Business Results for the First Quarter of the Year Ending December 31, 2020(Three Months Ended March 31, 2020)[Japan GAAP] (Consolidated)
May 8, 2020

Company:
The Pack Corporation
Stock code:
3950
Representative: Mitsuo Inada, President & CEO
Contact:
Michihisa Fujii, Managing Director, Corporate Division
TEL: +81-6-4967-1221
Expected date of filing of quarterly report:
May 11, 2020
Expected starting date of dividend payment:
Preparation of supplementary quarterly financial document:
None
Quarterly results briefing:
None

Listed on the TSE1
URL: https://www.thepack.co.jp(Rounded down to million yen)

1. Consolidated business results for the first quarter of the year ending December 31, 2020
(January 1, 2020 through March 31, 2020)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating profit

Million yen

Three months ended Mar. 31, 2020Three months ended Mar. 31, 2019
(Note) Comprehensive income%Million yen

Profit attributableto owners of parent

Ordinary profit%

Million yen%

Million yen

19,565 (7.1)
955 (12.1)
1,001 (12.9)
21,0696.0
1,087 (11.4)
1,149 (11.7)
Three months ended Mar. 31, 2020: (15) million yen (-%)
Three months ended Mar. 31, 2019: 888 million yen (up 30.1%)
Basic earnings per
share

Three months ended Mar. 31, 2020Three months ended Mar. 31, 2019

618
710%

(13.0)(18.0)

Diluted earnings per
share

Yen

Yen

32.59
36.22

32.54
36.17

(2) Consolidated financial position
Total assets

Net assets

Million yen

Capital adequacy ratio

Million yen

83,65657,90488,44658,495
As of Mar. 31, 2020: 57,815 million yen

As of Mar. 31, 2020
As of Dec. 31, 2019
(Reference) Owner’s equity%

69.1
66.0
As of Dec. 31, 2019: 58,371 million yen

2. Dividends
End of 1Q

End of 2Q

Yen

Dividend per share
End of 3Q

Year-endTotal

Yen

Yen

YenYenYear ended Dec. 31, 2019
25.00
Year ending Dec. 31, 2020
Year ending Dec. 31, 2020
30.00
(forecasts)(Note) Revisions to the most recently announced dividend forecast: None

-30.0055.00-30.0060.00

3. Forecast of consolidated business results for the year ending December 31, 2020
(January 1, 2020 through December 31, 2020)(% change from the previous corresponding period)
Net sales
Million yen

Operating profit%

Million yen

Profit attributable toowners of parent

Ordinary profit%

Basic earnings pershare

Million yen%

Million yen%

YenFirst half
34,800 (21.4)
900 (65.3)
1,000Full year
96,800
1.4
7,000
2.2
7,300(Note) Revisions to the most recently announced consolidated forecast: Yes(63.7)
1.4

600
4,900(66.8)
4.2

31.60
258.23

Regarding revisions to the first half consolidated forecast, please refer to the May 8, 2020 press release “Revision of the first halfconsolidated forecast” (Japanese version only).

* Notes(1) Material changes in subsidiaries during this period (Changes in scope of consolidations resulting from changes
in 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 fiscal year (including treasury shares)
As of Mar. 31, 2020:

19,900,000 shares

As of Dec. 31, 2019:

19,900,000 shares

As of Dec. 31, 2019:925,347 shares

2) Number of treasury shares at the end of fiscal year
As of Mar. 31, 2020:

915,347 shares

3) Average number of shares
Three months ended Mar. 31, 2020: 18,977,703 shares

Three months ended Mar. 31, 2019: 19,621,497 shares*The current quarterly financial summary is not subject to quarterly review by certified public accountants or auditing
firms.
*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 wasreleased and incorporates a number of current assumptions about uncertainties that may affect future resul ts 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 First Quarter of 2020

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

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

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6(3) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8Significant Changes in Shareholders’ Equity

8-1-The Pack Corporation (3950) Financial Report for the First Quarter of 2020

1. Overview of Results of Operations(1) Results of Operations
In the first quarter of 2020, there were measures by the Japanese government and Bank of Japan to support theeconomy. However, the spread of the novel coronavirus disease had a severe impact on people’s lives, jobs andthe activities of companies. The economic outlook in Japan is currently unclear.
In the United States, the economy continued to grow slowly with the backing of a strong labor market from thebeginning of 2020. However, economic activity fell sharply in March because of lower consumer spending aspeople stayed home and other effects of the coronavirus crisis. In China, this crisis caused internal demand todrop starting around the Lunar New Year holiday because of factory shutdowns, restrictions on travel and otherevents. Although the resumption of economic activity slowly began in March, economic growth in China
plummeted.
In the first quarter of 2020, under the slogan “Gather the strengths of our group, and progress forward withtenacity,” all group companies were focused on entering new markets, making substantial capital expendituresand improving quality management in order to increase earnings.
Net sales decreased 7.1% year-on-year to 19,565 million yen, operating profit decreased 12.1% to 955 million
yen, ordinary profit decreased 12.9% to 1,001 million yen, and profit attributable to owners of parent decreased
13.0% to 618 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 64.6% of consolidated sales in the first quarter of 2020. Sales of paperbags, which accounted for 28.2% of consolidated sales, decreased 16.4% to 5,508 million yen. One reason waslower sales to specialty retail stores in Japan because people were asked to stay home as much as possible.
Government orders to stay at home also brought down paper bag sales of T HE PACK AMERICA CORP. and The
Pack (Shanghai) Corporation.
Sales of paper folding cartons, which accounted for 21.1% of consolidated sales, increased 4.7% to 4,118 million
yen. The main reasons were firm sales of cartons for food products and to the e-commerce sector.
Sales of corrugated boxes, which accounted for 12.6% of consolidated sales, increased 0.5% to 2,467 million yen.
This increase was attributable to strong sales of boxes to the e-commerce sector.
Printing sales, which accounted for 2.7% of consolidated sales, increased 5.6% to 536 million yen. Sales at
Keihin Tokushu Printing Corp. were strong.
Overall, sales in this segment decreased 6.3% to 12,631 million yen, and operating profit decreased 5.1% to 831
million yen.
(Film Packaging)
The film packaging segment accounted for 19.1% of consolidated sales in the first quarter of 2020. Due to lower
sales to specialty retail stores in Japan, segment sales decreased 10.5% to 3,742 million yen. Operating profit was
down 31.9% to 162 million yen due to an increase in depreciation resulting from capital expenditures.
(Other Businesses)
Other businesses accounted for 16.3% of consolidated sales in the first quarter of 2020. Sales decreased 6.3% to3,191 million yen due to a decrease in sales of miscellaneous supplies to large retailers. Operating profit
decreased 5.9% to 150 million yen.

-2-The Pack Corporation (3950) Financial Report for the First Quarter of 2020

(2) Financial Position
Assets totaled 83,656 million yen at the end of the first quarter of 2020, down 4,789 million yen from the end of
2019. The main factors were increases of 1,409 million yen in cash and deposits, 447 million yen in constructionin progress and 307 million yen in deferred tax assets, and a decrease of 7,382 million yen in notes and accounts
receivable-trade.
Liabilities decreased 4,199 million yen to 25,752 million yen. The main factors were decreases of 3,412 million
yen in notes and accounts payable-trade and 638 million yen in income taxes payable.
Net assets decreased 590 million yen to 57,904 million yen. The main factor was a decrease of 627 million yen invaluation difference on available-for-sale securities.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
The first half consolidated forecast announced on February 7, 2020 has been revised to reflect the effects of thespread of novel coronavirus disease. For more information, please refer to the May 8, 2020 press release “Revisionof the first half consolidated forecast” (Japanese version only).

-3-The Pack Corporation (3950) Financial Report for the First Quarter of 2020

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2019)(Million yen)First quarter ofthe current fiscal year
(As of March 31, 2020)

AssetsCurrent assets
Cash and deposits

14,317

15,726

Notes and accounts receivable-trade

24,717

17,335

Securities

10,00010,000

Merchandise and finished goods

5,675

6,038

Work in process

931

1,124

Raw materials and supplies

887

865

Other

501

483

Allowance for doubtful accounts

(13)

(11)

57,01751,562

Buildings and structures, net

6,523

6,448

Machinery, equipment and vehicles, net

5,468

5,410

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

Tools, furniture and fixtures, net
LandConstruction in progress

164

165

8,397

8,397

226

674

20,781

21,096169

160

Investment securities

8,842

8,891

Deferred tax assets

774

1,082

Other

911

912

Total property, plant and equipment
Intangible assetsInvestments and other assets

Allowance for doubtful accounts

(50)

(50)

Total investments and other assets

10,478

10,836

31,42932,09488,446

83,656

Total non-current assets
Total assets-4-The Pack Corporation (3950) Financial Report for the First Quarter of 2020

(Million yen)First quarter ofthe current fiscal year
(As of March 31, 2020)

Previous fiscal year
(As of December 31, 2019)
Liabilities
Current liabilities
Notes and accounts payable-trade

15,005

11,592

Electronically recorded obligations-operating

5,763

5,929

Current portion of long-term borrowings
Income taxes payable

48

48

1,055

417

283

708

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other

43

17

3,449

2,932

Total current liabilities

25,64821,64730

14

Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

504

477

3,648

3,535

118

78

4,302

4,104

29,95125,752

2,553

2,553

Net assets
Shareholders’ equity
Share capital
Capital surplus

3,164

3,161

Retained earnings

54,60754,656Treasury shares(2,765)(2,735)

Total shareholders’ equity

57,56057,636

1,462

834

02

Foreign currency translation adjustment

(283)

(309)

Remeasurements of defined benefit plans

(367)

(348)

811

178

Share acquisition rights

93

65

Non-controlling interests

29

24

58,49557,90488,446

83,656

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 First Quarter of 2020

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)

Net sales
Cost of sales

First three months ofthe previous fiscal year
(from January 1, 2019
to March 31, 2019)
21,06916,126(Million yen)First three months ofthe current fiscal year
(from January 1, 2020
to March 31, 2020)
19,565
14,836Gross profit

4,942

4,728

1,090
819
120
4
209

1,022
859
112
1214

998190
672
755
3,854

7385
685
709
3,773

1,08795526013191027013467152

12130212

Selling, general and administrative expenses
Freight and packing costs
Salaries and allowances
Remuneration for directors (and other officers)
Provision of allowance for doubtful accounts
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Retirement benefit expenses
Depreciation
Rent expenses
OtherTotal selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income
Foreign exchange gains
OtherTotal non-operating income
Non-operating expenses
Interest expenses
Rental costs
Sales discounts
Other
Total non-operating expenses

86

1,149

1,001

083-

84-

23
1640055-

Total extraordinary losses

170

56

Profit before income taxes

1,063

944

Income taxes-current
Income taxes-deferred

491
(138)

402
(75)

Total income taxes

352

326

Profit

710

617

0(1)

710

618

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Insurance claim income
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
Impairment loss

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-6-The Pack Corporation (3950) Financial Report for the First Quarter of 2020

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months ofthe previous fiscal year
(from January 1, 2019
to March 31, 2019)710(Million yen)First three months ofthe current fiscal year
(from January 1, 2020
to March 31, 2020)
617

Valuation difference on available-for-sale securities

149(627)Deferred gains or losses on hedges(0)1Foreign currency translation adjustment

16(26)

Remeasurements of defined benefit plans, net of tax

1119

Total other comprehensive income

177(633)888(15)886(13)1(1)ProfitOther comprehensive income

Comprehensive income
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 First Quarter of 2020

(3) 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.

-8-