FOR TRANSLATION PURPOSE ONLYDISCLAIMER
This English translation is only for reference purpose. When there are any discrepancies between original
Japanese version and English translation version, the original Japanese version always prevails.
February 1, 2017

Summary of Financial Results of the Third Quarter of the Fiscal Year Ending March 31, 2017
[Japanese standards] (Consolidated)
Stock Exchange listings: Tokyo
Company name:
SATO RESTAURANT SYSTEMS COMPANY LIMITED
Securities code:
8163
URL: http://www.sato-restaurant-systems.co.jp
Representative:
Yoshitaka Shigesato, President & Chief Executive Officer
Contact:
Masahiro Tanaka, Director & Head of Corporate Planning Division
Tel: +81-6-7222-3101
Scheduled date of filing of quarterly report:
February 10, 2017
Scheduled date of payment of dividend:
N/A
Preparation of supplementary references regarding quarterly results:
None
Holding the briefing of quarterly results:
None(All amounts are rounded down to the nearest million yen)( means negative)

1. Financial results of the Third Quarter of the Fiscal Year Ending March 31, 2017 (Apr. 1, 2016 – Dec. 31, 2016)(1) Consolidated operating results (cumulative total)(Percentages represent changes from previous year)
Net sales

Operating income

Income attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

31,69629,919

5.9
5.9

101
674

85.0
32.3

202
620

67.3
46.4

272
303

―
59.8

3Q FY03/2017
3Q FY03/2016

3Q FY03/2017: 151 million yen (－%)
3Q FY03/2016:
316 million yen (61.0%)(Note) Comprehensive income

Net income per share

Diluted net income per share
Yen

Yen

―
―

8.20
9.56

3Q FY03/2017
3Q FY03/2016(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

31,981
27,82014,213
14,53144.1
51.8

425.02434.353Q FY03/2017
FY03/2016(Reference) Shareholders equity: 3Q FY03/2017:
FY03/2016:

14,114 million yen
14,424 million yen

2. Dividends
Annual dividend per share
1Q-end2Q-endFY03/2016
FY03/2017
FY03/2017 (forecasts)－－

Year-end

3Q-end

Yen

Yen

Yen

－
－

－
－
－

Total
Yen

Yen

5.00

5.00

5.00

5.00

(NOTE) Revisions to dividend forecasts published most recently: None

3. Consolidated performance forecasts for the Fiscal Year Ending March 31, 2017 (April 1, 2016 – March 31, 2017)(Percentages represent changes from previous year;  means negative)

Net sales

Full term

Operating income

Income attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen

44,000

9.8

550

1.4

300

17.0

300

(NOTE) Revisions to performance forecasts published most recently: None

Net income
per share
%

－

Yen

9.03

FOR TRANSLATION PURPOSE ONLY
*Notes(1) Changes in important subsidiaries during the current period(changes in specific subsidiaries resulting in modifications of the consolidation scope): Yes
New company: Two companies (Miyamoto Munashi Corporation; TWO SIX Corporation)
Excluded company: None
NOTE: Please see the appendix page 4, “2. Matters regarding Summary Information (Notes), (1) Changes in important subsidiaries
during the current consolidated cumulative period”.

(2) Application of special accounting methods to the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting principles, changes and restatements of accounting estimates
1) Changes in accounting principles caused by revision of accounting standards:
2) Changes other than 1):
3) Changes in accounting estimates:
4) Restatements:

None
None
None
None

(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury stock)
3Q FY03/2017:33,209,080 shares
FY03/2016:33,209,080 shares
2) Number of treasury stock at the end of the period
3Q FY03/2017:262 shares
FY03/2016:
212 shares
3) Average number of shares outstanding during the period (quarterly cumulative)
3Q FY03/2017:33,208,848 shares
3Q FY03/2016:
31,708,913 shares* Presentation concerning implementation status of quarterly review procedures
These quarterly financial results are not the subject of a quarterly review procedure based on the Financial Instruments
and Exchange Act, and at the time of disclosing these quarterly financial results, review procedures regarding thequarterly financial statements based on the Financial Instruments and Exchange Act had not been completed.
* Explanation regarding appropriate use of the earnings forecast and other special notes
Descriptions about the future such as performance forecasts contained in this document are based on information
currently available to the Company and certain presumptions considered to be reasonable, and therefore actual businessperformance and other elements may differ substantially due to various factors.

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY
○ Table of Contents: Appendix

1. Qualitative Information regarding the current quarter .............................................................................................. 2(1) Descriptions regarding operating results.............................................................................................................. 2(2) Descriptions regarding financial position ............................................................................................................ 3(3) Descriptions regarding future prospects such as consolidated performance forecasts ........................................ 3
2. Matters regarding summary information (Notes) ...................................................................................................... 4(1) Changes in important subsidiaries during the current consolidated cumulative period ....................................... 4(2) Application of special accounting methods to the preparation of quarterly consolidated financial statements ... 4(3) Additional information ........................................................................................................................................ 4
3. Summary of important information for going concern assumption .......................................................................... 44. Quarterly Consolidated Financial Statements ........................................................................................................... 5(1) Quarterly Consolidated Balance Sheets ............................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Statement of Comprehensive Income ................................. 7
Quarterly Consolidated Statements of Income
Third quarter consolidated cumulative period ................................................................................................. 7
Quarterly Consolidated Statement of Comprehensive Income
Third quarter consolidated cumulative period ................................................................................................. 8(3) Notes on Quarterly Consolidated Financial Statements....................................................................................... 9(Going concern assumption) ............................................................................................................................... 9(Notes in case of significant changes in the amount of shareholders’ equity) ..................................................... 9(Segment information, etc.) ................................................................................................................................. 91

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY
1. Qualitative Information regarding the Current Quarter(1)

Descriptions regarding operating results①

Consolidated performance(million yen;  means negative)

Actual results
Net sales

3Q FY03/2016+/- amounts
YoY

+/−%
YoY

Actual results

3Q FY03/2017+/− amounts
YoY

+/−%
YoY

29,919

1,670

5.9%

31,696

1,777

5.9%

Operating income

674

321

32.3%

101

573

85.0%

Ordinary income

620

537

46.4%

202

417

67.3%

Income attributable toowners of parent

303

451

59.8%

272

575

－

For the current third quarter consolidated cumulative period, financial results of Miyamoto Munashi Corporation and
TWO SIX Corporation, which had become the wholly-owned subsidiaries of SRS as of September 1, 2016, have been
consolidated into those of the entire Group for three months period from September 1, 2016 to November 30, 2016.
Miyamoto Munashi Corporation operates a restaurant chain named "Meshiya Miyamoto Munashi", and TWO SIX
Corporation holds the premise of "Miyamoto Munashi JR Nagoyaekimae branch".
Expanded restaurant operations by opening new ones and further addition of sales by acquiring the above-mentioned"Meshiya Miyamoto Munashi" contributed to higher sales amount as compared to the same period of the previous year.
The Group unfortunately experienced lower profitability as compared to the previous year because, for example,
labor cost increased due to arranging working environment, and also because of allocating advisory expenses and others
associated with share acquisition of Miyamoto Munashi Corporation and TWO SIX Corporation, loss on evaluation of
investment in overseas joint ventures, and allocating impairment loss due to decision to close two restaurants.
②
Measures for opening new restaurants(numbers of restaurants)

Washoku Sato
Tendon & Tenpura
restaurant Santen

201 (－)

1 (－)

－ (－)

As of end of thecurrent third quarter
consolidated fiscal
period202 (－)

22 (－)

11 (－)－ (－)

33 ( 1)25 ( 5)

Sushi-han

14 (－)

－ (－)

1 (－)

13 (－)－ (－)

Meotozenzai *1
Nigiri Chojiro
Nigiri Chujiro
Miyakobito
MeshiyaMiyamoto Munashi
Katsuya－ (－)
53 (－)
6 (－)
18 (17)

1 (－)
3 (－)
－ (－)
－ (－)

－ (－)
－ (－)
－ (－)
2 ( 2)

1 (－)
56 (－)
6 (－)
16 (15)

－ (－)
6 (－)
－ (－)
－ (－)

－ (－)

69 (7) *2－ (－)

69 (7)－ (－)

28 (14)

7 ( 4)－ (－)

35 (18)11 ( 6)

Domestic total
Overseas restaurants

342 (31)
6 ( 5)

92 (12)1 (－)

3 ( 2)
1 ( 1)

431 (41)
6 ( 4)

46 (11)－ (－)

Worldwide total
348 (36)
93 (12)4 ( 3)
437 (45)
NOTE: Numbers in parentheses represent FC restaurants (domestic) and joint venture restaurants (overseas).

46 (11)Category

As of end of theprevious consolidated
fiscal year

Newly opened
restaurants

Closedrestaurants

Planned to open
during the current
consolidated fiscal
year
4 (－)

*1

Previously, financial results of Sushi-han's Houzenji main restaurant and the adjoining Meotozenzai branch had been
included in the category of Sushi-han as such; but the former was closed on October 3, 2016 and therefore the latterhas been treated as another category separated from the category of Sushi-han.

*2

The number of newly opened "Meshiya Miyamoto Munashi" restaurants means that Miyamoto Munashi Corporation
had its shares entirely acquired and has since been included within the scope of the consolidated accounting.

Newly opened restaurants during the current third quarter consolidated cumulative period were as follows: 1 directly
managed "Washoku Sato" restaurant; 11 "Tendon & Tenpura restaurant Santen" restaurants including 10 directly managed
and 1 FC restaurants; 3 directly managed "Nigiri Chojiro" restaurants; and 7 "Katsuya" restaurants including 3 directly
managed and 4 FC restaurants, totaling 22 restaurants were newly opened in all categories domestically; moreover,contracts have already been executed for opening 14 new restaurants. As for overseas development, "Washoku Sato Jung-Li
branch" was newly opened in Taiwan, whereas "Washoku Sato AMATA Home Pro branch" was closed, which means theCompany currently operates 6 overseas restaurants: 2 in Taiwan, 2 in Indonesia and 2 in Thailand.
In addition, Miyamoto Munashi Corporation has joined the Group to add 69 "Meshiya Miyamoto Munashi"
restaurants (including 3 FC and 5 quasi-directly managed restaurants), resulting in 437 restaurants of the entire Group in
operation domestic and overseas at the end of the current third quarter consolidated fiscal period.

2

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY③

Other measures
As operational measures at "Washoku Sato" restaurants, renewed menu has been introduced in July, 2016 including
shifting vegetables used for "Sato-Shabu" (all-you-can-eat style Shabu-Shabu) to domestic ones for more added-value, andalso in August "Sato Suki" (all-you-can-eat style Sukiyaki) started, so that we could offer higher-value added items. As aresult, sales of all-you-can-eat style menu have become more prevalent in the overall sales composition to push up thecustomers' average spending, leading to higher sales in existing restaurants as compared to the previous year. In addition,
facilities renovations were carried out at 7 restaurants.
At "Santen" restaurants, Narumi branch (Aichi pref.), the first restaurant in Chubu area was newly opened in May
and Mikawa-Anjo branch (Aichi pref.), the first FC in the same area in August, and in October, AEON-Mall Yono branch(Saitama pref.) was also opened within the Mall's food court, resulting in broader area coverage and operation style with 33
restaurants currently in operation.
At "Nigiri Chojiro" restaurants, Chojiro's 15th anniversary special events were organized to roll out highly proactive
commercial measures coupled with promotional activities, along with offering campaigns featuring seasonal dishes.In
addition, 3 new restaurants were opened respectively in Shiga, Kyoto and Nara prefectures, resulting in 52 restaurants
currently in operation in Kansai area.
It should be noted that the Group is a single segment of food service business and therefore description of segmental
performance is omitted.
(2)

Descriptions regarding financial position(Status of assets, liabilities and net assets)
Total assets at the end of the current third quarter consolidated fiscal period were 31,981 million yen (increase by
4,160 million yen from the end of the previous consolidated fiscal year).
(Assets)
Current assets was 11,564 million yen (increase by 798 million yen from the end of the previous consolidated fiscal
year). It comprises mainly increase in cash and deposits by 330 million yen and increase in raw materials and supplies by
326 million yen.
Non-current assets was 20,327 million yen (increase by 3,273 million yen from the end of the previous consolidated
fiscal year). This is mainly due to, for example, increase in goodwill by 1,555 million yen and in intangible assets - other by
417 million yen.
(Liabilities)
Current liabilities were 7,787 million yen (increase by 434 million yen from the end of the previous consolidated
fiscal year). This is mainly due to, for example, increase in accounts payable - trade by 554 million yen.
Non-current liabilities was 9,980 million yen (increase by 4,043 million yen from the end of the previous
consolidated fiscal year). It comprises mainly increase in bonds payable by 3,395 million yen and increase in long-timeloans payable by 277 million yen.
(Net assets)
Net assets was 14,213 million yen (decrease by 317 million yen from the end of the previous consolidated fiscal
year).
(3)

Descriptions regarding future prospects such as consolidated performance forecasts
There is no change in consolidated performance forecasts for the full term, as announced in the Summary of
Financial Results on November 2, 2016.

3

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY
2. Matters regarding summary information (Notes)(1)

Changes in important subsidiaries during the current quarterly consolidated cumulative period

In the second quarter consolidated cumulative period, the Group acquired 100% shares of two companies:
Miyamoto Munashi Corporation which had operated "Meshiya Miyamoto Munashi" (a restaurant chain), and TWO
SIX Corporation which had held the premise of "Miyamoto Munashi JR Nagoyaekimae branch"; both of which havebeen included within the scope of consolidated accounting.
(2)

Application of special accounting methods to the preparation of quarterly consolidated financial
statements
Not applicable.

(3)

Additional information(Application of Implementation Guidance on Recoverability of Deferred Tax Assets)
The Company has applied the "Implementation Guidance on Recoverability of Deferred Tax Assets"(Accounting Standards Board of Japan Guidance No. 26 of March 28, 2016) since the current first quarter
consolidated fiscal period.

3. Summary of important information for going concern assumption
Not applicable.

4

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY

4. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousand yen;  means negative)

Previous consolidated
fiscal year
(March 31, 2016)

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise
Raw materials and supplies
Deferred tax assets
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investment and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

5

Current third quarter
consolidated fiscal period(December 31, 2016)

8,616,381
603,001
41,279710,854
312,739
481,583
10,765,840

8,920,315
759,670
40,531
1,036,869
171,630
635,754
11,564,771

2,456,152
4,742,506
2,174,772
9,373,431

2,753,689
4,742,506
2,379,119
9,875,315

1,116,373
977,751
2,094,124

2,671,452
1,394,917
4,066,369

805,407
833,7443,039,010
445,963475,766△13,505
5,586,386
17,053,942
649
27,820,432

1,036,727
917,5993,306,777
481,401
655,217△12,354
6,385,369
20,327,054
89,30831,981,134

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY

(Thousand yen;  means negative)

Previous consolidated
fiscal year
(March 31, 2016)

Liabilities
Current liabilities
Accounts payable - trade
Current portion of bonds
Current portion of long-term loans payable
Accounts payable-other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities for land revaluation
Deferred tax liabilities
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

Current third quarter
consolidated fiscal period(December 31, 2016)

1,179,980
50,0002,437,500
2,137,639
230,746
272,916
1,043,361
7,352,143

1,734,888
475,000
2,230,780
2,054,150
242,713
221,620
827,884
7,787,037－
3,759,945
274,908
83,74529,578510,772
1,277,478
5,936,428

3,395,000
4,037,105
274,908
256,397
29,578637,274
1,349,909
9,980,173

13,288,571

17,767,211

8,532,856
4,981,675
1,400,978△173
14,915,337

8,532,856
4,981,675
962,783△214
14,477,100

108,976△600,061△491,085
107,608
14,531,860
27,820,432

237,457△600,061△362,604
99,427
14,213,923
31,981,134

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY

(2) Quarterly Consolidated Statements of Income and Statement of Comprehensive Income(Quarterly Consolidated Statements of Income)(Second quarter consolidated cumulative period)(Thousand yen;  means negative)

Previous third quarter
consolidated cumulative
period(April 1, 2015 December 31, 2015)

Current third quarter
consolidated cumulative
period(April 1, 2016 December 31, 2016)

Net sales
Cost of sales

29,919,031
10,313,107

31,696,429
10,833,627

Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
House rent income
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses on real estates
Share issuance cost
Miscellaneous loss
Total non-operating expenses
Ordinary income or loss ()Extraordinary losses
Loss on retirement of noncurrent assets
Loss on sales of noncurrent assets
Loss on cancellation of rental contracts
Loss on valuation of investment securities
Impairment loss
Loss on closing of stores

19,605,924
18,931,132
674,791

20,862,802
20,761,793
101,008

10,433
15,862
76,67428,46942,861
174,301

10,532
15,752
52,341
150,439
38,001
267,068

105,377
62,12628,261
32,588228,353
620,739

95,67044,405－25,196
165,273
202,803

11,733
12,216－－－－23,950596,789
195,577
109,632
305,209291,579

18,605－410
59,315
12,251
888
91,471
111,331226,509
165,153
391,663△280,331△11,632
303,212△8,180△272,151

Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income or loss ()Net income or loss ()attributable to non-controlling interests
Net income or loss () attributable to owners of parent

7

SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY
(Quarterly Consolidated Statement of Comprehensive Income)(Second quarter consolidated cumulative period)(Thousand yen; △ means negative)

Net income or loss ()Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

8

Previous third quarter
consolidated
cumulative period(April 1, 2015
- December 31, 2015)

Current third quarter
consolidated
cumulative period(April 1, 2016
- December 31, 2016)

291,579△280,331

24,487

128,480

24,487
316,067

128,480△151,851

327,700△11,632△143,671△8,180SATO RESTAURANT SYSTEMS COMPANY LIMITED (8163)
Summary of Financial Results of the 3Q FY03/2017

FOR TRANSLATION PURPOSE ONLY
(3) Notes on Quarterly Consolidated Financial Statements(Going concern assumption)
Not applicable.

(Notes in case of significant changes in the amount of shareholders’ equity)
Not applicable.
(Segment information, etc.)
The Group is a single segment of food service business and therefore description of segment information, etc. isomitted.

9