Business Results for the Year Ended December 31, 2019
[Japan GAAP] (Consolidated)
February 7, 2020

Company:
The Pack Corporation
Listed on the TSE1
Stock code:
3950
URL: https://www.thepack.co.jp
Representative: Mitsuo Inada, President & CEO
Contact:
Michihisa Fujii, Managing Director, Corporate Division
TEL: +81-6-4967-1221
Expected date of annual shareholders’ meeting:March 26, 2020
Expected starting date of dividend payment:
March 27, 2020
Expected date of filing of annual securities report:
March 26, 2020
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, 2019
(January 1, 2019 through December 31, 2019)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating profit

Million yen

Year ended Dec. 31, 2019Year ended Dec. 31, 2018
(Note) Comprehensive income

95,502
93,126%

Million yen

%

2.6
6,850
(1.1)
3.1
6,924
(4.8)
Year ended Dec. 31, 2019:Year ended Dec. 31, 2018:

Basic earnings per
share

Diluted earnings
per share

Yen

Million yen

Million yen%

7,199 (0.2)
4,700
7,212 (5.0)
4,968
4,763 million yen (up 13.2%)
4,208 million yen (down 27.6%)

(5.4)
(4.6)

Return on
equityYen

Year ended Dec. 31, 2019
243.89Year ended Dec. 31, 2018
253.25(Reference) Investment earnings/loss on equity-method

Profit attributable toowners of parent

Ordinary profit%

Ratio of ordinary
profit to total assets%

243.508.2
252.91
9.0
Year ended Dec. 31, 2019: - million yen
Year ended Dec. 31, 2018: - million yen

Ratio of operating
profit to net sales

%

%

8.2
8.6

7.2
7.4

(2) Consolidated financial position
Total assets

Net assets

Million yen

Capital adequacy ratio

Net assets per share%

Yen

Million yen

88,44658,49586,49556,775
As of Dec. 31, 2019: 58,371 million yen

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

66.0
3,076.27
65.5
2,885.27
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 2019 and changed the method of presentation. Figures
as of December 31, 2018 have been adjusted retrospectively in accordance with these amendments.

(3) Consolidated cash flows
Cash flows fromoperating activities
Year ended Dec. 31, 2019Year ended Dec. 31, 2018

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

6,599
6,742

(4,136)(4,705)(3,319)(2,059)18,307
19,181

2. Dividends
Dividend per share
End of
1Q
Year ended Dec. 31, 2018Year ended Dec. 31, 2019Year ending Dec. 31, 2020
(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
30.00

50.00
55.00

980
1,043

19.7
22.6

1.8
1.8

-

30.00

-

30.00

60.00

Year-end

Total

23.2

(Note) Maintaining dividend stability and increasing retained earnings are the primary considerations for determining the dividend.
Retained earnings are used to increase financial soundness and provide funds for production facilities, R&D activities and otherinvestments needed for sustained growth. The Pack believes that this use of retained earnings will support stable and higher
dividends for shareholders by leading to earnings growth in the future.
The dividend forecast for 2019 was 25 yen per share. However, in accordance with this policy, The Pack plans to increase thedividend by 5 yen to 30 yen per share based on the current dividend payout ratio and in order to return more earnings toshareholders.

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

Operating profit

Profit attributable toowners of parent

Ordinary profit

Basic earnings per
share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

44,30096,800

0.0
1.4

2,600
7,000

0.2
2.2

2,700
7,300

(2.0)
1.4

1,800
4,900

(0.3)
4.2

94.86
258.23* Notes(1) Material changes in subsidiaries during this period (Changes in scope of consolidations resulting from changes
in subsidiaries): None
(2) 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

(3) 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 Dec. 31, 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 Dec. 31, 2019:925,347 shares

3) Average number of sharesYear ended Dec. 31, 2019:19,273,418 sharesYear ended Dec. 31, 2018:

19,621,078 shares*The current financial summary is not subject to audit 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 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.

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

3(3) Cash Flows3(4) Outlook

4

2. Basic Approach for the Selection of Accounting Standards

4

3. Consolidated Financial Statements and Notes

5(1) Consolidated Balance Sheet

5(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

7(3) Consolidated Statement of Changes in Equity

9(4) Consolidated Statement of Cash Flows

11(5) Notes to Consolidated Financial Statements

12

Going Concern Assumption

12

Significant Changes in Shareholders’ Equity

12

Reclassifications

12

Segment and Other Information

13

Per Share Information

15

Material Subsequent Events

15

-1-

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

1. Overview of Results of Operations(1) Results of Operations
In 2019, Japan’s exports decreased as global economic growth slowed and corporate earnings were lackluster,chiefly in the manufacturing sector. Although the labor market continued to improve, this did not produce an
upturn in consumer spending.
The downturn in consumer spending after the October 2019 consumption tax hike has continued and warm winterweather also held down spending. Furthermore, companies had to deal with rising expenses throughout the year
due to the increasing cost of logistics and raw materials.
In the United States, earnings were weak, mainly at manufacturers, because of the trade friction with China.
However, the U.S. economy was supported by consumer spending and low unemployment. In China, the trade
friction is reducing exports and exerting downward pressure on economic growth.
In 2019, under the slogan of “Bring about change and conquer new challenges,” all group companies werefocused on entering new markets, making substantial capital expenditures and improving quality management inorder to increase earnings.
Net sales increased 2.6% year-on-year to 95,502 million yen, operating profit decreased 1.1% to 6,850 million
yen, ordinary profit decreased 0.2% to 7,199 million yen, and profit attributable to owners of parent decreased
5.4% to 4,700 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 63.2% of consolidated sales in 2019. Sales of paper bags, which
accounted for 30.7% of consolidated sales, increased 0.9% to 29,264 million yen. This was the result of strong
sales to specialty retail stores in Japan.
Sales of paper folding cartons, which accounted for 19.2% of consolidated sales, increased 12.1% to 18,361
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 11.0% of consolidated sales, increased 0.7% to 10,514 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 3.3% to 2,213 million yen. Sales at
Keihin Tokushu Printing Corp. and NIKKO PRINT CORPORATION were favorable.
Overall, sales in this segment increased 4.1% to 60,353 million yen, and operating profit increased 0.4% to 5,265
million yen.
(Film Packaging)
The film packaging segment accounted for 20.6% of consolidated sales in 2019. Segment sales increased 0.1% to19,666 million yen. While sales were about the same as in 2018, operating profit increased 4.5% to 1,042 million
yen.
(Other Businesses)
Other businesses accounted for 16.2% of consolidated sales in 2019. Sales decreased 0.2% to 15,483 million yen
as the inclusion of the sales of the sales promotion products of Kannaru Printing was offset by a decrease in salesof miscellaneous supplies that The Pack sells to large retailers. Operating profit decreased 1.3% to 1,492 million
yen.

-2-

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

(2) Financial Position
Assets totaled 88,446 million yen at the end of 2019, up 1,951 million yen from the end of 2018. The main factor
was an increase of 2,060 million yen in cash and deposits.
Liabilities increased 232 million yen to 29,951 million yen. The main factor was an increase of 118 million yen
in electronically recorded obligations-operating.
Net assets increased 1,719 million yen to 58,495 million yen. The main factors were an increase of 3,735 million
yen in retained earnings and purchase of treasury shares of 2,041 million yen.
(3) Cash FlowsThe balance of cash and cash equivalents at the end of 2019 decreased 873 million yen, or 4.6% from the end of
2018 to 18,307 million yen.
Cash flows from operating activities
Operating activities provided net cash of 6,599 million yen (down 2.1 % from net cash provided of 6,742 million
yen in 2018). The principal factors were profit before income taxes of 6,899 million yen and depreciation of
1,713 million yen.
Cash flows from investing activities
Investing activities used net cash of 4,136 million yen (net cash used of 4,705 million yen in 2018). The principal
factors were outlays of 7,500 million yen for the purchase of securities and 1,492 million yen for the purchase ofproperty, plant and equipment, while there were proceeds from sales of securities of 4,000 million yen.
Cash flows from financing activities
Financing activities used net cash of 3,319 million yen (net cash used of 2,059 million yen in 2018). This was
mainly due to 966 million yen for the cash dividends paid and outlays of 2,049 million yen for purchase oftreasury shares.
Reference: Cash flow indicators
Fiscal years ended

Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019

Capital adequacy ratio

62.0

63.6

65.1

65.5

66.0

Capital adequacy ratio based on market prices

81.7

67.1

87.2

69.1

84.7

Interest-bearing debt to cash flow ratio

0.0

0.0

0.0

0.1

0.0

Interest coverage ratio
5,259.7
7,883.0
8,274.9(Notes): 1. Cash flow indices are calculated, using consolidated financial figures, as follows:

833.2

2,257.9

Capital adequacy ratio: Owner’s equity / Total assets
Capital adequacy 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
of issued and outstanding shares at the end of the fiscal year, net of treasury shares.
3. Interest-bearing debt includes all liabilities on the consolidated balance sheet 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-

The Pack Corporation (3950) Financial Report for Fiscal Year 2019(4) Outlook
Hopes are high among the people of Japan for 2020, when Tokyo will host the Summer Olympics. However,there are still no signs of the end of deflation and there is still considerable risk involving the global economy,
particularly involving trade friction. Furthermore, it is impossible to foresee the potential economic impacts ofnatural disasters and the new coronavirus. In the packaging sector, there is uncertainty about the impact of theJuly 2020 start in Japan of requiring stores to charge customers for plastic shopping bags.
All activities of The Pack Group in 2020 will be guided by the slogan “ Gather the strengths of our group, andprogress forward with tenacity.” Group companies are making substantial capital expenditures and investments inIT systems, taking actions aimed at improving productivity and using people more efficiently, and implementing
working style reforms. Environmentally responsible management and strict quality control are also priorities.
The goal of all these activities is earning greater customer satisfaction and achieving more growth in sales andearnings as a company that is a source of total solutions for packaging.
2. Basic Approach for the Selection of Accounting Standards
The Pack Group will continue to prepare consolidated financial statements using Japanese accounting standards
for the time being to permit comparisons with prior years and with the financial data of other companies. We willtake suitable actions with regard to the application of International Financial Reporting Standards (IFRS) by
taking into account associated factors in Japan and other countries.

-4-

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2018)(Million yen)
Current fiscal year
(As of December 31, 2019)

AssetsCurrent assets
Cash and deposits

12,257

14,317

Notes and accounts receivable-trade

24,58924,717

Securities

9,499

10,000

Merchandise and finished goods

5,547

5,675

Work in process

835

931

Raw materials and supplies

847

887

Other

912

501

Allowance for doubtful accounts

(33)

(13)

54,45557,017

Buildings and structures, net

7,006

6,523

Machinery, equipment and vehicles, net

5,125

5,468

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

Tools, furniture and fixtures, net

185

164

8,397

8,397

31

226

20,746

20,781

162

169

Investment securities

9,441

8,842

Deferred tax assets

876

774

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

Other

871

911

Allowance for doubtful accounts

(58)

(50)

Total investments and other assets
Total non-current assets
Total assets-5-

11,13010,47832,03931,42986,49588,446

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

(Million yen)
Current fiscal year
(As of December 31, 2019)

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

15,11915,005

Electronically recorded obligations-operating

5,645

5,763

Short-term loans payable

66-

Current portion of long-term loans payable

84

48

1,138

1,055

280

283

Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other

42

43

2,758

3,449

Total current liabilities

25,13625,648Non-current liabilities
Long-term loans payable

163

30

Deferred tax liabilities

483

504

3,795

3,648

Retirement benefit liability
Other

140

118

4,582

4,302

29,71929,951

Capital stock

2,553

2,553

Capital surplus

3,166

3,164

Retained earnings

50,871

54,607

Treasury shares(723)(2,765)

Total shareholders’ equity

55,86757,560

1,282

1,462

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

00Foreign currency translation adjustment

(249)

(283)

Remeasurements of defined benefit plans

(287)

(367)

745

811

81

93

Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

-6-

81

29

56,77558,49586,49588,446

The Pack Corporation (3950) Financial Report for Fiscal Year 2019(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income(Million yen)
Current fiscal year
(from January 1, 2019
to December 31, 2019)

Previous fiscal year
(from January 1, 2018
to December 31, 2018)
Net sales

93,126

95,502

Cost of sales

70,80872,381Gross profit

22,31823,121

Selling, general and administrative expenses

15,393

16,270Operating profit

6,924

6,850

Interest income

96

107

Dividend income

118

122

Rent income

56

54

Foreign exchange gains

0

31

Other

53

66

Total non-operating income

325

382

Interest expenses

82

Cost of lease revenue

11

10

Sales discounts

4

5

Other

12

15

Non-operating income

Non-operating expenses

Total non-operating expenses

37

33

7,212

7,199

Gain on sales of investment securities

119-

Gain on sales of non-current assets

02

Insurance income-

83

Gain on bargain purchase54-

Total extraordinary income

174

86

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sales of non-current assets

83Loss on retirement of non-current assets

58

28

Loss on valuation of investment securities

3-

Loss on valuation of membership0-

Demolition cost of non-current asset-

190

Impairment loss-

164

Loss on disaster11-

Total extraordinary losses

81

386

Profit before income taxes

7,305

6,899

Income taxes-current

2,267

2,120

Income taxes-deferred

75

78

Total income taxes

2,343

2,199

Profit

4,962

4,700

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

-7-

(6)

0

4,968

4,700

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

Consolidated Statement of Comprehensive Income(Million yen)
Current fiscal year
(from January 1, 2019
to December 31, 2019)

Previous fiscal year
(from January 1, 2018
to December 31, 2018)
Profit

4,962

4,700

(742)

177

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(7)0Foreign currency translation adjustment

(69)

(35)

65

(79)

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

(754)

62

4,208

4,763

4,217

4,766

(9)

(2)

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-8-

The Pack Corporation (3950) Financial Report for Fiscal Year 2019(3) Consolidated Statement of Changes in Equity
Previous fiscal year (from January 1, 2018 to December 31, 2018)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

2,553

Retainedearnings

3,166

Total shareholders’equity(728)

51,87546,883

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesAdditional purchase ofshares of subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTreasury shares

(981)

(981)

4,968

4,968

(0)

(0)

(0)

4

4
-

-

(0)

3,987

4

3,992

2,553

3,166

50,871(723)

55,867(Million yen)

Accumulated other comprehensive income
Valuation
RemeasureTotal
Share
NonDeferred Foreign
Total netdifference
ments ofaccumulatedacquisition controlling
gains or currency
assetson availabledefinedotherrightsinterests
losses on translation
for-salebenefit comprehensive
hedges adjustment
securities
plans
incomeBalance at beginning ofcurrent period
Changes of items during
period

2,023

7

(181)

(353)

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesAdditional purchase ofshares of subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

1,496

56

28

53,457

-

(981)

-

4,968

-

(0)

-

4

-

-

(740)

(7)

(67)

65

(751)

24

53

(673)

(740)

(7)

(67)

65

(751)

24

53

3,318

1,282

0

(249)

(287)

745

81

81

56,775-9-

The Pack Corporation (3950) Financial Report for Fiscal Year 2019

Current fiscal year (from January 1, 2019 to December 31, 2019)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

2,553

Retainedearnings

3,166

Total shareholders’equity(723)

55,86750,871Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesAdditional purchase ofshares of subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTreasury shares

(964)

(964)

4,700

4,700

0

(2,049)(2,049)

8

9

(2)

(2)
-

-

(2)

3,735

(2,041)

1,692

2,553

3,164

54,607(2,765)57,560(Million yen)

Accumulated other comprehensive income
Valuation
RemeasureTotal
Share
NonDeferred Foreign
Total netdifference
ments ofaccumulatedacquisition
controlling
gains or currency
assetson availabledefinedotherrightsinterests
losses on translation
for-salebenefit comprehensive
hedges adjustment
securities
plans
incomeBalance at beginning ofcurrent period
Changes of items during
period

1,282

0

(249)

(287)

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesAdditional purchase ofshares of subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

745

81

81

56,775

-

(964)

-

4,700

-

(2,049)

-

9

-

(2)

179

0

(34)

(79)

65

12

(51)

27

179

0

(34)

(79)

65

12

(51)

1,719

1,462

0

(283)

(367)

811

93

29

58,495- 10 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2019(4) Consolidated Statement of Cash Flows(Million yen)
Current fiscal year
(from January 1, 2019
to December 31, 2019)

Previous fiscal year
(from January 1, 2018
to December 31, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Expenses on dismantlement of non-current assets
Gain on bargain purchase
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 sales of non-current assets
Loss on retirement of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
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
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for leasehold 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- 11 -

7,305
1,761
(54)
(50)
(35)

6,899
1,713
164
190
(28)
2

(3)

0

(193)
(215)
8
8
58
(119)
3
199
(339)
857
(240)
8,948
248
(8)
(2,446)
6,742

(259)
(230)
2
0
28
(150)
(268)
19
464
8,549
247
(2)
(2,195)
6,599

(68)
67
(3,300)4,900
9(1,224)6(21)(5,104)146

64(7,500)4,000
4(1,492)
3
(52)
(160)
1,000

(28)

-

(162)
76
(4,705)(12)
11(4,136)

66
(715)
(398)
(981)

(66)
(169)
(966)

-

(50)

(0)
(30)
(2,059)(25)(47)
19,22819,181(2,049)(17)(3,319)(16)(873)
19,181
18,307

The Pack Corporation (3950) Financial Report for Fiscal Year 2019(5) Notes to 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 2019 to 2,765 million
yen at the end of 2019.
Reclassifications
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 2019. Accordingly, deferred tax assets and deferred tax
liabilities have been presented in the investments and other assets section and the non -current liabilities sectionof the balance sheet, respectively.
As a result, “deferred tax assets” under “current assets” in the consolidated balance sheet for the previous fiscal
year decreased 255 million yen and “deferred tax assets” under “investments and other assets” increased 229
million yen. In addition, “deferred tax liabilities” under “non-current liabilities” decreased 26 million yen.
Net figures are used for deferred tax assets and deferred tax liabilities for the same taxing authority. This chan ge
reduced total assets by 26 million yen.
Consolidated Statement of Cash Flows“Purchase of treasury shares,” which was included in “other, net” under “cash flows from financing activities” inthe previous fiscal year, is reclassified as a separate item in the current fiscal year as it has become significant.
To conform to this change, the consolidated financial statements for the previous fiscal year has been
reclassified.
Accordingly, “other, net” (-31 million yen) under “cash flows from financing activities” shown on the
consolidated statement of cash flows in the previous fiscal year has been reclassified into “purchase of treasury
shares” (-0 million yen) and “other, net” (-30 million yen).

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The Pack Corporation (3950) Financial Report for Fiscal Year 2019

Segment and Other 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 order to determine
resource allocation and evaluate results of operations.
The Group is engaged primarily in the manufacture and sale of paper bags, paper folding cartons, corrugatedboxes 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, profit 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
preparation of the consolidated financial statements.
Profit for reportable segments is stated on an operating profit basis.
3. Information concerning net sales, profit or loss, assets, liabilities and other items by reportable segment
Previous fiscal year (from January 1, 2018 to December 31, 2018)
Reportable segment

Net sales
Sales to externalcustomerInter-segment sales andtransfers
Total(Million yen)Amount posted in
Adjustment the consolidated(Note) 2 financial statements(Note) 3

Subtotal

Otherbusinesses(Note) 1

Total

19,641

77,613

15,512

93,126-

93,126

-

-

-

-

-

-

-

57,972

19,641

77,613

15,512

93,126-

93,126Paper
products

Film
packaging

57,972

Segment profit

5,244

996

6,241

1,511

7,752

(828)

6,924

Segment assets

39,604

10,62650,2308,005

58,23628,28586,521Other items
Depreciation
1,428
304
1,732
23
1,756
5
1,761
Increases in property,
plant and equipment and
1,006
206
1,213
4
1,218
1,218
intangible assets(Notes) 1. “Other businesses” includes supplies and other goods.
2. The adjustments are as follows.
(1) The -828 million yen adjustment to segment profit includes elimination of inter-segment transactions of 12 million
yen that are not allocated to reportable segments and corporate expenses of -840 million yen. Corporate expenses aremainly related to the parent company’s Administrative Department.
(2) The 28,285 million yen adjustment to segment assets is corporate assets that are not allocated to reportable segments.
Corporate assets mainly include the parent company’s surplus assets under management (cash and deposits of 9,255
million yen and securities of 9,499 million yen), long-term investments (investment securities of 8,971 million yen)and the parent company’s land of 558 million yen.
(3) The adjustments to depreciation and increases in property, plant and equipment and intangible assets are relate d tothe parent company’s head office assets.
3. Segment profit is adjusted for consistency with operating profit in the consolidated statement of income.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2019

Current fiscal year (from January 1, 2019 to December 31, 2019)
Reportable segment(Million yen)Amount posted in
Adjustment the consolidated(Note) 2 financial statements(Note) 3

Subtotal

Otherbusinesses(Note) 1

Total

19,66680,01915,483

95,502-

95,502

-

-

-

-

-

-

-

60,353

19,66680,01915,483

95,502-

95,502

Segment profit

5,265

1,042

6,307

1,492

7,800

(949)

6,850

Segment assets

41,605

9,736

51,341

7,292

58,63429,81288,446

Net sales
Sales to externalcustomerInter-segment sales andtransfers
Total

Paper
products

Film
packaging

60,353

Other items
Depreciation
1,345
306
1,651
52
1,703
10
1,713
Increases in property,
plant and equipment and
1,294
535
1,830
31
1,861
72
1,933
intangible assets(Notes) 1. “Other businesses” includes supplies and other goods.
2. The adjustments are as follows.
(1) The -949 million yen adjustment to segment profit includes elimination of inter-segment transactions of 12 million
yen that are not allocated to reportable segments and corporate expenses of -961 million yen. Corporate expenses aremainly related to the parent company’s Administrative Department.
(2) The 29,812 million yen adjustment to segment assets is corporate assets that are not allocated to reportable segments.
Corporate assets mainly include the parent company’s surplus assets under managem ent (cash and deposits of 10,845
million yen and securities of 10,000 million yen), long-term investments (investment securities of 8,396 million yen)and the parent company’s land of 569 million yen.
(3) The adjustments to depreciation and increases in property, plant and equipment and i ntangible assets are related tothe parent company’s head office assets.
3. Segment profit is adjusted for consistency with operating profit in the consolidated statement of income.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2019

Per Share Information(Yen)
Current fiscal year
(from January 1, 2019 to
December 31, 2019)

Previous fiscal year
(from January 1, 2018 to
December 31, 2018)
Net assets per share

2,885.27

3,076.27

Basic earnings per share253.25243.89Diluted earnings per share

252.91243.50(Notes) 1. The basis of calculating the basic earnings per share and diluted earnings per share is as follows.

Item(Million yen)
Current fiscal year
(from January 1, 2019 to
December 31, 2019)

Previous fiscal year
(from January 1, 2018 to
December 31, 2018)

Basic earnings per share
Profit attributable to owners of parent

4,968

4,700

-

-

4,968

4,700

19,621

19,273

-

-

26

31

( 26)

( 31)

Amounts unavailable to common shareholders
Profit attributable to owners of parent related tocommon shares
Average number of shares outstanding during
the period (thousand shares)
Diluted earnings per share
Adjustment to profit attributable to owners ofparentIncrease in the number of common shares(thousand shares)(of which share acquisition rights (thousand
shares))2. The basis of calculating the net assets per share is as follows.

Item(Million yen)
Current fiscal year
(As of December 31, 2019)

Previous fiscal year
(As of December 31, 2018)

Total net assets

56,77558,495

Deduction on total net assets

162

123

(of which share acquisition rights)

( 81)

( 93)

(of which non-controlling interests)

( 81)

( 29)

Net assets applicable to common shares

56,61358,371

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

19,621

18,974

Material Subsequent Events
Not applicable.

* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

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