FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Three Months Ended June 30,
2017Tokyo, Japan, July 31, 2017—Kurita Water Industries Ltd. (TSE Securities Code 6370)
announced net sales of 48,300 million yen and profit attributable to owners of parent of
2,483 million yen, or 22.10 yen per share, for the three months ended June 30, 2017
(April 1, 2017 – June 30, 2017).
Results of Operations
Total consolidated orders for the Kurita Group (Kurita Water Industries Ltd. and its
consolidated subsidiaries and equity method affiliates) in the three months ended June30, 2017 rose 20.8% from the level of the year-ago period, to 68,048 million yen, andnet sales increased 4.1%, to 48,300 million yen. Operating income was 3,520 million
yen, down 6.1% versus the same the year-ago period, and ordinary income was 3,598
million yen, down 5.4%. Profit attributable to owners of parent amounted to 2,483
million yen, down 6.1%.
Looking at the market environment surrounding the Kurita Group, in Japan, there
were signs of a recovery in production and capital expenditure in the manufacturingindustry on the back of a recovery in consumer spending and exports. Overseas, the U.S.
economy was strong. The European economy and emerging economies, particularly theChinese economy, continued to recover.
In this environment, the Group sought to develop and market competitive products
and services using IT and sensing technologies. It also proposed solutions to customers’
challenges including the reduction of environmental footprints, energy saving andimprovements in productivity. Results at Fremont Industries, LLC, a U.S. company theGroup has acquired, are being consolidated from the first three months under review.
Segment Information
The Group consists of two reportable segments in its segment information: Water
Treatment Chemicals and Water Treatment Facilities
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 22,157 million
yen, up 5.4% versus the same period of the fiscal year ended March 31, 2017, whilesales rose 4.6%, to 21,061 million yen. Operating income was down 17.6% to 1,538
million yen, reflecting the effect of a decline in sales in Asia and an increase in selling,
general and administrative expenses mainly due to the commencement of theamortization of intangible assets, including goodwill, which occurred in association
with the acquisition in the United States.
In Japan, capacity utilization recovered at customers’ plants, and the Group sought togain new customers by proposing solutions using new products and services. This effort
produced growth in our main products which are boiler water treatment chemicals andcooling water treatment chemicals, and both orders and sales were increasing. Overseas,
both orders and sales increased, reflecting the consolidation of results at the acquired
subsidiary based in the United States, despite a decline in sales in Asia.

1Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 45,891 million yen,
up 30.0% versus the same period of the previous fiscal year. Sales rose 3.8%, to 27,238
million yen. Operating income climbed 5.3%, to 1,984 million yen due to the increasein sales.
In Japan, in the electronics industry, orders in the water treatment facilities increased
due to orders for large-scale projects. Sales also increased with progress in construction
work for large-scale projects the orders for which were received in the previous fiscalyear. Orders and sales in maintenance services increased on the strength of orders
associated with expansion and remodeling projects against a backdrop of a rise incapacity utilization at customers’ plants.
In general industries, orders and sales in the water treatment facilities both declined.
Orders and sales in maintenance services increased mainly due to demand for therenewal and remodeling of facilities at customers’ plants. Orders and sales in the watertreatment facilities for electric power and in soil remediation services rose.
Overseas, orders rose significantly on orders for large-scale projects received in
China and South Korea. Sales also increased, reflecting progress in construction workfor projects the orders for which were received in the previous fiscal year. Sales in theultrapure water supply business in Japan and overseas declined due to the effect of adecrease in sales resulting from changes in contracts with a certain customer in theprevious fiscal year, despite the posting of sales from expansion projects.
Financial Condition
Current assets totaled 146,694 million yen at the end of the first quarter (June 30, 2017),
a decrease of 9,236 million yen versus the end of the previous fiscal year (March 31,2017). This was mainly a result of declines of 6,889 million yen in cash and deposits
and 4,880 million yen in trade notes receivable and trade accounts receivable, which
outweighed an increase of 2,205 million yen in work in process. The increase in work inprocess was chiefly the result of progress in the construction in the Water Treatment
Facilities business. The decrease in cash and deposits was mainly the result of theacquisition of 5,586 million yen’s worth of own shares, principally on the open market.
The decline in trade accounts receivable was primarily the result of progress incollecting receivables and weaker sales in the first quarter under review than in thefourth quarter of the previous fiscal year.
Non-current assets totaled 143,775 million yen at the end of the three-month period(June 30, 2017), an increase of 457 million yen versus the end of the previous fiscalyear. The increase reflected increases of 563 million yen in property, plant andequipment and 907 million yen in investments and other assets, which outweighed adecrease of 1,011 million yen in intangible fixed assets. The increase in investments andother assets was primarily due to an increase in unrealized gains on investment
securities due to rises in the market prices of the shares held by the Group. The decline
in intangible assets was mainly attributable to the amortization of goodwill andtechnology-related assets and a decrease in the value of assets in foreign currencies
because of the stronger yen.
Current liabilities totaled 41,267 million yen at the end of the period, a decline of
3,143 million yen versus the end of the previous fiscal year. The decrease mainlyreflected declines of 3,862 million yen in trade accounts payable, 1,743 million yen inincome taxes payable, and 1,074 million yen in provisions, which outweighed an2

increase of 2,824 million yen in “other” current liabilities.
Non-current liabilities totaled 26,109 million yen at the end of the period, an increaseof 29 million yen versus the end of the previous fiscal year.
Net assets totaled 223,094 million yen at the end of the period, a decrease of 5,664
million yen versus the end of the previous fiscal year primarily due to a fall of 5,965
million yen in shareholders’ equity, which outweighed an increase of 300 million yen inaccumulated other comprehensive income. The decrease in shareholders’ equity wasattributable mainly to a decline of 8,907 million yen in retained earnings, which
outweighed a decrease of 2,942 million yen in treasury stock (an increase in net assets).
The fall in retained earnings was attributable to a decrease of 11,390 million yen as aresult of year-end dividends of 2,865 million yen for the previous fiscal year and theretirement of treasury shares of 8,525 million yen, which outweighed the posting of a
profit attributable to owners of parent of 2,483 million yen for the first three-month
period under review. The decrease in treasury stock (an increase in net assets) was
attributable to an increase of 5,586 million yen mainly through market purchases and adecrease of 8,528 million yen mainly due to retirement.
Outlook for the Fiscal Year Ending March 31, 2018
The Group’s current outlook for the six months ending September 30, 2017, and the fullyear ending March 31, 2018 is consistent with the targets disclosed in “Earnings Reportfor the Full Year Ended March 31, 2017,” which was announced on April 28, 2017.

3

Financial Statements — Consolidated
Balance Sheet — Consolidated(Million yen)

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
OtherAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings (net)
Machinery and equipment (net)Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

As ofMarch 31, 2017
AmountAs ofJune 30, 2017
Amount

72,7507,843
60,439
603
3,114
4,181
2,229
5,016
(246)
155,930

65,861
8,998
54,404
586
3,340
6,386
2,242
5,113(238)
146,694

13,20335,93624,89674,036

12,51835,137
26,94374,59915,04910,25925,30814,372
9,925
24,297

34,8449,317(189)
43,972
143,318
299,249

36,6918,372(185)
44,879143,775
290,4704

(Million yen)

As ofMarch 31, 2017
Amount

As ofJune 30, 2017
Amount1,710
21,715
2,875
3,244
14,86344,4102,423
17,853
1,132
2,170
17,68741,267

16,05425
9,999
26,08070,490

16,242
109
9,757
26,10967,376

13,45010,993
205,586(13,891)
216,138

13,45010,993
196,679(10,949)
210,173

14,792

16,001670(380)(3,593)(3)
11,484
1,135
228,758
299,249

192(380)(4,026)(2)
11,7841,136
223,094
290,470

Liabilities
Current liabilities
Notes payable – trade
Accounts payable – trade
Income taxes payable
Provision
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive incomeUnrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5Statements of Income and Comprehensive Income — Consolidated
Statement of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent

Three months ended
June 30, 2016
Amount46,38630,296
16,09012,342
3,748

Three months ended
June 30, 2017
Amount48,30031,597
16,702
13,181
3,520

55
244

48
267

44

31

81
425

134
482

49
218
100
369
3,804
3,804
1,135
2,669
242,645

119
158
127
405
3,598
3,598
1,072
2,525
42
2,483

6

Statement of Comprehensive Income(Million yen)

Net income
Other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Components:
Comprehensive income attributable to owners ofparent
Comprehensive income attributable tonon-controlling interests

Three months ended
June 30, 2016
Amount2,669

Three months ended
June 30, 2017
Amount2,525(1,119)1,202912(1,455)
20(477)
(805)
0(63)

34(1,705)
964(45)2,480

968

2,460(3)207Notes to Consolidated Financial Statements(Notes on the Going-concern Assumption)
Three months ended June 30, 2017 (April 1, 2017 – June 30, 2017)
Not applicable(Notes on Significant Changes in Shareholders’ Equity)
Three months ended June 30, 2017 (April 1, 2017 – June 30, 2017)(1) Based on a resolution at a meeting of the Board of Directors held on February 28, 2017, 2,004,400
shares of own shares was acquired. As a result, treasury stock increased 5,586 million yen.
(2) Based on a resolution at a meeting of the Board of Directors held on March 30, 2017, treasury stock
was canceled. The retirement of treasury stock did not have any impact on the total amount ofshareholders’ equity. However, treasury stock declined by 8,525 million yen (shareholders amountincreased), and retained earnings declined by the same amount.
1) Class of stock canceled
Common stock of the Company
2) Number of shares canceled
2,963,900 shares
3) Value of shares canceled
8,525 million yen
4) Date of retirement of stock
April 6, 20175) Number of issued shares after the retirement of treasury stock
116,200,694 shares(Significant change in subsidiaries in the three-month period under review)
There was no change in specified subsidiaries resulting in change in the scope of consolidation(Application of accounting unique to the creation of quarterly consolidated financial statements)
Calculation of tax expense
The Company reasonably estimates an effective tax rate after the application of tax effect accounting fornet income before income taxes for the consolidated fiscal year and multiplies the net income before
income taxes by the estimated effective tax rate.

8

(Segment Information)
1. Sales and income by reportable segment
Three months ended June 30, 2016 (April 1, 2016 – June 30, 2016)(Million yen)

Reportable Segments

Amounts
reported on
Adjustments the quarterly
statements of(note 1)
income(note 2)Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

Sales
Sales to outside customers
Inter-segment sales or transfers

20,13747

26,24949

46,38697–(97)46,386–

Total

20,18526,29846,484(97)

46,386

1,867

1,884

3,751

(3)

3,748

Segment income

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

Three months ended June 30, 2017 (April 1, 2017 – June 30, 2017)(Million yen)

Reportable Segment

Sales
Sales to outside customers
Inter-segment sales or transfers
Total
Segment income

Water
Treatment
Chemicals

Water
TreatmentFacilities

Total

21,061
63
21,125
1,538

27,23829
27,267
1,984

48,30093
48,393
3,523

Amounts
reported on
Adjustments the quarterly
statements of(note 1)
income(note 2)
–(93)
(93)
(2)

48,300–48,3003,520

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

9Supplementary Information — Consolidated(1) Order Intake(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2016
2017
Amount%Amount21,01637.3
22,157%
32.6

Water Treatment Facilities

35,30962.7

45,891

67.4

Total

56,326100.0

68,048100.0(2) Net Sales(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2016
2017
Amount%Amount20,13743.4
21,061%
43.6

Water Treatment Facilities

26,24956.6

27,238

56.4

Total

46,386100.0

48,300100.0(3) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2016
2017
Amount%Amount347
22.1382%
10.5

Water Treatment Facilities

1,224

77.9

3,269

89.5

Total

1,571

100.0

3,651

100.0

(4) Depreciation (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2016
2017
Amount%Amount
387
11.5
414%
12.7

Water Treatment Facilities

2,987

88.5

2,841

87.3

Total

3,374

100.0

3,255

100.0

10