Summary of Consolidated Financial Statements
for the Third Quarter of the Term Ending March 31, 2019(Japan GAAP)
February 7, 2019
Exchange: Tokyo Stock Exchange
URL:
https://www.tsumura.co.jp
Name: Terukazu Kato
Name: Yosuke Tsuchiya

Name of Listed Company: TSUMURA & CO.
Code:
4540
Representative:
President and Representative Director
Contact:
Head of Corporate Communications Dept.
Telephone: 81-3-6361-7100
Scheduled date of submission: February 8, 2019
Scheduled date of dividend payment commencement: Preparation of supplementary materials for the quarterly financial statements: Yes
Holding of the quarterly results briefing: No(Figures are rounded down to the nearest one million yen.)

1.

Consolidated business results for the third quarter of the term ending March 31, 2019
(From April 1, 2018 to December 31, 2018)(1) Financial results (year to date)(Figures in percentages denote the year-on-year change.)

Net sales
Nine-month period ended
December 31, 2018
Nine-month period ended
December 31, 2017

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

92,0101.2

15,2801.0

16,094

2.6

11,731(4.6)

90,911

3.4

15,135

8.2

15,6847.2

12,302

10.2(Note) Comprehensive income： Nine-month period ended December 31, 2018: 10,198 million yen［(32.7)%］
Nine-month period ended December 31, 2017: 15,149 million yen［103.6%〕

Profit per share

Fully diluted profit per share

Nine-month period ended
December 31, 2018
Nine-month period ended
December 31, 2017

Yen

Yen

153.44－173.06－(2) Consolidated financial conditions
Total assets

Shareholders’ equity ratio

Net assets

Million yen

Million yen%

279,501
292,379

203,306
196,533

71.1
66.2

As of December 31, 2018
As of March 31, 2018

(Reference) Shareholders’ equity: As of December 31, 2018: 198,765 million yen

2.

As of March 31, 2018: 193,599million yen

Dividends
Dividend per share
End of Q1

End of Q2

End of Q3

End of FY

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2018

－

32.00

－

32.00

64.00

Year ending March 31, 2019

－

32.00

－
32.00

64.00

Year ending March 31, 2019
(Projection)(Note)Revisions to dividends projection published most recently: No

3.

Projections of consolidated business results for the term ending March 31, 2019
(From April 1, 2018 to March 31, 2019)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year)

Net sales
Million yen

Full-year

120,500

Operating profit

Profit attributable toowners of parent

Ordinary profit% Million yen% Million yen% Million yen

2.2

2.6

0.5

17,500(Note)Revisions to dividends projection published most recently: No

18,00012,800

Profit per share%

Yen(11.8)

167.41

Notes(1) Important changes of subsidiaries during the term(change of specified subsidiaries that lead to a change in the scope of consolidation): No(Note) Ping An Tsumura Inc. was included in the scope of consolidation in the second quarter because its importance had
increased, although the company does not meet the conditions for transfer of specific subsidiaries.
(2) Application of special accounting practices in consolidated quarterly financial statements preparation: Yes(Note) For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the Quarterly Consolidated
Financial Statements (application of specific accounting treatment to the preparation of quarterly financial statements)” on page 9of the material attached hereto.
(3) Changes in accounting principles and procedures and the method for indication, etc.
1) Changes associated with the revision of accounting principles, etc.: No
2) Change other than 1):
No3) Accounting estimate change:
No4) Retrospective restatement:No(4) Number of shares issued (common stock)1) Number of shares issued at the end of theterm(including treasury stock) (shares)

FY 3/2019 3Q

76,758,362

FY 3/201876,758,362

2) Number of treasury stock at the end of theterm(shares)

FY 3/2019 3Q

300,534

FY 3/2018

300,382

3) Average number of shares during the term
(shares)

FY 3/2019 3Q

76,457,945

FY 3/2018 3Q

71,085,085* This Summary of Quarterly Consolidated Financial Statements is exempt from quarterly review procedures.
* Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
In these materials, earnings forecasts and other statements about the future are forward-looking statements based on the information
currently available and certain assumptions that the company regards as reasonable. Accordingly, the Company cannot makepromises to achieve such forecasts. Actual financial results may differ materially from these forecasts depending on a number ofimportant factors. Please see “1.Qualitative information on quarterly results (3) Description of projections of consolidated businessresults” on page 2 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials

1.Qualitative information on quarterly results ···························································································

2(1) Description of operating results ··································································································

2(2) Description of financial condition ·······························································································

2(3) Description of projections of consolidated business results ···································································

2

2.Quarterly Consolidated Financial Statements and Key Notes ·······································································

3(1) Quarterly Consolidated Balance Sheets ·························································································

3(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ····

5

Quarterly Consolidated Statements of Income
For the Third Quarter Consolidated Accumulative Term ·····································································

5

Quarterly Consolidated Statements of Comprehensive Income
For the Third Quarter Consolidated Accumulative Term ·····································································

6(3) Quarterly Consolidated Statements of Cash Flows ·············································································

7(4) Notes to the Quarterly Consolidated Financial Statements ····································································

9(Notes on premise of a going concern) ··························································································

9(Notes on case of extreme change in shareholder's equity amount) ··························································

9(Transfer of important subsidiaries during the quarter under review) ·······················································

9(Application of specific accounting treatment to the preparation of quarterly financial statements) ······················

9(Additional information) ········································································································

91

1. Qualitative information on quarterly results(1) Description of operating results
In the third quarter of the consolidated fiscal year (from April 1 to December 31, 2018), net sales rose 1,099 million yen from the same
period of the previous fiscal year to 92,010 million yen.
Looking at profit, operating profit was 15,280 million yen (up 1.0% year on year), ordinary profit was 16,094 million yen (up 2.6%
year on year) and profit attributable to owners of parent was 11,731 million yen (down 4.6% year on year). The cost -to-sales ratio fell
0.8 percentage points year on year, due mainly to reduced costs related to crude drugs, which outweighed the cost increase arisingfrom the NHI drug price revisions implemented in April 2018. On the other hand, the cost-to-SGA ratio rose 0.9 percentage points
year on year. As a result, the operating profit margin was 16.6%, on a par with the year-ago level.
Net sales of overall prescription Kampo products increased 1.2% year on year, despite the impact of the NHI drug price revisions.
With diversifying needs for Kampo medicine among healthcare professionals, the Company conducts activities for providing
appropriate information on evidence in basic and clinical medicine, clinical practice guidelines in which Kampo products aredescribed and various uses for Kampo medicine prescriptions mainly through meetings with doctors, presentations for medical
institutions and Kampo medicine seminars.
The Company will continue to collect and provide more information on Kampo medicine and Kampo products and work to expand themarket for Kampo in the three important domains of geriatric field, cancer domain (supportive care) and gynecology field, tapping
into the large potential market.
(2) Description of financial condition
The financial position at the end of the third quarter under review was as follows:
Accompanying the application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28,
February 16, 2018), etc. in the first quarter of the fiscal year, the Company made comparisons and analysis with the previous fiscal
year in the details about financial position described below, using figures after adopting these revised standards retrospectively.
Total assets shrank 12,878 million yen from the end of the previous fiscal year, mainly due to a decrease in cash and deposits as aresult of the repayment of the current portion of long-term loans payable, to 279,501 million yen.
Liabilities decreased 19,651 million yen chiefly due to repayment of the current portion of long-term loans payable, to 76,195 million
yen.
Net assets rose 6,772 million yen from the end of the previous fiscal year, to 203,306 million yen. As a result, the equity ratio rose 4.9
percentage points, to 71.1%.
Cash flows in the nine months under review were as follows:
Cash provided by operating activities was 2,271 million yen. In comparison to the nine months of the previous fiscal year, cash inflow
decreased 12,383 million yen, due largely to a decline in inventories and a rise in income taxes paid.
Cash used in investing activities was 15,683 million yen. Compared with the nine months of the previous fiscal year, cash useddecreased 2,750 million yen year on year, mainly due to an increase in time deposits and an increase in proceeds from the sal e andredemption of short-term and long-term investment securities.
Cash used in financing activities was 18,508 million yen. Compared with the nine months of the previous fiscal year, cash provided
decreased 68,924 million yen, mainly reflecting a decrease in proceeds from the issuance of bonds and a decrease in proceeds from theissuance of common shares.
As a result, cash and cash equivalents at the end of the third quarter under review decreased 32,734 million yen from the end of theprevious fiscal year, to 45,579 million yen.
(3) Description of projections of consolidated business results
The projections of consolidated business results for the fiscal year ending March 31, 2019 published on May 10, 2018 remainunchanged.

2

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Unit:Million yen)
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Other
Accumulated depreciation
Total property, plant and equipment
Intangible assets
Investment and other assets
Investment securities
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investment and other assets
Total non-current assets
Total assets

3

As of December 31, 201883,52042,906
3,500
8,008
12,797
29,188
10,971(4)

65,00645,5896,372
9,523
10,83329,97818,582(4)

190,888

185,881

64,77882,327(75,776)

65,136
85,211(78,804)

71,32971,543526

786

14,1791,908
13,547(0)

14,529
2,254
4,506
(0)

29,634

21,291

101,491

93,620292,379

279,501

(Unit:Million yen)
As of March 31, 2018
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

As of December 31, 2018

5,619
10,314Current portion of long-term loans payable

5,507
10,31415,000

Income taxes payable
Provision for sales returns
Other

3,538
10
14,396929
16
11,262

Total current liabilities

48,76628,142

Non-current liabilities
Bonds payable
Long-term loans payable
Net defined benefit liability
Other

30,000
9,376
88
7,616

30,000
9,376
81
8,595

Total non-current liabilities

47,08048,053

Total liabilities

95,84676,195

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

30,142
14,027140,040(814)

30,142
14,027
146,878(815)

183,396

190,234

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

4,748
323
2,673
2,301
157

4,917
189
2,673
544
207

Total accumulated other comprehensive income

10,203

8,531

2,933

4,540

196,533

203,306

292,379

279,501

Total shareholders’ equity

Non-controlling interests
Total net assets
Total liabilities and net assets4－(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the Third Quarter Consolidated Accumulative Term
(Unit:Million yen)
Nine-month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)

Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

Net sales
Cost of sales

90,91137,75592,01037,403Gross profit

53,15554,606

Selling, general and administrative expenses

38,02039,326

Operating profit

15,135

15,280

107
379

315
231

37

75

177
273

158
214

974

995

Non-operating expenses
Interest expenses
Bond issuance cost

140
143

126

Share issuance cost
Other

108
33

－
55

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income

Total non-operating expenses

－

426

181

Ordinary profit

15,68416,094Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities

5
1,498

1
324

1,503

325

12
34

0
53

Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes

47

53

17,14016,365

Income taxes

4,570

4,337

Profit12,56912,028267

296

12,302

11,731

Profit attributable to non-controlling interests
Profit attributable to owners of parent

5

Quarterly Consolidated Statements of Comprehensive Income / For the Third Quarter Consolidated Accumulative Term
(Unit:Million yen)
Nine-month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)

Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

12,56912,028

1,917
279
236
141

169
(134)
(1,880)
49

5

(34)

2,579

(1,830)Comprehensive income

15,14910,198Comprehensive income attributable to
Owners of parent
Non-controlling interests

14,856
293

10,059138

6

(3) Quarterly Consolidated Statements of Cash Flows(Unit:Million yen)
Nine-month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses

Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)
16,365
4,743
0
(547)
126

Bond issuance cost

17,140
4,586
0
(486)
140
143

Share issuance cost

108

－

(37)

(75)

42

52

(3,700)2,568(1,353)(2,723)(924)
220(1,498)

(324)

(307)
(40)
784

(289)
7
(8,824)

Subtotal

18,0907,809Interest and dividend income received
Interest expenses paid
Income taxes paid

492
(132)
(3,794)500(149)(5,888)14,6552,271(5,829)(8,527)12(214)(10,008)(4,465)(7,211)
1(318)(11,502)

6,154

8,822

Purchase of investments in capital of subsidiaries
Payments of loans receivableCollection of loans receivable
Other

－
(3)
4
(22)

(952)
(1)
3
(59)

Net cash provided by (used in) investing activities(18,433)(15,683)

Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Loss (gain) on sales of short-term and long-term investment
securities
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Other

Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales and redemption of short-term and longterm investment securities

7－

(Unit:Million yen)
Nine-month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)

Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

Cash flows from financing activities
Decrease in short-term loans payable(2,267)－－(15,000)

Proceeds from issuance of bonds

29,856－

Proceeds from issuance of common shares

21,201－

Proceeds from sales of treasury shares

6,012

－

Repayments of long-term loans payable

Proceeds from share issuance to non-controllingshareholders
Cash dividends paid
Dividends paid to non-controlling interests
Other

－

1,468

(4,303)(49)(34)(4,887)(54)(34)

Net cash provided by (used in) financing activities

50,416(18,508)

Effect of exchange rate change on cash and cash equivalents

34

(813)

Net increase (decrease) in cash and cash equivalents

46,672(32,734)

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

29,901
76,57378,31345,5798

(4) Notes to the Quaterly Consolidated Financial Statements(Notes on premise of a going concern)
No relevant items.
(Notes on case of extreme change in shareholder's equity amount)
No relevant items.
(Transfer of important subsidiaries during the quarter under review)No relevant items.
In this regard, Ping An Tsumura Inc. was included in the scope of consolidation in the second quarter because its importance had
increased, although the said company does not meet the conditions for transfer of specific subsidiaries.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of the costaccounting period, which is, therefore, deferred as “current liabilities (other).”(Additional information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February
16, 2018), etc. at the beginning of the first quarter under review. Accordingly, “deferred tax assets” is now included in “investment
and other assets,” and “deferred tax liabilities” is now included in “non-current liabilities.”

9