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

November 12, 2018

Consolidated Financial Reportfor the Second Quarter of the Fiscal Year Ending March 31, 2019
<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 13, 2018
December 12, 2018
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, 2018
(From April 1, 2018 to September 30, 2018)(1) Results of Consolidated Operations(Millions of yen)

September 30, 2018
September 30, 2017

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profitPercentagechange29,29626,043

12.5
22.5

2,521
710

255.2
2.3

2,860
790

262.1
－Note: Comprehensive income
Six-month period ended September 30, 2018:
2,151 million yen(7.3) 8%Six-month period ended September 30, 2017:
2,320 million yen－8%: 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, 2018
September 30, 2017

Profitattributable toowners ofparent2,065
1,043

PercentagechangeEarningsper share(Yen)

97.9－28.87
14.51

1

Dilutedearnings
per share(Yen)
28.80
14.49

The 2nd quarter of the fiscal year 2019(2) Consolidated Financial Position

September 30, 2018
March 31, 2018

Total assets

Net assets

98,724
98,493

61,12759,666

Reference: Shareholders’ equity
As of September 30, 2018:
As of March 31, 2018:(Millions of yen)
Equity ratio
Net assets(%)
per share (Yen)
61.7
851.3360.1
828.2660,935 million yen
59,217 million yen

2. Dividends(Yen)Dividends per share
Base date2019(Forecast)
2019
2018

June 30September 30－－

7.50
6.50

December 31－March 31
7.50

Full Fiscal Year
15.00

－6.50

13.00

Note: Change in the current three-month period ended September 30, 2018, to dividend forecast: None

3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2019Year ending March
31, 2019

Year ending March
31, 2019

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profit(Millions of yen)
Percentagechange61,000

10.5

5,500

107.6

5,400

125.3

Profitattributable toowners ofparent

PercentagechangeEarnings
per share(Yen)

3,800126.4

53.11

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, 2018, to consolidated operating performance
forecast: None

2

The 2nd quarter of the fiscal year 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:

None
None
None
None

(4) Number of shares issued (Common stock)
Number of shares outstanding at period-end (Including treasury stock)
As of September 30, 2018:
As of March 31, 2018:

73,501,425 shares
73,501,425 shares

Number of treasury stock
As of September 30, 2018:
As of March 31, 2018:

1,924,744 shares
2,005,532 shares

Average number of shares outstanding at period-end
Six-month period ended September 30, 2018:
Six-month period ended September 30, 2017:

71,543,139 shares
71,901,493 shares

Note: The number of treasury stock includes treasury stock held by the ESOP trust. This resulted in the addition to treasury
stock of 431,900 shares as of September 30, 2018 and 480,100 shares as of March 31, 2018. In addition, treasury
stock held by the ESOP trust is excluded from the calculation of the average number of shares outstanding atperiod-end, as is other treasury stock. The number of shares excluded from said calculation totaled 454,016 sharesfor the six-month period ended September 30, 2018 and 74,766 shares for the six-month period ended September 30,
2017.

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 12, 2018. Accordingly, for a wide variety of reasons, there remains
the possibility that actual performance results may differ from projections. For performance forecasts, please refer onpages 6.

3

The 2nd quarter of the fiscal year 2019

5. Operating Results and Financial Position(1) Analysis of Operating Results
In the six-month period ended September 30, 2018, despite being somewhat impacted by several natural disasters, theJapanese economy saw continued gradual improvement due mainly to an increase in private capital investment thatreflected a pickup in employment figures and strong corporate profits. Overseas economies saw improvement,
especially in developed nations, but the future outlook grew more uncertain due to such factors as concerns over theimpact of international trade frictions.
Under these circumstances, in April 2018, the Group launched “IKO Mid-term business plan 2020
(three-year-plan) CHANGE & CHALLENGE ~Next Stage –ACCOMPLISH–.” With the aims of realizing
sustainable growth and establishing a highly profitable organization, the Group has been implementing a range ofmeasures to solve priority issues through inter-departmental efforts and improve efficiency in all operations.
From a sales perspective, amid steady demand for private capital investment, the Group worked to further
cultivate business ties with existing customers while focusing on reinforcing customer management using a newsystem.
In terms of product development, the Group worked to expand its lineup of products that provide highadded value from the customer perspective. To this end, the Group developed the long stroke Precision Positioning
Table TE series, designed to help make machinery lighter and more compact, and commenced sales of the series inOctober.
From a production standpoint, in light of robust demand in and outside Japan, the Group focused on
reinforcing its frameworks to expand its production capacity. At domestic factories and the production subsidiary IKO
Thompson Vietnam Co., Ltd., the Group worked quickly to upgrade its supply framework, mainly by increasing thenumber of personnel and expanding facilities. In addition, the Group strove to improve productivity by streamlining
processes and enhancing management capabilities.
Turning to the Group’s operational results, although orders received, which had been very hot, begancooling in the second quarter and continue to do so, the balance of orders received remained high. In the domesticmarket, net sales increased due mainly to demand for electronics-related devices and machine tools. Overseas, inNorth America, demand for general industrial machinery was firm, but sales of electronics-related devices weresluggish, and net sales were virtually unchanged year on year. In Europe, demand for machine tools and generalindustrial machinery was strong, and net sales increased. In China, due to proactive sales efforts through local sales
subsidiaries and sales agencies, net sales increased. In other regions, some customers in ASEAN countries took acautious stance, and net sales edged down.
As a result, consolidated net sales for the six-month period under review totaled ¥29,296 million, up 12.5%
year on year. On the earnings front, due in part to the increase in sales and a rise in production, operating profit came to¥2,521 million, up 255.2% year on year, and ordinary profit was ¥2,860 million, up 262.1% year on year. Profit
attributable to owners of the parent amounted to ¥2,065 million, up 97.9% year on year.
4The 2nd quarter of the fiscal year 2019

In addition, the value of needle roller bearings and linear motion rolling guides produced during the six-month
period under review, totaled ¥28,012 million, up 40.0% year on year (based on average sales prices). The value of orders
placed for these products and other machine components amounted to ¥33,110 million, up 3.0% year on year.
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 ¥25,913 million, a 13.8% increase compared with thecorresponding period in the previous fiscal year. Sales of Machine Components incline 3.4% to ¥3,382 million.

Business Segment Information
Six-month period ended
September 30, 2018
Millions of Component
yenpercentages
Needle Roller Bearings, LinearMotion Rolling Guides
Machine Components
Total net sales

Six-month period endedSeptember 30, 2017
Millions of Component
yenpercentages

ChangeMillions ofyen

Percentagechange25,913

88.5

22,770

87.4

3,142

13.8

3,382
29,296

11.5
100.0

3,272
26,043

12.6
100.0

110
3,253

3.4
12.5

(2) Analysis of Financial Position
Total assets as of September 30, 2018, totaled ¥98,724 million, an increase of ¥230 million compared with the end of theprevious fiscal year. This mainly comprised growth in securities of ¥2,099 million, inventories of ¥1,520 million anddeferred tax assets of ¥623 million as well as decreases in cash and deposits of ¥2,715 million, notes and accounts
receivable-trade of ¥891 million and investment securities of ¥461 million.
Total liabilities amounted to ¥37,596 million, a decrease of ¥1,230 million compared with the end of the previous
fiscal year. This mainly comprised a decrease in long-term loans payable of ¥1,389 million.
Total net assets stood at ¥61,127 million, an increase of ¥1,461 million compared with the end of the previous
fiscal year. This mainly comprised growth in retained earnings of ¥1,596 million.

Cash FlowsCash and cash equivalents as of September 30, 2018 totaled ¥17,405 million, a decrease of ¥613 million compared with theend of the previous fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥3,654 million, a decrease of ¥269 million compared with thecorresponding period of the previous fiscal year. The major inflows were profit before income taxes of ¥2,718 million,depreciation and amortization of ¥1,638 million and a decrease in notes and accounts receivable-trade of ¥904 million while
the major outflows were an increase in inventories of ¥1,237 million and income taxes paid of ¥373 million.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥2,155 million, an increase of ¥708 million compared with thecorresponding period of the previous fiscal year. This result was purchase of property, plant and equipment of ¥1,942
5

The 2nd quarter of the fiscal year 2019

million and purchase of intangible assets of ¥120 million.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥2,147 million, a decrease of ¥2,522 million compared with the corresponding
period of the previous fiscal year.

This result was repayments of long-term loans payable of ¥1,389 million, cash

dividends paid of ¥468 million and payments from changes in ownership interests in subsidiaries that do not result in change
in scope of consolidation of ¥316 million.

(3) Outlook
Looking forward, the Group’s operating results in the first half of the fiscal year have been largely as forecast at the start ofthe year. The Group has thus not amended the full-year operating results forecast announced on May 14, 2018.

6

The 2nd quarter of the fiscal year 2019

6. Consolidated Financial Statements(1) Consolidated Balance Sheets

As of September 30, 2018 and March 31, 2018
Millions of yen
March 31,
September 30,2018
2018

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

15,38815,481
2,099
12,677
9,242
5,142
922
(29)
60,92618,104
16,373－
11,734
8,713
5,095
1,301
(25)
61,296

9,559
11,323
20,882
2,746

9,700
10,613
20,313
2,956

10,6583,559(48)
14,16837,797

11,1192,856(48)
13,927
37,196

98,724

98,493

The 2nd quarter of the fiscal year 2019

Millions of yen
March 31,September 30,20182018

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

10,746
2,755
1,220
30
5,027
19,78010,939
2,778
479
60
5,319
19,577

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

10,0007,150
15649
17,815

10,0008,516
15717
19,24937,59638,827

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

9,533
12,87535,140(1,111)
56,437

9,533
12,88733,544(1,169)54,795

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

4,117
(0)
296
83
4,497
114
78

4,450
0(154)
125
4,422
76
372

TOTAL NET ASSETS

61,12759,666TOTAL LIABILITIES AND NET ASSETS

98,724

98,493TOTAL LIABILITIESNET ASSETS

8The 2nd quarter of the fiscal year 2019(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income

For the six-month period ended September 30, 2018 and 2017
Millions of yen
September 30,
September 30,
2017
2018
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
OthersOrdinary Profit
Extraordinary Income:Gain on sales of fixed assets
Compensation for transfer

Extraordinary Losses:
Impairment loss

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

929,296
20,0899,206
6,684

26,043
18,823
7,220
6,510

2,521

710

7
137
202
162
509

5103
30
162
301

43
88
38
170

71
118
32
221

2,860

790

0－
036
250
286

142
142－－

2,718

1,076

644
2,074
8
2,065

20
1,056
12
1,043

The 2nd quarter of the fiscal year 2019

Consolidated Statements of Comprehensive Income

For the six-month period ended September 30, 2018 and 2017
Millions of yen
September 30,
September 30,
2017
2018
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
Breakdown:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

10

2,074

1,056

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

895
(14)
340
42
1,264
2,320

2,140
112,316
3The 2nd quarter of the fiscal year 2019(3) Consolidated Statements of Cash Flows

For the six-month period ended September 30, 2018 and 2017
Millions of yen
September 30,
2018

September 30,
2017

Profit before Income Taxes

2,718

1,076

Depreciation and amortization

1,638

1,528

Impairment loss

142－

Decrease in account reserve

(27)

(30)

Decrease in net defined benefit liabilities

(21)

(134)

Interest and dividend income

(144)

(109)

4371

(104)

(46)

Loss on retirement of fixed assets

129

Compensation for transfer－(250)

Decrease(Increase) in notes and accounts receivable-trade904(1,112)

Decrease(Increase) in inventories(1,237)

522

Increase(Decrease) in notes and accounts payable-trade

(214)

1,465

Increase in accrued expenses

19182

Others-net

394

308

Subtotal

4,124

3,479

Interest and dividend income received

144

109

Interest expenses paid

(43)

(81)

Proceeds from compensation for removal－250

Dismantlement expenses paid

(197)

－

Income taxes refund (paid)

(373)

166

Net cash provided by operating activities

3,654

3,924

Purchase of property, plant and equipment(1,942)(852)

Purchase of intangible assets

(120)

(68)

Others-net

(92)

(525)

(2,155)(1,447)

Cash Flows from Operating Activities:

Interest expenses
Foreign exchange gains

Cash Flows from Investing Activities:

Net cash used in investing activities

11

The 2nd quarter of the fiscal year 2019

Millions of yen
September 30,
2018

September 30,
2017

Net decrease in short-term loans payable

－

(211)

Proceeds from long-term loans payable

－

2,100

Repayments of long-term loans payable(1,389)(1,106)－(5,000)

Cash dividends paid
Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation
Others-net

(468)

(467)

(316)

－27

15

Net cash used in financing activities(2,147)(4,670)

34

134

(613)

(2,058)Cash and cash equivalents at beginning of year

18,01920,040Cash and cash equivalents at end of period

17,405

17,981

Cash Flows from Financing Activities:

Redemption of bonds

Effect of exchange rate change on cash and cash equivalents
Net decrease in cash and cash equivalents

12The 2nd quarter of the fiscal year 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, andmultiplying profit before income taxes by said estimated effective tax rate.

(7) Additional Information

The Group has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement NO.
28 on February 16, 2018), etc. from the beginning of the first quarter of the fiscal year under review. As a result, deferred tax
assets are presented in investments and other assets, and deferred tax liabilities are presented in non-current liabilities.

13