Business Results for the Second Quarter of the Year Ending December 31, 2019
(Six Months Ended June 30, 2019)[Japan GAAP] (Consolidated)
August 7, 2019

Company:
The Pack Corporation
Listed on the TSE1
Stock code:
3950
URL: http://www.thepack.co.jp
Representative: Mitsuo Inada, President & CEO
Contact:
Michihisa Fujii, Managing Director, Corporate Division
TEL: +81-6-4967-1221
Expected date of filing of quarterly report:
August 9, 2019
Expected starting date of dividend payment:
September 4, 2019
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, 2019
(January 1, 2019 through June 30, 2019)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating profit

Million yen

Six months ended Jun. 30, 2019
Six months ended Jun. 30, 2018
(Note) Comprehensive income%

Million yen%

44,284
5.3
2,595
(3.7)
2,754
(3.7)
1,804
42,0540.8
2,695 (11.7)
2,858 (11.1)
1,927
Six months ended Jun. 30, 2019: 1,664 million yen (down 5.7%)
Six months ended Jun. 30, 2018: 1,765 million yen (down 26.0%)

(6.4)
(8.5)

Basic earnings per
share
Six months ended Jun. 30, 2019
Six months ended Jun. 30, 2018

Million yen

Profit attributable toowners of parent

Ordinary profit%

Million yen%

Diluted earnings per
share

Yen

Yen

92.41
98.22

92.27
98.11

(2) Consolidated financial position
Total assets

Net assets

Million yen

Capital adequacy ratio

Million yen

82,32755,89386,49556,775
As of Jun. 30, 2019: 55,748 million yen

As of Jun. 30, 2019
As of Dec. 31, 2018
(Reference) Owner’s equity

%

67.7
65.5
As of Dec. 31, 2018: 56,613 million yen

The Pack has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board ofJapan (ASBJ) Statement No. 28, February 16, 2018) from the beginning of the first quarter of 2019 and changed the method ofpresentation. Figures as of December 31, 2018 have been adjusted retrospectively in accordance with these amendments.

2. Dividends
End of 2Q

End of 1Q
Yen

Dividend per share
End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Year ended Dec. 31, 2018
25.00
Year ending Dec. 31, 2019
25.00
Year ending Dec. 31, 2019
(forecasts)(Note) Revisions to the most recently announced dividend forecast: None

-

25.00

50.00

-

25.00

50.00

3. Forecast of consolidated business results for the year ending December 31, 2019
(January 1, 2019 through December 31, 2019)(% change from the previous corresponding period)
Net sales
Million yen

Operating profit%

Million yen

Profit attributable toowners of parent

Ordinary profit%

Million yen

Basic earnings per
share

%

Million yen%

Yen

Full year
95,800
2.9
7,300
5.4
7,600
5.4
(Note) Revisions to the most recently announced consolidated forecast: None

5,000

0.6

254.82

* 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 Jun. 30, 2019:

19,900,000 shares

As of Dec. 31, 2018:

19,900,000 shares

As of Dec. 31, 2018:278,548 shares

2) Number of treasury shares at the end of fiscal year
As of Jun. 30, 2019:925,308 shares

3) Average number of shares
Six months ended Jun. 30, 2019:19,529,486 shares

Six months ended Jun. 30, 2018:

19,620,748 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
Note concerning forward-looking statements
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 2019

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

2(2) Explanation of Financial Position

2(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 Statement of Income and Comprehensive Income

6(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

Additional Information

9-1-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2019

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of 2019, the overall business confidence has been firm supported by strong corporate earnings
and improved employment situation. However, operating expenses have been increasing because of the higher
cost of logistics and rising prices of raw materials.
Overseas, the U.S. economy was firm but the U.S.-China trade friction is showing signs of becoming protracted.
There are concerns about its effect on the global economy and as a result, the future direction of the global
economy remains unclear.
In the first half of 2019, under the slogan of “Bring about change and conquer new challenges,” all groupcompanies were focused on entering new markets, making substantial capital expenditures and improving quality
management in order to increase earnings.
Net sales increased 5.3% year-on-year to 44,284 million yen, operating profit decreased 3.7% to 2,595 million
yen, ordinary profit decreased 3.7% to 2,754 million yen, and profit attributable to owners of parent decreased
6.4% to 1,804 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 63.3% of consolidated sales in the first half of 2019. Sales of paperbags, which accounted for 30.8% of consolidated sales, increased 3.8% to 13,627 million yen. This was the resultof strong sales to specialty retail stores in Japan and higher sales at THE PACK AMERICA CORP. and The Pack
(Shanghai) Corporation.
Sales of paper folding cartons, which accounted for 18.8% of consolidated sales, increased 14.2% to 8,308
million yen. The main reasons were firm sales of cartons for food products and the inclusion of sales of Kannaru
Printing Co., Ltd. which was acquired in April 2018.
Sales of corrugated boxes, which accounted for 11.4% of consolidated sales, increased 2.3% to 5,049 million yen.
This increase was attributable to strong sales of boxes to the e-commerce sector.
Printing sales, which accounted for 2.3% of consolidated sales, increased 6.4% to 1,039 million yen. Sales at
Keihin Tokushu Printing Corp. and NIKKO PRINT CORPORATION were favorable.
Overall, sales in this segment increased 6.5% to 28,025 million yen, but operating profit decreased 3.0% to 2,028
million yen due to the higher cost of logistics and raw materials.
(Film Packaging)
The film packaging segment accounted for 20.7% of consolidated sales in the first half of 2019. Due to strong
sales of products for disposable diapers and higher sales at THE PACK AMERICA, segment sales increased 3.6%
to 9,185 million yen. Operating profit was up 12.9% to 410 million yen.
(Other Businesses)
Other businesses accounted for 16.0% of consolidated sales in the first half of 2019. Sales increased 3.0% to
7,073 million yen mainly due to the inclusion of the sales of promotional items at Kannaru Printing. O perating
profit decreased 5.3% to 585 million yen.
(2) Explanation of Financial Position
1) Balance sheet position
Assets totaled 82,327 million yen at the end of the second quarter of 2019, down 4,167 million yen from the endof 2018. The main factors were an increase of 2,754 million yen in cash and deposits, and decreases of 5,865
million yen in notes and accounts receivable-trade and 1,061 million yen in investment securities.
Liabilities decreased 3,284 million yen to 26,434 million yen. The main factors were decreases of 2,934 million
yen in notes and accounts payable-trade and 412 million yen in electronically recorded obligations-operating.

-2-The Pack Corporation (3950) Financial Report for the Second Quarter of 2019

Net assets decreased 882 million yen to 55,893 million yen. The main factors were an increase of 1,314 million
yen in retained earnings and purchase of treasury shares of 2,041 million yen.
2) Cash flow position
The balance of cash and cash equivalents at the end of the second quarter of 2019 increased 665 million yen, or3.4% from the end of the second quarter of 2018 to 20,136 million yen.
Cash flows from operating activities
Operating activities provided net cash of 4,775 million yen (net cash provided of 5,000 million yen in the firsthalf of 2018). The principal factors were profit before income taxes of 2,658 million yen and a decrease of 5,842
million yen in notes and accounts receivable-trade, while there was a decrease of 3,336 million yen in notes andaccounts payable-trade.
Cash flows from investing activities
Investing activities used net cash of 1,014 million yen (net cash used of 3,171 million yen in the first half of2018). The principal factors were outlays of 2,500 million yen for the purchase of securities and 114 million yen
for the purchase of investment securities, while there were proceeds from sales of securities of 2,000 million yen.
Cash flows from financing activities
Financing activities used net cash of 2,790 million yen (net cash used of 1,572 million yen in the first half of2018). This was mainly due to outlays of 2,049 million yen for purchase of treasury shares and 490 million yen
for the cash dividends paid.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
The consolidated forecasts announced on February 8, 2019 remain unchanged.

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The Pack Corporation (3950) Financial Report for the Second Quarter of 2019

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2018)(Million yen)
Second quarter ofthe current fiscal year
(As of June 30, 2019)

AssetsCurrent assets
Cash and deposits

12,25715,011

Notes and accounts receivable-trade

24,58918,724

Securities

9,499

9,699

Merchandise and finished goods

5,547

5,686

Work in process

835

948

Raw materials and supplies

847

880

Other

912

580

Allowance for doubtful accounts

(33)

(28)

54,45551,502

Buildings and structures, net

7,006

6,704

Machinery, equipment and vehicles, net

5,125

5,150

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

Tools, furniture and fixtures, net
LandConstruction in progress

185

183

8,397

8,397

31

109

20,746

20,546162

183

Investment securities

9,441

8,379

Deferred tax assets

876

913

Other

871

868

Total property, plant and equipment
Intangible assets
Investments and other assets

Allowance for doubtful accounts

(58)

(65)

Total investments and other assets

11,13010,09632,03930,82586,49582,327

Total non-current assets
Total assets-4-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2019

(Million yen)
Second quarter ofthe current fiscal year
(As of June 30, 2019)

Previous fiscal year
(As of December 31, 2018)
Liabilities
Current liabilities
Notes and accounts payable-trade

15,11912,185

Electronically recorded obligations-operating

5,645

5,232

Short-term loans payable

66

31

Current portion of long-term loans payable

84

21

Income taxes payable

1,138

935

Provision for bonuses

280

310

Provision for directors’ bonuses

42

20

Other

2,758

3,408

Total current liabilities

25,13622,146Long-term loans payable

163

51

Deferred tax liabilities

483

466

3,795

3,647

140

123

Non-current liabilities

Net defined benefit liability
Other
Total non-current liabilities
Total liabilities

4,582

4,287

29,71926,434

2,553

2,553

Net assets
Shareholders’ equity
Capital stock
Capital surplus

3,166

3,165

Retained earnings

50,871

52,185

Treasury shares(723)(2,764)

Total shareholders’ equity

55,86755,139

1,282

1,167

0

(0)

Foreign currency translation adjustment

(249)

(295)

Remeasurements of defined benefit plans

(287)

(262)

745

609

Share acquisition rights

81

93

Non-controlling interests

81

50

56,77555,89386,49582,327

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 2019(2) Quarterly Consolidated Statement of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)

Net sales
Cost of sales
Gross profit
Selling, 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
Total selling, general and administrative expenses
Operating profit
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
Sales discounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Insurance income
Gain on bargain purchaseTotal extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of non-current assets
Impairment loss
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

First six months ofthe previous fiscal year
(from January 1, 2018
to June 30, 2018)
42,05432,034
10,019(Million yen)First six months ofthe current fiscal year
(from January 1, 2019
to June 30, 2019)44,28433,767
10,516

2,031
1,913
263
(8)
137
20
194
190
1,164
1,418
7,324
2,695

2,271
1,992
257
4
143
19
141
182
1,359
1,548
7,920
2,595

40
50
28
33
25
178

54
51
27
24
19
176

5
5
2
1
15
2,858

2
4
2
8
18
2,754

54
54

0
83
84

47
8
55
2,858
891
44
935
1,922
(4)
1,927

12
3
164
179
2,658
869
(15)
854
1,804
(0)
1,804

-6-

The Pack Corporation (3950) Financial Report for the Second Quarter of 2019

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)(Million yen)First six months ofthe current fiscal year
(from January 1, 2019
to June 30, 2019)

First six months ofthe previous fiscal year
(from January 1, 2018
to June 30, 2018)
Profit

1,922

1,804

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

(151)

(117)

Deferred gains or losses on hedges

(4)

(0)

Foreign currency translation adjustment

(45)

(46)

44

25

(156)

(139)

1,765

1,664

1,770

1,668

(5)

(3)

Remeasurements of defined benefit plans, net of tax
Total other 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 Second Quarter of 2019(3) Quarterly Consolidated Statement of Cash Flows(Million yen)First six months ofthe current fiscal year
(from January 1, 2019
to June 30, 2019)

First six months ofthe previous fiscal year
(from January 1, 2018
to June 30, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Gain on bargain purchase
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Loss (gain) on sales of non-current assets
Loss on retirement 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
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of securities
Proceeds from sales of securities
Collection of loans receivable
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for lease and guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Cash dividends paid
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Purchase of treasury shares
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
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

-8-

2,858
837
(54)
(56)
(36)
(22)
(88)
(91)
5
8
47
6,231
(391)
(3,450)
331
6,128
105
(5)
(1,227)
5,000

2,658
821
164
1
29
(21)
(110)
(105)
2
2
12
5,842
(289)
(3,336)
62
5,733
104
(2)
(1,060)
4,775

(69)
68
(1,300)
2,900
8
(613)
3
(2)
(4,090)(66)
66(2,500)
2,000
8
(389)
0
(43)
(114)

(28)

-

(84)
36
(3,171)(13)
38(1,014)

(672)
(398)
(490)

(66)
(144)
(490)

-

(28)

(0)
(10)
(1,572)(13)242
19,22819,471(2,049)(10)(2,790)(16)
955
19,181
20,136

The Pack Corporation (3950) Financial Report for the Second Quarter of 2019(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
The Pack acquired 650,000 treasury shares by means of the tender offer pursuant to the resolution of the Board of
Directors on May 8, 2019. As a result, treasury shares increased 2,049 million yen during the first half to 2,764
million yen at the end of the second quarter of 2019.
Additional Information
Application of the Partial Amendments to Accounting Standard for Tax Effect Accounting
The Pack has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement
No. 28, February 16, 2018) from the beginning of the first quarter of 2019. Accordingly, deferred tax assets anddeferred tax liabilities have been presented in the investments and other assets section and the non -current
liabilities section of the balance sheet, respectively.

* 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.

-9-