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

November 7, 2016

Consolidated Financial Reportfor the Second Quarter of the Fiscal Year Ending March 31, 2017
<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 8, 2016
December 7, 2016
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, 2016
(From April 1, 2016 to September 30, 2016)(1) Results of Consolidated Operations(Millions of yen)

September 30, 2016
September 30, 2015

Net sales

PercentagechangeOperatingincomePercentagechangeOrdinary
incomePercentagechange21,26022,745

(6.5)
2.5

694
1,979

(64.9)
10.8

(20)
2,009

－
9.9

Note: Comprehensive income
Six-month period ended September 30, 2016:(2,217))million yen－ 8%
Six-month period ended September 30, 2015:(168)) million yen－ 8%: Percentage change for net sales, operating income, ordinary income, and profit attributable to owners of parent indicate
percentage increase/decrease compared to the same period in the previous year.

September 30, 2016
September 30, 2015

Profitattributable toowners ofparent(1,070)1,218

PercentagechangeEarnings
per share
(Yen)

－
3.2

(14.80)16.76

1Dilutedearnings
per share
(Yen)
－
15.14

The 2nd quarter of the fiscal year 2017(2) Consolidated Financial Position

September 30, 2016
March 31, 2016

Total assets

Net assets

86,28589,19755,20558,056

Reference: Shareholders’ equity
As of September 30, 2016:
As of March 31, 2016:(Millions of yen)
Equity ratio
(%)
63.9
65.0

55,141 million yen
58,003 million yen

2. Dividends(Yen)
Dividends per share
Base dateJune 30

September 30

2017(Forecast)
2017
2016

－
－

6.50
6.50

December 31－

March 31
6.50

Full Fiscal Year
13.00

－

6.50

13.00

Note: Change in the current three-month period ended September 30, 2016, to dividend forecast: None

3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2017

Year ending March
31, 2017

Year ending March
31, 2017

Net sales

PercentagechangeOperatingincomePercentagechange42,500

(2.7)

1,500

(50.3)

Profitattributable toowners ofparentPercentagechangeEarnings
per share
(Yen)

(500)

－

(6.94)

Ordinary
income700(Millions of yen)
Percentagechange(74.6)

Notes: Percentage change for net sales, operating income, ordinary income, 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, 2016, to consolidated operating performance
forecast: Yes

2

The 2nd quarter of the fiscal year 2017

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 to “2. Summary Information” on page 7.
(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, 2016:
As of March 31, 2016:

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

Number of treasury stock
As of September 30, 2016:
As of March 31, 2016:

1,637,110 shares
1,140,077 shares

Average number of shares outstanding at period-end
Six-month period ended September 30, 2016:
72,294,627 shares
Six-month period ended September 30, 2015:
72,704,318 shares
Note: The number of treasury stock includes treasury stock held by the ESOP trust. This resulted in the addition to treasury
stock of 207,400 shares as of September 30, 2016 and 338,000 shares as of March 31, 2016. 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 267,200 sharesfor the six-month period ended September 30, 2016 and 456,833 shares for the six-month period ended September
30, 2015.

Disclosure with Regard to Implementation of Quarterly Review Procedures
Although falling outside quarterly review procedures based on the Financial Instruments and Exchange Law, thesefinancial results are subjected to such review procedures, which are completed at the time of disclosure.
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 7, 2016. Accordingly, for a wide variety of reasons, there remains
the possibility that actual performance results may differ from projections. For performance forecasts, please refer to“1.Operating Results and Financial Position (3) Outlook” on pages 6.

3

The 2nd quarter of the fiscal year 2017

1. Operating Results and Financial Position(1) Analysis of Operating Results
In the six-month period ended September 30, 2016, the Japanese economy gradually recovered, backed by ongoing
improvement in hiring and wages, despite weakness in corporate earnings and capital investment. Overseas, theeconomies of developed countries, especially that of the United States, continued to recover, but the outlook for the global
economy grew more unclear, reflecting concerns about economic slowdown in China and other emerging countries.
Under these circumstances, the Group worked toward achieving the consolidated numerical goals of the “IKO
Mid-term business plan 2017 (three-year plan) CHANGE & CHALLENGE,” launched in April 2015, aiming to enhance
the Group’s competitiveness and presence in global markets. To this end, the Group implemented various measures toexpand its businesses and reinforce profitability.
From a sales perspective, the Group held private shows and exhibitions in and outside Japan, striving to deepen
relationships with existing customers while also cultivating new markets and relationships. The Group also worked tofurther the penetration of the IKO brand by promoting the sales expansion of strategic products under the mid-termbusiness plan.
In terms of product development , the Group worked to enhance its lineup of products that provide high added
value from a customer perspective. To this end, the Group introduced the MX Master Grade roller-type linear motion
rolling guide, which achieves running precision among the best in the series, and CRBHV/CRBFV crossed roller bearings,
which offer quick delivery and excellent cost performance.
From a production standpoint, the Group continued global procurement of materials and components toreinforce its price competitiveness and worked to shorten delivery lead times.
Turning to the Group’s operational results, domestic demand for devices for electronics-related industries,
including semiconductor manufacturing equipment, continued to recover, but demand for products for machine tools
stagnated, and overall sales in Japan fell year on year. Overseas, demand for devices for electronics-related industries andproducts for precision machinery was firm in North America and Europe, and sales increased compared with the same
period of the previous fiscal year on a local currency basis. However, the negative impact of the appreciation of the yencaused revenues in these regions to decline. In Asia, the Group worked to cultivate markets through aggressive sales efforts,
especially through sales subsidiaries in China. As a result, sales increased compared with the same period of the previous
fiscal year on a local currency basis, but revenues fell due to the appreciation of the yen.
As a result, the Group’s net sales for the six-month period under review decreased 6.5% compared with thecorresponding period of the previous fiscal year to ¥21,260 million. On the earnings front, operating income fell 64.9% to¥694 million, due largely to decreased production and sales as well as the impact of the yen’s appreciation. Ordinary loss
came to ¥20 million, compared with ordinary income of ¥2,009 million in the corresponding period of the previous fiscal
year. Reflecting an increase in the Company’s tax burden as a result of the reversal of deferred tax assets, loss attributableto owners of the parent amounted to ¥1,070 million, compared with profit attributable to owners of the parent of ¥1,218
million in the first half of the previous fiscal year.
Because the Group manufactures and sells Needle Roller Bearings, Linear Motion Rolling Guides and
4The 2nd quarter of the fiscal year 2017

Machine Components on an integrated basis, disclosure of segment information has been omitted. Sales of Needle Roller
Bearings and Linear Motion Rolling Guides totaled ¥18,682 million, a 6.2% decrease compared with the corresponding
period in the previous fiscal year. Sales of Machine Components decline 9.2% to ¥2,578 million.

Business Segment Information
Six-month period ended
September 30, 2016
Millions of Component
yenpercentages
Needle Roller Bearings, Linear
Motion Rolling Guides
Machine Components
Total net sales

Six-month period ended
September 30, 2015
Millions of Component
yenpercentages

ChangeMillions ofyen

Percentagechange18,682

87.9

19,90687.5(1,224)

(6.2)

2,578
21,260

12.1
100.0

2,839
22,745

12.5
100.0

(261)
(1,485)

(9.2)
(6.5)

(2) Analysis of Financial Position
Total assets as of September 30, 2016, totaled ¥86,285 million, a decrease of ¥2,912 million compared with the end of theprevious fiscal year. This mainly comprised growth in notes and accounts receivable-trade of ¥536 million, short-term
investment securities of ¥1,260 million as well as decreases in cash and deposits of ¥920 million, inventories of ¥2,068
million, accounts receivable-other of ¥488 million, deferred tax assets of ¥761 million and tangible fixed assets of ¥642
million.
Total liabilities amounted to ¥31,080 million, a decrease of ¥61 million compared with the end of the previous
fiscal year. This mainly comprised growth in bonds payable of ¥5,000 million and long-term bank loans of ¥1,438 million as
well as decreases in notes and accounts payable-trade of ¥275 million, current portion of bonds with subscription rights toshares of ¥4,999 million and accounts payable-other of ¥1,239 million.
Total net assets stood at ¥55,205 million, a decrease of ¥2,850 million compared with the end of the previous
fiscal year. The main components were increases in treasury stock of ¥172 million as well as decreases in retained earningsof ¥1,542 million and foreign currency translation adjustments of ¥1,141 million.

Cash Flows
Cash and cash equivalents as of September 30, 2016 totaled ¥13,726 million, an increase of ¥340 million compared with theend of the previous fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥2,452 million, an increase of ¥47 million compared with thecorresponding period of the previous fiscal year. The major inflows were depreciation and amortization of ¥1,268 million, adecrease in inventories of ¥1,345 million and a decrease in accounts receivable-other of ¥468 million, while the major
outflows were an increase in notes and accounts receivable-trade of ¥748 million.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥2,766 million, a decrease of ¥78 million compared with the corresponding
period of the previous fiscal year. This result was primarily attributable to the purchase of property, plant and equipment.
5

The 2nd quarter of the fiscal year 2017

Cash Flows from Financing Activities
Net cash provided by financing activities was ¥874 million. This was outflow of ¥3,064 million at the corresponding periodof the previous fiscal year. The major inflows were proceeds from long-term bank loans of ¥3,400 million and proceedsfrom issuance of bonds of ¥5,000 million, while the major outflows were repayments of long-term bank loans of ¥1,863
million, redemption of bonds with subscription rights to shares of ¥4,999 million, payments for purchase of treasury stock of¥232 million and cash dividends paid of ¥472 million.

(3) Outlook
Regarding future forecasts, the resilience of the global economy is expected to be weak, reflecting such factors as theslowing of economic growth in China. Furthermore, the Group expects to record expenses related to the acquisition ofequity interest , as described in the October 17, 2016 press release titled “Notice of acquisition of equity interest of UBC(Shanghai) Precision Bearing Manufacturing Co., Ltd. as the subsidiary.” In light of these economic conditions and theresults of the first half of the fiscal year, the Group is forecasting consolidated net sales of ¥42.5 billion, operating income of¥1.5 billion, ordinary income of ¥0.7 billion and loss attributable to owners of the parent of ¥0.5 billion for the year ending
March 31, 2017.

6

The 2nd quarter of the fiscal year 2017

2. Summary Information(1) 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. However, in cases where tax expenses
calculations using the estimated effective tax rate produce results that are notably unreasonable, tax expenses arecalculated by multiplying profit (loss) before income taxes by the statutory tax rate, with consideration given to therecoverability of deferred tax assets.

(2) Additional information

Application of the “Implementation Guidance on Recoverability of Deferred Tax Assets”
The Group has adopted the “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ
Guidance No. 26, March 28, 2016) from the first quarter of the fiscal year under review.

7

The 2nd quarter of the fiscal year 2017

3. Consolidated Financial Statements(1) Consolidated Balance Sheets

As of September 30, 2016 and March 31, 2016
Millions of yen
March 31,
September 30,
2016
2016

ASSETS
Current Assets:
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Finished products
Material in process
Raw material
OthersLess: Allowance for doubtful accounts
Total current assets
Fixed 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 fixed assets
TOTAL ASSETS

8

13,012
10,776
1,260
13,032
8,078
5,206
2,581
(13)
53,936

13,933
10,240－13,814
9,013
5,558
3,691
(15)
56,236

10,3409,762
20,102
2,142

10,566
10,177
20,744
1,974

7,918
2,231
(45)
10,10432,349

7,914
2,373
(45)
10,24232,961

86,28589,197

The 2nd quarter of the fiscal year 2017

Millions of yen
March 31,
September 30,
2016
2016

LIABILITIESCurrent Liabilities:
Notes and accounts payable-trade
Current portion of bonds
Current portion of convertible bond with subscription rights
Current portion of long-term bank loans
Income taxes payable
Allowance for directors’ and corporate auditors’ bonuses
OthersTotal current liabilities

6,276
5,000
－
2,780
173
35
3,811
18,076

6,551
－
4,999
2,876
187
70
5,043
19,728Long-Term Liabilities:
Corporate bondLong-term bank loans
Net defined benefit liabilities
OthersTotal long-term liabilities

5,000
6,649
413
939
13,003

5,000
5,114
539
758
11,412TOTAL LIABILITIES

31,08031,141

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

9,533
12,88732,491(792)
54,1189,533
12,88734,034(620)
55,833

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

2,146
2
(978)
(146)
1,022

2,177
(4)
163
(167)
2,169

30
34

18
35

55,20558,05686,28589,197NET ASSETS

Subscription rights to shares
Non-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

9The 2nd quarter of the fiscal year 2017(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income

For the six-month period ended September 30, 2016 and 2015
Millions of yen
September 30,
September 30,
2015
2016
Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income:Interest income
Dividend income
Foreign exchange gain
Others

Non-Operating Expenses:
Interest expenses
Sales discounts
Foreign exchange losses
OthersOrdinary Income (loss)
Extraordinary losses
Loss on sales of fixed assets
Profit (loss) before Income Taxes
Income Taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

10

21,26014,7696,491
5,796

22,74515,089
7,655
5,675

694

1,979

5
96
－
89
191

10
89
20
59
180

60
61
730
52
906
(20)

63
53
－
33
150
2,009

－
－
(20)

2
2
2,006

1,047
(1,067)2(1,070)

787
1,219
1
1,218

The 2nd quarter of the fiscal year 2017

Consolidated Statements of Comprehensive Income

For the six-month period ended September 30, 2016 and 2015
Millions of yen
September 30,
September 30,
2015
2016
Profit (loss)
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 Other Comprehensive Income
Comprehensive Income
Breakdown:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests11(1,067)

1,219

(31)
6
(1,145)20(1,149)(2,217)(1,016)
(0)
(347)
(23)
(1,387)(168)(2,216)
(0)

(164)
(3)

The 2nd quarter of the fiscal year 2017(3) Consolidated Statements of Cash Flows

For the six-month period ended September 30, 2016 and 2015
Millions of yen
September 30,
September 30,
2015
2016
Cash Flows from Operating Activities:
Profit (loss) before Income Taxes
Depreciation and amortization
Decrease in account reserve
Decrease in net defined benefit liabilities
Interest and dividend income
Interest expenses
Foreign exchange losses
Loss on retirement of tangible fixed assets
Decrease(Increase) in notes and accounts receivable-trade
Decrease(Increase) in inventories
Increase(Decrease)in notes and accounts payable-trade
Decrease in accrued expenses
Others-net
SubtotalInterest and dividend income received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Others-net
Net cash used in investing activities

12

(20)
1,268
(37)
(125)
(101)
60
232
15
(748)
1,345
(53)
(231)
887
2,491

2,006
1,089
(25)
(118)
(99)
63
5
14
542
(852)
549
(4)
43
3,215

101
(52)
(88)
2,452

99
(63)
(846)
2,405

(2,371)(210)(184)(2,766)(1,532)(384)(927)(2,844)

The 2nd quarter of the fiscal year 2017

Millions of yen
September 30,
September 30,
2015
2016
Cash Flows from Financing Activities:
Proceeds from long-term bank loans
Repayments of long-term bank loans
Proceeds from issuance of bonds
Redemption of bonds with subscription rights to shares
Payments for purchase of treasury stock
Cash dividends paid
Others-net
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
Cash and cash equivalents at beginning of year
Decrease in cash and cash equivalents due to change in fiscal period of
consolidated subsidiaries
Cash and cash equivalents at end of period

13

3,400
(1,863)5,000(4,999)
(232)
(472)
41
874

－
(2,224)
－
－
(425)
(440)
25
(3,064)(220)
340
13,386－1(3,501)
18,038(240)

13,726

14,295

The 2nd quarter of the fiscal year 2017(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.

14