Business Results for the Second Quarter of the Year Ending December 31, 2022
[Japan GAAP] (Consolidated)
Company:
Stock code:
Representative:
Contact:

August 5, 2022

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:
August 9, 2022
Expected starting date of dividend payment:
September 2, 2022
Quarterly supplementary financial documents:
Yes
Quarterly results briefing:
Yes

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

Second quarter of year ending
December 31, 2022

39,617

8.3

2,044

40.1

2,298

43.6

1,422

33.0

Second quarter of year ended
December 31, 2021

36,589

-

1,459

18.7

1,600

16.4

1,069

23.8

(Note) Comprehensive income

Second quarter of year ending December 31, 2022: 1,744 million yen (22.7%)
Second quarter of year ended December 31, 2021: 1,421 million yen (457.8%)
Quarterly basic
earnings per share

Quarterly diluted
earnings per share

Yen

Yen

Second quarter of year ending December 31, 2022

74.85

74.78

Second quarter of year ended December 31, 2021

56.31

56.24

(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%

Second quarter of year ending December 31, 2022

86,56563,323

73.1

Year ended December 31, 2021

87,422

62,032

70.9(Reference) Owner’s equity

Second quarter of year ending December 31, 2022: 63,263 million yen
Year ended December 31, 2021:
61,955 million yen

2. Dividends
Dividend per share
End of 1Q

End of 2Q

End of 3Q

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)Year-end

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
2Q, year ending
shares at the end of fiscal year
December 31, 2022
(including treasury shares)2)

Number of treasury shares at theend of fiscal year

3)

Average number of shares(quarterly cumulative)

19,900,000 sharesYear ended
December 31, 2021

19,900,000 shares

2Q, year ending
December 31, 2022

890,617 sharesYear ended
December 31, 2021

904,917 shares

2Q, year ending
December 31, 2022

19,002,040 shares

2Q, year ended
December 31, 2021

18,992,624 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 Second Quarter of 2022

Contents of Attachments
1. Qualitative information concerning business results for the quarter under review(1) Description of Operational Results(2) Description of Financial Position(3) Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

2
2
3
4

2.
(1)
(2)
(3)
(4)

5
5
7
9
10
10
10
10

Quarterly Consolidated Financial Statements and Notes
Quarterly Consolidated Balance Sheet
Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Cash Flows
Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)(Significant Changes in Shareholders’ Equity)(Changes in Accounting Policies)- 1 -The Pack Corporation (3950) Financial Report for the Second 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: (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies):(Application of Accounting Standard for Revenue Recognition and Related Guidance).”
In the cumulative period through the second quarter of the consolidated fiscal year under review, Japan’s economy
experienced a recovery in consumption at department stores and convenience stores and for leisure and travel. Growing
numbers of consumers ventured out, particularly during the long holiday period, which, with the lifting in March of thequasi-states of emergency imposed in response to the rapid spread of the COVID-19 omicron variant, was free of restrictions
on movement for the first time in three years. Nevertheless, the recovery was delayed in the automotive and home-electronics
industries due to shortages of chips and other materials. Supermarkets faced challenges due to higher prices and a decline instay-at-home demand. Various factors leave conditions uncertain, including rising inflation in Japan resulting from bothsoaring resource prices due to the lengthening of the 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.
During the second quarter of the consolidated fiscal year under review, net sales grew by 8.3% year on year to 39,617 million
yen; operating profit rose 40.1% to 2,044 million yen; ordinary profit grew 43.6% to 2,298 million yen; and profit attributableto owners of parent improved 33.0% to 1,422 million yen.
The business performance for each segment is given below.
(Paper Products)
The paper products segment accounted for 70.7% of consolidated sales in the second quarter. Sales of paper bags, which
accounted for 28.4% of consolidated sales, saw continued recovery from a sales slump attributable to earlier slowing indomestic consumer spending. The overseas subsidiary The Pack America Corp. recorded strong performance, with net sales
growing 16.3% year on year to 11,259 million yen.
Sales of folding paper cartons, which accounted for 24.6% of consolidated sales, grew 10.5% to 9,728 million yen. Sales ofcartons for takeout/delivery food products and to the e-commerce sector remained strong, while demand for souvenirs andother items also recovered.
Continued strong sales to the manufacturing and e-commerce sectors drove sales of corrugated boxes, which accounted for
15.0% of consolidated sales, leading to growth of 2.9% to 5,947 million yen.

- 2 -The Pack Corporation (3950) Financial Report for the Second Quarter of 2022

Printing sales, which accounted for 2.7% of consolidated sales, rose 1.7% to 1,063 million yen based on strong sales at
Keihin Tokushu Printing Corp. and NIKKO PRINT CORPORATION.
Overall, sales in this segment grew 10.6% to 27,998 million yen. Operating profit rose 37.8% to 1,952 million yen.
(Film Packaging)
The film packaging segment accounted for 13.2% of consolidated sales during the quarter under review. Segment sales were
down 1.9% to 5,221 million yen due to declining sales of disposable diaper products, which offset strong sales of flexible
film packaging for food products and strong performance by The Pack America Corp. Operating profit, however, increased
21.0% to 19.7 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. Kannaru Printing Co., Ltd. recorded strong sales of miscellaneous
supplies to medical institutions. This, combined with the strong performance of The Pack America Corp., resulted in sales
growth of 7.5% to 6,396 million yen and 14.0% growth in operating profit to 431 million yen.
(2)

Description of Financial Position(i)

Assets, liabilities, and net assets

Assets totaled 86,565 million yen at the end of the quarter under review, down 857 million yen from the end of 2021. Major
factors included growth of 2,533 million yen in cash and deposits, 2,001 million yen in securities, and 838 million yen in
construction in progress, offset by declines of 4,564 million yen in notes and accounts receivable-trade and 1,957 million
yen in investment securities.
Liabilities fell 2,149 million yen to 23,241 million yen. The primary factors were declines of 1,532 million yen in notes andaccounts payable-trade and 277 million yen in income taxes payable.
Net assets grew by 1,291 million yen to 63,323 million yen. The key factors were increases of 947 million yen in retained
earnings and 318 million yen in foreign currency translation adjustment.
(ii)

Cash flow

Compared to the cumulative period through the second quarter of the previous consolidated fiscal year, the balance of cash
and cash equivalents in the cumulative period through the second quarter of the consolidated fiscal year under review grew
by 1,949 million yen (10.7%) to 20,101 million yen.
(Cash flow from operating activities)
Cash flow from operating activities in the cumulative period through the second quarter of the consolidated fiscal year underreview stood at 4,449 million yen (vs. cash flow from operating activities of 6,143 million yen in the cumulative period
through the second quarter of the previous consolidated fiscal year). Factors contributing to this figure include the recordingof 2,060 million yen in profit before income taxes, a decline of 4,705 million yen in notes and accounts receivable-trade,and depreciation of 945 million yen, despite a decrease of 1,641 million yen in notes and accounts payable-trade and anincrease of 843 million yen in inventories.
(Cash flow used in investment activities)
Cash flow used in investment activities in the cumulative period through the second quarter of the consolidated fiscal year
under review stood at 2,065 million yen (vs. cash flow used in investment activities of 2,764 million yen in the cumulative
period through the second quarter of the previous consolidated fiscal year). This figure reflects various factors, including- 3 -The Pack Corporation (3950) Financial Report for the Second Quarter of 2022

5,000 million yen in purchase of securities and 1,323 million yen in purchase of property, plant, and equipment, despite
4,500 million yen in proceeds from sales of investment securities.
(Cash flow used in financing activities)
Cash flow used in financing activities in the cumulative period through the second quarter of the consolidated fiscal year
under review stood at 514 million yen (vs. cash flow used in financing activities of 523 million yen in the cumulative period
through the second quarter of the previous consolidated fiscal year). This figure reflects various factors, including cash
dividends paid of 473 million yen.
(3)

Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

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

- 4 -The Pack Corporation (3950) Financial Report for the Second 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)

Second quarter of current fiscal year
(as of June 30, 2022)

AssetsCurrent assets
Cash and deposits

15,077

17,611

Notes and accounts receivable-trade

21,003

16,439Securities

12,006

14,007

Merchandise and finished goods

4,768

5,457

Work in process

867

941

Raw materials and supplies

794

903

Other

934

874

Allowance for doubtful accounts

(13)

(15)

55,43856,219Buildings and structures, net

6,169

6,012

Machinery, equipment, and vehicles, net

6,159

5,596

348

352

Land

8,539

8,539

Construction in progress

1,441

2,280

Total property, plant, and equipment

22,65822,781643

841

Investment securities

7,405

5,447

Deferred tax assets

416

417

Other

907

904

Allowance for doubtful accounts

(48)

(47)

Total investments and other assets

8,682

6,722

31,98430,34587,422

86,565

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- 5 -The Pack Corporation (3950) Financial Report for the Second Quarter of 2022

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

Second quarter of current fiscal year
(as of June 30, 2022)

Liabilities
Current liabilities
Notes and accounts payable-trade

12,235

10,703

Electronically recorded obligations-operating

5,521

5,478

Current portion of long-term loans payable

25

25

Income taxes payable

991

714

Provision for bonuses

267

270

Provision for bonuses for directors (and other officers)

32

15

Other

3,206

3,122

Total current liabilities

22,27920,329Long-term loans payable

60

47

Deferred tax liabilities

440

446

2,434

2,276

176

141

3,110

2,911

25,39023,241

Capital stock

2,553

2,553

Capital surplus

3,164

3,160

Retained earnings

57,64058,588Treasury shares(2,704)(2,661)

Total shareholders’ equity

60,654

61,641

1,212

1,211

0

12

Foreign currency translation adjustment

(98)

219

Remeasurements of defined benefit plans

185

178

1,300

1,621

Share acquisition rights

63

46

Non-controlling interests

13

14

62,032

63,32387,422

86,565

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- 6 -The Pack Corporation (3950) Financial Report for the Second Quarter of 2022

(2)

Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

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

Net sales
Cost of sales

36,58927,92739,61730,183Gross profit

8,661

9,433

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

1,784
1,961
213
2
130
16
139
186
1,289
1,477

1,868
2,003
215
0
143
13
131
180
1,355
1,476

7,202

7,389

1,459

2,044

52
44
26
13
17

61
56
25
65
20
37

154

267

0
4
8

0
4
8

13

13

1,600

2,298

-

1

-

1

4
-

6
44
188

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 non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of investment securities
Impairment loss
Total extraordinary losses

4239

Profit before income taxes

1,595

2,060

524
3

636
1

Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

- 7 -

528

637

1,067

1,422

(2)

(0)

1,069

1,422

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

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

Profit

1,067

1,422

220

(0)

0

11

124

319

8

(7)

353

322

1,421

1,744

Comprehensive income attributable to owners of parent

1,421

1,743

Comprehensive income attributable to non-controllinginterests(0)

1

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)- 8 -The Pack Corporation (3950) Financial Report for the Second Quarter of 2022

(3)

Consolidated Statement of Cash Flows(Million yen)
Cumulative period through second Cumulative period through second
quarter of previous fiscal year
quarter of current fiscal year
(from January 1, 2021
(from January 1, 2022
to June 30, 2021)
to June 30, 2022)

Cash flows from operating activities
Profit before income taxes

1,595

2,060

Depreciation

1,007

945

Impairment loss-

188

Increase (decrease) in allowance for doubtful accounts

00Increase (decrease) in provision for bonuses

26

2

Increase (decrease) in provision for bonuses for directors
and other officers

(1)

(16)

Increase (decrease) in retirement benefit liability

(110)

(169)

Interest and dividend income

(97)

(118)

0

0

Loss (gain) on sales of non-current assets-(1)

Loss on retirement of non-current assets

46Interest expenses

Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable-trade

-

44

5,577

4,705

(207)

(843)

(2,089)(1,641)Other, net

357

74

Subtotal

6,065

5,238

Interest and dividend income received

92

124

Interest expenses paid

(0)

(0)

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

Income taxes paid

(14)

(912)

Net cash provided by (used in) operating activities

6,143

4,449

Purchase of securities(5,005)(5,000)

Proceeds from sales of securities

4,402

4,500

Collection of loans receivable13

8(1,801)(1,323)

Cash flows used in investment activities

Purchase of property, plant, and equipment-

3

Purchase of intangible assets

(434)

(184)

Purchase of investment securities

Proceeds from sales of property, plant, and equipment

(42)

(154)

Proceeds from sales of investment securities

7

60

Payments for leasehold and guarantee deposits

(11)

(16)

Other, net

106

41

(2,764)(2,065)

Net cash provided by (used in) investment activities
Cash flows used in financing activities
Proceeds from long-term loans payable

100-

Repayments of long-term loans payable

(28)

(12)

Cash dividends paid

(569)

(473)

Other, net

(25)

(27)

Net cash provided by (used in) financing activities

(523)

(514)

71

163

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

2,926

2,033

Cash and cash equivalents at beginning of period

15,22418,067

Cash and cash equivalents at end of period

18,151

20,101- 9 -The Pack Corporation (3950) Financial Report for the Second Quarter of 2022

(4)

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 254 million yen in each of net sales
and cost of sales for the cumulative period through the second 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.

- 10 -