October 31, 2018

First Half Earnings Report for Fiscal Year 2018, Ending March 31, 2019
[Japanese Standards] (Consolidated)
Company name:Securities code:
Representative:

Ryosan Company, Limited
Stock listing: First Section, Tokyo Stock Exchange
8140
URL http://www.ryosan.co.jp
Hiroyuki Kurihara, Representative Director, President
Masahide Nishiura, Director, Senior Executive Officer,
Inquiries:
TEL: +81-3-3862-2591
General Manager, Finance and Accounting Headquarters
Scheduled filing date of quarterly earnings report:
November 13, 2018
Scheduled payment date of dividend:
November 30, 2018
Supplementary materials for the quarterly financial results:
Yes
Investor conference for the quarterly financial results:
Yes (for security analysts and institutional investors)(Millions of yen rounded down)

1. Consolidated results for the first half of fiscal year 2018 (April 1, 2018 to September 30, 2018)(1) Consolidated operating results (Cumulative)(% change compared with the same period of the previous fiscal year (YoY))
Profit attributable toOperating income
Ordinary income
owners of parent

Net salesFirst Half, Fiscal Year 2018

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

128,968

4.3

2,894

(10.2)

1,620(49.2)

1,057(52.5)

3,224

71.8

3,191

36.0

2,227

30.7

First Half, Fiscal Year 2017

123,629
21.3(Note) Comprehensive income
First Half, Fiscal Year 2018: 1,864 million yen (-35.7%)
First Half, Fiscal Year 2017: 2,898 million yen (－%)
Basic earnings per
share

Diluted earnings per
share

Yen

First Half, Fiscal Year 2018
First Half, Fiscal Year 2017

Yen

43.62
82.66

―
―

(2) Consolidated financial position
Total assets

Net assets

Net assets to total assets

Net assets per share

Millions of yen

Millions of yen%

September 30, 2018
161,352
March 31, 2018
162,257(Reference) Shareholders’ equity
September 30, 2018: 90,384 million yen
March 31, 2018: 94,331 million yen

90,384
94,331

56.0
58.1

Yen

3,839.66
3,852.59

2. Dividends
Dividends per share (Yen)End of 1Q
Yen

Fiscal Year 2017―
Fiscal Year 2018―
Fiscal Year 2018 (Forecast)(Note) Revision of dividend forecasts: None

End of 2Q

End of 3Q

Yen

75.00
75.00

Annual

Yen

Total
Yen

Yen

―

75.00

150.00―75.00

150.00Fiscal Year 2017

Interim dividend breakdown: 50 yen (ordinary), 25 yen (special)

Fiscal Year 2017

Year-end dividend breakdown: 50 yen (ordinary), 25 yen (special)

Fiscal Year 2018

Interim dividend breakdown: 50 yen (ordinary), 25 yen (special)

Fiscal Year 2018

Year-end dividend breakdown (forecast): 50 yen (ordinary), 25 yen (special) or more

3. Forecast of results for the fiscal year 2018 (April 1, 2018 to March 31, 2019)
Net sales
Millions of yen(% figures represent year-on-year increase or decrease)
Basic
Profit attributable toearnings per
Ordinary income
owners of parent
share

Operating income
Millions of yen%

Millions of yen%

Millions of yen%

Full Fiscal Year
254,000(0.0)
5,600(Note) Revision of financial results forecasts: None

(1.2)

4,000

(37.5)

2,800(37.5)%

Yen

117.21* Notes(1) Transfer of major subsidiaries during the scope of consolidation of these six months ended September 30, 2018 (transfer of
specified subsidiaries in line with changes in the consolidated range): NoneNew:

－ (Company name:)

Excluded:－ (Company name:)(2) Application of accounting procedures specific to preparing quarterly financial statements: None
(3) Changes in accounting principles, changes in accounting estimates, and restatements
1) Changes in accordance with revisions to accounting standards and related practices of accounting principles: None
2) Changes in items of accounting principles other than 1) above: None
3) Changes in accounting estimates: None
4) Restatements: None
(4) Number of shares issued and outstanding (common shares)
1. Total number of shares issued andoutstanding (including treasury shares) at the

September 30, 2018

25,000,000 shares

March 31,2018

28,500,000 shares

September 30, 2018

1,460,249 shares

March 31,2018

4,014,862 sharesperiod-end:
2. Total number of treasury shares at theperiod-end:
3. Average number of shares outstanding
during the period (Cumulative total for thequarterly consolidated period)First Half,
Fiscal Year 2018

First Half,
24,236,702 sharesFiscal Year26,940,644 shares

2017

This quarterly consolidated earnings report is not subject to the quarterly review by certified public accountants or auditing
corporations.
Caution with respect to forward-looking statements(Notes on forward-looking statements)
The estimates referred in this report are based on the information available as of the date of this release. Ryosan Company Limited(Ryosan) does not promise the realization of the estimates in this report. The actual results may significantly differ from the estimates due
to a variety of factors. For details on the conditions that form the assumptions used for earnings forecasts and notes on using earnings
forecasts, please refer to appendix page 3, "1. Qualitative Information Regarding this Quarterly Statement (3) Qualitative Information
Concerning Consolidated Forecast and Other Future Predictions."

○Table of contents of the appendix
1. Qualitative Information Regarding this Quarterly Statement ........................................................................................................... 2(1) Qualitative Information Concerning Consolidated Operating Results .................................................................................. 2(2) Qualitative Information Concerning Consolidated Financial Position .................................................................................. 3(3) Qualitative Information Concerning Consolidated Forecast and Other Future Predictions .................................................. 3
2. Consolidated Quarterly Financial Statements and Main Notes ........................................................................................................ 5(1) Consolidated Quarterly Balance Sheet .................................................................................................................................. 5(2) Consolidated Quarterly Statement of Income and Consolidated Quarterly Statement of Comprehensive Income ............... 7
Consolidated Quarterly Statement of Income
Scope of Consolidation of this First Half Period ........................................................................................................ 7
Consolidated Quarterly Statement of Comprehensive Income
Scope of Consolidation of this First Half Period ........................................................................................................ 8(3) Consolidated Quarterly Statements of Cash Flows ............................................................................................................... 9(4) Notes Regarding Consolidated Quarterly Financial Statements............................................................................................ 10(Notes Regarding Going Concern)........................................................................................................................................ 10(Notes Regarding Substantial Changes in Shareholders’ Equity).......................................................................................... 10(Additional Information) ....................................................................................................................................................... 10(Segment Information) .......................................................................................................................................................... 10-1-

1. Qualitative Information Regarding this Quarterly Statement(1) Qualitative Information Concerning Consolidated Operating Results1) Overview
During this consolidated first half (April 1, 2018 to September 30, 2018), the global economy continued growing,supported by steady investment and consumption. The United States enjoyed rapid growth; European growth
remained strong driven mainly by domestic demand; and Asian countries other than Japan but including China
remained solid. In Japan, improved employment rates and wages led to expanded consumer spending, andfavorable corporate income was also a positive factor for the economy.
The electronics industry achieved stable growth, especially in the in-vehicle electrical equipment and industrial
equipment markets. However, clouds on the horizon for the industry include factors such as intensifying trade
friction between China and the United States, destabilization of the market related to exchange rates and stock
prices, and large scale disasters.
Ryosan recently issued its 10th Medium-Term Business Plan, a 3-year plan that is starting in this fiscal year.
With "growth" and "speed" defining the fundamental attitude, the plan calls for achieving sustainable growththrough quick responses to changes in the management environment and electronics systems coordination. Ryosanwill pursue three different strategies to achieve this objective: the "growth strategy" will strengthen its revenue
stream and reconstruct its business portfolio, the "capital strategy" will strive for ROE improvements, and the"infrastructure strategy" will institute qualitative enhancement of corporate governance and strengthen the
management infrastructure, both of which are indispensable in securing continuous growth.
In the midst of these circumstances, due to factors such as the consolidation of Hong Kong's Edal Electronics
Co., Ltd. ("Edal") as a subsidiary in this fiscal year following its acquisition in 2017, net sales in this first half
period were 128,968 million yen (up 4.3% from the same period of the previous fiscal year) and operating income
was 2,894 million yen (down 10.2%). As a result of the revaluation of liabilities denominated in foreign currencies,
ordinary income was 1,620 million yen (down 49.2%) and profit attributable to owners of parent was 1,057 million
yen (down 52.5%).
2) Business Segment Informationa. Semiconductors
Ryosan sells system LSIs, discrete semiconductors and memory, and develops system LSIs on a contract basis.
In this consolidated first half period, due to the strong performance in the in-vehicle electrical equipment business,consolidation of Edal, and inventory revaluations, net sales were 77,001 million yen (up 6.9% from the same
period of the previous fiscal year), and operating income was 1,396 million yen (down 23.6%).
b. Electronic Components
Ryosan sells electromechanical components, display devices and power supplies. Since the performance of
Ryosan’s businesses for consumer and industrial equipment was strong in this consolidated first half period, net
sales were 40,427 million yen (up 2.3% from the same period of the previous fiscal year), and operating income
was 1,487 million yen (up 12.5%).
c. Electronic Equipment
Ryosan sells systems equipment and facilities equipment. In this consolidated first half period, due to factors
such as the end of large-scale business projects, net sales were 11,539 million yen (down 4.1% from the same
period of the previous fiscal year), and operating income was 171 million yen (down 37.3%).

-2-

(2) 1) Qualitative Information Concerning Consolidated Financial Position
As of September 30, 2018, total assets decreased by 904 million yen compared with the end of the previous fiscal
year, to 161,352 million yen.
Also, net assets decreased by 3,946 million yen compared with the end of the previous fiscal year, to 90,384
million yen, with the ratio of net assets to total assets being 56.0%.
2) Overview of Cash Flows
As of September 30, 2018, cash and cash equivalents increased by 3,719 million yen compared with the end of
the previous fiscal year, to 17,190 million yen.
Net cash provided by (used in) operating activities
Regarding cash flow from operating activities in this consolidated first half period, profit before income taxes
was 1,624 million yen and funds in total increased by 9,021 million yen. This was because notes and accounts
receivable – trade and accounts receivable – other decreased by 8,797 million yen and 3,077 million yen
respectively, which offset an increase in inventories of 2,932 million yen. For a comparison, in net cash fromoperating activities in the same period of the previous fiscal year, funds had decreased by 15,896 million yen.
Net cash provided by (used in) investing activities
Regarding cash flow from investing activities in this consolidated first half period, funds in total decreased by
273 million yen due to such factors as the purchase of shares of subsidiaries and associates. For a comparison, in
net cash from investing activities in the same period of the previous fiscal year, funds had increased by 625
million yen.
Net cash provided by (used in) financing activities
Regarding cash flow from financing activities in this consolidated first half period, funds in total decreased by
5,121 million yen due to the purchase of treasury shares of 3,870 million yen and cash dividends paid of 1,833
million, even though short-term loans payable increased by 6,701 million yen. For a comparison, in net cash fromfinancing activities in the same period of the previous fiscal year, funds had decreased by 8,056 million yen.
(3) Qualitative Information Concerning Consolidated Forecast and Other Future Predictions
1) Projected Operating Results
The operating results forecast for the fiscal year ending March 31, 2019 is below. No changes have been madesince the operating results forecast published on October 24, 2018.

Net sales
Operating income
Ordinary income
Profit attributable to owners ofparentMillions of yen
254,000
5,600
4,000

YoY change
Down 0.0%
Down 1.2%
Down 37.5%

2,800

Down 37.5%

2) Estimates by Business Segment
a. Semiconductors
In addition to the continuing robust performance of the in-vehicle electrical equipment business, inventory
expenses are expected to be lower than the same period of the previous fiscal year, and the forecast figures for net
sales and operating income are 152,000 million yen (up 4.3% from the same period of the previous fiscal year)and 2,750 million yen (up 4.7%).
b. Electronic Components
The forecast figures for net sales and operating income are 78,500 million yen (down 4.2% from the same
period of the previous fiscal year) and 2,800 million yen (down 0.4%). These reductions were prompted mainly
by an expected decrease in sales in the consumer segment.
-3-

c. Electronic Equipment
Due to the effect of changes such as the end of large-scale business projects occurring by the end of the first halfof the consolidated fiscal year, the forecast figures for net sales and operating income are 23,500 million yen (down
10.9% from the same period of the previous fiscal year) and 400 million yen (down 34.1%).

-4-

2. Consolidated Quarterly Financial Statements and Main Notes(1) Consolidated Quarterly Balance Sheet(Millions of yen)
Fiscal Year Ended
March 31, 2018
(As of March 31, 2018)

First Half of the Fiscal YearEnding March 31, 2019
(As of September 30, 2018)ASSETS
Current assets
Cash and deposits

13,547

17,266

Notes and accounts receivable - trade75,53868,892Inventories

44,01549,333

Accounts receivable - other

10,249

7,171

Other

242

429

Allowance for doubtful accounts

(42)

(41)

143,550

143,051

Buildings and structures, net

3,168

3,116

Land

6,189

6,146

Leased assets, net

576

573

Other, net

155

157

10,090

9,993

903

1,445

Investment securities

5,310

4,458

Deferred tax assets

296

295

Other

2,238

2,227

Allowance for doubtful accounts

(132)

(118)

Total investments and other assets

7,713

6,862

18,70718,301

162,257

161,352

Total current assets
Non-current assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets
Investments and other assets

Total non-current assets
Total assets-5-

(Millions of yen)
Fiscal Year Ended
March 31, 2018
(As of March 31, 2018)

First Half of the Fiscal YearEnding March 31, 2019
(As of September 30, 2018)

LIABILITIESCurrent liabilities
Accounts payable - trade

36,35536,020

Short-term loans payable

23,95928,410164168

Accounts payable - other

1,714

1,566

Accrued expenses

1,362

1,328

Income taxes payable

1,598

539

183

319

65,337

68,352

Lease obligations

475

468

Deferred tax liabilities

247

318

Net defined benefit liability

1,782

1,744

Asset retirement obligations

31

31

Other

52

52

2,589

2,615

67,92670,967

Capital stock

17,69017,690Capital surplus

19,114

19,114Retained earnings

72,74056,915

Treasury shares(17,215)(6,143)

Total shareholders’ equity

92,32987,576

1,923

1,861

Deferred gains or losses on hedges(0)0Foreign currency translation adjustment

52

933

Remeasurements of defined benefit plans

25

13

2,001

2,808

Total net assets

94,331

90,384

Total liabilities and net assets

162,257

161,352

Lease obligations

Other
Total current liabilities
Non-current liabilities

Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income-6-(2) Consolidated Quarterly Statement of Income and Consolidated Quarterly Statement of Comprehensive Income(Consolidated Quarterly Statement of Income)(Scope of Consolidation of this First Half Period)(Millions of yen)First Half of the Fiscal Year
Ended March 31, 2018

First Half of the Fiscal YearEnding March 31, 2019

(April 1, 2017 to Sept. 30, 2017)(April 1, 2018 to Sept. 30, 2018)

123,629
113,143
10,486
7,262
3,224

128,968
118,261
10,706
7,812
2,894

21
39
39
15
47
164

10
52
21
102
187

154
28
13
196
3,191

328
198
7
917
10
1,461
1,620

3
3
3,194
967
2,227
2,227

0
3
3
1,624
567
1,057
1,057

Net sales
Cost of Sales
Gross Profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Rent income
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Commission for purchase of treasury shares
Foreign exchange losses
Miscellaneous loss
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Profit before income taxes
Income taxes
ProfitProfit attributable to owners of parent-7-

(Consolidated Quarterly Statement of Comprehensive Income)(Scope of Consolidation of this First Half Period)(Millions of yen)First Half of the Fiscal Year
Ended March 31, 2018

First Half of the Fiscal YearEnding March 31, 2019

(April 1, 2017 to Sept. 30, 2017)(April 1, 2018 to Sept. 30, 2018)

2,227

1,057

321
0
358
(8)
671
2,898

(61)
1
880
(12)
807
1,864

2,898

1,864

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent-8-

(3) Consolidated Quarterly Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Decrease (increase) in accounts receivable - other
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of shares of subsidiaries and associates
Purchases of investment securities
Proceeds from sales of investment securities
Payments for investments in capital
Proceeds from distribution of investment in partnerships
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Increase in cash and cash equivalents from newly consolidated
subsidiary
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period-9-First Half of the Fiscal Year
Ended March 31, 2018

First Half of the Fiscal YearEnding March 31, 2019

(April 1, 2017 to Sept. 30, 2017)(April 1, 2018 to Sept. 30, 2018)

3,194
304
18
(56)
(61)
154

1,624
242
100
(19)
(41)
(63)
328

-

198

(3)
(8,650)(9,941)
3,528(4,284)150(15,645)
71
(153)
(168)
(15,896)(3)
8,797(2,932)(1,606)
3,077
1,103
10,806105(366)(1,524)
9,021

(58)
(19)
(200)
1,003
(8)
(91)
625

(35)
45
(86)
(200)
(30)
3
(2)
18
(98)
111
(273)

8,584
(90)
(14,584)(1,965)(8,056)
117(23,210)671(88)(3,870)(1,833)(5,121)
50
3,677

-

41

38,692
15,482

13,471
17,190(4) Notes Regarding Consolidated Quarterly Financial Statements(Notes Regarding Going Concern)
None(Notes Regarding Substantial Changes in Shareholders’ Equity)
Based on a corporate resolution made at the Board Meeting on May 29, 2018, Ryosan retired 3,500,000
treasury shares effective as of June 11, 2018. As a result, retained earnings and treasury shares in thisconsolidated first half period both decreased by 14,941 million yen respectively.
(Additional Information)
Application of "Partial Revisions to 'Accounting Standards for Tax-Effect Accounting'"
Due to changes such as "Partial Revisions to 'Accounting Standards for Tax-Effect Accounting'"(Corporate Accounting Standard No. 28, February 16, 2018) which have been applied as of the beginning of
the consolidated first quarter of this fiscal year, deferred tax assets are classified as "investments and otherassets" and deferred tax liabilities are classified as "non-current liabilities."(Segment Information)
I. Information Concerning Sales and Income or Loss Amount by Reporting Segment
The consolidated first half of the fiscal year ended March 31, 2018 (April 1, 2017 to September 30, 2017)(Millions of yen)
Semiconductors
Net sales
Sales to external customers
Internal sales or exchange
between segments
Total
Segment income (loss)

Reporting Segment
Electronic
Electronic
Components
Equipment

Total

Adjusted
amount(Note 1)

Amounts shown on
consolidated statement ofincome (Note 2)

72,06039,531

12,037

123,629―

123,629

―

―

―

―

―

―

72,0601,828

39,531
1,322

12,037
272

123,629
3,423

―
(199)

123,629
3,224(Notes)1. The adjusted amount of minus 199 million yen represents corporate expenses (mainly general and administrative
expenses) which are not allocated to the reporting segment.
2. Segment income has been adjusted with operating income in the consolidated quarterly statement of income.

The consolidated first half of the fiscal year ending March 31, 2019 (April 1, 2018 to September 30, 2018)(Millions of yen)
Semiconductors
Net sales
Sales to external customers
Internal sales or exchange
between segments
Total
Segment income (loss)

Reporting Segment
Electronic
Electronic
Components
Equipment

Total

Adjusted
amount(Note 1)

Amounts shown on
consolidated statement ofincome (Note 2)

77,00140,427

11,539128,968―

128,968

―

―

―

―

―

―

77,001
1,396

40,427
1,487

11,539171

128,968
3,054

―
(160)

128,968
2,894(Notes)1. The adjusted amount of minus 160 million yen represents corporate expenses (mainly general and administrative
expenses) which are not allocated to the reporting segment.
2. Segment income has been adjusted with operating income in the consolidated quarterly statement of income.

- 10 -

II. Information Concerning Sales and Income or Loss Amount by Sales Destination
Fiscal Year 2017, first half of the fiscal year ended March 31, 2018 (April 1, 2017 to September 30, 2017)(Millions of yen)

Eliminations
or corporate

Consolidated

123,629―

123,629

3

8,947(8,947)

―

4,265
115

132,577
3,049(8,947)
174

123,629
3,224

Japan

Asia

Other

Total

75,46043,906

4,262

8,869

74

84,3301,370

43,981
1,563

Net sales
Sales to external customers
Internal sales or exchange between
segments
Total
Segment income(Notes)1. Country and regional segments are classified on the basis of geographic proximity.
2. Principal countries and regions covered:
Asia: Hong Kong, Thailand, China, South Korea, etc.
Other: United States, etc.

Fiscal Year 2018, first half of the fiscal year ending March 31, 2019 (April 1, 2018 to September 30, 2018)(Millions of yen)

Eliminations
or corporate

Consolidated

128,968―

128,968

0

9,595(9,595)

―

4,575
131

138,5642,645(9,595)249

128,968
2,894

Japan

Asia

Other

Total

73,65450,738

4,575

9,482

112

83,137864

50,851
1,649

Net sales
Sales to external customers
Internal sales or exchange between
segments
Total
Segment income(Notes)1. Country and regional segments are classified on the basis of geographic proximity.
2. Principal countries and regions covered:
Asia: Hong Kong, Thailand, China, South Korea, etc.
Other: United States, etc.

III. Information Concerning Sales by Region
Fiscal Year 2017, first half of the fiscal year ended March 31, 2018
(April 1, 2017 to September 30, 2017)(Millions of yen)Japan
Net sales
Ratio to consolidated net sales (%)

70,99057.4

China
26,654
21.6

Asia
21,675
17.5

Other
4,309
3.5

Consolidated
123,629100.0(Note) Net sales are on the basis of customer location and classified by country or region.

Fiscal Year 2018, first half of the fiscal year ending March 31, 2019
(April 1, 2018 to September 30, 2018)(Millions of yen)Japan
Net sales
Ratio to consolidated net sales (%)

68,58553.2

China
32,95225.6

Asia
22,824
17.7(Note) Net sales are on the basis of customer location and classified by country or region.

- 11 -

Other
4,605
3.6

Consolidated
128,968100.0