December 19, 2016 Name of listed company: TSURUHA Holdings, Inc. Listed on: Tokyo Stock Exchange, 1st Section
Securities code: 3391 URL: http://www.tsuruha-hd.co.jp Representative: Masashi Horikawa, President and Representative Director
Contact: Naoto Aoki, Chief Financial Officer and Chief Administrative Officer
Investor Relations Officer TEL: +81-11-783-2755
Scheduled date of filing quarterly financial report: December 28, 2016 Scheduled date to start dividends distribution: January 10, 2017 Supplementary quarterly materials prepared: Yes
Quarterly results information meeting held: Yes (for institutional investors and financial analysts)
(Figures shown are rounded down to the nearest million yen.)
- Consolidated financial results for the second quarter ended November 15, 2016 (May 16, 2016 - November 15, 2016)
Consolidated operating results
(Percentage figures show changes from the same period in the previous year.)
Net Sales
Operating Income
Ordinary Income
Net Income Attributable to Owners of the Parent
Six months ended November 15, 2016
Millions of yen
%
Millions of yen
%
Millions of yen
%
Millions of yen
%
289,079
19.4
18,804
30.9
19,713
29.7
13,260
33.3
Six months ended November 15, 2015
242,144
11.1
14,366
6.9
15,195
8.0
9,951
19.5
Note: Comprehensive income: Six months ended November 15, 2016: 11,794 million yen (-8.1%)
Six months ended November 15, 2015: 12,837 million yen (23.6%)
Net Income per Share
Diluted Net Income per Share
Six months ended November 15, 2016
Yen
Yen
276.95
274.33
Six months ended November 15, 2015
209.58
207.12
Consolidated financial position
Total Assets
Net Assets
Equity Ratio
Net Assets per Share
As of November 15, 2016
Millions of yen
Millions of yen
%
Yen
274,102
164,830
58.7
3,352.35
As of May 15, 2016
293,541
155,290
51.6
3,170.60
Reference: Equity capital: As of November 15, 2016: 160,851 million yen As of May 15, 2016: 151,568 million yen
-
Dividends
Annual Dividends (Yen)
First Quarter-end
Second Quarter-end
Third Quarter-end
Year-end
Annual
Year ended May 15, 2016
―
44.00
―
64.00
108.00
Year ending May 15, 2017
―
54.00
Year ending May 15, 2017
(Forecast)
―
54.00
108.00
Note: Revisions to the most recently announced dividend forecast during the period: None
- Consolidated financial forecasts for the year ending May 15, 2017 (May 16, 2016 - May 15, 2017)
(Percentage figures show changes from the same period in the previous year.)
Net Sales
Operating Income
Ordinary Income
Net Income Attributable to Owners of the Parent
Net Income per Share
Full year
Millions of yen
%
Millions of yen
%
Millions of yen
%
Millions of yen
%
Yen
583,000
10.5
37,100
18.4
37,900
16.2
23,460
21.4
490.75
Note: Revisions to the most recently announced earnings forecasts during the period: None
NotesSignificant changes to subsidiaries during the period (Transfers of specific subsidiaries with changes in the scope of consolidation): None
Application of the specific accounting methods for preparing the quarterly consolidated financial statements: None
Changes in accounting policies, accounting estimates and restatement of revisions
Changes in accounting policies due to revision of accounting standard, etc.: None
Changes in accounting policies other than 1): None
Changes in accounting estimates: None
Restatement of revisions: None
As of November 15, 2016
48,867,768 shares
As of May 15, 2016
48,690,268 shares
As of November 15, 2016
886,038 shares
As of May 15, 2016
886,038 shares
Six months ended November 15, 2016
47,879,951 shares
Six months ended November 15, 2015
47,482,379 shares
Number of shares issued and outstanding (common shares)
Number of shares issued and outstanding (including treasury shares)
Number of treasury shares
Average number of shares issued and outstanding in each period (quarterly consolidated cumulative period)
-
Implementation status of review procedures
The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to the quarterly consolidated financial results and the procedure based on this Act was not complete as of the release of these Consolidated Financial Results.
- Explanation of appropriate use of financial forecasts and other special items
This document contains projections of performance based on information currently available. Actual performance may differ from these projections due to changes in the economic environment and other uncertainties. Please refer to page 3 of the supplementary materials for further details about the above financial forecasts.
Contents
-
Implementation status of review procedures
Qualitative information on quarterly financial results 2
Explanation of consolidated financial results 2
Explanation of consolidated financial position 2
Explanation of consolidated financial forecasts and other forward-looking statements 3
Summary (notes) information 3
Significant changes to subsidiaries during the period 3
Application of the specific accounting methods for preparing the quarterly consolidated financial statements 3
Changes in accounting policies, accounting estimates and restatement of revisions 3
Additional information 3
Quarterly consolidated financial statements 4
Quarterly consolidated balance sheets 4
Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income 6
(Quarterly consolidated statements of income) 6
(Quarterly consolidated statements of comprehensive income) 7
Quarterly consolidated statements of cash flows 8
Notes on quarterly consolidated financial statements 10
- Qualitative information on quarterly financial results
Explanation of consolidated financial results
In the first six months of the current fiscal year (May 16, 2016 to November 15, 2016), the Japanese economy showed signs of a moderate recovery. However, consumer sentiment was weak amid uncertainty about the economic outlook, including rising prices caused by the weak yen and the risk of a downturn in overseas economies.
In the drugstore sector, the operating environment remained challenging, with competition to open stores and reduce prices continuing to intensify and the pace of consolidation and realignment accelerating as companies sought to remain competitive. Against this backdrop, the TSURUHA Group continued to offer a high level of customer service mainly through advice- based sales, and implemented a number of strategic business initiatives. Specifically, in addition to focusing on advice-based sales of high value-added products that meet customer needs, the Group worked to address the shrinking market caused by Japan's aging population and intensifying competition, pushing ahead with store renovations aimed at improving convenience for customers by introducing new product categories such as food. Also, in order to strengthen the competitiveness and value of the Group's private brands, M's one and Medis' one, the Group took a number of steps to boost the quality of the product
range, such as rolling out new packaging with a more visible, unified brand and updating products.
In store openings, the Group targeted specific areas for multiple store openings as part of its area dominance store-opening strategy and implemented a scrap and build approach for existing stores. In the second quarter under review, the Group opened 55 new stores and closed 17 existing stores. As a result, the number of directly managed stores totaled 1,705 at the end of the second quarter.
TSURUHA Group store openings and closures (Number of stores)End of previous fiscal year
Store openings
Store closures
Net change
End of current period
Of which dispensing pharmacies
Hokkaido
358
11
2
9
367
76
Tohoku
416
13
2
11
427
80
Kanto, Koshin
390
12
4
8
398
119
Chubu, Kansai
50
4
1
3
53
12
Chugoku
263
9
3
6
269
64
Shikoku
188
3
5
(2)
186
42
Kyushu
2
3
-
3
5
-
Total
1,667
55
17
38
1,705
393
(The figure at the end of the current period excludes 20 overseas stores and two franchise stores.)
As a result of the above, in the first six months of the current fiscal year, TSURUHA Holdings reported net sales of ¥289,079 million (up 19.4% year on year), operating income of ¥18,804 million (up 30.9%), ordinary income of ¥19,713 million (up 29.7%), and net income attributable to owners of the parent of ¥13,260 million (up 33.3%).
Explanation of consolidated financial position (Assets, liabilities and net assets)
As of the end of the second quarter, assets totaled ¥274,102 million, a decrease of ¥19,438 million compared with the end of the previous fiscal year. This mainly reflected declines in securities and accounts receivable - trade, as the settlement date for the previous fiscal year fell on a non-business day for financial institutions.
Liabilities totaled ¥109,272 million, a decrease of ¥28,978 million compared with the end of the previous fiscal year. This mainly reflected a decline in accounts payable - trade, as the settlement date for the previous fiscal year fell on a non-business day for financial institutions.
Net assets totaled ¥164,830 million, an increase of ¥9,539 million compared with the end of the previous fiscal year. As a result, the equity ratio was 58.7%, up 7.1 points from the previous fiscal year-end.
(Cash flows)
As of the end of the second quarter, cash and cash equivalents (cash) totaled ¥51,039 million, a decrease of ¥18,277 million compared with the end of the previous fiscal year.
The Group's cash flow position and factors affecting cash flows during the first six months of the fiscal year were as follows: (Cash flows from operating activities)
In the first six months, operating activities used net cash of ¥8,198 million, compared with net cash provided of ¥34,900 million in the same period a year earlier. This mainly reflected income before income taxes of ¥19,746 million and cash negative items such as decrease in notes and accounts payable - trade of ¥25,476 million (including an impact of ¥26,953 million because the settlement date for the previous fiscal year fell on a non-business day for financial institutions) and income
taxes paid of ¥5,576 million, against cash positive items such as decrease in notes and accounts receivable - trade of ¥4,878 million (including an impact of ¥4,683 million because the settlement date for the previous fiscal year fell on a non-business day for financial institutions).
(Cash flows from investing activities)
In the first six months, investing activities used net cash of ¥6,939 million, a decline of 5.6% compared with the same period a year earlier. This primarily reflected cash used of ¥3,506 million for payments for guarantee deposits related to new store openings and ¥4,170 million for the purchase of property, plant and equipment.
(Cash flows from financing activities)
In the first six months, financing activities used net cash of ¥3,139 million, compared with cash used of ¥2 million in the same period a year earlier. This mainly reflected cash used of ¥3,059 million for cash dividends paid.
Explanation of consolidated financial forecasts and other forward-looking statements The full-year financial forecasts announced on June 14, 2016 are unchanged.
- Summary (notes) information
Significant changes to subsidiaries during the period There is no related information.
Application of the specific accounting methods for preparing the quarterly consolidated financial statements There is no related information.
Changes in accounting policies, accounting estimates and restatement of revisions Changes in accounting policy
There is no related information.
Additional information
Application of 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).
- Quarterly consolidated financial statements
Quarterly consolidated balance sheets
(Millions of yen)
As of May 15, 2016
As of November 15, 2016
Assets
Current assets
Cash and deposits
38,347
44,064
Accounts receivable-trade
21,046
16,167
Securities
31,000
7,000
Merchandise and finished goods
71,343
75,171
Raw materials and supplies
15
15
Deferred tax assets
2,514
2,589
Short-term loans receivable
2
1
Others
10,721
9,460
Total current assets
174,991
154,470
Non-current assets
Property, plant and equipment
Buildings and structures, net
19,063
19,752
Machinery, equipment and vehicles, net
0
0
Tools, furniture and fixtures, net
7,243
7,994
Land
7,610
7,911
Leased assets, net
1,594
1,553
Construction in progress
82
325
Total property, plant and equipment
35,595
37,537
Intangible assets
Goodwill
17,464
16,287
Software
392
431
Telephone subscription right
76
77
Others
449
447
Total intangible assets
18,382
17,244
Investments and other assets
Investment securities
23,205
21,055
Long-term loans receivable
24
22
Deferred tax assets
1,431
1,509
Guarantee deposits
36,305
38,124
Others
3,689
4,224
Allowance for doubtful accounts
(84)
(86)
Total investments and other assets
64,571
64,850
Total non-current assets
118,549
119,632
Total assets
293,541
274,102
(Millions of yen)
As of May 15, 2016
As of November 15, 2016
Liabilities
Current liabilities
Accounts payable-trade
91,542
66,065
Current portion of long-term loans payable
1,206
1,206
Accounts payable-other
9,332
8,626
Lease obligations
264
242
Income taxes payable
6,101
7,089
Provision for bonuses
3,782
3,507
Provision for directors' bonuses
400
217
Provision for point card certificates
1,867
1,938
Others
4,873
2,686
Total current liabilities
119,370
91,579
Non-current liabilities
Long-term loans payable
5,322
4,719
Lease obligations
1,917
1,842
Deferred tax liabilities
6,693
5,974
Net defined benefit liability
1,050
1,228
Provision for directors' retirement benefits
6
5
Asset retirement obligations
1,691
1,745
Others
2,199
2,177
Total non-current liabilities
18,880
17,692
Total liabilities
138,250
109,272
Net assets
Shareholders' equity
Capital stock
8,321
8,734
Capital surplus
26,373
26,786
Retained earnings
106,716
116,917
Treasury shares
(5,311)
(5,311)
Total shareholders' equity
136,100
147,127
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
15,527
13,816
Remeasurements of defined benefit plans
(60)
(92)
Total accumulated other comprehensive income
15,467
13,724
Subscription rights to shares
875
897
Non-controlling interests
2,846
3,081
Total net assets
155,290
164,830
Total liabilities and net assets
293,541
274,102
Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income (Quarterly consolidated statements of income)
(Millions of yen)
Six months ended November 15, 2015
Six months ended November 15, 2016
Net sales
242,144
289,079
Cost of sales
173,981
206,604
Gross profit
68,162
82,475
Selling, general and administrative expenses
53,795
63,671
Operating income
14,366
18,804
Non-operating income
Interest income
65
65
Dividends income
86
106
Gain on donation of equipment
449
578
Rent income
59
77
Share of profit of entities accounted for using equity method
54
-
Compensation income
15
128
Insurance income
7
13
Others
101
124
Total non-operating income
839
1,094
Non-operating expenses
Interest expenses
7
154
Early withdrawal penalty
-
27
Provision of allowance for doubtful accounts
3
1
Others
0
2
Total non-operating expenses
10
185
Ordinary income
15,195
19,713
Extraordinary income
Gain on sales of non-current assets
-
1
Gain on reversal of subscription rights to shares
-
39
Gain on sales of investment securities
-
0
Settlement received
-
280
Gain on step acquisitions
244
-
Others
-
7
Total extraordinary income
244
327
Extraordinary losses
Loss on retirement of non-current assets
34
27
Loss on sales of non-current assets
-
0
Donation for reconstruction
-
180
Charge for agreed cancellation of lease agreement
-
71
Others
0
14
Total extraordinary losses
34
294
Income before income taxes
15,404
19,746
Income taxes-current
5,372
6,280
Income taxes-deferred
80
(98)
Total income taxes
5,453
6,182
Income
9,951
13,564
Net income attributable to non-controlling interests
-
304
Net income attributable to owners of the parent
9,951
13,260
(Quarterly consolidated statements of comprehensive income)
(Millions of yen)
Six months ended November 15, 2015
Six months ended November 15, 2016
Income
9,951
13,564
Other comprehensive income
Valuation difference on available-for-sale securities
2,877
(1,708)
Remeasurements of defined benefit plans
8
(61)
Total other comprehensive income
2,885
(1,769)
Comprehensive income
12,837
11,794
(Breakdown of comprehensive income)
Comprehensive income attributable to owners of the parent
12,837
11,517
Comprehensive income attributable to non-controlling interests
-
277
Quarterly consolidated statements of cash flows
Six months ended November 15, 2015
Six months ended November 15, 2016
Cash flows from operating activities
Income before income taxes
15,404
19,746
Depreciation and amortization
1,797
2,462
Amortization of goodwill
1,038
1,177
Increase (decrease) in allowance for doubtful accounts
3
1
Increase (decrease) in provision for bonuses
129
(275)
Increase (decrease) in provision for directors' bonuses
(195)
(182)
Increase (decrease) in net defined benefit liability
(71)
177
Increase (decrease) in provision for point card certificates
174
70
Increase (decrease) in provision for directors' retirement benefits
(582)
(0)
Interest and dividends income
(151)
(172)
Compensation income
(15)
(128)
Insurance income
(7)
(13)
Interest expenses paid on loans and installment interests
7
154
Gain on donation of equipment
(449)
(578)
Loss on retirement of non-current assets
34
27
Loss (gain) on sales of non-current assets
-
(1)
Loss (gain) on sales of investment securities
-
0
Gain on reversal of subscription rights to shares
-
(39)
Share of (profit) loss of entities accounted for using equity method
(54)
-
Loss (gain) on step acquisitions
(244)
-
Decrease (increase) in notes and accounts receivable - trade
(5,661)
4,878
Decrease (increase) in inventories
(1,108)
(3,827)
Increase (decrease) in notes and accounts payable - trade
28,525
(25,476)
Increase (decrease) in accrued consumption taxes
(784)
15
Others
4,116
(759)
Subtotal
41,905
(2,742)
Interest and dividends income received
108
131
Proceeds from insurance income
7
13
Proceeds from compensation
15
128
Interest expenses paid
(7)
(154)
Income taxes paid
(7,128)
(5,576)
Net cash provided by (used in) operating activities
34,900
(8,198)
Six months ended November 15, 2015
Six months ended November 15, 2016
Cash flows from investing activities
Payments into time deposits
(0)
(0)
Proceeds from withdrawal of time deposits
-
5
Purchase of securities
(1,000)
-
Proceeds from sales of securities
1,000
-
Purchase of property, plant and equipment
(2,984)
(4,170)
Proceeds from sales of property, plant and equipment
-
1
Purchase of software
(26)
(116)
Purchase of investment securities
(0)
(311)
Proceeds from sales of investment securities
-
0
Purchase of shares of subsidiaries resulting in change in scope of consolidation
(2,728)
-
Payments of loans receivable
(1)
(0)
Collection of loans receivable
5
2
Payments for guarantee deposits
(2,489)
(3,506)
Proceeds from collection of guarantee deposits
885
1,130
Others
(11)
25
Net cash provided by (used in) investing activities
(7,352)
(6,939)
Cash flows from financing activities
Repayment of short-term loans payable
(269)
-
Repayments of long-term loans payable
-
(603)
Repayments of lease obligations
(5)
(141)
Proceeds from issuance of new shares
255
707
Proceeds from sales of treasury shares
2,515
-
Cash dividends paid
(2,499)
(3,059)
Dividends paid to non-controlling interests
-
(42)
Net cash provided by (used in) financing activities
(2)
(3,139)
Net increase (decrease) in cash and cash equivalents
27,544
(18,277)
Cash and cash equivalents at the beginning of period
29,949
69,317
Cash and cash equivalents at the end of period
57,494
51,039
Notes on quarterly consolidated financial statements (Notes on premise of a going concern)
There is no related information.
(Notes on significant changes in the amount of shareholders' equity) There is no related information.
(Notes on premise of a going concern) 10
(Notes on significant changes in the amount of shareholders' equity) 10
TSURUHA Holdings Inc. published this content on 19 December 2016 and is solely responsible for the information contained herein.
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