Summary of Financial Statements for Second Quarter of Fiscal Year Ending March 31, 2022 [Japanese GAAP](Consolidated)

Summary of Financial Statements

for Second Quarter of Fiscal Year Ending March 31, 2022 [Japanese GAAP]

(Consolidated)

		November 9, 2021
Name of listed company:	SHIP HEALTHCARE HOLDINGS, INC.
	Shares listed on: Tokyo Stock Exchange
Code:	3360	URL https://www.shiphd.co.jp/en/

Representative:	(Title) President		(Name) Futoshi Ohashi
Contact:	(Title) Executive Director	(Name) Hiroshi Yokoyama
									Tel.: [phone]
Scheduled date for filing quarterly report: November 12, 2021 Scheduled start date of dividend payments: -
Supplementary briefing materials on results: Yes
Briefing on quarterly results:			Yes (for institutional investors and analysts)
								(All figures are rounded down to the nearest million yen.)
1. Consolidated financial results for the second quarter of fiscal year ending March 31, 2022
	(April 1, 2021 - September 30, 2021)
	(1) Consolidated operating results					(Percentages represent year-on-year changes.)
			Net sales		Operating profit	Ordinary profit		Profit attributable to
					owners of parent
			(Million yen)		%	(Million yen)		%	(Million yen)		%		(Million yen)	%
	Q2 FY ending March 2022	234,663		-	7,593		(3.1)	7,378		(10.8)		4,118	(12.6)
	Q2 FY ended March 2021	220,731		(8.9)	7,832		(22.3)	8,268		(24.8)		4,711	(29.6)
	Note: Comprehensive income: Q2 FY ending March 2022: ¥3,670 million ((42.2) %)
			Q2 FY ended March 2021: ¥6,352 million ((10.6) %)
			Net income per share	Diluted net
			income per share
					(Yen)			(Yen)
	Q2 FY ending March 2022			43.65			39.57
	Q2 FY ended March 2021			49.82			45.19

Note: 1 Accounting Standard for Revenue Recognition (ASBJ Statement No.29, March 31,2020) have been applied from the beginning of the first quarter of the current consolidated accounting period, and each numerical value for the second quarter of the fiscal year ending March 2022 is the value after applying the relevant accounting standards. Due to the above reason, quarterly YoY rate of change in net sales is not stated.

2 The company executed a two-for-one common stock split, effective on April 1, 2021. "Net income per share" and "Diluted net income per share" are calculated as if the relevant stock split was executed at the beginning of the previous consolidated fiscal year ended March 31, 2021.

1. Consolidated financial condition

	Total assets	Net assets	Equity capital ratio
	(Million yen)	(Million yen)	%
Q2 FY ending March 2022	308,496	114,938	36.1
FY ended March 2021	334,498	115,103	33.3
Reference: Equity: Q2 FY ending March 2022: ¥111,464 million; FY ended March 2021: ¥111,440 million

2. Dividends

			Annual dividends
	End Q1	End Q2	End Q3		Year-end	Total
	(Yen)	(Yen)	(Yen)		(Yen)	(Yen)
FY ended March 2021	-	0.00	-		80.00	80.00
FY ending March 2022	-	0.00
FY ending March 2022			-		41.00	41.00
(forecast)

Note: Revisions made in most recently announced dividend forecasts: None

Note: The company executed a two-for-one common stock split, effective on April 1, 2021. Annual dividends for the year ended March 31, 2021 are actual amounts paid prior to the relevant stock split. Forecasted annual dividends for the year ending March 31, 2022 are the amount after the relevant stock split.

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022 (April 1, 2021 - March 31, 2022)

						(Percentages represent changes	from previous year.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per
		owners of parent	share
	(Million yen)		%	(Million yen)	%	(Million yen)	%	(Million yen)		%	(Yen)
Full-year	530,000		-	22,500	3.2	22,500	3.4	12,500		1.8	132.48

Note: Revisions made in most recently announced forecasts of business performance: None

Note: 1 Accounting Standard for Revenue Recognition (ASBJ Statement No.29, March 31,2020) have been applied from the beginning of the first quarter of the current consolidated accounting period, and each numerical value for the fiscal year ending March 2022 is the value after applying the relevant accounting standards. Due to the above reason, YoY rate of change in net sales are not stated.

2 The company executed a two-for-one common stock split, effective on April 1, 2021. "Net income per share" in the forecast of consolidated financial results for the fiscal year ending March 31, 2022 is calculated based on the number of shares outstanding after the relevant stock split.

Notes

(1)	Changes made in significant subsidiaries during consolidated cumulative quarter under review:	None
(2)	Special account processing applied in preparation of quarterly consolidated financial statements:	None

1. Changes made in accounting policies, accounting estimates, and/or restatements:

(i)	Changes in accounting policies associated with changes in accounting standards, etc.:	Yes
(ii)	Any changes in accounting policies other than those under (i) above:		None
(iii) Changes in accounting estimates:					None
(iv) Restatements:					None
(4) Number of shares issued and outstanding (common stocks)
(i)	Number of shares issued and outstanding at
	Q2 FY ending		FY ended March
	the end of the period (including treasury		101,669,400 shares	101,669,400 shares
		March 2022	2021
	stock)
(ii)	Number of treasury stock at the end of the		Q2 FY ending	7,319,084 shares	FY ended March	7,319,054 shares
	March 2022	2021
	period
(iii) Average number of shares during the period
	Q2 FY ending	94,350,320 shares	Q2 FY ended	94,573,488 shares
	(quarterly cumulative)		March 2022	March 2021

Note: The company executed a two-for-one common stock split, effective on April 1, 2021. "Number of shares issued and outstanding at the end of the period", "Number of treasury stock at the end of the period", and "Average number of shares during the period" are calculated as if the relevant stock split was executed at the beginning of the previous consolidated fiscal year ended March 31, 2021.

• This quarterly summary of financial results is not subject to quarterly review by a Certified Public Accountant or an audit firm.
• Information on appropriate use of financial forecasts and other special notes:
• • The forecasts of financial results and other forward-looking statements provided herein are based on information available to the Company and assumptions considered reasonable at the time this document was prepared. They are not guarantee that the Company will achieve such forecasts. Actual results may differ significantly from the forecasts for various reasons. For the assumptions on which financial forecasts are based, notes on using financial forecasts, and other information, please refer to "Information on consolidated financial forecasts and other forward-looking statements" on page 3 of the [attached materials].

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements for Second Quarter of Fiscal Year Ending March 31, 2022

• Index of attached materials

1.	Qualitative information on quarterly results ......................................................................................................	2
	(1)	Description of business results.........................................................................................................	2
	(2)	Analysis of financial position...........................................................................................................	3
	(3)	Information on consolidated financial forecasts and other forward-looking statements ................	3
2.	Quaeterly consolidated financial statements and notes thereto ..........................................................................	4
	(1)	Quarterly consolidated balance sheet ...............................................................................................	4

1. Quarterly consolidated statement of income and consolidated statement of comprehensive

	income .............................................................................................................................................	6
(3)	Quarterly consolidated statement of cash flows ...............................................................................	8
(4)	Notes on quarterly consolidated financial statements ....................................................................	10
	(Notes on the going concern assumption) .......................................................................................	10
	(Notes on marked changes to shareholders' equity) ........................................................................	10
	(Changes in accounting policy) ......................................................................................................	10
	(Segment information, etc.) .............................................................................................................	11

1

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements for Second Quarter of Fiscal Year Ending March 31, 2022

1. Qualitative information on quarterly results

(1) Description of business results

In the Japanese economy during the second quarter of the current consolidated cumulative period, state of emergency had been declared intermittently, and consumption movements weakened due to restrictions on economic activities and continued self-quarantine. Economy remains in a difficult situation and future outlook still remain uncertain.

Healthcare industry in which the Group operates, while the medical care system temporarily became overwhelmed than ever due to the fifth wave of the spread of COVID-19, the industry trend has recovered compared to the same period last year due to the rapid decrease in the number of newly infected people due to the progress of vaccination.

In the Group's performance under such conditions, the business performed poorly in Total Pack Produce business since the sizes of completed projects were smaller and the business plan is also particularly focused on the second half than usual. In Medical Supply business, demand for medical materials recovered due to improvements in the occupancy rate of medical institutions and the number of surgical cases compared to the same period last year. This recovery of demand allowed the business to perform firmly. In addition, the industry's first automated logistic center "Osaka Solution Center", which manages all consumables inventories collectively with RFID, has started full-scale operation. In Lifecare business, occupancy rate has maintained high in the pay nursing homes, and the dispensing pharmacy business also performed steadily due to M&A of small-sized stores.

For the second quarter of the current consolidated cumulative period, the various factors noted above resulted in net sales of 234,663 million yen (The cumulative consolidated period for the same quarter of the previous year: 220,731 million yen), operating profit of 7,593 million yen (down 3.1% YoY), ordinary profit of 7,378 million yen (down 10.8% YoY), and profit attributable to owners of parent of 4,118 million yen (down 12.6% YoY).

Accounting Standard for Revenue Recognition (ASBJ Statement No.29, March 31,2020) have been applied from the beginning of the first quarter of the current fiscal year. Due to the application, the explanation regarding business results does not include the YoY comparison (%) concerning net sales since the accounting method is different from the consolidated cumulative period for the second quarter of the previous fiscal year. For details, please refer to "2. Quarterly consolidated financial statements and notes thereto (4) Notes on consolidated financial statements (Changes in accounting policy) and (Segment information, etc.)".

Business results by segment are summarized below.

From the first quarter of the current fiscal year, the Company has changed the categorization of reportable segments, and the comparisons and analysis of the consolidated cumulative second quarter under review are based on the categorization after the change.

1. Total Pack Produce business
   In Total Pack Produce business, the sales of simplified negative pressure devices and the renovation works of air conditioning system were favorable in manufacturing companies, however, the business performance was weak overall because the plan of completion of many projects are placed in the second half, and the political changes and spread of COVID-19 in Myanmar subsidiary influenced the performance. On the other hand, we have been newly undertaken various services for infectious control, including the maintenance and operation of the Osaka Corona Large-Scale Medical and Medical Care Center.

As a result, this segment recorded net sales of 34,705 million yen (The cumulative consolidated period for the same quarter of the previous year: 39,234 million yen) and segment profit (operating profit) of 2,224 million yen (down 26.6% YoY).

1. Medical Supply business
   In Medical Supply business, the business performance was firm compared to the same period last year since the demand for medical materials recovered due to improvements in the occupancy rate of medical institutions and the number of surgical cases. Also, an efficient management and operation system has been prepared with the start of full-scale operation of "Osaka Solution Center" which is the automated logistic center for medical consumables.
   As a result, this segment recorded net sales of 173,368 million yen (The cumulative consolidated period for the same quarter of the previous year: 156,029 million yen) and segment profit (operating profit) of 2,646 million yen (up 11.4% YoY).
2. Lifecare business
   In Lifecare business, the business performed favorable with high occupancy rate due to the success in strict infection control measures, etc.
   As a result, this segment recorded net sales of 12,504 million yen (The cumulative consolidated period for the same quarter of the previous year: 12,262 million yen) and segment profit (operating profit) of 1,240 million yen (up 8.9% YoY).

2

SHIP HEALTHCARE HOLDINGS, INC. (3360): Summary of Financial Statements for Second Quarter of Fiscal Year Ending March 31, 2022

1. 1. Dispensing Pharmacy business
      In Dispensing Pharmacy business, the business performance was firm due to the improvement in avoidance on medical consultations compared to the same period last year. Furthermore, newly developed stores and M&A of small-sized stores contributed to the performance.
      As a result, this segment recorded net sales of 14,084 million yen (The cumulative consolidated period for the same quarter of the previous year: 13,205 million yen) and segment profit (operating profit) of 1,547 million yen (up 19.0% YoY)
2. Analysis of Financial Position
3. 1. Assets, liabilities, and net assets

Assets at the end of the consolidated second quarter under review stood at 308,496 million yen, down 26,002 million yen from the end of the previous consolidated fiscal year. The primary reasons for this decline included decreases of 21,628 million yen in notes, accounts receivable, and contract asset, and 4,965 million yen in cash and deposits despite increases of 1,416 million yen in merchandise and finished goods, and 965 million yen in buildings and structures.

Liabilities stood at 193,557 million yen, down 25,837 million yen from the end of the previous consolidated fiscal year. The primary reasons for this decline included decreases of 17,258 million yen in notes and accounts payable - trade, and 3,161 million yen in income taxes payable, and 2,274 million yen in electronically recorded obligations - operating despite increases of 809 million yen in short-term loans payable.

Net assets were 114,938 million yen, down 164 million yen from the end of the previous consolidated fiscal year. The primary reasons for this decline included decreases of 3,774 million yen in retained earnings due to payment of dividends, 369 million yen in valuation differences on available-for-sale securities despite increases of 4,118 million yen in retained earnings from profit attributable to owners of parent.

As a result of all these factors, at the end of the consolidated second quarter under review stood at 36.1%. (up 2.8% from the end of the previous consolidated fiscal year)

1. Cash flow

Net cash provided by operating activities during the consolidated cumulative second quarter under review totaled 2,531 million yen (up 695 million yen from the same period in the previous consolidated fiscal year). Major contributing factors include decrease of 21,917 million yen in notes and accounts receivable - trade, and record of 7,376 million yen in profit before income taxes despite decrease 19,547 million yen in notes and accounts payable - trade, and payment of 6,098 million yen for income taxes.

Net cash used in investing activities totaled 2,187 million yen (down 13,966 million yen from the same period in the previous consolidated fiscal year). Major contributing factors include expense of 1,660 million yen for purchase of property, plant, and equipment.

Net cash used in financing activities totaled 5,310 million yen (up 802 million yen from the same period in the previous consolidated fiscal year). Major contributing factors include payment of 3,774 million yen for dividend paid, and expense of 2,235 million yen for repayments of long-term loans payable.

As the result of the above factors, the balance of cash and cash equivalents at the end of the consolidated cumulative second quarter under review stood at 67,949 million yen, down 5,001 million yen from the end of the previous consolidated fiscal year.

1. Information on consolidated financial forecasts and other forward-looking statements

In general, business performance matched financial forecasts made at the start of the period. The consolidated financial forecasts for the fiscal year remain unchanged from the forecasts announced on May 11, 2021.

3