First Quarter Fiscal Year Ending March 31, 2017 Consolidated Earnings Announcement (Japanese GAAP) Company Name: Hoosiers Holdings Stock Code: 3284 Representative: (Title) CEO and President Contact: (Title) Senior managing director and head of Management Department Scheduled date to file Quarterly Report: August 10, 2016 Scheduled date to commence dividend payment: Preparation of supplementary information of quarterly financial results : Yes Holding of quarterly financial results briefing : No August 10, 2016 Listed market: Tokyo Stock Exchange First Section URL: http://www.hoosiers.co.jp (Name) Tetsuya Hirooka (Name) Tsutomu Ikuma Telephone: +81332870704 (Figures are rounded down to the nearest million yen) 1. 1st Quarter FY3/17 Consolidated Earnings (April 1, 2016 to June 30, 2016) (1) Consolidated Earnings (Cumulative) (% indicates changes from the corresponding period of the previous fiscal year) Profit Attributable to Net Sales Operating Income Ordinary Income Owners of Parent Million yen % yy Million yen % yy Million yen % yy Million yen % yy 1st Quarter FY3/17 3,193 58.1 543 656 479 1st Quarter FY3/16 7,616 12.7 683 6.8 596 9.8 386 30.9 (Note) Comprehensive income: 1st Quarter FY3/17 463 million ( %) FY3/16 388 million (30.5%) EPS Diluted EPS Yen Yen 1st Quarter FY3/17 17.35 1st Quarter FY3/16 12.81 12.62 (2) Consolidated Financial Position Total Assets Net Assets Net Asset Ratio Million yen Million yen % June 30, 2016 79,124 20,944 26.5 March 31, 2016 74,585 21,891 29.3 (Reference) Shareholders equity: 1st Quarter FY3/17 20,941 million FY3/16 21,888 million 2. Dividends End of 1st Quarter End of 2nd Quarter Dividend per Share End of 3rd Quarter End of Period Annual Yen Yen Yen Yen Yen FY3/16 7.00 7.00 14.00 FY3/17 FY3/17 (Forecast) 12.00 12.00 24.00 (Note) Changes to the dividend forecast during the quarter under review: No 3. Consolidated Earnings Projections for Fiscal Year Ending March 2017 (From April 1, 2016 to March 31, 2017) (% indicates changes from the relevant corresponding period of the previous fiscal year) Net Income Attributable to Parent Net Sales Operating Income Ordinary Income EPS Company Shareholders Million yen % Million yen % Million yen % Million yen % Yen Full year 50,000 39.1 5,400 69.6 5,000 77.8 3,300 79.8 119.60 (Note) Changes to the consolidated earnings projections during the quarter under review: No
* Matters to be noted (1) Changes in important subsidiaries during the quarter under review: No Changes in specified subsidiaries which accompany a change in the scope of consolidation Newly included: Excluded: (2) Application of special accounting practices for the preparation of quarterly consolidated financial statements: No (3) Changes in accounting principles, changes in accounting estimates and retrospective restatements (a) Changes in accounting principles in accordance with revisions to accounting and other standards: Yes (b) Changes in accounting principles other than above (a): No (c) Changes in accounting estimates: No (d) Retrospective restatements: No (4) Outstanding shares (Common stock) (a) Number of outstanding shares at end of period (Including treasury shares) 1st Quarter FY3/17 31,555,600 shares FY ended March 2016 (b) Number of outstanding treasury shares at end of period 1st Quarter FY3/17 3,972,300 shares FY ended March 2016 (c) Average number of shares during the period (Quarterly cumulative period) 1st Quarter FY3/17 27,622,093 shares 1st Quarter FY3/16 31,555,600 shares 3,406,600 shares 30,160,200 shares * Statement regarding the state of implementation of quarterly review procedures This quarterly consolidated earnings announcement is exempt from the quarterly review procedures stipulated under the Financial Instruments and Exchange Act. Review procedures of the quarterly financial statements as stipulated under the Financial Instruments and Exchange Act have been completed at the time of disclosure of this quarterly consolidated earnings announcement. * Explanatory statement regarding the proper use of financial forecasts and other notes All projections provided in this document are based on certain reasonable assumptions and beliefs in light of information currently available. Actual results may differ from our projections due to various unforeseen reasons.
4. Qualitative Information on the Financial Statements for the Quarter Under Review, etc. (1) Description of business performance During this first quarter, the number of contracted units was 373, 1 lot and 2 buildings, and that of delivered units was 88 and 1 building. As of the end of this first quarter, we managed 12,341 units. Consequently, as the results for this first quarter, we posted net sales of 3,193 million yen (58.1% down from the same quarter of the previous year), operating loss of 543 million yen (683 million yen: operating income from the same quarter of the previous year), ordinary loss of 656 million yen (596 million yen: ordinary income from the same quarter of the previous year), and net loss attributable to owners of parent of 479 million yen (386 million yen: net income attributable to owners of parent from the same quarter of the previous year). In our Condominium Apartments for Families and Singles, Houses and Flats and Condominium Apartments for Seniors businesses, while contracts progress in line with ongoing construction, sales for the majority of condominium lots and detached houses are booked upon delivery to customers after construction has been completed and not at the time purchase and sales contracts are executed. As a result, this tends to cause a deviation in quarterly sales depending on the timing of delivery. Results by segment are as follow. We have changed the way in which we calculate segment income or loss since the previous consolidated fiscal year. Therefore, we are disclosing our year on year comparisons with figures for each segment that we have created according to the changed way in which we calculate segment income or loss. The details of this are as in 3. Reporting Segment Changes for this first quarter in (3) Notes on the Consolidated Quarterly Financial Statements (Segment Information) of 3. Consolidated Quarterly Financial Statements. (I) Condominium Apartments for Families and Singles During this first quarter, the Hoosiers Group recorded net sales and an operating loss of 1,084 million (78.3% down from the same quarter of the previous year) and 469 million (466 million yen: operating income from the same quarter of the previous year), respectively. (1) Real Estate Sales We recorded net sales of 940 million (80.4% down from the same quarter of the previous year) due to a delivery of 54 condominium units such as Duo Hills Tsukuba Mirai and Duo Hills Maruyama First. (2) Sales Commissions We recorded net sales of 20 million (76.4% down from the same quarter of the previous year) from the sale of Wellith Tsukuba Kenkyugakuen Residence. (3) Rental Revenue Due to the stable operation of owned incomeproducing properties, we recorded net sales of 121 million (50.9% up from the same quarter of the previous year). (4) Other Income We recorded net sales of 2 million (93.2% down from the same quarter of the previous year) due to loan application service commissions. (II) Houses and Flats We recorded net sales of 1,302 million (23.5% up from the same quarter of the previous year) and operating loss of 22 million ( 23 million: operating loss from the same quarter of the previous year) during this first quarter. (1) Real Estate Sales We recorded net sales of 1,293 million (22.9% up from the same quarter of the previous year) due to a delivery of 31 detached houses and 1 condominium unit such as Duo Avenue Takahatafudo and Duo Avenue HigashiFuchu. (2) Other Income We recorded net sales of 9 million (204.0% up from the same quarter of the previous year) on the back of loan application service commissions and rental revenue. (III) Asset Management We recorded net sales of 382 million (49.3% down from the same quarter of the previous year) and operating income of 4 million (96.6% down from the same quarter of the previous year) during this first quarter.
(1) Real Estate Sales We recorded net sales of 88 million (84.4% down from the same quarter of the previous year) due to the sales of inventory assets. (2) Rental Revenue We recorded net sales of 219 million (59.0% up from the same quarter of the previous year) due to the stable operation of owned incomeproducing properties. (3) Other Income We recorded net sales of 74 million (58.0% up from the same quarter of the previous year) due to the management of capsule hotels and commercial facilities. (IV) Property Management and Related Services We recorded net sales of 413 million (28.8% up from the same quarter of the previous year) and operating loss of 8 million ( 12 million: operating loss from the same quarter of the previous year) during this first quarter. (1) Condominium Management We recorded net sales of 304 million (17.0% up from the same quarter of the previous year). (2) Other Income We recorded net sales of 109 million (79.6% up from the same quarter of the previous year) mainly due to the insurance agency, other lifestyle related sales and consigned construction business. (V) Condominium Apartments for Seniors We recorded net sales of 7 million (98.4% down from the same quarter of the previous year) and operating loss of 75 million ( 90 million: operating income from the same quarter of the previous year) during this first quarter. (1) Real Estate Sales We did not record any net sales during this first quarter. (2) Other Income We recorded net sales of 7 million (798.8% up from the same quarter of the previous year) due to the management of day services. (VI) Other We recorded net sales of 2 million (366.0% up from the same quarter of the previous year) and operating loss of 5 million ( 2 million: operating loss from the same quarter of the previous year) through PFI operations. As indicated in the table below, contract progress remains robust with respect to delivery plans for the full fiscal year under review. Trends in proper condominiums, which in particular contribute significantly to earnings, are robust with 66.5% of contracts completed. Contracts on about 677 units are progressing at the end of June in regards to proper condominiums and detached houses scheduled to be delivered in the fiscal year ending March 2017. FY3/17 Number of Planned Property Deliveries Number of Properties for Which Contracts Have Been Completed Rate of Progress Proper Condominiums 1,120 677 60.5% and Detached houses *The number of units for joint venture properties is described with consideration for the joint venture ratio. (2) Qualitative information concerning shifts in consolidated financial position Due mainly to the procurement of premises for business use, repay of loans and other items, total assets, total liabilities, and net assets stood at 79,124 million (6.1% up from the end of the previous fiscal year), 58,179 million (10.4% up from the end of the previous fiscal year) and 20,944 million (4.3% down from the end of the previous fiscal year), respectively, as of the end of this first quarter,. (3) Qualitative information regarding performance forecast In connection with the business performance forecasts for the fiscal year ending March 2017, results and the status of sales for the first quarter of the fiscal year under review progressed steadily. Taking into consideration that the Group s operating environment is basically within the bounds of initial assumptions, full fiscal year projection announced on May 13, 2016 remains unchanged.
5. Items regarding Summary Information (Notes) (1) Changes in important subsidiaries during the quarter under review Not applicable (2) Application of special accounting practices for the preparation of quarterly consolidated financial statements Not applicable (3) Changes in accounting principles, changes in accounting estimates and retrospective restatements (Changes in accounting principles) (Application of Handling in Practice for Changes to the Method of Depreciation concerning the FY2016 Revision to the Tax System) We have applied Handling in Practice for Changes to the Method of Depreciation concerning the FY2016 Revision to the Tax System (Practical Response Report No. 32: June 17, 2016) to this first quarter in line with a revision to the Corporation Tax Act. We have changed the method of depreciation concerning facilities annexed to buildings and structures acquired after April 1, 2016 from the fixed percentage method to the straight line method. The impact from this change is minimal. (Additional information) (Application of the Application Guidelines for the Recoverability of Deferred Tax Assets) We apply the Application Guidelines for the Recoverability of Deferred Tax Assets (Corporate Accounting Standard Application Guidelines No. 26: March 28, 2016) from this first quarter.
6. Consolidated Quarterly Financial Statements (1) Consolidated Quarterly Balance Sheet (Unit: 1,000) End of 1 st Quarter Under End of Previous Fiscal Year Review (March 31, 2016) (June 30, 2016) Assets Current assets Cash and deposits 13,822,376 9,751,494 Accounts receivabletrade 64,641 191,894 Products 24,511 Real estate for sale 10,034,710 10,883,024 Real estate for sale in process 30,705,244 35,288,416 Prepaid expenses 1,504,936 1,779,632 Deferred tax assets 469,504 648,971 Other 1,166,554 2,084,348 Allowance for doubtful accounts (2,070) (2,392) Total current assets 57,765,898 60,649,900 Noncurrent assets Property, plant and equipment s and structures, net 4,851,885 5,233,221 Machinery, equipment and vehicles, net 5,481 4,833 Tools, furniture and fixtures, net 62,518 77,881 Land 8,354,614 8,430,623 Construction in progress 1,630,903 1,671,913 Total property, plant and equipment 14,905,403 15,418,472 Intangible assets Goodwill 590,173 1,355,817 Other 49,357 45,879 Total intangible assets 639,531 1,401,697 Investments and other assets 1,274,848 1,654,859 Total noncurrent assets 16,819,783 18,475,030 Total assets 74,585,681 79,124,930 Liabilities Current liabilities Notes and accounts payable trade 1,911,416 768,985 Shortterm loans payable 2,103,700 3,340,574 Current portion of bonds 210,000 210,000 Current portion of longterm loans payable 12,372,417 14,652,700 Income taxes payable 478,619 14,123 Advances received 4,272,305 5,306,474 Subsidy advances received 1,311,572 1,999,358 Provision for bonuses 103,165 55,965 Other 2,093,126 2,563,650 Total current liabilities 24,856,323 28,911,833 Noncurrent liabilities Bonds payable 515,000 515,000 Longterm loans payable 26,315,918 27,560,874 Deferred tax liabilities 556,473 527,815 Net defined benefit liability 1,088 50,692 Asset retirement obligations 163,986 235,866 Other 285,347 377,884 Total noncurrent liabilities 27,837,814 29,268,132 Total liabilities 52,694,137 58,179,965
(Unit: 1,000) End of 1 st Quarter Under End of Previous Fiscal Year Review (March 31, 2016) (June 30, 2016) Net assets Shareholders' equity Capital stock 2,400,240 2,400,240 Retained earnings 21,217,795 20,541,546 Treasury shares (1,714,370) (1,999,977) Total shareholders' equity 21,903,666 20,941,809 Accumulated other comprehensive income Valuation difference on availableforsale securities (15,277) Total accumulated other comprehensive income (15,277) Subscription rights to shares 3,155 3,155 Total net assets 21,891,543 20,944,965 Total liabilities and net assets 74,585,681 79,124,930
(2) Consolidated Quarterly Income Statements and Comprehensive Income Statements Consolidated Quarterly Income Statements Consolidated Income Statements for the First Quarter (Cumulative) Previous 1st Quarter (From April 1, 2015 to June 30, 2015) (Unit: 1,000) 1st Quarter Under Review (From April 1, 2016 to June 30, 2016) Net sales 7,616,481 3,193,511 Cost of sales 5,761,063 2,469,445 Gross profit 1,855,418 724,066 Selling, general and administrative expenses 1,171,832 1,267,244 Operating income (loss) 683,586 (543,177) Nonoperating income Interest income 6,089 4,630 Contract cancellations 2,015 1,500 Commission fee 6,414 1,268 Other 2,281 5,479 Total nonoperating income 16,800 12,878 Nonoperating expenses Interest expenses 90,724 113,889 Commission fee 9,982 6,658 Other 3,235 5,766 Total nonoperating expenses 103,942 126,314 Ordinary income (loss) 596,444 (656,614) Extraordinary loss Loss from investment securities revaluation 20,833 Total extraordinary loss 20,833 Income before income taxes and minority interests (loss) 596,444 (677,447) Income taxes current 113,641 2,824 Income taxes deferred 96,589 (201,066) Total income taxes 210,230 (198,241) Profit (loss) 386,213 (479,206) Profit attributable to owners of parent (loss) 386,213 (479,206)
Consolidated Quarterly Comprehensive Income Statements Consolidated Income Statements for the First Quarter (Cumulative) Previous 1st Quarter (From April 1, 2015 to June 30, 2015) (Unit: 1,000) 1st Quarter Under Review (From April 1, 2016 to June 30, 2016 Profit (loss)) 386,213 (479,206) Other comprehensive income Valuation difference on availableforsale securities 1,880 15,277 Total other comprehensive income 1,880 15,277 Comprehensive income 388,093 (463,928) Comprehensive income attributable to Comprehensive income attributable to owners of parent 388,093 (463,928) Comprehensive income attributable to noncontrolling interests
7. Other Information (1) Records of Sales Segment Name Previous 1st Quarter (From April 1, 2015 to June 30, 2015) Sales ( 1,000) 1st Quarter Under Review (From April 1, 2016 to June 30, 2016) Sales ( 1,000) YoY Change (%) (I) Condominium Apartments for Families and Singles 1. Real Estate Sales 4,804,708 940,723 (80.4) 2. Sales Commissions 86,182 20,337 (76.4) 3. Rental Revenue 80,522 121,488 50.9 4. Other Income 30,928 2,101 (93.2) Total Condominium Apartments for Families and Singles 5,002,342 1,084,651 (78.3) (II) Houses and Flats 1. Real Estate Sales 1,052,059 1,293,059 22.9 2. Other Income 3,167 9,628 204.0 Total Houses and Flats 1,055,226 1,302,687 23.5 (III) Asset Management 1. Real Estate Sales 568,826 88,547 (84.4) 2. Rental Revenue 138,032 219,459 59.0 3. Other Income 47,178 74,529 58.0 Total Asset Management 754,037 382,536 (49.3) (IV) Property Management and Related Services 1. Condominium Management 260,089 304,232 17.0 2. Other Income 60,783 109,145 79.6 Total Property Management and Related Services 320,873 413,377 28.8 (V) Condominium Apartments for Seniors 1. Real Estate Sales 482,619 2. Other Income 882 7,929 798.8 Total Condominium Apartments for Seniors 483,501 7,929 (98.4) (VI) Other 500 2,329 366.0 Total 7,616,481 3,193,511 (58.1)
(2) Real Estate Sales Information Previous 1st Quarter (From April 1, 2015 to June 30, 2015) Outstanding Contracts New Contracts Signed Unit Delivered Outstanding Contracts Item at Term Start during Term during Term at Term End Value Value Value Value Condominium Apartments for Families and Singles Houses and Flats Asset Management Condominium Apartments for Seniors Total 603 1 17,828,089 ( 1,000) 10 5 11 629 357,411 ( 1,000) 144,947 ( 1,000) 264 42 11 11 YoY YoY YoY 154 1 713 8,670,905 ( 1,000) 4,890,891 ( 1,000) 21,608,103 ( 1,000) (%) (%) (%) 29 23 1,614,881 ( 1,000) 1,052,059 ( 1,000) 920,233 ( 1,000) (%) (%) (%) 1 8 1 8 684,941 ( 1,000) 568,826 ( 1,000) 261,062 ( 1,000) (%) (%) (%) 16 6 338,364 ( 1,000) 333,033 ( 1,000) 482,619 ( 1,000) 188,778 ( 1,000) 1 328 (%) (%) (%) 1 207 1 1 750 18,668,811 ( 1,000) 11,303,761 ( 1,000) 6,994,396 ( 1,000) 22,978,176 ( 1,000) (%) (%) (%) Item Condominium Apartments for Families and Singles Houses and Flats Asset Management 1st Quarter Under Review (From April 1, 2016 to June 30, 2016) Outstanding Contracts at Term Start New Contracts Signed during Term Unit Delivered during Term Outstanding Contracts at Term End Value Value Value Value YoY YoY YoY 650 279 54 875 24,993,437 ( 1,000) 5,848,189 ( 1,000) 961,060 ( 1,000) 29,880,565 ( 1,000) (67.4 %) (19.7 %) (138.3 %) 14 51 1 31 1 34 428,139 ( 1,000) 2,232,455 ( 1,000) 1,293,059 ( 1,000) 1,367,535 ( 1,000) (138.2 %) (122.9 %) (148.6 %) 1 1 3 1 1 1 Unit 4 2 37,856 ( 1,000) 565,817 ( 1,000) 88,547 ( 1,000) 515,126 ( 1,000) (82.6 %) (15.6 %) (197.3 %)
Condominium Apartments for Seniors Total 95 39 134 Unit 3,823,624 ( 1,000) 1,479,345 ( 1,000) ( 1,000) 5,302,970 ( 1,000) (444.2 %) ( %) (2,809.1 %) 760 373 1 2 88 1 1,045 1 1 s 29,283,057 ( 1,000) 10,125,806 ( 1,000) 2,342,666 ( 1,000) 37,066,197 ( 1,000) (89.6 %) (33.5 %) (161.3 %)