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

November 6, 2017

Consolidated Financial Reportfor the Second Quarter of the Fiscal Year Ending March 31, 2018
<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 7, 2017
December 6, 2017
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, 2017
(From April 1, 2017 to September 30, 2017)(1) Results of Consolidated Operations(Millions of yen)

September 30, 2017
September 30, 2016

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profitPercentagechange26,04321,260

22.5(6.5)

710
694

2.3(64.9)

790
(20)

－－Note: Comprehensive income
Six-month period ended September 30, 2017:
2,320 million yen－ 8%
Six-month period ended September 30, 2016:(2,217)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, 2017
September 30, 2016

Profitattributable toowners ofparent
1,043(1,070)

PercentagechangeEarningsper share(Yen)

－－

14.51
(14.80)1

Dilutedearnings
per share(Yen)
14.49－

The 2nd quarter of the fiscal year 2018

(2) Consolidated Financial Position

September 30, 2017
March 31, 2017

Total assets

Net assets

99,337
99,62760,53458,605

Reference: Shareholders’ equity
As of September 30, 2017:
As of March 31, 2017:(Millions of yen)
Equity ratio
Net assets(%)
per share (Yen)
60.5
835.4358.4
810.1160,095 million yen
58,216 million yen

2. Dividends(Yen)Dividends per share
Base date2018(Forecast)
2018
2017

June 30September 30

－－

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, 2017, to dividend forecast: None

3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2018Year ending March31, 2018Year ending March31, 2018

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profit(Millions of yen)
Percentagechange52,500

19.0

2,300

100.8

2,400

165.0

Profitattributable toowners ofparent

PercentagechangeEarnings
per share(Yen)

2,000－27.80

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, 2017, to consolidated operating performance
forecast: Yes

2

The 2nd quarter of the fiscal year 2018

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, 2017:
As of March 31, 2017:

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

Number of treasury stock
As of September 30, 2017:
As of March 31, 2017:

1,568,274 shares
1,638,790 shares

Average number of shares outstanding at period-end
Six-month period ended September 30, 2017:
71,901,493 shares
Six-month period ended September 30, 2016:
72,294,627 shares
Note: The number of treasury stock includes treasury stock held by the ESOP trust. This resulted in the addition to treasury
stock of 43,000 shares as of September 30, 2017 and 113,700 shares as of March 31, 2017. 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 74,766 shares forthe six-month period ended September 30, 2017 and 267,200 shares for the six-month period ended September 30,2016.

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 6, 2017. 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 2018

5. Operating Results and Financial Position(1) Analysis of Operating Results
In the six-month period ended September 30, 2017, the Japanese economy saw continued gradual improvement due
mainly to a pickup in employment figures, income levels, and corporate profits. Overseas, the U.S. and European
economies continued to gradually recover, backed by rising personal consumption and private capital investment. The
economies of China and other Asian countries appeared to recover.
Under these circumstances, the Nippon Thompson Group has entered the final fiscal year of its “IKO
Mid-term business plan 2017 (three-year-plan) CHANGE & CHALLENGE.” Aiming to bolster its competitiveness andpresence in global markets, the Group has implemented a wide range of initiatives to ensure sustainable growth andimprove corporate value. In addition, two Chinese companies that the Group turned into subsidiaries in January
2017—(UBC (Shanghai) Precision Bearing Manufacturing Co., Ltd. and UBC (Suzhou) Bearing Co., Ltd.)—werebrought into the scope of consolidation from the first quarter of fiscal 2018.
From a sales perspective, amid robust demand for private capital investment and a consistently high level oforders, the Group worked to further cultivate business ties with existing customers and develop new growth markets while
focusing on expanding sales of strategic products, demand for which is expected to increase going forward.
From a production standpoint, the Group strove to strengthen its overseas production system in part byexpanding the range of products produced by overseas subsidiary IKO Thompson Vietnam Co., Ltd. and improving
production efficiency at UBC (Suzhou) Bearing Co., Ltd.
Turning to the Group's operational results, domestic sales increased, especially for electronics-related devices,
including semiconductor manufacturing equipment and mounting equipment, due to active investment insemiconductor-related markets. In North America, sales rose, especially those of electronics-related devices and machine
tools. In Europe, sales grew as demand remained strong mainly for medical equipment and machine tools. In Asia, sales
soared due to stepped up investment in the automation of manufacturing equipment in China, higher demand forsmart-phones and infrastructure-related products in China, and the inclusion of UBC (Shanghai) Precision Bearing
Manufacturing Co., Ltd. as a consolidated subsidiary.
As a result, consolidated net sales for the six-month period under review totaled ¥26,043 million, up 22.5%
year on year. On the earnings front, production efficiency worsened at the beginning of the period following the installationof a new mission-critical system and costs related to said system added to expenses. As a result, operating profit came to¥710 million, rising only 2.3% year on year, and ordinary profit came to ¥790 million, compared to an ordinary loss of ¥20
million for the previous year. Profit attributable to owners of the parent amounted to ¥1,043 million, compared to loss
attributable to owners of the parent of ¥1,070 million in the previous 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 ¥22,770 million, a 21.9% increase compared with the corresponding
period in the previous fiscal year. Sales of Machine Components incline 26.9% to ¥3,272 million.
4

The 2nd quarter of the fiscal year 2018

Business Segment Information
Six-month period ended
September 30, 2017
Millions of Component
yenpercentages
Needle Roller Bearings, LinearMotion Rolling Guides
Machine Components
Total net salesSix-month period ended
September 30, 2016
Millions of Component
yenpercentages

ChangeMillions ofyen

Percentagechange22,77087.4

18,682

87.9

4,088

21.9

3,272
26,043

12.6
100.0

2,578
21,260

12.1
100.0

694
4,783

26.9
22.5

(2) Analysis of Financial Position
Total assets as of September 30, 2017, totaled ¥99,337 million, a decrease of ¥289 million compared with the end of theprevious fiscal year. This mainly comprised growth in notes and accounts receivable-trade of ¥1,217 million, securities of¥3,200 million, investment securities of ¥1,262 million as well as decreases in cash and deposits of ¥4,374 million,
inventories of ¥256 million, accounts receivable-other of ¥638 million and tangible fixed assets of ¥567 million.
Total liabilities amounted to ¥38,802 million, a decrease of ¥2,218 million compared with the end of the previous
fiscal year. This mainly comprised growth in notes and accounts payable-trade of ¥1,586 million, long-term loans payable of¥997 million, deferred tax liabilities of ¥376 million as well as decreases in short-term loans payable of ¥219 million andcorporate bond of ¥5,000 million.
Total net assets stood at ¥60,534 million, an increase of ¥1,929 million compared with the end of the previous
fiscal year. This mainly comprised growth in retained earnings of ¥575 million, net unrealized holding gains onavailable-for-sale securities of ¥895 million and foreign currency translation adjustments of ¥349 million.

Cash Flows
Cash and cash equivalents as of September 30, 2017 totaled ¥17,981 million, a decrease of ¥2,058 million compared withthe end of the previous fiscal year.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥3,924 million, an increase of ¥1,471 million compared with thecorresponding period of the previous fiscal year. The major inflows were profit before income taxes of ¥1,076 million,depreciation and amortization of ¥1,528 million, a decrease in inventories of ¥522 million and increase in notes and accounts
payable-trade of ¥1,465 million while the major outflows were an increase in notes and accounts receivable-trade of ¥1,112million.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥1,447 million, a decrease of ¥1,318 million compared with thecorresponding period of the previous fiscal year. This result was purchase of securities of ¥1,001 million and purchase ofproperty, plant and equipment of ¥852 million.

5

The 2nd quarter of the fiscal year 2018

Cash Flows from Financing Activities
Net cash used in financing activities was ¥4,670 million. This was inflow of ¥874 million at the corresponding period of theprevious fiscal year. The major inflow was proceeds from long-term loans payable of ¥2,100 million, while the major
outflows were repayments of long-term loans payable of ¥1,106 million, redemption of bonds of ¥5,000 million and cash
dividends paid of ¥467 million.

(3) Outlook
Looking forward, net sales are expected to exceed previous predictions as demand remains strong, and, in light of its
first-half results, the Group has revised the full-year operating results forecast announced on May 15, 2017. In light of these
economic conditions and the results of the first half of the fiscal year, the Group is forecasting consolidated net sales of ¥52.5billion, operating profit of ¥2.3 billion, ordinary profit of ¥2.4 billion and profit attributable to owners of the parent of ¥2.0
billion for the year ending March 31, 2018.

6

The 2nd quarter of the fiscal year 2018

6. Consolidated Financial Statements(1) Consolidated Balance Sheets

As of September 30, 2017 and March 31, 2017
Millions of yen
March 31,
September 30,
2017
2017

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
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

7

15,866
14,3303,200
12,058
8,801
4,800
3,152
(11)
62,19920,24013,113－
13,186
7,892
4,837
3,369
(11)
62,62910,202
10,101
20,304
3,111

10,548
10,32420,872
3,374

11,7032,063(45)
13,72137,137

10,4402,356(45)12,751
36,99899,337

99,627

The 2nd quarter of the fiscal year 2018

Millions of yen
March 31,
September 30,2017
2017

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

9,730
181
－3,506455
30
3,904
17,808

8,143
400
5,000
3,133
202
60
3,920
20,861Long-Term Liabilities:
Corporate bondLong-term loans payable
Net defined benefit liabilities
OthersTotal long-term liabilities

10,000
8,758
47
2,188
20,99410,000
8,133
182
1,844
20,160TOTAL LIABILITIES

38,802

41,021

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

9,533
12,88733,377(771)
55,026

9,533
12,88732,801(801)54,420

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

4,871
(7)
244
(39)
5,069
76
363

3,975
6(104)
(82)
3,795
30
359

TOTAL NET ASSETS

60,53458,605TOTAL LIABILITIES AND NET ASSETS

99,337

99,627NET ASSETS

8The 2nd quarter of the fiscal year 2018

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income

For the six-month period ended September 30, 2017 and 2016
Millions of yen
September 30,
September 30,20162017
Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Non-Operating Income:Interest income
Dividend income
Insurance returnOthers

Non-Operating Expenses:
Interest expenses
Sales discounts
Foreign exchange losses
OthersOrdinary Profit (loss)
Extraordinary income:Gain on sales of fixed assets
Compensation for transfer

Profit (loss) before Income Taxes
Income Taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

926,043
18,8237,220
6,510

21,26014,769
6,491
5,796

710

694

5103
72119301596088191

71118－
32
221

60
61730
52906790

(20)

36250
286－－－

1,076(20)

20
1,056
12
1,043

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

The 2nd quarter of the fiscal year 2018

Consolidated Statements of Comprehensive Income

For the six-month period ended September 30, 2017 and 2016
Millions of yen
September 30,
September 30,
2016
2017
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 plansTotal Other Comprehensive Income
Comprehensive Income
Breakdown:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

10

1,056

(1,067)

895
(14)
340
42
1,264
2,320(31)6(1,145)20(1,149)(2,217)2,316
3(2,216)(0)

The 2nd quarter of the fiscal year 2018

(3) Consolidated Statements of Cash Flows

For the six-month period ended September 30, 2017 and 2016
Millions of yen
September 30,
2017

September 30,
2016

Profit (loss) before Income Taxes

1,076

(20)

Depreciation and amortization

1,5281,268

Decrease in account reserve

(30)

(37)

Decrease in net defined benefit liabilities

(134)

(125)

Interest and dividend income

(109)

(101)

Interest expenses

7160

Foreign exchange gains (losses)

(46)

232

Loss on retirement of fixed assets

915

Compensation for transfer(250)－Increase in notes and accounts receivable-trade(1,112)(748)

Decrease in inventories

522

1,345

Increase(Decrease) in notes and accounts payable-trade

1,465

(53)

Increase(Decrease) in accrued expenses

182

(231)

Others-net

308

887

Subtotal

3,479

2,491

Interest and dividend income received

109

101

Interest expenses paid

(81)

(52)

Proceeds from compensation for removal

250－

Income taxes refund (paid)

166

(88)

Net cash provided by operating activities

3,924

2,452

Purchase of property, plant and equipment(852)(2,371)

Purchase of intangible assets

(68)

(210)

Others-net

(525)

(184)

Net cash used in investing activities(1,447)(2,766)

Cash Flows from Operating Activities:

Cash Flows from Investing Activities:

11

The 2nd quarter of the fiscal year 2018

Millions of yen
September 30,
2017

September 30,
2016

Net decrease in short-term loans payable

(211)

－

Proceeds from long-term loans payable

2,100

3,400

Repayments of long-term loans payable(1,106)(1,863)－5,000(5,000)－

Redemption of bonds with subscription rights to shares－(4,999)

Payments for purchase of treasury stock

(0)

(232)

(467)

(472)

1641

Net cash provided by (used in) financing activities(4,670)874

Effect of exchange rate change on cash and cash equivalents

134

(220)

Net increase(decrease) in cash and cash equivalents(2,058)340

Cash and cash equivalents at beginning of year20,040

13,386

Cash and cash equivalents at end of period

17,981

13,726

Cash Flows from Financing Activities:

Proceeds from issuance of bonds
Redemption of bonds

Cash dividends paid
Others-net

12

The 2nd quarter of the fiscal year 2018(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 financialstatements

Calculation of tax expensesTax 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.

13