NIPPON THOMPSON CO., LTD.
Corporate Headquarters: Tokyo
Listed Code: 6480
Li sted Stock Exchange: Tokyo(URL: https://www.ikont.co.jp/eg/)

November 11, 2019

Consolidated Financial Reportfor the Second Quarter of the Fiscal Year Ending March 31, 2020
<Japanese GAAP>
Representative: Shigeki Miyachi, President and Representative Director
For further information contact: Kesaaki Ushikoshi, General Manager of Accounting Department
Telephone: +81-3-3448-5824
Scheduled Date to Submit Quarterly Annual Securities Report:
Scheduled Date to Begin Dividend Payments:
Preparation of Supplementary Explanation Material for Quarterly
Financial Results:
Holding of Presentation Meeting for Quarterly Financial Results:

November 12, 2019
December 11, 2019
Yes
Yes (Targeted at institutional investors and analysts)

Figures have been rounded off to eliminate amounts less than one million yen.

1. Consolidated Operating Performance for the Six-month Period Ended September 30, 2019
(From April 1, 2019 to September 30, 2019)(1) Results of Consolidated Operations(Millions of yen)

September 30, 2019
September 30, 2018

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profitPercentagechange25,44329,296

△13.2
12.5

1,210
2,521

△52.0
255.2

942
2,861

△67.0
262.1

PercentagechangeEarnings
per share
(Yen)

△85.6
97.9

4.14
28.87

Note: Comprehensive income
Six-month period ended September 30, 2019:△147 million yen―%
Six-month period ended September 30, 2018:
2,151 million yen△7.3 %: Percentage change for net sales, operating profit, ordinary profit, and profit attributable to owners of parent indicate
percentage increase/decrease compared to the same period in the previous year.

September 30, 2019
September 30, 2018

Profitattributable toowners ofparent
297
2,065

1

Dilutedearnings
per share
(Yen)
4.13
28.80

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019(2) Consolidated Financial Position
Total assets(Millions of yen)
Equity ratio
Net assets(%)
per share (Yen)
59.0
827.4359.1
837.24

Net assets

September 30, 2019100,650
59,657
March 31, 2019
101,468
60,195
Reference: Shareholders’ equity
As of September 30, 2019: 59,405 million yen
As of March 31, 2019:
59,987 million yen

2. Dividends(Yen)
Dividends per share
Base date2020(Forecast)
2020
2019

June 30

September 30

－
－

7.50
7.50

December 31－

March 31
7.50

Full Fiscal Year
15.00

－

7.50

15.00

Note: Change in the current three-month period ended September 30, 2019, to dividend forecast: None

3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2020

Year ending March
31, 2020

Year ending March
31, 2020

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profit(Millions of yen)
Percentagechange48,500(15.8)

2,000(59.0)

1,800(66.2)

Profitattributable toowners ofparentPercentagechangeEarnings
per share
(Yen)

600

(83.9)

8.36

Notes: Percentage change for net sales, operating profit, ordinary profit, and profit attributable to owners of parent indicate
percentage increase/decrease compared to the same period in the previous year.
Notes: Change in the current three-month period ended September 30, 2019, to consolidated operating performance
forecast: Yes

2

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

4. Others(1) Changes in the state of significant subsidiaries during the period (Changes regarding specific companies accompanying
changes in the scope of consolidation): None
(2) Application of the special accounting methods for the presentation of the quarterly consolidated financial statements: Yes
Note: For further details, please refer on page 13.
(3) Changes in accounting principles and accounting estimates, and restatements
Changes in accounting principles arising from revision of accounting standards:
Changes other than those in above:
Changes in accounting estimates:
Restatements:

Yes
None
None
None

Note: For further details, please refer on page 13.
(4) Number of shares issued (Common stock)
Number of shares outstanding at period-end (Including treasury stock)
As of September 30, 2019:
As of March 31, 2019:73,501,425 shares
73,501,425 shares

Number of treasury stock
As of September 30, 2019:
As of March 31, 2019:

1,705,612 shares
1,851,802 shares

Average number of shares outstanding at period-end
Six-month period ended September 30, 2019:
Six-month period ended September 30, 2018:

71,737,936 shares
71,543,139 shares

Note: The number of treasury stock includes treasury stock held by the ESOP trust. This resulted in the addition to treasury
stock of 242,800 shares as of September 30, 2019 and 358,500 shares as of March 31, 2019. In addition, treasury
stock held by the ESOP trust is excluded from the calculation of the average number of shares outstanding at
period-end, as is other treasury stock. The number of shares excluded from said calculation totaled 296,083 sharesfor the six-month period ended September 30, 2019 and 454,016 shares for the six-month period ended September
30, 2018.

These consolidated financial statements are not subject to quarterly review by auditors
Explanations or Other Items Pertaining to Appropriate use of Operating Performance Forecasts
Performance forecasts presented herein are based on information available to the Nippon Thompson Group (the“Group”) as of the date of this document, November 11, 2019. Accordingly, for a wide variety of reasons, there remains
the possibility that actual performance results may differ from projections. For performance forecasts, please refer on
pages 6.

3

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

5. Operating Results and Financial Position(1) Analysis of Operating Results
In the six-month period ended September 30, 2019, despite some weakness in exports and production, the Japanese
economy saw continued gradual improvement, reflecting firm personal consumption due mainly to improvement in
employment and wages. Overseas economies saw growing uncertainty due to such factors as U.S.-China trade tensions
and the prolongation of Brexit-related issues.
Under these circumstances, the Group entered the second year of its “IKO Mid-term business plan 2020
(three-year-plan) CHANGE & CHALLENGE ~Next Stage –ACCOMPLISH–.” With the aims of realizing sustainablegrowth and establishing a highly profitable organization, the Group has been implementing a range of measures to solve
priority issues through inter-departmental efforts and improve efficiency in all operations.
From a sales perspective, the Group worked to further cultivate business ties with existing customers whiledeveloping new markets and customers. The Group also focused on reinforcing customer management using a new
system and finding opportunities related to strategic products for which demand is expected to expand.
From a production standpoint, the Group worked to expand its facilities to meet medium- to long-term demand
growth and reinforced its production capacity by such means as beginning production of IKO brand products at
production subsidiary UBC (Suzhou) Bearing Co., Ltd. In addition, the Group strove to improve productivity bycontinuing to implement on-site improvement measures.
Turning to the Group’s operational results, in the domestic market, due in part to sluggish
semiconductor-related demand, net sales, especially those of electronics-related devices, decreased year on year. Overseas,in North America, while demand for medical equipment grew, sales of general industrial machinery and electronics-related
devices slowed, and net sales decreased. In Europe, demand for general industrial machinery and precision machinery was
weak, and the appreciation of the yen exerted a negative effect, leading to a decrease in net sales. In China, due toeconomic deceleration resulting in large part from trade tensions with the United States, net sales decreased. In otherregions, customers in Taiwan and South Korea took a cautious stance with regard to capital investment, and net sales
decreased.
As a result, consolidated net sales for the six-month eriod under review totaled ¥25,443 million, down 13.2%
year on year. On the earnings front, due in part to the decrease in sales and a fall in production, operating profit came to¥1,210 million, down 52.0% year on year, and ordinary profit was ¥942 million, down 67.0% year on year. Profit
attributable to owners of the parent amounted to ¥297 million, down 85.6% year on year.
In addition, the value of needle roller bearings and linear motion rolling guides produced during the six-month
period under review, totaled ¥24,706 million, down 11.8% year on year (based on average sales prices). The value oforders placed for these products and other machine components amounted to ¥20,602 million, down 37.8% year on year.

4

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

Because the Group manufactures and sells Needle Roller Bearings, Linear Motion Rolling Guides andMachine Components on an integrated basis, disclosure of segment information has been omitted. Sales of Needle Roller
Bearings and Linear Motion Rolling Guides totaled ¥22,642 million, a 12.6% decrease compared with the corresponding
period in the previous fiscal year. Sales of Machine Components decline 17.2% to ¥2,800 million.

Business Segment Information
Six-month period ended
September 30, 2019
Millions of Component
yenpercentages
Needle Roller Bearings, Linear
Motion Rolling Guides
Machine Components
Total net sales

Six-month period ended
September 30, 2018
Millions of Component
yenpercentages

22,64289.0

25,91388.5

2,800
25,443

11.0
100.0

3,382
29,29611.5
100.0

ChangeMillions ofyen

Percentagechange△3,270△12.6△582△3,853

△17.2
△13.2

(2) Analysis of Financial Position
Total assets as of September 30, 2019, totaled ¥100,650 million, a decrease of ¥817 million compared with the end of theprevious fiscal year. This mainly comprised growth in inventories of ¥3,067 million and tangible fixed assets of ¥2,638
million as well as decreases in cash and deposits of ¥3,696 million and notes and accounts receivable-trade of ¥2,693
million.
Total liabilities amounted to ¥40,993 million, a decrease of ¥279 million compared with the end of the previous
fiscal year. This mainly comprised growth in accounts payable of ¥643 million and long-term loans payable of ¥1,321
million as well as decreases in notes and accounts payable-trade of ¥1,071 million and income taxes payable of ¥1,224
million.
Total net assets stood at ¥59,657 million, a decrease of ¥537 million compared with the end of the previous fiscal
year. This mainly comprised decreases in retained earnings of ¥242 million, treasury stock of ¥115 million and foreign

currency translation adjustments of ¥405 million.

Cash Flows
Cash and cash equivalents as of September 30, 2019 totaled ¥13,751 million, a decrease of ¥3,272 million compared withthe end of the previous fiscal year.
Cash Flows from Operating Activities
Net cash used in operating activities amounted to ¥525 million. This was inflow of ¥3,654 million at the corresponding
period of the previous fiscal year. The major inflows were depreciation and amortization of ¥1,895 million and a decrease innotes and accounts receivable-trade of ¥2,522 million while the major outflows were an increase in inventories of ¥3,477
million and income taxes paid of ¥1,493 million.

5

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥3,432 million, an increase of ¥1,277 million compared with thecorresponding period of the previous fiscal year. This result was purchase of property, plant and equipment of ¥3,226
million and purchase of intangible assets of ¥91 million.
Cash Flows from Financing Activities
Net cash provided by financing activities was ¥800 million. This was outflow of ¥2,147 million at the corresponding periodof the previous fiscal year. The major inflow was proceeds from long-term loans payable of ¥3,000 million, while the major
outflows were repayments of long-term loans payable of ¥1,678 million and cash dividends paid of ¥539 million.

(3) Outlook
Looking forward, such factors as the growing impact of the prolonged U.S.-China trade tensions and softening demand for
private capital investment in and outside Japan are prompting concerns of a possible economic downturn. In light of these
conditions and the results of the first half of the fiscal year, the Group is forecasting consolidated net sales of ¥48,500
million, operating profit of ¥2,000 million, ordinary profit of ¥1,800 million and profit attributable to owners of the parentof ¥600 million for the year ending March 31, 2020.

6

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

6. Consolidated Financial Statements(1) Consolidated Balance Sheets

As of September 30, 2019 and March 31, 2019
Millions of yen
March 31,
September 30,
2019
2019

ASSETS
Current Assets:
Cash and deposits
Notes and accounts receivable-trade
Securities
Finished products
Material in process
Raw material
OthersLess: Allowance for doubtful accounts
Total current assets
Non-Current Assets:
Tangible fixed assets:
Machinery and vehicles
OthersTotal tangible fixed assets
Intangible fixed assets
Investments and other assets:
Investment securities
OthersLess: Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
TOTAL ASSETS

7

13,327
12,761500
15,892
10,832
6,113
1,334
(16)
60,74517,023
15,455－
14,461
9,667
5,642
1,389
(19)
63,61911,31913,74925,0692,295

9,767
12,66322,430
2,566

8,333
4,256
(49)
12,54039,905

8,385
4,515
(49)
12,85137,848100,650

101,468

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

Millions of yen
March 31,
September 30,
2019
2019

LIABILITIESCurrent Liabilities:
Notes and accounts payable-trade
Current portion of long-term loans payable
Income taxes payable
Allowance for directors’ and corporate auditors’ bonuses
OthersTotal current liabilities

10,366
3,622
523
36
6,062
20,61011,438
3,179
1,747
60
5,713
22,138

Non-Current Liabilities:
Corporate bondLong-term loans payable
Net defined benefit liabilities
OthersTotal non-current liabilities

10,000
9,195
13
1,172
20,382

10,0008,317
13
803
19,13440,993

41,273

Shareholders’ Equity:
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

9,533
12,87536,011(933)
57,487

9,533
12,87536,253(1,048)57,614

Accumulated Other Comprehensive Income:Net unrealized holding gains on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests

2,531
(1)
(568)
(43)
1,918
148
103

2,568
(0)
(162)
(32)
2,373
114
93

TOTAL NET ASSETS

59,65760,195TOTAL LIABILITIES AND NET ASSETS

100,650

101,468

TOTAL LIABILITIESNET ASSETS

8

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income

For the six-month period ended September 30, 2019 and 2018
Millions of yen
September 30,
September 30,
2018
2019
Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Non-Operating Income:Interest income
Dividend income
Foreign exchange gains
Others

Non-Operating Expenses:
Interest expenses
Sales discounts
Foreign exchange loss
OthersOrdinary Profit

Extraordinary Losses:
Impairment loss

Profit Before Income Taxes
Income Taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

925,443
17,172
8,270
7,059

29,29620,089
9,206
6,684

1,210

2,521

7
129
－
241
377

7
137
202
162
509

44
29
549
22
645

43
88
－
38
170

942

2,861

－
－

142
142

942

2,718

636
305
8
297

644
2,074
8
2,065

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

Consolidated Statements of Comprehensive Income

For the six-month period ended September 30, 2019 and 2018
Millions of yen
September 30,
September 30,
2018
2019
ProfitOther Comprehensive Income:Net unrealized holding gains on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total Other Comprehensive Income
Comprehensive Income

305

2,074

(36)
(1)
(404)
(10)
(453)
(147)

(332)
(1)
453
(42)
77
2,151

Breakdown:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

(157)
9

2,140
11

10

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019(3) Consolidated Statements of Cash Flows

For the six-month period ended September 30, 2019 and 2018
Millions of yen
September 30,
2019

September 30,
2018

Profit before Income Taxes

942

2,718

Depreciation and amortization

1,895

1,638

Impairment loss－

142

Decrease in account reserve

(27)

(27)

Decrease in net defined benefit liabilities

(25)

(21)

Interest and dividend income

(136)

(144)

Interest expenses

44

43

Foreign exchange gains

247

(104)

Loss on retirement of fixed assets

14

12

Decrease(Increase) in notes and accounts receivable-trade

2,522

904

Decrease(Increase) in inventories(3,477)(1,237)

Increase(Decrease) in notes and accounts payable-trade

(865)

(214)

Increase in accrued expenses

(56)

19

Others-net

(200)

394

Subtotal

876

4,124

Interest and dividend income received

136

144

Interest expenses paid

(44)

(43)

Dismantlement expenses paid

－

(197)

Income taxes paid

(1,493)(373)

Net cash provided by (used in) operating activities

(525)

3,654

(3,226)(1,942)

Purchase of intangible assets

(91)

(120)

Others-net

(114)

(92)

(3,432)(2,155)

Cash Flows from Operating Activities:

Cash Flows from Investing Activities:
Purchase of property, plant and equipment

Net cash used in investing activities

11

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019

Millions of yen
September 30,
2019

September 30,
2018

Proceeds from long-term loans payable

3,000

－

Repayments of long-term loans payable(1,678)(1,389)Cash dividends paid
Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation
Others-net

(539)

(468)

－

(316)

18

27

Net cash provided by (used in) financing activities

800(2,147)

Effect of exchange rate change on cash and cash equivalents

(114)

34

Net decrease in cash and cash equivalents(3,272)(613)

Cash and cash equivalents at beginning of year

17,02318,019Cash and cash equivalents at end of period

13,751

17,405

Cash Flows from Financing Activities:

12

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2019(4) Notes on the Premise of a Going Concern

There are no applicable articles.

(5) Notes on the Statement of Changes in Consolidated Shareholders’ Equity

There are no applicable articles.

(6) Application of the special accounting methods for the presentation of the quarterly consolidated financial
statements

Calculation of tax expenses
Tax expenses are calculated by reasonably estimating the effective tax rate after the application of deferred tax accounting
on profit before income taxes in the current consolidated fiscal year, including the second quarter, and multiplying profit
before income taxes by said estimated effective tax rate.

(7) Changes in accounting policies
Parts of consolidated overseas subsidiaries adopted IFRS 16 “Leases” from April 1, 2019 and recognize all leases as alessee in principle as assets and liabilities on the balance sheets. In adopting the accounting standards, in accordance with thetransitional treatment, the Group recognizes the cumulative effect of initially applying the accounting standards at the date ofinitial application.
As a result, others included in tangible fixed assets, others included in current liabilities, and others included in long-term
liabilities at the end of the current second quarter increased by ¥490 million, ¥68 million, and ¥421 million, respectively. The
effects of these revisions on the quarterly consolidated statements of income for the current second quarter are immaterial.

13