United Arrows : Financial Results for the 1st Half Ended September 30, 2019 (Consolidated)

November 6, 2019

	Consolidated Financial Results
	for the 1st Half Ended September 30, 2019
	(Japanese GAAP)
	Note: Figures smaller than one million yen are rounded down.
Listed Company Name:	UNITED ARROWS LTD.
Securities Traded:	First Section of the Tokyo Stock Exchange
Code Number:	7606
URL:	http://www.united-arrows.co.jp/en/
Representative:	Mitsuhiro Takeda, Representative Director, President and CEO
Contact:	Takeo Nakazawa, Department Manager, Finance and Accounting Department
Telephone:	[phone]

Scheduled Date of Reporting Date:	November 14, 2019
Scheduled Date of Dividend Payment:	December 3, 2019
Supplementary materials for the financial results:	Yes
Holding of presentation of financial results:	Yes (for institutional investors and analysts)

1. Consolidated Business Results for the 1st half of the Fiscal Year Ending March 31, 2020 (April 1, 2019 to September 30, 2019)

1. Consolidated Business Performance (aggregate)

(% indicates increase / decrease YoY)

	Total Sales	Operating Profit	Ordinary Profit	Net Income attributable
	to owners of parent
Six months ended	¥ million	%		¥ million	%		¥ million	%	¥ million	%
September 30, 2019	74,576	3.9		3,903	28.8		3,893	24.6	1,942	29.2
September 30, 2018	71,752	2.9		3,031	0.2		3,124	0.0	1,503	18.6
Note: Comprehensive	income: Six months ended	September 30, 2019: ¥2,245 million (24.7%)
	Six months ended September 30, 2018: ¥1,801 million (30.4%)
	Net Income per		Net Income per Share
		after Adjusting for
	Share
			Dilutive Effects
Six months ended		yen			yen
September 30, 2019		68.47			－
September 30, 2018		53.01			－

Note: There are no dilutive shares as of September 30, 2018 and 2019.

(2) Consolidated Financial Conditions

	Total Assets	Net Assets	Equity Ratio	Per-share net worth
	¥ million	¥ million	%	¥
As of September 30, 2019	74,079	40,121	51.4	1,342.33
As of March 31, 2019	70,738	39,578	53.5	1,333.16

Reference: Shareholders' equity: September 30, 2019: ¥38,088 million March 31, 2019: ¥37,828 million

2. Conditions of Dividend Payment

			Annual Dividend
	1Q End	2Q End	3Q End	Fiscal Year End	Annual
	yen	yen	yen	yen	yen
Fiscal year ended March 31, 2019	-	20.00	-	60.00	80.00
Fiscal year ending March 31, 2020	-	22.00
Fiscal year ending March 31, 2020 (Est.)			-	61.00	83.00

Note: Revision to recently disclosed projected dividend payment: None

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3. Projected Consolidated Performance of the Fiscal Year Ending March 31, 2020 (From April 1, 2019 to March 31, 2020)

							(% indicates increase / decrease YoY)
	Total Sales	Operating Profit	Ordinary Profit	Net Income	Net Income
	attributable to
	per share
							owners of parent
	¥ million	%	¥ million	%	¥ million	%	¥ million	%	yen
Full Fiscal Year	164,240	3.3	11,970	8.2	12,000	6.1	6,700	4.4	236.12

Note: Revision to recently disclosed projected consolidated performance: None

4. Others

1. Changes in Significant Subsidiaries during the Current Quarter: None (Changes in special subsidiaries that caused a change in scope of consolidation)
2. Adoption of Special Accounting Methods for Preparing Quarterly Consolidated Financial Statements: None
3. Changes in Accounting Principles, Procedures, Methods of Presentation and Other Items

1. Changes due to revision of accounting standards: None
2. Changes other than 1: None
3. Changes in accounting estimates: None
4. Restatement of prior period financial statements after error corrections: None

1. Number of Stocks Issued (Common Stocks)

1.	Number of stocks issued at term end (including treasury stock)
	As of September 30, 2019:	30,213,676 stocks
	As of March 31, 2019:	30,213,676 stocks
2.	Number of treasury stock
	As of September 30, 2019:	1,838,346 stocks
	As of March 31, 2019:	1,838,256 stocks
3. Average number of stocks issued and outstanding for the period
	Six months ended September 30, 2019:	28,375,370 stocks
	Six months ended September 30, 2018:	28,370,181 stocks

*The quarterly financial statements are not subject to quarterly reviews.

*Explanation regarding appropriate use of projected business performance

The above projection was made based on information available at present. Please note in advance that potential risks and uncertainties are included. The actual figures might differ from the figures stated above due to any possible factor.

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Consolidated Financial Results

(1) Quarterly Consolidated Balance Sheet

		(millions of yen)
	At the end of	At the end of
	the previous fiscal year	the second quarter
	(March 31, 2019)	(September 30, 2019)
Assets
Current assets
Cash and deposits	6,103	6,659
Notes and accounts receivable-trade	186	157
Merchandise	24,407	27,541
Supplies	581	1,162
Accounts receivable-other	12,587	11,471
Other	670	872
Allowance for doubtful accounts	(3)	(3)
Total current assets	44,533	47,860
Noncurrent assets
Tangible noncurrent assets
Buildings and structures (net)	8,195	8,071
Machinery and equipment (net)	930	852
Other (net)	1,747	1,960
Total tangible noncurrent assets	10,873	10,884
Intangible noncurrent assets
Other	2,783	3,298
Total intangible noncurrent assets	2,783	3,298
Investments and other assets
Guarantee deposits	8,180	8,271
Other	4,389	3,787
Allowance for doubtful accounts	(22)	(22)
Total investments and other assets	12,548	12,036
Total noncurrent assets	26,205	26,219
Total assets	70,738	74,079
Liabilities
Current liabilities
Notes and accounts payable-trade	10,648	13,082
Short-term loans payable	2,100	6,300
Current portion of long-term loans payable	1,500	500
Income taxes payable	1,673	902
Provision for bonuses	2,340	1,367
Provision for directors' bonuses	111	51
Other	8,707	7,467
Total current liabilities	27,082	29,672
Noncurrent liabilities
Asset retirement obligations	4,054	4,264
Other	23	22
Total noncurrent liabilities	4,078	4,286
Total liabilities	31,160	33,958
Net assets
Shareholders' equity
Capital stock	3,030	3,030
Capital surplus	4,278	4,278
Retained earnings	36,335	36,575
Treasury stock	(5,833)	(5,833)
Total shareholders' equity	37,810	38,050
Accumulated other comprehensive income
Deferred gains or losses on hedges	(8)	(1)
Foreign currency translation adjustment	27	39
Total accumulated other comprehensive income	18	38
Non-controlling interests	1,749	2,032
Total net assets	39,578	40,121
Total liabilities and net assets	70,738	74,079

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1. Statements of Consolidated Income and Comprehensive Income Statements of Consolidated Income

Second Quarter (Six Months Aggregate)			(millions of yen)
	Six months ended		Six months ended
	September 30, 2018		September 30, 2019
	(April 1, 2018 to		(April 1, 2019 to
	September 30, 2018)		September 30, 2019)
Net sales	71,752		74,576
Cost of sales	34,804		36,054
Gross profit	36,947		38,521
Selling, general and administrative expenses	33,915		34,617
Operating income	3,031		3,903
Non-operating income
Interest income	0		0
Foreign exchange gains	7		-
Purchase discounts	33		32
Rent income	11		12
Commission fee	24		15
Other	58		40
Total non-operating income	136		101
Non-operating expenses
Interest expenses	10		8
Foreign exchange losses		-	15
Rent expenses	11		12
Share of loss of entities accounted for using equity method		-	44
Other	21		31
Total non-operating expenses	43		111
Ordinary income	3,124		3,893
Extraordinary loss
Loss on retirement of noncurrent assets	56		42
Impairment loss	281		341
Other	0		0
Total extraordinary loss	338		385
Income before income taxes	2,786		3,507
Income taxes-current	810		973
Income taxes-deferred	316		311
Total income taxes	1,126		1,284
Net income	1,659		2,223
Net income attributable to non-controlling interests	155		280
Net income attributable to owners of parent	1,503		1,942

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Statements of Consolidated Comprehensive Income

Second Quarter (Six Months Aggregate)		(millions of yen)
	Six months ended		Six months ended
	September 30, 2018		September 30, 2019
	(April 1, 2018 to		(April 1, 2019 to
	September 30, 2018)		September 30, 2019)
Net income	1,659	2,223
Other comprehensive income
Deferred gains or losses on hedges	123	10
Foreign currency translation adjustment		18	12
Total other comprehensive income		141	22
Comprehensive income		1,801	2,245
Comprehensive income attributable to:
Owners of the parent company	1,627	1,962
Non-controlling interests	173	282

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(3) Consolidated Cash Flows

			(millions of yen)
	Six months ended		Six months ended
	September 30, 2018		September 30, 2019
	(April 1, 2018 to		(April 1, 2019 to
	September 30, 2018)		September 30, 2019)
Cash flows from operating activities
Income before income taxes	2,786	3,507
Depreciation	897	957
Depreciation of intangible assets	211	221
Amortization of long-term prepaid expenses	84	213
Impairment loss	281	341
Increase (decrease) in provision for bonuses	(414)	(972)
Increase (decrease) in provision for directors' bonuses	(39)	(60)
Increase (decrease) in allowance for doubtful accounts	(2)	(0)
Interest and dividends income	(0)	(0)
Interest expenses	10	8
Decrease (increase) in notes receivable	932	1,167
Decrease (increase) in inventories	(2,614)	(3,714)
Decrease (increase) in other current assets	(293)	(223)
Increase (decrease) in trade payables	2,445	2,482
Increase (decrease) in other current liabilities	(1,836)	(831)
Other		20	168
Subtotal		2,466	3,265
Interest and dividends income received	0	0
Interest expenses paid	(10)	(8)
Income taxes paid		(1,254)	(1,712)
Net cash provided by operating activities		1,201	1,544
Cash flows from investment activities
Payments into time deposits	(6)	(6)
Purchase of property, plant and equipment	(2,462)	(880)
Payments for asset retirement obligations	(81)	(83)
Purchase of intangible assets	(487)	(765)
Purchase of long-term prepaid expenses	(886)	(87)
Payment for guarantee deposits	(245)	(176)
Proceeds from collection of guarantee deposits	123	85
Other		0	(67)
Net cash provided by investment activities		(4,045)	(1,980)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable	5,600	4,200
Repayment of long-term loans payable	(1,000)	(1,000)
Cash dividends paid	(1,963)	(2,225)
Other		-	(0)
Net cash provided by financing activities		2,636	974
Effect of exchange rate change on cash and cash equivalents		19	12
Increase (decrease) in cash and cash equivalents		(188)	549
Cash and cash equivalents at beginning of term		6,300	5,839
Cash and cash equivalents at end of term		6,112	6,389

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