Business Results for the Second Quarter of the Year Ending December 31, 2023
[Japan GAAP] (Consolidated)
August 7, 2023

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:
August 10, 2023
Expected starting date of dividend payment:
September 4, 2023
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, 2023
(January 1, 2023 through June 30, 2023)(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, 2023

44,878

13.3

2,976

45.6

3,147

36.9

2,133

50.0

Second quarter of year ended
December 31, 2022

39,617

8.3

2,044

40.1

2,298

43.6

1,422

33.0

(Note) Comprehensive income

Second quarter of year ending December 31, 2023: 2,942 million yen (68.7%)
Second quarter of year ended December 31, 2022: 1,744 million yen (22.7%)
Quarterly basic
earnings per share

Quarterly diluted
earnings per share

Yen

Yen

Second quarter of year ending December 31, 2023

112.16112.08

Second quarter of year ended December 31, 2022

74.85

74..78(2)

Consolidated financial position
Total assets

Net assets

Capital adequacy ratio

Million yen

Million yen%

Second quarter of year ending December 31, 2023

93,831

67,705

72.1

Year ended December 31, 2022

94,36565,371

69.2(Reference) Owner’s equity

Second quarter of year ending December 31, 2023: 67,660 million yen
Year ended December 31, 2022:
65,324 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, 2022

-

30 00

-

35.00

65.00

Year ending December 31, 2023

-

35 00
-

43.00

78.00

Year ending December 31, 2023 (forecast)Year-end

Total(Note) Revision from most recently announced dividends forecast: Yes
Please refer to the Notice of Revisions of Full-year Forecast of Consolidated Results and Year-end Dividend Forecast publishedtoday (August 7, 2023) for the updated dividend forecast.

3. Forecast of consolidated results for the year ending December 31, 2023
(January 1, 2023 through December 31, 2023)(Full year %: change from the previous corresponding period)
Net sales
Million yen%

Operating profit

Ordinary profit

Million yen

Million yen

%

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

Yen

Full year
97,000 8.9
7,100 18.9
7,500 18.1
4,900 20.7
257.45(Note) Revision from most recently announced forecast of results: Yes
Please refer to the Notice of Revisions of Full-year Forecast of Consolidated Results and Year-end Dividend Forecast publishedtoday (August 7, 2023) for the updated forecast of consolidated results.

*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: None
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, 2023
(including treasury shares)

19,900,000 sharesYear ended
December 31, 2022

19,900,000 shares

2)

Number of treasury shares at theend of fiscal year

2Q, year ending
December 31, 2023

867,896 sharesYear ended
December 31, 2022

890,661 shares

3)

Average number of shares(quarterly cumulative)

2Q, year ending
December 31, 2023

19,023,178 shares

2Q, year ended
December 31, 2022

19,002,040 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 Fiscal Year 2023

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

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)- 1 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

1. Qualitative Information Concerning Business Results for the Quarter Under Review(1)

Description of Operational Results

In the cumulative period through the second quarter of the consolidated fiscal year under review, Japan’s economy trended
toward recovery, particularly in the industries of food and beverage, leisure, and lodging. This was due in part to the fading
impact of the COVID-19 pandemic, which in turn boosted inbound tourism and associated demand, as well as other factors,
including wage rises against a backdrop of increasing prices. Nevertheless, various factors leave conditions uncertain,
including the prolonged effects of high prices for daily necessities, the soaring cost of energy and materials, and fluctuations
in foreign exchange rates.
In the United States, personal consumption remained firm as real wages rose. Employment numbers trended upward. Dueto the continuing tightening of monetary policy intended to control inflation, which remains high, fears of recession remain.
In China, while the economy continues to see recovery in consumption of services such as food and beverage and travel
following the easing of quarantine restrictions, sluggish real estate and export sectors are weighing on the economy.
Within this context, the Group has adopted Evolution —Start of purpose-based management and Sustainable Management
as the slogan for our Medium -Term Management Plan, which aims to achieve consolidated net sales of 107,000 million yen
and operating income of 7,000 million yen for the fiscal year ending December 31, 2025. Toward this goal, group companies
worked collectively to increase earnings by venturing into new markets, making substantial capital expenditures, andimproving quality management.
Due to these efforts, during the second quarter of the consolidated fiscal year under review, net sales grew by 13.3% to44,878 million yen; operating profit rose 45.6% to 2,976 million yen; ordinary profit grew 36.9% to 3,147 million yen; andprofit attributable to owners of parent improved 50.0% to 2,133 million yen.
The business performance for each segment is reviewed 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 29.0% of consolidated sales, rose alongside recovery in domestic consumer spending and tourism demand,with net sales growing 15.4% year on year to 12,993 million yen.
Net sales of folding paper cartons, which accounted for 25.1% of consolidated sales, grew 15.8% year on year to 11,262
million yen. This was due to recovery in the market for souvenirs driven by tourism consumption and strong sales of cartons
for takeout/delivery food products.
Sales of corrugated boxes, which accounted for 14.1% of consolidated sales, grew 6.7% year on year to 6,343 million yen,driven by strong sales to the manufacturing sector and firm sales to the e-commerce sector.
Printing sales, which accounted for 2.5% of consolidated sales, rose 6.7% to 1,135 million yen based on firm sales at Keihin
Tokushu Printing Corp. and NIKKO PRINT CORPORATION.
Overall, sales in this segment grew 13.3% to 31,734 million yen. Operating profit rose 39.1% to 2,715 million yen.
(Film Packaging)
In the film packaging segment, which accounted for 14.8% of consolidated sales during the period under review, net salesrose 27.4% year on year to 6,654 million yen. This was due to strong sales of disposable diaper products and flexible film
packaging for food products, as well as strong sales in mail order enterprises as well as specialty stores generated byrecovering tourism consumption and demand from foreign tourists. Operating profit grew by 46.1% year on year to 28.8
million yen.

- 2 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

(Other Businesses)
Other businesses in the period under review accounted for 14.5% of consolidated sales. While COVID-19 vaccine-related
sales declined, sales of sewn products and non-woven bags to specialty stores were firm. Net sales grew by 1.4% year on
year to 6,489 million yen. Operating profit rose 12.5% year on year to 485 million yen.
(2)

Description of Financial Position(i)

Assets, liabilities, and net assets

Assets totaled 93,831 million yen at the end of the quarter under review, down 534 million yen from the end of the previous
fiscal year. Major factors included growth of 2,101 million yen in buildings and structures, 1,909 million yen in land, and1,418 million yen in intangible assets, offset by declines of 5,490 million yen in notes and accounts receivable-trade and1,900 million yen in securities.
Liabilities fell 2,868 million yen to 26,125 million yen. The primary factors were declines of 2,414 million yen in notes andaccounts payable-trade and 413 million yen in electronically recorded obligations-operating.
Net assets grew by 2,334 million yen to 67,705 million yen. The key factors were increases of 1,468 million yen in retained
earnings and 623 million in valuation difference on available-for-sale securities.
(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 fell
by 2,381 million yen (11.8%) to 17,719 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 5,066 million yen (vs. cash flow from operating activities of 4,449 million yen in the cumulative period
through the second quarter of the previous consolidated fiscal year). Factors contributing to this figure include the recordingof 3,129 million yen in profit before income taxes, a decrease 5,566 million yen in notes and accounts receivable-trade, anddepreciation of 1,014 million yen. These factors more than offset a decrease of 2,857 million yen in notes and accounts
payable-trade and an increase of 738 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 5,413 million yen (vs. cash flow used in investment activities of 2,065 million yen in the cumulative
period through the second quarter of the previous consolidated fiscal year). This figure reflects various factors, including
6,000 million yen in purchase of securities, 4,351 million yen in purchase of property, plant, and equipment, 1,465 million
yen in purchase of intangible assets, despite 6,500 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 703 million yen (vs. cash flow used in financing activities of 514 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 664 million yen.

- 3 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

(3)

Explanation Regarding Consolidated Business Forecasts and Other Forward-Looking Statements

We have revised our forecast due to stronger performance than initially forecast in the second quarter of the fiscal year
ending December 31, 2023. (The previous forecast of consolidated results was announced in the Summary of BusinessResults published on February 6, 2023.)
For more information, please review the Notice of Revisions of Full-year Forecast of Consolidated Results and Year-end
Dividend Forecast published today (August 7, 2023).

- 4 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

2. Quarterly Consolidated Financial Statements and Notes(1)

Quarterly Consolidated Balance Sheet(Million yen)Previous fiscal year
(as of December 31, 2022)

Second quarter of current fiscal year
(as of June 30, 2023)

AssetsCurrent assets
Cash and deposits

16,163

16,729Notes and accounts receivable-trade

23,886

18,396

Securities

12,50010,600

Merchandise and finished goods

6,015

6,733

Work in process

1,032

1,214

Raw materials and supplies

1,108

953

Other

792

956

Allowance for doubtful accounts

(14)

(19)

61,48455,565

Buildings and structures, net

6,132

8,233

Machinery, equipment, and vehicles, net

5,641

5,908

348

363

Land

8,539

10,448Construction in progress

3,068

2,057

Total property, plant, and equipment

23,72927,011

1,044

2,462

Investment securities

6,746

7,537

Deferred tax assets

421

171

Other

992

1,133

Allowance for doubtful accounts

(53)

(50)

Total investments and other assets

8,106

8,792

32,881

38,266

94,36593,831

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 Fiscal Year 2023

(Million yen)Previous fiscal year
(as of December 31, 2022)

Second quarter of current fiscal year
(as of June 30, 2023)

Liabilities
Current liabilities
Notes and accounts payable-trade

14,37011,956

Electronically recorded obligations-operating

6,689

6,275

Current portion of long-term loans payable

25

25

Income taxes payable

1,349

1,122

Provision for bonuses

291

334

Provision for bonuses for directors (and other officers)

45

21

Other

3,283

3,571

Total current liabilities

26,05423,306Long-term loans payable

34

22

Deferred tax liabilities

431

453

2,294

2,251

178

91

2,939

2,818

28,994

26,125

Capital stock

2,553

2,553

Capital surplus

3,166

3,156

Retained earnings

60,654

62,123

Treasury shares(2,661)(2,592)

Total shareholders’ equity

63,71365,240

1,391

2,014

Deferred gains or losses on hedges(3)2Foreign currency translation adjustment

89

273

Remeasurements of defined benefit plans

134

130

1,611

2,420

46

45

65,371

67,70594,36593,831

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

Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets- 6 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

(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, 2022
(from January 1, 2023
to June 30, 2022)
to June 30, 2023)
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
Loss on investment limited partnership
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Government subsidies
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of investment securities
Impairment loss
Loss on reduction of non-current assets
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- 7 -39,61730,1839,433

44,87833,587
11,291

1,868
2,003
215
0
143
13
131
180
1,355
1,476
7,389
2,044

2,001
2,208
265
4
178
19
144
256
1,479
1,755
8,314
2,976

61
56
25
65
20
37
267

74
57
20
14
18
185

0
4
8
13
2,298

1
2
6
4
14
3,147

1
1

49
49

6
44
188
239
2,060
636
1
637
1,422
(0)
1,422

18
49
67
3,129
981
14
995
2,133
2,133

The Pack Corporation (3950) Financial Report for Fiscal Year 2023

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, 2022
(from January 1, 2023
to June 30, 2022)
to June 30, 2023)
1,422

2,133

Valuation difference on available-for-sale securities

(0)

623

Deferred gains or losses on hedges

11

6Foreign currency translation adjustment

319

183

Remeasurements of defined benefit plans, net of tax

(7)

(4)

Total other comprehensive income

322

808

1,744

2,942

Comprehensive income attributable to owners of parent

1,743

2,942

Comprehensive income attributable to non-controllinginterests

1-

ProfitOther comprehensive income

Comprehensive income(Comprehensive income attributable to)- 8 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

(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, 2022
(from January 1, 2023
to June 30, 2022)
to June 30, 2023)

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors
and other officers
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Loss (gain) on investment limited partnership
Loss (gain) on sales of non-current assets
Government subsidies
Loss on retirement of non-current assets
Loss (gain) on sales of investment securities
Loss on reduction of non-current assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net

2,060
945
188
0
2

3,129
1,014
1
42

(16)

(23)

(169)
(118)
0
(1)
6
44
4,705
(843)
(1,641)
74

(49)
(131)
1
6
(49)
18
49
5,566
(738)
(2,857)162

Subtotal

5,238

6,143

Interest and dividend income received
Interest expenses paid
Income taxes paid

124
(0)
(912)

132
(1)
(1,208)Net cash provided by (used in) operating activities

4,449

5,066

Cash flows used in investment activities
Purchase of securities
Proceeds from sales of securities
Purchase of property, plant, and equipment
Proceeds from sales of property, plant, and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Collection of loans receivable
Payments for leasehold and guarantee deposits
Proceeds from government subsidies
Other, net(5,000)4,500(1,323)
3
(184)
(154)
60
8
(16)
41

(6,000)6,500(4,351)(1,465)
(18)
6
28
(200)
49
36

Net cash provided by (used in) investment activities(2,065)(5,413)

(12)
(473)
(27)

(12)
(664)
(26)

(514)

(703)

163

117

Cash flows used in financing activities
Repayments of long-term loans payable
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

2,033

(933)

Cash and cash equivalents at beginning of period

18,067

18,653

Cash and cash equivalents at end of period

20,101

17,719- 9 -The Pack Corporation (3950) Financial Report for Fiscal Year 2023

(4)

Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable(Significant Changes in Shareholders’ Equity)
Not applicable- 10 -