February 8, 2017

Consolidated Financial Results
for the Nine Months Ended December 31, 2016
(Japanese Accounting Standards)
Name of the Listed Company: Nitta Gelatin Inc.
Listing:First Section of Tokyo Stock Exchange
Stock code:
4977
URL:
http://www.nitta-gelatin.co.jp
Representative:
Koichi Ogata, Representative Director and President
Contact Person:
Toru Tamaoka, Director and Executive Officer;
General Manager of Administration Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: February 10, 2017
Scheduled date to commence dividend payments: ―Supplementary explanatory materials prepared:No
Explanatory meeting:
No(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2016
(from April 1, 2016 to December 31, 2016)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net income
Net sales

Operating income

Ordinary income

Nine months ended
Millions of yen%
Millions of yen%
Millions of yen
December 31, 2016
27,100
(2.6)
1,343
47.9
1,652
December 31, 2015
27,821
16.7
908
169.7
836
Note: Comprehensive income
For the nine months ended December 31, 2016: ¥954 million, 56.8%
For the nine months ended December 31, 2015: ¥609 million, (63.6%)
Net income
per share

%

97.6
(7.8)

attributable to ownersof the parent
Millions of yen

661
404

Diluted net income
per share

Nine months ended
Yen
Yen
December 31, 2016
36.02
December 31, 2015
22.00
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Consolidated financial position
Total assets

Net assets

As ofMillions of yen
Millions of yen
December 31, 2016
39,904
17,584As of March 31, 2016
37,597
16,876
Reference: Equity
As of December 31, 2016: ¥15,629 million.
As of March 31, 2016:¥14,972 million

Equity ratio
%

39.2
39.8

%

63.7
(34.9)

2. Cash dividends
Cash dividends per shareFirst quarter
Fiscal year ended
March 31, 2016
Fiscal year ending
March 31, 2017
Fiscal year ending
March 31, 2017
(Forecasts)

Second quarter

Third quarter

Fiscal year-end

Annual

Yen

Yen

Yen

Yen

Yen

-

6.00

-

6.00

12.00

-

6.00

6.00

12.00

-

Note: Changes to most recent dividend forecasts: None

3. Consolidated financial forecasts for the fiscal year ending March 31, 201 7(from April 1, 2016 to March 31, 2017)(Percentages indicate year-on-year changes.)

Millions of yen

Fiscal year ending
March 31, 2017

35,000Net income

OperatingincomeNet sales%(5.1)

Millions of yen

1,700

Ordinary income%

33.5

Millions of yen

1,400

%

42.9

attributable to ownersof the parent
Millions of yen

800

Net income
per share

%

Yen

67.5

43.54

Note: Changes to most recent consolidated financial forecasts: None

Notes
(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): None
New:
None
Excluded: None
(2) Adoption of special accounting methods for the preparation of quarterly consolidated financial
statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting policies due to revisions to accounting standards and other guidelines: Yes
b. Changes in accounting policies due to reasons other than a. above: No
c. Changes in accounting estimates: No
d. Restatement of revisions: No
Note: For details, please refer to “(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions” in “2.
Matters Concerning Summary Information (Notes)” on page 4 of the Attachment to this report.

(4) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of December 31, 2016
18,373,974 shares
As of March 31, 2016
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of December 31, 2016
162 shares
As of March 31, 2016
162 sharesc. Average number of shares
For the nine months ended December 31, 2016
For the nine months ended December 31, 2015

18,373,812 shares
18,373,812 shares

* Disclosure of status of quarterly review procedure
This report falls outside the scope of quarterly review procedures as laid out in the Financial Instruments and Exchange Act. Asof the time of the release of this report, the review of the financial statements, etc., outlined in the Act had not yet beenconcluded.

* Proper use of earnings forecasts, and other special matters
The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently
available to the Company and on certain assumptions deemed to be reasonable. These statements do not guarantee that theCompany will achieve its earnings forecasts. In addition, actual business and other results may differ substantially due to various
factors. For details on the conditions assumed and the cautionary notes and items in the financial forecasts, please refer to “(3)Description of Consolidated Business Forecasts and Other Forward-looking Information” in “1. Qualitative Information
Concerning Quarterly Financial Statements” on page 3 of the Attachment to this report.

Attachment Contents
1. Qualitative Information Concerning Quarterly Financial Statements ･････････････････････････････ 2(1) Description of Business Results ･･･････････････････････････････････････････････････････････ 2(2) Description of Financial Position ･･････････････････････････････････････････････････････････ 3(3) Description of Consolidated Business Forecasts and Other Forward-looking Information ･･････････････ 3

2. Matters Concerning Summary Information (Notes) ････････････････････････････････････････････ 3(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review ･････････････････････ 3(2) Application of Special Accounting Methods in the Preparation of Quarterly Consolidated
Financial Statements ････････････････････････････････････････････････････････････････････ 3(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions ･･･････････････････････ 4(4) Additional Information ･･････････････････････････････････････････････････････････････････ 4

3. Quarterly Consolidated Financial Statements ･････････････････････････････････････････････････ 5(1) Consolidated Balance Sheets ･････････････････････････････････････････････････････････････ 5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ･･･････････ 7
Consolidated Statements of Income
Nine months ended December 31, 2016 ･････････････････････････････････････････････････････ 7
Consolidated Statements of Comprehensive Income
Nine months ended December 31, 2016 ･･････････････････････････････････････････････････････ 8(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)･････････････････････････････････････････ 9･･････････････････････････････････････････････ 9(Note Concerning Significant Changes in Shareholders’ Equity)(Segment Information)･････････････････････････････････ 9･････････････････････････････････････････････････････････････････ 9

11. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results(a) Business Performance for the Period under Review
During the first nine months of the fiscal year ending March 31, 2017, global economies
continued to recover gradually, led by the U.S. and other advanced economies.
The Japanese economy continued on a moderate recovery trend, albeit with a growing senseof uncertainty due to major fluctuations in foreign exchange rates and stock markets in the wakeof the U.K. decision to exit the European Union and the U.S. presidential election.
Under these conditions, the Nitta Gelatin Group formulated its medium-term management
plan finishing in the fiscal year ending March 31, 2018, and worked to address the strategic
priorities of 1. Develop high-value-added products, 2. Ensure optimal production, optimal sales,and 3. Strengthen global business foundations.
As a result, in the first nine months of the fiscal year ending March 31, 2017, net sales
declined 2.6% year on year to ¥27,100 million and operating income increased 47.9% to ¥1,343
million. Ordinary income rose 97.6% to ¥1,652 million, mainly due to foreign exchange gains.
Net income attributable to owners of the parent increased 63.7% year on year to ¥661 million,
reflecting ¥346 million recorded for loss on retirement of noncurrent assets at overseas
subsidiaries and so forth as an extraordinary loss.

(b) Status by Segment(Collagen Material Business)
In the gelatin field, sales and profits both increased in Japan atop continued steady sales for use infood and for capsules. In North America, delays in the recovery of the gelatin-for-capsulesmarket caused overall sales to falter.
In the collagen peptide field, demand from inbound tourism has declined, driving sales for use
in health foods lower; however, the Company is beginning to win orders for use in general foodproducts.
Collagen casings saw brisk sales in the U.S.
As a result, net sales in this segment declined 5.6% to ¥19,744 million, while segment profit(operating income) increased 16.3% to ¥1,548 million.
(Formula Solution Business)
In food materials, sales and profits grew atop continued strong sales for use in ready-madedelicatessen items along with confectionary and desserts.
Adhesives sales declined for bookbinding, but grew for hygiene products. Profits improved asowing to cost reduction efforts.

2

As a result, net sales in the segment were up 6.4% year on year to ¥7,355 million and segment
profit (operating income) increased 31.1% year on year to ¥794 million.

(2) Description of Financial Position(Assets)
Total assets amounted to ¥39,904 million at December 31, 2016, ¥2,306 million higher than at
March 31, 2016. This was mainly attributable to increases in notes and accounts receivable-tradeand goodwill.
(Liabilities)
Total liabilities stood at ¥22,319 million at December 31, 2016, ¥1,598 million higher than at
March 31, 2016. This was mainly attributable to increases in short-term loans payable andlong-term loans payable.
(Net assets)
Net assets amounted to ¥17,584 million at December 31, 2016, ¥707 million higher than at
March 31, 2016. This was mainly attributable to increases in retained earnings and valuationdifference on other available-for-sale securities.
As a result, the equity ratio stood at 39.2% at December 31, 2016, compared to 39.8% at
March 31, 2016.

(3) Description of Consolidated Business Forecasts and Other Forward- looking
Information
The consolidated earnings forecast for the fiscal year ending March 31, 2017 is unchanged fromthe consolidated earnings forecast announced on November 8, 2016 in the “Consolidated
Financial Results for the Six Months Ended September 30, 2016.”
Actual business and other results may differ substantially from projections due to various
factors.

2. Matters Concerning Summary Information (Notes)(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review
None(2) Application of Special Accounting Methods in the Preparation of Quarterly
Consolidated Financial StatementsNone3

(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions(Changes in Accounting Policies)(Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016)
Following the revision of the Corporation Tax Act, the Company applied “Practical Solution on a
Change in Depreciation Method due to Tax Reform 2016” (ASBJ Practical Issues Task Force
Report No. 32, June 17, 2016) from the first quarter of the fiscal year ending March 31, 2017.
Accordingly, the depreciation method for buildings acquired on or after April 1, 2016 will bechanged from the declining-balance method to the straight-line method.
The effect of this change on the Company’s consolidated profit and loss for the nine months
ended December 31, 2016 was minor.

(4) Additional Information(Changes in Presentation Basis)(Quarterly Consolidated Statements of Income)“Rent income” was reported as a separate item under non-operating income in the nine months
ended December 31, 2015; however, since the materiality of this item has diminished, it has
been included in “Other” under non-operating income from the six months ended September 30,
2016.
To reflect this change in presentation basis, the financial statements for the nine months
ended December 31, 2015 have been restated.
As a result, ¥35 million for “Rent income” has been included in “Other” under non-operating
expenses in the statement of income for the nine months ended December 31, 2015.
(Application of Revised Implementation Guidance on Recovery of Deferred Tax Assets)
The Company has applied “Revised Implementation Guidance on Recovery of Deferred Tax
Assets” (ASBJ Guidance No. 26, March 28, 2016) from the first quarter of the fiscal year ending
March 31, 2017.

4

3. Quarterly Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)

Fiscal 2016
(As of March 31, 2016)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

5

3Q Fiscal 2017
(As of December 31, 2016)

2,688
7,375
5,262
1,429
2,275
629
(2)
19,657

1,952
9,069
5,697
1,141
2,534
804
(5)
21,194

4,412
5,000
4,311
13,724

4,418
4,620
4,949
13,988

357
357

425
368
793

2,919
939
(0)
3,858
17,94037,597

2,962
965
(0)
3,927
18,70939,904

(Millions of yen)

Fiscal 2016
(As of March 31, 2016)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Valuation difference on other available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive loss
Non-controlling interests
Total net assets
Total liabilities and net assets

6

3Q Fiscal 2017
(As of December 31, 2016)

4,252
2,186
2,215
145
213
2,062
11,076

4,069
2,845
2,441
396
109
2,395
12,258

5,380
2,938
1,325
9,644
20,720

5,905
2,884
1,270
10,06022,319

3,144
2,966
9,569
(0)
15,6803,144
2,966
10,009(0)
16,121

1,024

1,125

(38)
466
(2,160)(707)
1,904
16,876
37,59749428(2,094)(491)
1,954
17,58439,904

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(Nine months ended December 31)(Millions of yen)

Net sales
Cost of sales
Gross profit on sales
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Gain on negative goodwill
Gain on change in equity
Total extraordinary gains
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on stepped acquisitions
Total extraordinary losses
Income before provision for income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Nine Months Ended
December 31, 2015
(From April 1, 2015 to
December 31, 2015)
27,821
22,136
5,684
4,776
908

7

Nine Months Ended
December 31, 2016
(From April 1, 2016 to
December 31, 2016)
27,10020,869
6,230
4,886
1,343

13
29
34
6
86
170

17
31
275
112
70
507

227
14
242
836

177
20
198
1,652

1
502
157
661

－
－
－
－

41
620
662
835
377
458
53
404

346
－
346
1,305
570
735
73
661

Consolidated Statements of Comprehensive Income(Nine months ended December 31)(Millions of yen)

Nine Months Ended
December 31, 2015
(From April 1, 2015 to
December 31, 2015)
Net income

Nine Months Ended
December 31, 2016
(From April 1, 2016 to
December 31, 2016)

458

735

Valuation difference on otheravailable-for-sale securities

50

100

Deferred gains (losses) on hedges

(89)

95

Foreign currency translation adjustments

(322)

113

Pension liability adjustment

60

66

Share of other comprehensive income(loss) of
associates accounted for using equity method

452

(157)

Total other comprehensive income (loss)

151

219

609

954

Owners of the parent

664

878

Non-controlling interests

(55)

76

Other comprehensive income

Total comprehensive income
Comprehensive income attributable to:8(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
None(Segment Information)
I. Nine months ended December 31, 2015 (From April 1, 2015 to December 31, 2015)
1. Information on net sales, income and loss by reporting segment(Millions of yen)

Reporting segment
Adjustments

Amounts in the
consolidated
financialstatements*2

27,821－

27,821－

1,448(1,448)－22,354

6,915

29,269(1,448)27,821

1,331

606

1,937

(1,029)908

Collagenmaterial
business

Formulasolutionbusiness

Sales to third parties

20,9066,915Inter-segment sales andtransfers

1,448

Total
Segment income

Total

*1

Net sales(Notes)1. Adjustment for segment income of ¥(1,029) million comprises elimination ofintersegment transactions of ¥(1) million and unallocated expenses of ¥(1,027) million.
2. Segment income is adjusted against the operating income recorded in the consolidated
income statement.

2. Information on reporting segment assets
Segment assets of the Collagen Material Business had increased by ¥4,200 million at December
31, 2015 compared to March 31, 2015 as a result of the conversion of Nitta Gelatin India Ltd.,
Bamni Proteins Ltd. and Reva Proteins Ltd. into subsidiaries within the scope of Nitta GelatinInc.’s consolidation in the first quarter ended June 30, 2015.
3. Information on impairment loss on noncurrent assets and goodwill by reporting segments(Material gain on negative goodwill)
The Collagen Material Business segment recorded a ¥502 million gain on negative goodwill in
the nine months ended December 31, 2015 as a result of the conversion of Nitta Gelatin India
Ltd., Bamni Proteins Ltd. and Reva Proteins Ltd. into subsidiaries within the scope of Nitta
Gelatin Inc.’s consolidation.

9II. Nine months ended December 31, 2016 (From April 1, 2016 to December 31, 2016)
1. Information on net sales, income and loss by reporting segment(Millions of yen)

Reporting segment
Adjustments

Amounts in the
consolidated
financialstatements*2

27,100－27,1007

1,403(1,403)－

21,141

7,362

28,503(1,403)

27,100

1,548

794

2,343

(999)

1,343

Collagenmaterial
business

Formulasolutionbusiness

Sales to third parties

19,7447,355Inter-segment sales andtransfers

1,396

Total
Segment income

Total

*1

Net sales(Notes)1.Adjustment for segment income of ¥(999) million comprises elimination ofintersegment transactions of ¥6 million and unallocated expenses of ¥(1,005) million
2. Segment income is adjusted against the operating income recorded in the consolidated
income statement.

2. Information on impairment loss on noncurrent assets and goodwill by reporting segments(Significant changes in the amount of goodwill)In the Collagen Material Business segment, Vyse Gelatin, LLC was newly established, and the
new company took over a portion of the business of Vyse Gelatin Company, resulting in therecording of goodwill.
The increase in goodwill due to these events was ¥379 million in the nine months ended
December 31, 2016. The amount of goodwill is a provisional estimate as the allocation of theacquisition cost has not yet been completed.

10