Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Three Months Ended June 30, 2017
(Based on Japanese GAAP)
July 31, 2017
Company name:
Hodogaya Chemical Co., Ltd.
Stock exchange listing: Tokyo
Stock code:
Representative:

4112
President

URL

http://www.hodogaya.co.jp/
Yuto Matsumoto

Inquiries:

General Manager, Corporate Planning
Department

Taito MuraokaTEL

Scheduled date to file Quarterly Securities Report:
Scheduled date to commence dividend payments:

August 10, 2017–

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:Yes
No03-5299-8019(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the three months ended June 30, 2017 (from April 1, 2017 to June 30, 2017)(1) Consolidated operating results (cumulative)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profitowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Three months ended June 30, 2017
9,720
28.3
1,303 589.4
1,341–772–
Three months ended June 30, 2016
7,578
(2.1)
189
–
6–
69
–
Earnings per share

Diluted earnings per share

Yen
97.75
8.75

Three months ended June 30, 2017
Three months ended June 30, 2016

Yen––(2) Consolidated financial position
Total assets

Net assets

Millions of yen
54,19953,430

As of June 30, 2017
As of March 31, 2017

Equity ratio

Millions of yen
35,11633,857%60.4
59.5

2. Cash dividends
Annual dividends per share

Year ended March 31, 2017
Year ending March 31, 2018

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
2.50

Yen–

Yen
35.00

Yen–

25.00

–

25.00

50.00

Year ending March 31, 2018 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2018 (from April 1, 2017 to March 31, 2018)
Net sales
Full year

Millions of yen
35,500Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profitEarnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen
2.2
1,300 (38.9)
1,100 (47.5)600 (69.3)
75.91

1

4. Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2017(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2017

8,413,726 shares As of March 31, 2017

8,413,726 shares

511,497 shares As of March 31, 2017

511,518 shares

Number of treasury shares at the end of the period
As of June 30, 2017

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2017

7,902,176 shares Three months ended June 30, 2016

27,905,258 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2017

As of June 30, 2017

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

7,172
12,2508,262
10,887

Merchandise and finished goods
Work in process

3,012415

3,330301

Raw materials and supplies
Deferred tax assets

1,2075541,466
536

379
(21)

473
(16)

24,972

25,241

6,414
11,234

6,253
11,228

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net

2,538

2,398

Total property, plant and equipment

20,186

19,880Goodwill
Other

14198

12183

Total intangible assets

212

195

Investments and other assets
Investment securities

7,407

8,182

Long-term loans receivable
Net defined benefit asset

15282

16308

Other
Allowance for doubtful accounts

558(205)

572
(197)

Total investments and other assets

8,058

8,881

28,45728,95753,43054,199Intangible assets

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2017

As of June 30, 2017

Liabilities
Current liabilities
Notes and accounts payable - trade

4,612

4,421

Short-term loans payable
Income taxes payable

3,766
291

3,614
195

Provision
Other458
1,363

244
1,622

Total current liabilities

10,491

10,098Non-current liabilities
Long-term loans payable

5,346

5,010

1,882
1,228

2,120
1,228

Provision
Net defined benefit liability

8288

82
76

Asset retirement obligations
Other

79
372

79385

Total non-current liabilities

9,080

8,983

19,572

19,082

Shareholders' equity
Capital stock

11,196

11,196

Capital surplus
Retained earnings

9,589
6,056

9,589
6,552

Treasury shares(1,709)(1,710)Total shareholders' equity

25,132

25,628Valuation difference on available-for-sale securities
Revaluation reserve for land

2,238
2,783

2,783
2,783

Foreign currency translation adjustment
Remeasurements of defined benefit plans

1,205
437

1,108407

Total accumulated other comprehensive income

6,664

7,083

Deferred tax liabilities
Deferred tax liabilities for land revaluation

Total liabilities
Net assets

Accumulated other comprehensive income

Non-controlling interests

2,060

2,405

Total net assets

33,85735,11653,43054,199Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)Three months ended

Three months ended

June 30, 2016

June 30, 2017

Net sales
Cost of sales

7,578
5,195

9,720
6,040

Gross profit

2,382

3,679

Selling, general and administrative expenses

2,193

2,376

189

1,303

Interest income
Dividend income

560

489

Rent income on non-current assets
Miscellaneous income

14
91426

Total non-operating income

89

134

2722209
30

635

432

Operating profit
Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses
Environmental maintenance expenses
Miscellaneous loss

271

96

Ordinary profit

Total non-operating expenses

61,341

Extraordinary income
Gain on sales of non-current assets

803

Subsidy income

31

Total extraordinary income

84

4

Loss on retirement of non-current assets
Loss on valuation of investment securities

1–10

Total extraordinary losses

12

Profit before income taxes

88

1,343

Income taxes

84

174

Extraordinary losses

Profit4

1,168

Profit (loss) attributable to non-controlling interests

(64)

396

Profit attributable to owners of parent

69772

5

Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income

Three months ended

Three months ended

June 30, 2016

June 30, 2017
4

1,168

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

(269)
(507)

544
(139)

Remeasurements of defined benefit plans, net of tax

(14)

(29)

Total other comprehensive income

(791)

374

Comprehensive income

(786)

1,543

Comprehensive income attributable toComprehensive income attributable to owners of parent

(577)

1,190

(208)

353

Comprehensive income attributable to non-controllinginterests

6Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Three months ended

Three months ended

June 30, 2016

June 30, 2017
88

1,343

Depreciation
Amortization of goodwill

387
1359
2

Increase (decrease) in provision
Increase (decrease) in net defined benefit liability

(187)
(25)

(226)
(9)

Interest and dividend income
Interest expenses(65)
27(93)
22

Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment

138(80)

5(3)

1–

10

Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories

1,428(344)

1,352(474)

Increase (decrease) in notes and accounts payable - trade
Increase/decrease in other assets/liabilities(397)
162(186)(11)

Increase (decrease) in accrued consumption taxes
Other, net(48)26

28(19)

Loss on retirement of non-current assets
Loss (gain) on valuation of investment securities

Subtotal

1,115

2,090

Interest and dividend income received
Interest expenses paid

52
(28)

90(19)

Income taxes paid

(237)

(291)

Net cash provided by (used in) operating activities

901

1,869

Payments into time deposits
Proceeds from withdrawal of time deposits(203)186–
516

Purchase of property, plant and equipment and intangible
assets

(122)

(187)

Proceeds from sales of property, plant and equipment andintangible assets

85

10

Purchase of investment securities
Collection of loans receivable

(0)
5(0)
1

Payments for guarantee deposits
Proceeds from collection of guarantee deposits(59)
21(50)
6

Other, net

(0)

(0)

Net cash provided by (used in) investing activities

(87)

296

Cash flows from investing activities

7

(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Three months ended

Three months ended

June 30, 2016

June 30, 2017–(100)

Repayments of long-term loans payable
Cash dividends paid

(384)
(0)

(387)
(0)

Dividends paid to non-controlling interests
Proceeds from sales of treasury shares

(3)
–

(6)
0

Purchase of treasury shares
Repayments of lease obligations

(0)
(8)

(1)
(8)

Net cash provided by (used in) financing activities

(396)

(504)

Effect of exchange rate change on cash and cash equivalents

(217)

(45)

Net increase (decrease) in cash and cash equivalents

2001,616

Cash and cash equivalents at beginning of period

6,175

6,597

Cash and cash equivalents at end of period

6,376

8,213

8