Business Results for the Year Ended December 31, 2013
[Japan GAAP] (Consolidated)
February 12, 2014
Company:
The Pack Corporation
Listed on the TSE1
Stock code:
3950
URL: http://www.thepack.co.jp
Representative: Yoshikazu Nakao, President & CEO
Contact:
Keiji Kimori, Managing Director, General Manager of Administration HQ
TEL: +81-6-6972-1221
Expected date of annual shareholders’ meeting:March 28, 2014
Expected starting date of dividend payment:
March 31, 2014
Expected date of filing of annual securities report: March 28, 2014
Preparation of supplementary financial document: Yes
Results briefing: Yes (for institutional investors and securities analysts)(Rounded down to million yen)

1. Consolidated business results for the year ended December 31, 2013
(January 1, 2013 through December 31, 2013)(1) Consolidated results of operations(% change from the previous corresponding period)
Net salesYear ended Dec. 31, 2013
Year ended Dec. 31, 2012
(Note) Comprehensive income

Million yen
84,31584,554

%
(0.3)
2.4

Operating income

Ordinary income

Million yen
5,253
5,036

Million yen
5,391
5,261

%
4.3
(4.4)

Net income

%
2.5
(3.1)

Million yen
3,301
3,009

%
9.7
12.3

Year ended Dec. 31, 2013: 3,932 million yen (up 13.5%)
Year ended Dec. 31, 2012: 3,463 million yen (up 28.2%)
Net income per
Diluted net
Return on
Ratio of ordinary
Ratio of operating
share
income per shareequityincome to total assets income to net sales
Yen

Yen

Year ended Dec. 31, 2013165.98Year ended Dec. 31, 2012151.30(Reference) Investment earnings/loss on equity-method

%

8.7
8.5
Year ended Dec. 31, 2013: - million yen
Year ended Dec. 31, 2012: - million yen

%

%

8.3
8.2

6.2
6.0

(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Dec. 31, 2013
As of Dec. 31, 2012
(Reference) Shareholders’ equity

Shareholders’ equity
ratio

Net assets per share%

Yen

Million yen

65,091
39,50765,532
36,569As of Dec. 31, 2013: 39,483 million yen

60.7
1,984.74
55.8
1,837.34
As of Dec. 31, 2012: 36,551 million yen(3) Consolidated cash flows
Cash flows fromoperating activities
Year ended Dec. 31, 2013
Year ended Dec. 31, 2012

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

3,736
6,819

39
(3,283)(2,310)(2,647)

10,5819,051

2. Dividends
Annual dividend
End of
1Q
Year ended Dec. 31, 2012
Year ended Dec. 31, 2013
Year ending Dec. 31, 2014
(forecasts)

Total
dividends(Total)Dividend
payout ratio(Consolidated)

Ratio of total
dividend to
net assets(Consolidated)

End of2Q

End of
3Q

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

25.00
25.00

-

25.00
25.00

50.00
50.00

994
994

33.1
30.1

2.8
2.6

-

25.00

-

25.00

50.00

Year-end

Total

3. Forecast of consolidated business results for the year ending December 31, 2014
(January 1, 2014 through December 31, 2014)(% change from the previous corresponding period)
Net salesFirst half
Fiscal year

Million yen
39,50086,000Operating income
%
2.7
2.0

Million yen
2,100
5,700

%
5.6
8.5

Ordinary income
Million yen
2,180
5,800

%
6.8
7.6

Net income
Million yen
1,180
3,310

Net income per share
%
(8.0)
0.2

Yen
59.32
166.39

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes inthe scope of consolidation): None
(2) Changes in accounting policies, accounting estimates and restatements
1) Changes in accounting policies associated with revision of accounting standards: None
2) Changes in accounting policies other than 1): None
3) Changes in accounting estimates: None
4) Restatements: None

(3) Shares outstanding (common stock)1) Number of shares outstanding at the end of period (treasury stock included)
As of Dec. 31, 2013:

19,900,000 shares

As of Dec. 31, 2012:

19,900,000 shares

As of Dec. 31, 2012:

6,562 shares

2) Number of shares of treasury stock at the end of period
As of Dec. 31, 2013:

6,602 shares

3) Average number of stock during period
Year ended Dec. 31, 2013:

19,893,431 sharesYear ended Dec. 31, 2012:

19,893,445 shares(Reference) Summary of non-consolidated business results
1. Non-consolidated business results for the year ended December 31, 2013
(January 1, 2013 through December 31, 2013)(1) Non-consolidated results of operations(% change from the previous corresponding period)

Net sales
Million yen
77,23677,873

Year ended Dec. 31, 2013
Year ended Dec. 31, 2012

%
(0.8)
3.0

Operating income

Ordinary income

Million yen
4,798
4,740

Million yen
5,103
5,123

%
1.2
(1.4)

Net income per share

Diluted net income per share

Yen

Yen

158.80150.87-

Year ended Dec. 31, 2013
Year ended Dec. 31, 2012

Net income

%
(0.4)
0.0

Million yen
3,159
3,001

%
5.3
19.4

(2) Non-consolidated financial position
Total assets

Net assets

Million yen

As of Dec. 31, 2013
As of Dec. 31, 2012
(Reference) Shareholders’ equity

Shareholders’ equity
ratio

Net assets per share%

Yen

Million yen

63,57739,027
63,91936,420
As of Dec. 31, 2013: 39,027 million yen

61.4
1,961.84
57.0
1,830.78
As of Dec. 31, 2012: 36,420 million yen

2. Forecast of non-consolidated business results for the year ending December 31, 2014
(January 1, 2014 through December 31, 2014)(% change from the previous corresponding period)
Net salesFirst half
Fiscal year

Million yen
36,60080,000Ordinary income
%
4.0
3.6

Million yen
2,100
5,500

Net income
%
6.1
7.8

Million yen
1,350
3,330

Net income per share
%
7.4
5.4

Yen
67.86
167.39*Implementation status of auditing procedure
This financial summary is not subject to auditing procedure pursuant to the Financial Instruments and Exchange Act. At the timeof disclosure of this report, the auditing procedure of financial statements pursuant to the Financial Instruments and Exchan ge Act
has not been completed.
*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 assumptions judged to be valid and information available
to the Company’s management at the time the materials were prepared. These materials are not promises by the Company
regarding future performance. Therefore, actual results may differ significantly from the forecasts due to various factors. Pleaserefer to "1. Analysis of Results of Operations and Financial Position, (1) Analysis of results of operations" on page 2 for forecast
assumptions and notes of caution for usage.
.

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Contents of Attachments
1. Analysis of Results of Operations and Financial Position

2(1) Analysis of Results of Operations

2(2) Analysis of Financial Position

3(3) Basic Policy Concerning the Distribution of Profits and Dividend Distributions for the Fiscal Year
Under Review and the Subsequent Fiscal Year4(4) Business Risks

4

2. The Pack Corporation Group6

3. Management Principles

8(1) Fundamental Management Principles

8(2) Goals and Performance Indicators

8(3) Medium-term Business Strategy

8(4) Important Issues

8

4. Consolidated Financial Statements

9(1) Consolidated Balance Sheet

9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income11(3) Consolidated Statement of Changes in Equity

13(4) Consolidated Statement of Cash Flows

15(5) Notes to Consolidated Financial Statements

16

Going Concern Assumption

16

Segment and Other Information

16

Per Share Information

18

Subsequent Events18

5. Other19(1) Changes in Executives

19

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The Pack Corporation (3950) Financial Report for Fiscal Year 2013

1. Analysis of Results of Operations and Financial Position(1) Analysis of Results of Operations
In 2013, there were numerous signs of a recovery in the Japanese economy as the government and Bank of Japan
took many actions in line with policies referred to as Abenomics. Stock prices rose as the yen weakened and there
were rebounds in corporate earnings and exports. However, the outlook for consumer spending is still uncertain.
Consumers in Japan are retaining an extremely defensive stance and strong desire to live economically because ofhigher prices, including electricity rates, resulting from the weaker yen and suspension of nuclear power plant
operations.
In the packaging industry where The Pack Group is active, costs increased because of the higher cost of imported
products and raw materials because of the weaker yen, the higher cost of electricity, a nd other reasons. Since
packaging companies have been unable to raise prices to fully offset these expenses, the operating environment has
been consistently challenging.
Based on the slogan “we enthusiastically strive always to produce excellence and best possible results,” the Groupfurther increased solidarity among group companies and concentrated on forming ties with new customers, mainlyin the Tokyo area. Other actions to increase sales and earnings included selling unused land and reexamining andimproving unprofitable operations.
In the current fiscal year, net sales decreased 0.3% year-on-year to 84,315 million yen, operating income increased
4.3% to 5,253 million yen, ordinary income was up 2.5% to 5,391 million yen, and net income increased 9.7% t o
3,301 million yen.
(Paper Products)
The paper products segment accounts for 57.9% of total sales. Sales of paper bags, which account for 30.7% of total
sales, remained firm overall and increased 1.5% to 25,843 million yen.
Sales of paper folding cartons, which account for 14.7% of total sales, increased 3.9% to 12,371 million yen mainly
because of higher sales of cartons for food products.
Sales of corrugated boxes, which account for 10.2% of total sales, decreased 6.5% to 8,574 million yen. Sales were
down despite the start of a recovery late in the fiscal year in the consumer electronics industry, which is the primarysource of demand for these boxes.
Printing sales, which account for 2.4% of total sales, increased 8.5% to 2,003 million yen mainly because of higher
sales in eastern Japan.
Overall, sales in this segment increased 0.9% to 48,794 million yen. Operating income was up 27.7% to 3,664
million yen due mainly to a decline in depreciation at The Tokyo plant.
(Film Packaging)
Sales in the film packaging segment, which accounts for 20.7% of total sales, decreased 2.5% to 17,465 million yen
as a recovery in sales of plastic bags for disposable diapers was insufficient to offset its lower sales in the fiscal
year’s first half. Segment operating income was down 35.0% to 913 million yen.
(Other Businesses)
Other businesses account for 21.4% of total sales. Sales of clothing and gift products were higher than one year
earlier but there was a decline in sales of products used in conjunction with the Pack Assortment Service system,
which is a comprehensive outsourcing system that covers everything from manufacturing and procuring packaging
materials and other products to inventory control and delivery. As a result, sales decreased 1.1% to 18,056 million
yen and operating income decreased 4.3% to 1,662 million yen.

-2-

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Outlook for 2014
There are hopes that Abenomics will support a continuation of Japan’s economic recovery in 2014. However, theoutlook for the distribution and manufacturing sectors, which are the main sources of sales for the Company, andconsumer spending is uncertain in part due to concerns about the effect of the April 2014 consumption tax hike.
Furthermore, the packaging industry will probably be affected again in 2014 by the higher cost of raw materials andimported products caused by the weaker yen. At the same time, price-based competition is expected to continue. As
a result, the business climate will probably remain challenging for the foreseeable future.
In 2014, we will maximize the use of our facilities and production capacity to further develop markets and expand
operations in Japan and overseas. We will also work on selling our products at adequate prices while focusing on
developing products and services, proposing new ideas to customers, and improving quality. Meanwhile, we willcontinue to reexamine business activities and use reforms to streamline operations in order to further improve our
performance.
As we take these actions, we ask for the continued support and understanding of our shareholders.

(2) Analysis of Financial Position
1) Balance sheet position
Assets totaled 65,091 million yen at the end of the current fiscal year, down 441 million yen from the end of theprevious fiscal year. The main factors were increases of 501 million yen in securities, 596 million yen in investment
securities, and decreases of 338 million yen in buildings and structures, and 482 million yen in deferred tax assets.
Liabilities decreased 3,378 million yen to 25,584 million yen. The main factors were decreases of 1,039 million yen
in notes and accounts payable-trade, and 562 million yen in long-term loans payable.
Net assets increased 2,937 million yen to 39,507 million yen. The main factors were increases of 2,307 million yen
in retained earnings, and 435 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 current fiscal year increased 1,529 million yen, or 16.9%
from the end of the previous fiscal year to 10,581 million yen.
Cash flows from operating activities
Operating activities provided net cash of 3,736 million yen (down 45.2% from net cash provided of 6,819 million
yen in the previous fiscal year). The principal factors were depreciation and amortization of 2,012 million yen, while
there were a decrease of 1,108 million yen in notes and accounts payable-trade, and income taxes paid of 2,774
million yen.
Cash flows from investing activities
Investing activities provided net cash of 39 million yen (net cash used of 3,283 million yen in the previous fiscal
year). The principal factors were 1,116 million yen in purchase of property, plant and equipment, 1,201 million yen
in purchase of securities, while there were proceeds from sales of securities of 2,200 million yen.
Cash flows from financing activities
Financing activities used net cash of 2,310 million yen (net cash used of 2,647 million yen in the previous fiscal
year). This was mainly due to the cash dividends paid of 994 million yen and the repayment of long-term loans
payable of 1,245 million yen.

-3-

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Reference: Cash flow indicators
Fiscal years ended

Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2012 Dec. 31, 2013

Shareholders’ equity ratio

53.8

49.5

53.8

55.8

60.7

Shareholders’ equity ratio based on market prices

46.1

44.4

35.2

44.0

57.1

Interest-bearing debt to cash flow ratio

0.1

1.1

1.1

0.3

0.2

277.7

282.6

157.5

340.1

237.6

Interest coverage ratio

Notes: 1. Cash flow indices are calculated, using consolidated financial figures, as follows:
Shareholders’ equity ratio: Shareholders’ equity / Total assets
Shareholders’ equity ratio based on market prices: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments
2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares issued and outstanding at the end of the period, net of treasury sto ck.
3. Interest-bearing debt includes all liabilities on the consolidated balance sheets that incur interest.
4. Operating cash flows and interest payments are taken from “Net cash provided by (used in) operating activities” and“Interest expenses paid” on the consolidated statement of cash flows, respectively.

(3) Basic Policy Concerning the Distribution of Profits a nd Dividend Distributions f or the Fiscal Year
Under Review and the Subsequent Fiscal YearThe fundamental policy on dividend payments is to pay a stable dividend while taking into consideration each year's
performance as well as the need to retain earnings to expand businesses and build a sound base for growth.
Retained earnings are used to sustain and increase the dividend by funding initia tives that are expected to increase
earnings in the future, such as strengthening the financial position and paying for production facilities, R&D
programs and other activities.
The Pack Group intends to pay a year-end dividend of 25 yen per share for Fiscal Year 2013. This will make thecompany’s total dividend distributions for Fiscal Year 2013 50 yen per share, as planned.
In Fiscal Year 2014, we plan to pay an interim dividend of 25 yen per share and a year-end dividend of 25 yen per
share, resulting in an annual dividend of 50 yen.
(4) Business Risks
The following risk factors could have a material effect on decisions by investors. Forward-looking statements in thissection are based on the judgments of management as of the end of 2013. The Pack Group is aware that thefollowing events may occur and has taken actions to avoid these problems or respond properly.
1) Decline in domestic demand or lower market prices
Since our operations rely mainly on demand within Japan, sales are greatly influenced by the health of the Japanese
economy. If domestic demand shrinks or market prices fall due to a major recession in Japan, there could be an
adverse impact on the financial position or performance of the Group.
2) Impact of a disasterWe have done everything possible to minimize the impact of a disaster, but there is no guarantee that the effects of adisaster can be prevented or minimized. If the Group is unable to prevent or minimize the effects of a disaster, there
could be an adverse impact on the financial position or performance of the Group caused by a reduction in theGroup's production capacity or an increase in manufacturing costs.
3) Risks involving legal and regulatory requirements or litigation
Our business activities are subject to a variety of legal and regulatory requirements, including environmental
regulations and intellectual property law, and there could be a risk of litigation in connection with these legal andregulatory requirements.

-4-

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

There could be an adverse impact on the financial position or performance of the Group based on the outcome ofsuch litigation.
4) Product liability
In connection with its products, the Group is subject to claims for damages based on product liability.
At present the Group has not received any major claim for damages, but there could be a claim in the future.
The Group has product liability insurance, but it is conceivable that this insurance could be insufficient to a liability
payment that the Group may be required to make.
5) Procuring raw materials and merchandise
We constantly work on maintaining stable supplies and prices for the raw materials and merchandise that we
procures by using a variety of Japanese and foreign manufacturers. Nevertheless, if a surge in the price of oil upset
the balance of supply and demand, there could be an adverse impact on the financial position or performance of theGroup.
6) Impairment accounting
There may be asset impairment losses that result from how the Group uses noncurrent assets.
7) Counterparty credit risk
There are risks associated with the payments received by the Group from counterparties. We use commercial credit
insurance and other measures to manage credit risk. However, if the financial soundness of a major customer
deteriorated, there could be an adverse impact on the financial position or performance of the Group.

-5-The Pack Corporation (3950) Financial Report for Fiscal Year 2013

2. The Pack Corporation Group
There are eight companies in The Pack Group: the parent company and seven consolidated subsidiaries. The primarybusiness activities are the manufacturing and marketing of paper products, film packaging and other products, aswell as research, distribution and services associated with these businesses.
The activities of the Group and information about each business segment are shown in the following table.

Name of businesssegment

Businesses

Company name

Paper products

Manufacturing, purchasing, and selling paperbags, printed paper folding cartons, corrugatedboxes and other products

Film packaging

Manufacturing, purchasing, and selling plastic
bags, garment bags and other products

Other businesses

Manufacturing, purchasing, and selling gifts,
clothing, supplies, price tags, calendars, designer
creations, promotional goods and other products

The Pack Corporation
Keihin Tokushu Printing Corp.
NIKKO PRINT CORPORATIONPACK TAKEYAMA CO., LTD
The Pack America Corp.
The Pack (Shanghai) Corporation
The Pack (Changshu) Co., Ltd.
The Pack Corporation
PACK TAKEYAMA CO., LTD
The Pack America Corp.
The Pack (Shanghai) Corporation
The Pack Corporation
THE NICOLS CORP.
PACK TAKEYAMA CO., LTD
The Pack America Corp.

The Pack America Corp. is incorporated in the United States. Sales are mainly within the United States and Canada.
The Pack (Shanghai) Corporation mainly sells products to customers in China and the parent company in Japan. The
Pack (Changshu) Co., Ltd. manufactures paper bags for sale in China. Both companies are incorporated in China.
THE NICOLS CORP. was absorbed by the parent company on January 1, 2014.

-6-

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

(Purchasing and selling paper
products, film packaging, gifts andother products)* The Pack America Corp.

Finished products(Manufacturing, purchasing, andselling paper products, film
packaging, gifts and other products)

Outsourced production* PACK TAKEYAMA CO., LTD

Finished products

Purchase of finished andsemi-finished products
Outsourced
production
Outsourced production

Purchase of
semi-finished products(Printing of paper products)* Keihin Tokushu Printing Corp.
* NIKKO PRINT CORPORATION

Purchase of

Finished products

semi-finished products(Selling paper products andfilm packaging)
Finished products

Finished products* The Pack (Shanghai) Corporation

Outsourced
production

Purchase of finishedproducts(Manufacturing paper products)* The Pack (Changshu) Co., Ltd.

(Manufacturing and selling clothing)
Finished products* THE NICOLS CORP.

(Note) * Consolidated subsidiaries-7-

Customers

The Pack Corporation(Manufacturing, purchasing, and selling paper products, film packaging, gifts and other products)

Finished products

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

3. Management Principles(1) Fundamental Management Principles
With "management that values and nurtures people" as our guiding principle, we aim to create "a management
culture that is capable of adapting to any type of change in our markets." Furthermore, while keeping in mind our
responsibilities to society, such as addressing global environment issues, as an integrated packaging company wewill strive to achieve even better performance and meet the expectations of our shareholders while contributing to
the development and prosperity of society.
(2) Goals and Performance Indicators
We are committed to building a sound financial base in order to increase profitability in each business and maintainstable relationships with all of our stakeholders, including business partners, employees and, foremost, shareholders.
For this reason, our current goal is to increase our shareholders' equity ratio and return on equity. We also placeemphasis on the dividend yield and dividend payout ratio.
(3) Medium-term Business Strategy
The Pack Group has established a medium-term management plan with the goals of raising sales to 100 billion yen,ordinary income to 10 billion yen and the shareholders’ equity ratio to 70%. To accomplish these goals, we are
pursuing the 3S Vision, which consists of Scale, Speed and Saving. All employees have established their own targets
in order to contribute to reaching the overall goals of the medium-term management plan.
(4) Important Issues
In the packaging industry, the outlook for the performance of companies in the distribution and manufacturingsectors, our main sales targets, and consumer spending is unclear. We believe that the business climate will remainchallenging for the time being because prices of raw materials are increasing while the competition to keep theprices down continues.
One goal of ours is to grow by developing new markets in Japan and overseas. For example, we plan to take fulladvantage of the facilities and capabilities of The Tokyo plant that started operations in July 2011 to targeting
demand in the Tokyo area. We will also develop new products and services and upgrade quality. Building a stronger
profit structure by using reforms to further streamline operations is another goal. By taking these actions, we aredetermined to make steady progress in line with our medium-term management goals and to continue increasing
sales and earnings.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2013

4. Consolidated Financial Statements(1) Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2012)(Million yen)
Current fiscal year
(As of December 31, 2013)

AssetsCurrent assets
Cash and deposits

8,140

8,191

Notes and accounts receivable-trade21,401

21,452

Securities

3,198

3,699

Merchandise and finished goods

4,702

4,761

Work in process

573

605

Raw materials and supplies

652

606

Deferred tax assets

230

167

Other

1,325

592

Allowance for doubtful accounts

(33)

(16)

40,19240,059Buildings and structures, net

8,043

7,704

Machinery, equipment and vehicles, net

5,509

5,281

Total current assets
Noncurrent assets
Property, plant and equipment

Tools, furniture and fixtures, net

283

253

7,219

7,146

152

59

21,20920,445233

187

Investment securities

2,769

3,365

Deferred tax assets

875

456

Land
Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets

Other

312

638

Allowance for doubtful accounts

(59)

(62)

Total investments and other assets
Total noncurrent assets
Total assets

-9-

3,897

4,398

25,34025,031

65,53265,091

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Previous fiscal year
(As of December 31, 2012)(Million yen)
Current fiscal year
(As of December 31, 2013)

Notes and accounts payable-trade

20,201

19,161

Short-term loans payable

1,545

792

Income taxes payable

1,576

703

Provision for bonuses

168

166

Liabilities
Current liabilities

Provision for directors' bonuses

27

30

Other

2,248

2,069

Total current liabilities

25,76622,923

562

-

2,531

2,576

102

84

3,196

2,661

28,96325,584

Capital stock

2,553

2,553

Capital surplus

3,165

3,165

Retained earnings

30,69633,003(6)(6)

36,40938,716531

967

Noncurrent liabilities
Long-term loans payable
Provision for retirement benefits
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges-

7

Foreign currency translation adjustment

(390)

(207)

Total accumulated other comprehensive income

141

766

Minority interests
Total net assets
Total liabilities and net assets- 10 -

18

23

36,56939,50765,53265,091

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Million yen)
Current fiscal year
(from January 1, 2013 to
December 31, 2013)

Previous fiscal year
(from January 1, 2012 to
December 31, 2012)
Net sales

84,55484,315

Cost of sales

65,642

65,270Gross profit

18,911

19,045

Selling, general and administrative expenses

13,875

13,792

Operating income

5,036

5,253

Interest income

79

79

Dividend income

64

72

Rent income25

21

Foreign exchange gains

17-

Non-operating income

Other

77

34

Total non-operating income

265

208

Interest expenses

20

15

Loss on sales of accounts receivable

54Compensation expenses

12Foreign exchange losses

-

30

Other

12

17

Non-operating expenses

Total non-operating expenses

39

70

5,261

5,391

305

1

-

110

305

112

Loss on sales of noncurrent assets

00Loss on retirement of noncurrent assets

63

4

Loss on valuation of investment securities

14

2

Impairment loss

116-

Loss on closing of factory

15-

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses

209

7

Income before income taxes and minority interests

Total extraordinary losses

5,357

5,496

Income taxes-current

2,520

1,908

Income taxes-deferred

(171)

285

Total income taxes

2,348

2,193

Income before minority interests

3,008

3,302

Minority interests in income (loss)
Net income- 11 -

(0)

0

3,009

3,301

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Consolidated Statement of Comprehensive Income(Million yen)
Current fiscal year
(from January 1, 2013 to
December 31, 2013)

Previous fiscal year
(from January 1, 2012 to
December 31, 2012)
Income before minority interests

3,008

3,302

Valuation difference on available-for-sale securities

362

435

Deferred gains or losses on hedges(0)7Foreign currency translation adjustment

92

186

Total other comprehensive income

454

629

3,463

3,932

Comprehensive income attributable to owners of parent

3,462

3,927

Comprehensive income attributable to minority interests

1

4

Other comprehensive income

Comprehensive income
Comprehensive income attributable to- 12 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (from January 1, 2012 to December 31, 2012)(Million yen)
Shareholders’ equity
Capital stock
Balance at the beginning ofcurrent period

Capital surplus Retained earnings Treasury stock

2,553

3,165

28,581

Total shareholders’equity(6)34,294

Changes of items during the period
Dividend from surplus

(895)

(895)

Net income

3,009

3,009

Purchase of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

(0)

(0)

-

-

2,114

(0)

2,114

2,553

3,165

30,696(6)

36,409(Million yen)
Accumulated other comprehensive income
Valuation
Total accumulated
Minority Total net
Foreign currency
difference on Deferred gains orotherinterests assets
translation
available-for-sale losses on hedges
comprehensive
adjustment
securities
incomeBalance at the beginning ofcurrent period

169

0

(480)

(311)

17

34,001

Changes of items during the period
Dividend from surplus(895)

Net income

3,009

Purchase of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

(0)
362

(0)

90

452

1

453

362

(0)

90

452

1

2,568

531

-

(390)

141

18

36,569- 13 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Current fiscal year (from January 1, 2013 to December 31, 2013)(Million yen)
Shareholders’ equity
Capital stock
Balance at the beginning ofcurrent period

Capital surplus Retained earnings Treasury stock

2,553

3,165

30,696

Total shareholders’equity(6)36,409Changes of items during the period
Dividend from surplus(994)

Net income

3,301

Purchase of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

(994)
3,301
(0)

(0)

-

-

2,307

(0)

2,307

2,553

3,165

33,003(6)

38,716(Million yen)

Accumulated other comprehensive income
Valuation
Total accumulated
Minority Total net
Foreign currency
difference on Deferred gains orotherinterests assets
translation
available-for-sale losses on hedges
comprehensive
adjustment
securities
incomeBalance at the beginning ofcurrent period

531

-

(390)

141

18

36,569Changes of items during the period
Dividend from surplus(994)

Net income

3,301

Purchase of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at the end of current
period

(0)
435

7

182

625

4

630

435

7

182

625

4

2,937

967

7

(207)

766

23

39,507- 14 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

(4) Consolidated Statement of Cash Flows
Previous fiscal year
(from January 1, 2012 to
December 31, 2012)(Million yen)
Current fiscal year
(from January 1, 2013 to
December 31, 2013)

Income before income taxes and minority interests

5,357

5,496

Depreciation and amortization

2,279

2,012

Cash flows from operating activities

Impairment loss

116-

Amortization of goodwill

13

8

Increase (decrease) in allowance for doubtful accounts

(73)

(13)

Increase (decrease) in provision for bonuses

7(1)

Increase (decrease) in provision for directors' bonuses(0)2

Increase (decrease) in provision for retirement benefits

81

44

(143)

(152)

Interest and dividend income
Interest expenses

20

15

Loss (gain) on sales of noncurrent assets

(305)

(0)

Loss on retirement of noncurrent assets

63

4

Loss (gain) on sales of investment securities

-

(110)

Loss (gain) on valuation of investment securities

142

Decrease (increase) in notes and accounts receivable-trade

(36)

83

Decrease (increase) in inventories

(76)

(27)

Increase (decrease) in notes and accounts payable-trade728(1,108)Other, net

680

121

Subtotal

8,726

6,377

Interest and dividend income received

140

148

Interest expenses paid

(20)

(15)

Income taxes paid

(2,027)(2,774)

Net cash provided by (used in) operating activities

6,819

3,736

Cash flows from investing activities
Payments into time deposits

(26)

(2)

Purchase of securities(3,404)(1,201)

Proceeds from sales of securities

1,405

2,200

Payments of loans receivable

(313)

(110)

Collection of loans receivable

57

45

Purchase of property, plant and equipment(1,819)(1,116)

Proceeds from sales of property, plant and equipment

885

140

Purchase of intangible assets

(26)

(31)

Purchase of investment securities

(22)

(67)

Proceeds from sales of investment securities
Other, net
Net cash provided by (used in) investing activities

-

208

(18)

(25)

(3,283)39

Cash flows from financing activities
Increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities

-

(70)

(1,752)(1,245)

(895)

(994)

(0)

(0)

(2,647)(2,310)Effect of exchange rate change on cash and cash equivalents

28

63

Net increase (decrease) in cash and cash equivalents

916

1,529

Cash and cash equivalents at beginning of period

8,135

9,051

Cash and cash equivalents at end of period

9,051

10,581- 15 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2013

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Segment and Other Information
Segment Information
1. Segment overview
The reportable segments of The Pack Group are the smallest units for which separate financial information can beobtained and for which regular examinations are performed by the Board of Directors in orde r to allocate resourcesand evaluate results of operations.
The Group is engaged primarily in the manufacture and sale of paper bags, paper folding cartons, corrugated boxes
and plastic bags.
Therefore, based on the nature of products, there are two reportable segments: “Paper products” and “Filmpackaging.”
The Group’s major products are paper bags, paper folding cartons, corrugated boxes and printing in the “Paper
products” segment and plastic bags and garment bags in the “Film packaging” segment.
2. Method to determine net sales, income or loss, assets, liabilities and other items by reportable segment
Accounting methods used for the reportable segments are generally the same as the methods used for the preparationof the consolidated financial statements with the exception of the standard for the valuation of inventories.
Profit for reportable segments is stated on an operating income basis.
3. Information concerning net sales, income or loss, assets, liabilities and other items by reportable segment
Previous fiscal year (from January 1, 2012 to December 31, 2012)(Million yen)

Reportable segment

Other
businesses(Note) 1

Amount posted in
Adjustment the consolidated(Note) 2 financial statements(Note) 3

Total

Paper
products

Film
packaging

Subtotal

48,384

17,916

66,301

18,25384,554-84,554

-

-

-

-

-

-

-

Total

48,384

17,916

66,301

18,25384,554-84,554

Segment income

2,869

1,404

4,273

1,736

6,010

(974)

5,036

Segment assets

34,817

9,408

44,226

7,430

51,656

13,87665,532

Net sales
Sales to externalcustomerInter-segment sales andtransfers

Other items
Depreciation
2,074
158
2,233
31
2,264
27
2,292
Increases in property,
plant and equipment and
516
589
1,106
9
1,116
8
1,124
intangible assets(Notes) 1. “Other businesses” includes clothing, supplies and other goods.
2. The adjustments are as follows.
(1) The -974 million yen adjustment of segment income includes elimination of intersegment transactions of 29 million yenthat are not allocated to reportable segments and -1,003 million yen in corporate expenses. Corporate expenses aremainly related to the parent company’s Administrative Department.
(2) The 13,876 million yen adjustment of segment assets is corporate assets that are not allocated to reportable segments.
Corporate assets of 680 million yen mainly include the parent company’s surplus assets under management (cash anddeposits of 7,231 million yen and securities of 3,198 million yen), long-term investments (investment securities of
2,766 million yen) and the parent company’s land.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2013

(3) The adjustment of depreciation and adjustment of increases in property, plant and equipment andintangible assets are related to the parent company’s head office assets.
3. Segment income is adjusted for consistency with operating income in the consolidated statement of income.
Current fiscal year (from January 1, 2013 to December 31, 2013)(Million yen)

Reportable segment
Paper
products
Net sales
Sales to externalcustomerInter-segment sales andtransfers

Filmpackaging

Other
businesses(Note) 1

Subtotal

Amount posted in
Adjustment the consolidated(Note) 2 financial statements(Note) 3

Total

48,794

17,46566,25918,05684,315-84,315

-

-

-

-

-

-

-

Total

48,794

17,46566,25918,05684,315-84,315

Segment income

3,664

913

4,577

1,662

6,240

(986)

5,253

Segment assets

33,981

9,062

43,0447,150

50,195

14,89665,091Other items
Depreciation
1,728
236
1,964
27
1,992
28
2,020
Increases in property,
plant and equipment and
1,101
222
1,323
92
1,416
19
1,435
intangible assets(Notes) 1. “Other businesses” includes clothing, supplies and other goods.
2. The adjustments are as follows.
(1) The -986 million yen adjustment of segment income includes elimination of intersegment transactions of 28 million yenthat are not allocated to reportable segments and -1,015 million yen in corporate expenses. Corporate expenses aremainly related to the parent company’s Administrative Department.
(2) The 14,896 million yen adjustment of segment assets is corporate assets that are not allocated to reportable segments.
Corporate assets of 543 million yen mainly include the parent company’s surplus assets under management (cash anddeposits of 7,288 million yen and securities of 3,699 million yen), long-term investments (investment securities of 3,365
million yen) and the parent company’s land.
(3) The adjustment of depreciation and adjustment of increases in property, plant and equipment and intangible assets are
related to the parent company’s head office assets.
3. Segment income is adjusted for consistency with operating income in the consolidated statement of income.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2013

Per Share Information
Previous fiscal year
(from January 1, 2012 to December
31, 2012)(Yen)
Current fiscal year
(from January 1, 2013 to December
31, 2013)

Net assets per share

1,837.34

1,984.74

Net income per share

151.30165.98Item

Notes: 1. Diluted net income per share is not presented since the Company has no outstanding residual securities.
2. The basis of calculating the net income per share is as follows
Previous fiscal year
(from January 1, 2012 to December
31, 2012)(Million yen)
Current fiscal year
(from January 1, 2013 to December
31, 2013)

3,009

3,301

-

-

Net income related to common stock

3,009

3,301

Average number of shares outstanding during theperiod (thousand shares)

19,89319,893

Previous fiscal year
(As of December 31, 2012)
36,569(Million yen)
Current fiscal year
(As of December 31, 2013)
39,507

18

23

Item
Net income per share
Net income
Amounts unavailable to common shareholders

3. The basis of calculating the net assets per share is as follows
Item
Total net assets
Deduction on total net assets

[18]

[23]

Net assets applicable to common shares

36,551

39,483

Number of common stock shares used in calculationof net assets per share (thousand shares)

19,89319,893[of which minority interests]

Subsequent Events
Not applicable.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2013

5. Other(1) Changes in Executives
1) Change in representative
Not applicable.
2) Change in other executives (effective March 28, 2014)
1. Candidate for director
Director, Deputy General Manager of Administration HQ and General Manager of Corporate Planning Dept.
Michihisa Fujii (currently Corporate Officer, Deputy General Manager of Administration HQ and
General Manager of Corporate Planning Dept.)
2. Retiring director
Director, General Manager of Packaging Products Division
Yutaka Nishimura (to be appointed as Advisor of The Pack Corporation)
3. Candidates for corporate auditors
Standing Corporate Auditor
Hiroshi Nishikawa (currently delegated sales management operations)
Corporate Auditor
Hirofumi Hayashi (currently President of Hayashi Certified Public Accountant and Tax Accountant
Office)4. Retiring auditor
Corporate Auditor
Tamotsu Kawachi
Note: Mr. Hirofumi Hayashi is a candidate to become an external auditor.

* 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 the c onvenience ofreaders who prefer an English translation.

- 19 -