Summary of Financial Statements for the Third Quarter of Fiscal Year Ending April 2017
[Japan GAAP] (Consolidated)

March 2, 2017

Name of listed company:

AIN HOLDINGS INC.

Exchange listed on:First Section of Tokyo Stock Exchange and Sapporo Securities Exchange

Code number:

9627

URL:

http://www.ainj.co.jp/

Representative:
Inquiries:

Kiichi Otani, President and Representative Director
Toshihide Mizushima, Representative Senior Managing Director
TEL: +81-11-814-1000
Date of filing quarterly securities report:
March 17, 2017
Start of dividend payment:–

Supplementary documents for quarterly results:

Yes

Quarterly results briefing:No(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the third quarter of fiscal year ending April 30, 2017 (May 1, 2016 to January 31, 2017)(1) Consolidated operating results(Percentage figures show year-on-year changes.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Nine months ended January 31,
2017
Nine months ended January 31,
2016(Note) Comprehensive income:Million yen%

Million yen%

Million yen%

Million yen%

182,100

7.5

9,591

(4.1)

10,019

(2.9)

5,438

(1.7)

169,395

24.2

10,00433.2

10,315

31.8

5,531

23.7

Nine months ended January 31, 2017: ¥5,576 million (+3.1%)
Nine months ended January 31, 2016: ¥5,408 million (+17.1%)
Earnings
per share

Nine months ended January 31,
2017
Nine months ended January 31,
2016

Diluted earnings
per share
Yen

Yen

171.53–174.44–(2) Consolidated financial position
Shareholders’equity ratio

Net assets

Total assets

Net assets per
share

Million yen

Million yen%

Yen

As of January 31, 2017

154,224

57,63237.3

1,816.01

As of April 30, 2016

139,888

53,32438.1

1,679.69(Reference) Shareholders’ equity:

As of January 31, 2017: ¥57,581 million

As of April 30, 2016: ¥53,258 million

2. Dividends

Year ended April 30, 2016

End of firstquarterYen–

End of second
quarter
Yen
0.00

Dividend per share
End of third
quarter
Yen
–

–
0.00
Year ending April 30, 2017
Year ending April 30, 2017
(forecast)(Note) Revision to the most recently announced dividend forecasts: No

End of year

Full year

Yen

Yen

40.00

40.00

50.00

50.00

–

3. Consolidated financial forecasts for the fiscal year ending April 30, 2017 (May 1, 2016 to April 30, 2017)(Percentage figures show year-on-year changes.)
Profit attributable toEarnings
Net sales
Operating income
Ordinary income
owners of parent
per share
Million yen%
Million yen%
Million yen%
Million yen%
Yen
Full year

250,000

6.5

14,8001.2

15,300

0.9

8,300

4.8

261.77(Note) Revision to the most recently announced consolidated financial forecasts: Yes
For more details about revisions to the consolidated financial forecasts, please refer to the announcement released today (March 2, 2017),“Notice on the Revision of Consolidated Business Performance Forecast.”*Notes(1) Major changes in subsidiaries during the period (changes in specified subsidiaries resulting from changes in scope of
consolidation): No
Newly consolidated: –Excluded: –(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements: Yes(Note) For detail, please refer to “2. Matters concerning summary information (notes) (2) Application of specified accounting methods forthe preparation of quarterly consolidated financial statements” on page 3 of the Attachment.

(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions
1) Changes in accounting principles as a result of revisions to accounting standards, etc.:
No2) Changes in accounting principles other than 1):
No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of outstanding shares (common stock)1) Number of outstanding
As of January 31,
shares (including treasury
2017
stock):
2) Number of shares held in
As of January 31,
treasury:
20173) Average number ofNine months ended
shares outstanding:January 31, 2017

31,888,212 shares As of April 30, 2016

31,888,212 shares

180,644 shares As of April 30, 2016

180,595 shares

Nine months ended
January 31, 2016

31,707,617 shares

31,707,568 shares*Status of execution of the quarterly review of financial statements
This quarterly financial summary is not subject to the quarterly review procedure based on the Financial Instruments and Exchange Act. Asof the time of disclosure, this review procedure for quarterly financial consolidated statements had not been completed.
*Statement regarding the proper use of financial forecasts and other special remarks
The above forecasts are calculated based on the information available as of the publication date of this material, and actual financial
results may vary due to change in future economic conditions and others.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017

Contents of the Attachment
1. Qualitative information on consolidated results for the period under review .......................................................................... 2(1) Consolidated operating results ........................................................................................................................................... 2(2) Consolidated financial position ........................................................................................................................................... 3(3) Forecast of consolidated financial results and other forward-looking information ............................................................... 3
2. Matters concerning summary information (notes) ................................................................................................................... 3(1) Major changes in subsidiaries during the period ................................................................................................................ 3(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements ................. 3(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions .................................... 3(4) Additional information ........................................................................................................................................................... 3
3. Quarterly consolidated financial statements ............................................................................................................................ 4(1) Quarterly consolidated balance sheet .................................................................................................................................. 4(2) Quarterly consolidated statements of income and comprehensive income .......................................................................... 6
Quarterly consolidated statements of income ..................................................................................................................... 6
Quarterly consolidated statements of comprehensive income ............................................................................................. 7(3) Notes on quarterly consolidated financial statements .......................................................................................................... 8(Notes on the premise of a going concern) ............................................................................................................................ 8(Notes on significant changes in the amount of shareholders’ equity) ................................................................................... 8(Segment Information, etc.).................................................................................................................................................... 8

1

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017

1. Qualitative information on consolidated results for the period under review(1) Consolidated operating results
During the first nine months of the current fiscal year (May 1, 2016 to January 31, 2017), some areas of the Japanese
economy were slow to improve, but consumer spending picked up and the economy continued to recover at a moderatepace overall. Corporate earnings remained at a high level but lost momentum.
In this economic environment, the AIN HOLDINGS Group (the Group) worked to expand its business and increase
earnings. Specifically, the Group opened new dispensing pharmacies and used M&A to expand the business. It also
developed its urban drug and cosmetic store business.
In the first nine months of the fiscal year, net sales rose 7.5% year on year to ¥182,100 million, operating income
decreased 4.1% to ¥9,591 million, ordinary income decreased 2.9% to ¥10,019million, and profit attributable to owners ofparent decreased 1.7% to ¥5,438 million.
Financial results by business segment are as follows.
(Dispensing pharmacy business)
In drug price and dispensing fee revisions in April 2016, the role of pharmacies located near hospitals was reevaluated,
but in order to realize patient-focused non-hospital dispensing services, pharmacists and dispensing pharmacies are now
being required to play a key role at the heart of local communities.
To ensure our pharmacists and dispensing pharmacies fulfill their role at the heart of local communities, the Group
continues to build links with local healthcare service providers, mainly in the area of home-based dispensing, step up theintegration and continuous management of drug information using patient medication notebooks and other means, andpromote wider use of generic drugs.
In business development, the Group continued to push ahead with business expansion by opening new dispensing
pharmacies and through M&A deals.
In December 2016, AOI Pharmacy Corporation (Sendai-shi, Miyagi Prefecture), which operates a total of 115 dispensing
pharmacies across Japan, became a subsidiary of the Group. As a result, the Group now operates a network of more than
1,000 dispensing pharmacies in Japan’s 47 prefectures. The Group intends to use the acquisition of the company to further
strengthen its network of dispensing pharmacies to support local healthcare provision.
As a result, for the first nine months of the fiscal year, the dispensing pharmacy business reported higher sales but lower
profit with sales rising 7.1% year on year to ¥162,599 million and segment income decreasing 2.3% to ¥13,029 million.
During the period under review, the Group opened 202 new dispensing pharmacies, including those acquired throughM&A deals, and closed 14 pharmacies, resulting in a total of 1,069.
(Drug and cosmetic store business)
In the drug and cosmetic store business, the market environment remained challenging due to a narrowing competitive
gap between companies in the sector and the emergence of new competitors from sector consolidation and realignmentthat also extends to other business sectors.
Against this backdrop, the Group continued to open ainz & tulpe urban drug stores and worked to make stores more
appealing by refurbishing existing stores and strengthening merchandise lineups, particularly drug and cosmetics
products. We also actively developed proprietary merchandise brands such as LIPS and HIPS and cocodecica, leading toan increase in profit margins.
As a result, for the first nine months of the fiscal year, the drug and cosmetic store business reported an increase insales of 2.0% year on year to ¥15,907 million. However, segment loss was ¥578 million, compared with segment loss of¥336 million in the same period a year earlier.
In the same period, the Group opened ainz & tulpe Colette Mare SAKURAGICHO-B1 (Naka Ward, Yokohama), ainz &tulpe GINZA NAMIKIDORI (Chuo Ward, Tokyo), ainz & tulpe KITASENJU MARUI (Adachi Ward, Tokyo), and ainz & tulpe
Colette Mare SAKURAGICHO (Naka Ward, Yokohama), as well as LIPS and HIPS Style Store SHINSAPPORO
Sunpiazza (Atsubetsu Ward, Sapporo), which mainly sells proprietary brands. Five stores were also closed, resulting in a
total of 52 cosmetic and drugs stores at the end of the third quarter.
(Other businesses)
Net sales from other businesses rose 88.1% year on year to ¥3,593 million and segment loss was ¥1,114 million
compared with the loss of ¥786 million a year earlier.

2

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017(2) Consolidated financial position
The balance of total assets at the end of the third quarter increased by ¥14,336 million from the end of the previous
fiscal year to ¥154,224 million.
This mainly reflected an increase in goodwill and inventories due to business expansion through new store openings
and M&A, against a decrease in notes and accounts receivable.
The balance of liabilities increased ¥10,028 million to ¥96,591 million.
The balance of short- term and long-term debts increased by ¥11,019 million to ¥31,563 million.
Total net assets increased by ¥4,307 million to ¥57,632 million and the shareholders’ equity ratio decreased 0.8
percentage points to 37.3%.
(3) Forecast of consolidated financial results and other forward-looking information
The Group has revised its consolidated financial forecasts for the fiscal year ending April 30, 2017, announced on May
27, 2016. For more details, please refer to the announcement released today (March 2, 2017), “Notice on the Revision ofConsolidated Business Performance Forecast.”

2. Matters concerning summary information (notes)(1) Major changes in subsidiaries during the period
There are no applicable matters to be reported.

(2) Application of specified accounting methods for the preparation of quarterly consolidated financial statements
Tax expenses were calculated by reasonably estimating the effective tax rate after the application of tax effectaccounting to income before income taxes for the consolidated fiscal year including the third quarter, and multiplying theestimated effective tax rate by income before income taxes for the quarter.
(3) Changes in accounting principles, changes in accounting estimates, and restatement of revisions
There are no applicable matters to be reported.
(4) Additional information(Adoption of the Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from the first quarter of the current fiscal year, the Company has applied the Implementation Guidance on
Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26, March 28, 2016).

3

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheet

Fiscal year endedApril 30, 2016
(As of April 30, 2016)

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise
Supplies
Deferred tax assets
Short-term loans
Other accounts receivable
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Land
Other property, plant and equipment, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investments in securities
Deferred tax assets
Deposits and guarantees
Other investments and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

4(Thousand yen)
Nine months ended
January 31, 2017
(As of January 31, 2017)

22,647,300
12,385,821
10,661,177
323,473
1,149,432
639,457
5,983,629
2,806,438(3,337)56,593,392

26,292,014
9,178,960
12,966,081
326,863
1,082,208
790,885
8,191,131
2,334,464(6,544)
61,156,064

14,694,738
9,537,493
3,921,089
28,153,320

15,515,227
10,021,126
3,371,860
28,908,215

33,337,372
2,248,861
35,586,233

41,714,203
2,290,640
44,004,844

2,677,643
2,038,851
10,013,440
6,062,530(1,237,174)
19,555,292
83,294,846
139,888,239

2,725,418
2,206,644
10,515,551
5,486,136(778,525)
20,155,225
93,068,284
154,224,349

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017

Fiscal year endedApril 30, 2016
(As of April 30, 2016)

Liabilities
Current liabilities
Accounts payable
Short-term debt
Accrued income taxes
Deposits received
Allowance for bonuses to employees
Allowance for bonuses to directors
Reserve for reward obligations
Provision for sales returns
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Net defined benefit liability
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Unrealized holding gains (losses) on securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5(Thousand yen)
Nine months ended
January 31, 2017
(As of January 31, 2017)

39,987,595
5,690,001
4,448,862
10,112,896
1,633,520
13,590390,200
15,815
4,452,428
66,744,908

41,032,529
9,313,789
1,180,917
11,942,074
810,150
6,378
400,324
15,9804,555,446
69,257,591

14,854,307
2,228,446
2,735,964
19,818,717
86,563,626

22,249,847
2,409,019
2,675,499
27,334,366
96,591,958

8,682,976
6,367,844
38,605,783(419,311)
53,237,293

8,682,976
6,367,844
42,776,278(419,598)
57,407,502(63,296)
84,867
21,57065,74853,324,613
139,888,239

113,245
60,354
173,600
51,28857,632,391
154,224,349

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income
Nine months ended
January 31, 2016
(May 1, 2015 toJanuary 31, 2016)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commissions received
Real estate rental revenue
Fiduciary obligation fee
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Losses on sales of accounts receivables
Real estate rental expenses
Provision of allowance for doubtful accounts
Other non-operating expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sales of investments in securities
Gains on sales of fixed assets
Penalty income
Insurance income
Other extraordinary income
Total extraordinary income
Extraordinary losses
Losses on disposal and sales of fixed assets
Impairment losses on investments in securities
Restructuring loss
Other extraordinary losses
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6(Thousand yen)
Nine months ended
January 31, 2017
(May 1, 2016 toJanuary 31, 2017)

169,395,846
142,049,330
27,346,515
17,341,735
10,004,780

182,100,350
152,007,928
30,092,422
20,501,181
9,591,241

42,97733,47749,455
132,803
143,655
420,964
823,333

72,18338,666
31,128
155,914
111,486
293,484
702,864

71,59460,59465,628282,600
31,707512,125
10,315,987

120,313
48,97363,387
41,810274,485
10,019,621

23,681
68,196
13,122
2,772
107,773

152,400
10,71770,37965,349298,847

242,529
96,273
98,637
11,448448,8899,974,871
4,427,691
5,547,180
16,011
5,531,168

289,660
72,827
59,121
421,610
9,896,858
4,472,517
5,424,340(14,460)
5,438,800

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017

Quarterly consolidated statements of comprehensive income
Nine months ended
January 31, 2016
(May 1, 2015 toJanuary 31, 2016)

ProfitOther comprehensive income
Unrealized holding gains (losses) on securities
Remearurements of defined benefit plans, net of tax
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income (loss) attributable tonon-controlling interests

7(Thousand yen)
Nine months ended
January 31, 2017
(May 1, 2016 toJanuary 31, 2017)

5,547,180

5,424,340(161,265)

176,542

22,514(138,751)
5,408,429
5,392,417(24,513)152,029
5,576,369
5,590,829

16,011(14,460)

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017(3) Notes on quarterly consolidated financial statements(Notes on the premise of a going concern)
There are no applicable matters to be reported.

(Notes on significant changes in the amount of shareholders’ equity)
There are no applicable matters to be reported.
(Segment Information, etc.)
I Nine months ended January 31, 2016 (May 1, 2015 to January 31, 2016)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

151,884,602

15,601,084

1,910,159

169,395,846-

169,395,846(2) Intersegment sales--

242,067

242,067(242,067)-

Total sales

151,884,602

15,601,084

2,152,227

169,637,913(242,067)

169,395,846

Segment income (loss)

13,341,126(336,964)(786,910)

12,217,251(1,901,263)

10,315,987

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,901,263) thousand to segment income (loss) includes ¥1,958,290 thousand in corporate
expenses, ¥7,299 thousand in (income) losses that are not allocated to reportable segments, and ¥(64,327)
thousand in eliminations due to intersegment transactions.
Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.

2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
In the dispensing pharmacy business segment, the Company acquired 13 dispensing pharmacy companies and twoother companies. During the first nine months of the fiscal year, the increase in goodwill related to these companieswas ¥6,671,010 thousand.
II Nine months ended January 31, 2017 (May 1, 2016 to January 31, 2017)
1. Net sales and income (loss) by reportable segment
Reportable segments(Thousand yen)
Carried onquarterly
Adjustments
consolidated(Note) 1
statements ofincome(Note) 2

Dispensing
pharmacy

Drug andcosmetic store(1) Sales to third parties

162,599,949

15,907,287

3,593,114

182,100,350-

182,100,350(2) Intersegment sales--

282,915

282,915(282,915)-

Total sales

162,599,949

15,907,287

3,876,029

182,383,266(282,915)

182,100,350

Segment income (loss)

13,029,406(578,991)(1,114,301)

11,336,112(1,316,491)

10,019,621

Other

Total

Sales

Notes:

1. The adjustment of ¥(1,316,491) thousand to segment income (loss) includes ¥2,506,952 thousand in corporate
expenses, ¥(1,172,991) thousand in (income) losses that are not allocated to reportable segments, and ¥(17,470)
thousand in eliminations due to intersegment transactions.
8

AIN HOLDINGS INC. (9627) Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending April 30, 2017

Corporate expenses consist mainly of expenses associated with the administrative divisions of the parent
company, such as general affairs and accounting divisions.
2. Segment income (loss) is adjusted with the ordinary income of quarterly consolidated statements of income.
2. Impairment losses on fixed assets and goodwill by reportable segment[Significant impairment losses on fixed assets]:
There are no applicable matters to be reported.
[Significant changes in the amount of goodwill]:
In the dispensing pharmacy business segment, the Company acquired 38 dispensing pharmacy companies. During
the first nine months of the fiscal year, the increase in goodwill related to these companies was ¥10,629,661 thousand.

9