(739)

(727)

Total shareholders’ equity

47,63649,263

1,595

1,869

33

15

Foreign currency translation adjustment

(190)

(225)

Remeasurements of defined benefit plans

(541)

(486)

896

1,173

Subscription rights to shares

43

56

Non-controlling interests

26

27

48,60350,521

76,29175,678

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 Second Quarter of 2017(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
IncomeQuarterly Consolidated Statement of Income(For the Six-month Period)

Net sales
Cost of sales

First six months ofthe previous fiscal year
(from January 1, 2016
to June 30, 2016)
41,32031,768(Million yen)First six months ofthe current fiscal year
(from January 1, 2017
to June 30, 2017)
41,72931,590Gross profit

9,551

10,139Selling, general and administrative expenses
Freightage and packing expenses
Salaries and allowances
Directors’ compensations
Provision of allowance for doubtful accounts
Provision for bonuses
Provision for directors’ bonuses
Retirement benefit expenses
Depreciation
Rent expenses
Other

1,867
1,910
257
60
105
20
225
240
1,094
1,243

1,923
1,863
254
(5)
148
21
221
199
1,123
1,335

7,026

7,086

2,524

3,053

61
48
31
47
34

47
50
30
26
26

222

180

0
5
15

0
6
9

Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cost of lease revenue
Other
Total non-operating expenses

21

16

2,726

3,217

0

0
0

0

1

0
0
0

3
-

Total extraordinary losses

03Profit before income taxes

2,725

3,215

Income taxes-current
Income taxes-deferred

1,088
(29)

1,033
74

Total income taxes

1,058

1,107

Profit

1,666

2,108

0

0

1,666

2,107

Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of non-current assets
Loss on valuation of investment securities

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2017

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months ofthe previous fiscal year
(from January 1, 2016
to June 30, 2016)
1,666(Million yen)First six months ofthe current fiscal year
(from January 1, 2017
to June 30, 2017)
2,108

(535)

274

Deferred gains or losses on hedges

(28)

(17)

Foreign currency translation adjustment

(200)

(35)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

23

55

(740)

276

926

2,384

930

2,383

(4)

0

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-7-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2017(3) Quarterly Consolidated Statement of Cash Flows(Million yen)First six months ofthe current fiscal year
(from January 1, 2017
to June 30, 2017)

First six months ofthe previous fiscal year
(from January 1, 2016
to June 30, 2016)
Cash flows from operating activities
Profit before income taxes

2,725

3,215

Depreciation

881

790

Increase (decrease) in allowance for doubtful accounts

59

(6)

Increase (decrease) in provision for bonuses

7

11

(22)

(24)

55

115

(110)

(97)

0

0

Loss (gain) on sales of non-current assets

(0)

(0)

Loss on retirement of non-current assets

03

Loss (gain) on sales of investment securities-(0)

Loss (gain) on valuation of investment securities

0

-

6,124

5,680

Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade

(312)

(260)

(3,535)(2,961)Other, net

210

150

Subtotal

6,083

6,618

Interest and dividend income received

108

100

Interest expenses paid

(0)

(0)

(1,306)(1,219)

4,884

5,498

Payments into time deposits

-

(83)

Proceeds from withdrawal of time deposits

33

83

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities

Purchase of securities(4,200)(2,501)

Proceeds from sales of securities

3,400

6,002

Collection of loans receivable

113

0(1,129)

(279)

4

1

Purchase of intangible assets

(0)

(60)

Purchase of investment securities

(13)

(14)

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

Proceeds from sales of investment securities-

1

Other, net

1642(1,776)

3,191

(482)

(490)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(8)

4

(490)

(485)

(82)

(13)

Net increase (decrease) in cash and cash equivalents

2,535

8,190

Cash and cash equivalents at beginning of period

11,451

12,900Cash and cash equivalents at end of period

13,98621,091-8-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2017(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.

* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

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