Pack : Quarterly Report for the First Quarter of 73rd Term

Quarterly Report

2024

(First quarter of 73rd term)

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Quarterly Report

1. This document is the print version of the Quarterly Report submitted via the Electronic Disclosure for Investors' NETwork (EDINET), pursuant to Article 27-30-2 of the Financial Instruments and Exchange Act of Japan, to which a table of contents and pagination have been added.
2. The quarterly review attached to the Quarterly Report submitted via EDINET and the letter of confirmation submitted alongside the Quarterly Report are appended to the end of this document.

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		Contents
			Page
[Cover page]	4
Part 1. Corporate information	5
1.	Corporate overview	5
	1.	Trends in major management indicators	5
	2.	Lines of business	5
2. Business overview	6
	1.	Business and other risks	6
	2.	Management analysis of financial standing, business results, and cash flow	6
	3.	Major business contracts, etc	7
3. Information on filing company	8
	1.	Information on stock, etc	8
	2.	Directors	9
4.	Financial information	10
	1.	Quarterly Consolidated Financial Statements	11
	2.	Other	18
Part 2. Information concerning guarantor of filing company	19

Independent Auditor's Report on Quarterly Review

Confirmation Letter

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[Cover page]

Document filed:	Quarterly Report
Legal basis:	Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act
Submitted to:	Director-General, Kinki Local Finance Bureau
Filing date:	May 13, 2024
Quarterly accounting period:	First quarter of 73rd term (January 1 - March 31, 2024)
Company name (Japanese):	ザ・パック株式会社
English name:	THE PACK CORPORATION
Name and title of representative:	Hideaki Yamashita, President & CEO
Location of head office:	9-3 Higashiobase 2-chome,Higashinari-ku, Osaka, Japan
Telephone no.:	[phone]
Name of administrative contact:	Ikuo Shimomura, Director, Corporate General Manager
Nearest point of contact:	9-3 Higashiobase 2-chome,Higashinari-ku, Osaka, Japan
Telephone no.:	[phone]
Name of administrative contact:	Ikuo Shimomura, Director, Corporate General Manager
Locations where this document is	THE PACK CORPORATION
available for public inspection:	(9-3 Higashiobase 2-chome,Higashinari-ku, Osaka, Japan)
	Tokyo Stock Exchange
	(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan)

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Part 1. Corporate information

1. Corporate overview

1. Trends in major management indicators

		First quarter of
Term		consolidated 72nd term
		(cumulative)
Fiscal period		January 1 -
	March 31, 2023
Net sales	(million yen)	21,424
Ordinary profit	(million yen)	1,493
Profit attributable to owners of	(million yen)	1,001
parent
Comprehensive income (loss)	(million yen)	1,189
Net assets	(million yen)	65,926
Total assets	(million yen)	91,698
Basic earnings per share	(yen)	52.64
Diluted earnings per share	(yen)	52.60
Capital adequacy ratio	(%)	71.8

First quarter of

consolidated 73rd term

(cumulative)

January 1 -

March 31, 2024

22,694

1,670

1,479

1,880

72,010

97,122

77.70

77.64

74.1

72nd term

January 1, 2023 - December 31, 2023

97,714

8,063

5,652

7,059

71,156

98,847

297.07

296.86

71.9

Notes: Trends in key management indicators for the reporting company are not provided because the Company prepares quarterly consolidated financial statements.

2. Lines of business

No material changes occurred in the lines of business pursued by the Group (i.e., the Company and its affiliates) during the cumulative period through the first quarter of the consolidated fiscal year under review.

No changes affecting major affiliates emerged.

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2. Business overview

1. Business and other risks
   During the cumulative period through the first quarter of the consolidated fiscal period under review, no new business or other risks were incurred. Additionally. no material changes arose with respect to the business and other risks presented in the Securities Repot for the preceding fiscal year.
2. Management analysis of financial standing, business results, and cash flow
   Forward-looking statements in the text below are based on judgments made as of the end of the quarter of the consolidated fiscal period under review.
3. 1. Business performance
      In the first quarter of the consolidated fiscal year under review, Japan's economy was supported by a recovery in consumption due to factors including rising wages and fiscal policies, robust capital investment, strong inbound consumption, and was on the brink of steering away from deflation due to progress in passing on increased costs to consumers through price increases. Nevertheless, prospects remain uncertain for various reasons, including soaring energy costs, the rising cost of imports driven by the devalued yen, and the effects on consumption of slower corporate capital investment due to financial normalization of Bank of Japan monetary policies.
      The United States economy remained firm, centered on consumer spending, and employment conditions remained favorable, but there are concerns about a gradual slowdown in personal consumption as the inflation rate shows signs of slowing down against a backdrop of overheated domestic demand.
      Amid growing uncertainties related to its economic policies, China continues to experience slow consumer spending. No policies have emerged to date to halt the vicious circle of the sustained slump in the real estate market.
      Under such conditions, in the period ending December 2025, the Group seeks to achieve net sales of 107,000 million yen and operating profit of 8,300 million yen under the slogan of its Medium-Term Management Plan: "Evolution: Start of Purpose-Based Management and Sustainable Management." The entire Group is working as one to boost business results through efforts including new market development, proactive capital investment, and improved quality control.
      During the first quarter of the consolidated fiscal year under review, net sales grew by 5.9% year on year to 22,694 million yen; operating profit rose 13.5% to 1,613 million yen; ordinary profit grew 11.9% to 1,670 million yen; and profit attributable to owners of parent improved 47.8% to 1,479 million yen.
      The business performance for each segment is given below.
   2. 1. Paper Products
         In the first quarter, the paper products segment accounted for 71.8% of consolidated sales. Thanks in part to recovering consumer spending and booming tourism demand, including inbound tourism, sales of paper bags, which accounted for 30.9% of consolidated sales, grew by 12.0% year on year to 7,005 million yen.
         Sales of folding paper cartons, which accounted for 26.1% of consolidated sales, grew by 13.1% to 5,913 million yen. Contributing factors included strong sales to the souvenirs market, chiefly in cartons for food products, as well as sales of cartons for takeout/delivery food products.
         Despite robust sales to the manufacturing sector, following on from last year, sales of corrugated boxes, which accounted for 12.7% of consolidated sales, fell by 5.8% to 2,881 million yen due to revised package specifications for the e-commerce sector.
      2. • 6 -

Printing sales, which accounted for 2.1% of consolidated sales, fell by 7.5% to 487 million yen owing to a drop in operation hours since productivity was improved following introduction of efficient facilities.

Overall, sales in this segment grew 8.1% to 16,289 million yen. Operating profit rose 14.0% to 1,442 million yen.

1. 1. Film Packaging
      The film packaging segment accounted for 13.7% of consolidated sales during the first quarter under review. Segment sales were down 7.3% year on year to 3,113 million yen due to lower sales of products to the e-commerce segment and to specialty retail stores, as a result of the migration to paper packaging. Improvements in production efficiency helped to restrain this decrease, and operating profit was up 8.5% to 161 million yen.
   2. Other Businesses
      Other businesses accounted for 14.5% of consolidated sales in the first quarter. Strong sales of sewn products and nonwoven bags to specialty retail stores helped boost sales in this segment by 9.9% to 3,292 million yen. Operating profit rose by 5.7% to 239 million yen.
2. Analysis of Financial Position
   Assets totaled 97,122 million yen at the end of the quarter under review, down 1,725 million yen from the end of 2023. Major factors included a decline of 4,693 million yen in notes and accounts receivable-trade, offset by an increase of 3,293 million yen in cash and deposits.
   Liabilities fell 2,578 million yen to 25,112 million yen. The primary factors were declines of 2,194 million yen in notes and accounts payable-trade and 476 million yen in income taxes payable.
   Net assets grew by 853 million yen to 72,010 million yen. The key factors were increases of 432 million yen in retained earnings and 230 million yen in valuation difference on available-for-sale securities.
3. Management policies, management strategies, etc.
   No material changes occurred in the Group's established management policies, management strategies, or other plans during the cumulative period through the first quarter of the consolidated fiscal period under review.
4. Major business and financial issues
   No material changes arose with regard to major business or financial issues during the cumulative period through the first quarter of the consolidated fiscal period under review.
5. Research and development activities
   The total research and development costs recorded during the cumulative period through the first quarter of the consolidated fiscal period under review amounted to 122 million yen.

3. Major business contracts, etc.

No major business contracts, etc. were concluded and no associated decisions were made during the cumulative period through the first quarter of the consolidated fiscal period under review.

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3. Information on filing company

1. Information on stock, etc.

1. Total number of shares, etc.
2. 1. Total number of shares

Class	Total number of authorized shares
Common stock	77,000,000
Total	77,000,000

(ii) Shares issued and outstanding

	Current number of shares	Current number of shares
Class	issued as of the end of	issued as of the filing
the first quarter	date
	(March 31, 2024)	(May 13, 2024)
Common	19,900,000	19,900,000
stock
Total	19,900,000	19,900,000

Name of exchange on

which shares are listed or

financial instruments

trading industry

association with which shares are registered and authorized

Tokyo Stock Exchange

Prime Market

-

Details

One trading unit consists

of 100 shares.

-

1. Information on stock acquisition rights, etc.
2. 1. Stock option plan details Not applicable
   2. Information on other stock acquisition rights, etc. Not applicable
3. Information on exercise of bonds with stock acquisition rights and strike price adjustment terms, etc. Not applicable

(4) Trends in total shares issued and outstanding, capital, etc.

	Increase	Balance of total	Increase	Balance of
	(decrease) in total
Date	shares issued and	(decrease) in
shares issued and	capital
	outstanding	outstanding	capital	(million yen)
	(thousand shares)	(million yen)
	(thousand shares)
January 1 -	-	19,900	-	2,553
March 31, 2024

Increase

(decrease) in

capital reserve (million yen)

-

Balance of

capital reserve (million yen)

2,643

1. Major shareholders
   Omitted because the quarter under review is the first quarter of the fiscal year

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1. Voting rights
   Since the specifics of the shareholder register cannot be confirmed, the status of voting rights as of the end date of the first quarter under review cannot be described here. Accordingly, the status of voting rights given below is based on the shareholder register as of the previous basis date (December 31, 2023).
2. 1. Shares issued and outstanding

			As of December 31, 2023
Category	Number of shares	Number of voting	Details
rights
Non-voting shares	-		-	-
Shares with restricted voting rights	-		-	-
(e.g., treasury shares)
Shares with restricted voting rights	-		-	-
(other)
Shares with full voting rights	(Treasury shares)		-	-
(e.g., treasury shares)	Common stock	868,100
Shares with full voting rights (other)	Common stock	19,024,000	190,240	-
				This refers to shares in
Shares in less than one trading unit	Common stock	7,900	-	lots numbering fewer
than 100 shares (one
				trading unit).
Total shares issued and outstanding		19,900,000	-	-
Total shareholder voting rights	-		190,240	-

Note: The shares of common stock under "Shares in less than one trading unit" include 36 shares of treasury shares owned by the Company.

(ii) Treasury shares, etc.

As of December 31, 2023

					Rate of shares
Name or title of		Number of shares	Number of shares		held as a
Address of owner	Total number of	percentage of
owner	held in own name	held in other	shares held	total shares
			names		issued and
					outstanding (%)
(Treasury shares	9-3 Higashiobase
owned by the
2-chome,
Company)	868,100	-	868,100	4.36
Higashinari-ku,
THE PACK
Osaka, Japan
CORPORATION
Total	-	868,100	-	868,100	4.36

2. Directors Not applicable

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4. Financial information

1. How quarterly consolidated financial statements are prepared
   The Company's quarterly consolidated financial statements are prepared based on the Ordinance on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No. 64 of 2007).
2. Audit certification
   Pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan, the Company's quarterly consolidated financial statements for the first quarter of the consolidated fiscal period under review (January 1 - March 31, 2024) and the cumulative period through the first quarter of the consolidated period under review (January 1 - March 31, 2024) were subjected to a quarterly review by Ernst & Young ShinNihon LLC.

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