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

November 12, 2020

Consolidated Financial Reportfor the Second Quarter of the Fiscal Year Ending March 31, 2021
<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, 2020
December 9, 2020
Yes
Yes (Targeted at institutional investors and analysts)

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

1. Consolidated Operating Performance for the Six-month Period Ended September 30, 2020
(From April 1, 2020 to September 30, 2020)(1) Results of Consolidated Operations(Millions of yen)

September 30, 2020
September 30, 2019

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profitPercentagechange20,25825,443(20.4)(13.2)

(748)
1,210

―
(52.0)

(757)
942

―
(67.0)

Note: Comprehensive income
Six-month period ended September 30, 2020:
99 million yen―%
Six-month period ended September 30, 2019:△147 million yen―%: 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, 2020
September 30, 2019

Profitattributable toowners ofparent(588)
297

PercentagechangeEarnings
per share(Yen)―(85.6)(8.20)
4.14

1

Dilutedearnings
per share
(Yen)
―
4.13

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

(2) Consolidated Financial Position
Total assets(Millions of yen)
Equity ratio
Net assets(%)
per share (Yen)
57.2
800.65
58.4
796.63

Net assets

September 30, 2020
98,96056,788March 31, 2020
98,11857,439Reference: Shareholders’ equity
As of September 30, 2020: 56,640 million yen
As of March 31, 2019:57,291 million yen

2. Dividends(Yen)
Base date
2021(Forecast)
2021
2020

June 30

September 30

－
－

4.00
7.50

Dividends per share
December 31－

March 31
4.00

Full Fiscal Year
8.00

－

5.00

12.50

Note: Change in the current three-month period ended September 30, 2020, to dividend forecast: Yes

3. Forecast of Consolidated Operating Performance for the Fiscal Year Ending March 31, 2021

Year ending March
31, 2021

Year ending March
31, 2021

Net sales

PercentagechangeOperatingprofitPercentagechangeOrdinary
profit(Millions of yen)
Percentagechange41,500(12.6)(1,000)

―

(800)

―

Profitattributable toowners ofparentPercentagechangeEarnings
per share
(Yen)

(640)

―

(8.98)

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, 2020, to consolidated operating performance
forecast: Yes

2

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

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, 2020:
As of March 31, 2020:

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

Number of treasury stock
As of September 30, 2020:
As of March 31, 2020:

2,758,425 shares
1,584,793 shares

Average number of shares outstanding at period-end
Six-month period ended September 30, 2020:
Six-month period ended September 30, 2019:

71,772,645 shares
71,737,936 shares

Note: The number of treasury stock as of the fiscal year-end includes Nippon Thompson shares held by the share-issuing trust
account for executives and by the employee stock ownership plan (ESOP) trust account (1,762,900 shares as of 2Q
FY2021 and 121,700 shares as of March 31, 2020). In the calculation of the average number of shares during the fiscal
year (cumulative for the quarter), Nippon Thompson shares held by the share-issuing trust account for executives andthe ESOP trust account are included in excluded treasury stock (421,366 shares as of 2Q FY2021 and 296,083 shares
as of 2Q FY2020).

These consolidated financial report 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, 2020. 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, 2020

5. Operating Results and Financial Position(1) Analysis of Operating Results
In the six-month period ended September 30, 2020, economic conditions remained very harsh due to rapidly worsening
economies worldwide as the COVID-19 pandemic gathered momentum. Although China and other countries graduallyrestarted economic activities and signs of recovery emerged, concerns grew about another wave of infections, and theoutlook remained unclear.
Under these circumstances, placing the utmost priority on ensuring the safety of its customers, suppliers andemployees, the Group has implemented robust measures aimed at preventing the spread of the novel coronavirus in thecourse of its efforts to maintain its product supply structure. Also, in line with “IKO Mid-term business plan 2020
(three-year-plan) CHANGE & CHALLENGE ~Next Stage –ACCOMPLISH–,” the Group has been focused onrealizing sustainable growth and establishing a highly profitable organization. To this end, we are pushing ahead withmeasures to solve priority issues through inter-departmental efforts and to improve efficiency in all operations.
From a sales perspective, despite significant restrictions attributable to the fallout from the novel coronavirus
pandemic, the Group carried out proactive sales activities employing a flexible approach via, for example, the use of
web-conferencing systems. The Group also worked to cultivate business ties with existing customers and expanded salesof strategic products for which demand is expected to grow going forward.

In terms of product development, we worked to expand our lineup of high-value-added products that
help further reduce the size and weight of machinery. This included the launch of our smallest ever Super Slim Type
Crossed Roller Bearings (CRBT), the thinnest and lightest product in the IKO cross roller bearing series with thesame high durability and rotational accuracy.
From a production standpoint, our production subsidiary UBC (Suzhou) Bearing Co., Ltd is upgrading its
stable supply system for IKO brand products and constructing a more effective production system through, for example,
measures focused on ongoing improvement in frontline operations, while striving to enhance price competitiveness acrossthe entire supply chain.
The Group’s sales remained weak as private capital investment demand decelerated worldwide, reflecting
worsening economic conditions due to the COVID-19 pandemic. In the domestic market, although sales ofelectronics-related devices remained steady, sales of machine tools in particular, and thus net sales, declined. In North
America, net sales decreased as sales for precision machinery and commercial products stagnated despite strong sales ofelectronics-related devices. In Europe, net sales decreased due to a deceleration in sales for general industrial machineryand commercial products, although demand increased for precision machinery. In China, the economy showed signs ofgradual recovery thanks to the early resumption of economic activities and net sales increased. In other regions, economic
activities stalled due to restrictive measures, including a lockdown in India, and net sales declined.
As a result, consolidated net sales for the six-month period under review totaled ¥20,258 million, down 20.4%
year on year. On the earnings front, even though we implemented cost reduction measures with restrictions of sales
4

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

activities, due mainly to decreased revenue and production, operating loss came to ¥748 million, compared with operating
profit of ¥1,210 million for the corresponding period of the previous fiscal year, and ordinary loss was ¥757 million,
compared with ordinary profit of ¥942 million for the corresponding period of the previous fiscal year. Loss attributable toowners of the parent amounted to ¥588 million, compared with profit attributable to owners of the parent of ¥297 million
for the corresponding period of the previous fiscal year.
In addition, the value of needle roller bearings and linear motion rolling guides produced during the six-month
period under review, totaled ¥18,270 million, down 26.0% year on year (based on average sales prices). The value oforders placed for these products and other machine components amounted to ¥18,608 million, down 9.7% 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 ¥18,107 million, a 20.0% decrease compared with the corresponding
period of the previous fiscal year. Sales of Machine Components decline 23.2% to ¥2,150 million.
Business Segment Information
Six-month period ended
September 30, 2020
Millions of Component
yenpercentages
Needle Roller Bearings, Linear
Motion Rolling Guides
Machine Components
Total net sales

Six-month period ended
September 30, 2019
Millions ofComponent
Yenpercentages

ChangeMillions ofyen

Percentagechange18,10789.4

22,64289.0△4,535

△20.0

2,150
20,258

10.6
100.0

2,800
25,443

11.0
100.0

△649
△5,185

△23.2
△20.4

(2) Analysis of Financial Position
Total assets as of September 30, 2020, totaled ¥98,960 million, an increase of ¥841 million compared with the end of theprevious fiscal year. This mainly comprised increases in cash and deposits of ¥2,477 million and investment securities of¥1,210 million as well as decreases in notes and accounts receivable-trade of ¥1,020 million, inventories of ¥250 million,
accounts receivable-other of ¥582 and income taxes receivable of ¥772 million.
Total liabilities amounted to ¥42,171 million, an increase of ¥1,492 million compared with the end of theprevious fiscal year. This mainly comprised increases in long-term loans payable of ¥3,479 million and lease obligations of¥420 million as well as decreases in notes and accounts payable-trade of ¥1,232 million and short-term loans payable of¥1,200 million.
Total net assets stood at ¥56,788 million, a decrease of ¥650 million compared with the end of the previous fiscal
year. This mainly comprised increases in treasury stock of ¥307 million and valuation difference on available-for-salesecurities of ¥868 million as well as decreases in retained earnings of ¥1,030 million and foreign currency translation

adjustments of ¥224 million.

5

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

Cash Flows
Cash and cash equivalents as of September 30, 2020 totaled ¥15,324 million, an increase of ¥2,476 million compared withthe end of the previous fiscal year.
Cash Flows from Operating Activities
Net cash provided in operating activities amounted to ¥2,500 million. This was outflow of ¥525 million at the corresponding
period of the previous fiscal year. The major inflows were depreciation and amortization of ¥1,945 million, a decrease innotes and accounts receivable-trade of ¥1,026 million and income taxes refund of ¥624 while the major outflows were loss
before income taxes of ¥752 million and a decrease in trade payables of ¥1,270 million.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥1,355 million, a decrease of ¥2,076 million compared with thecorresponding period of the previous fiscal year. This result was purchase of property, plant and equipment of ¥1,310
million.
Cash Flows from Financing Activities
Net cash provided by financing activities was ¥1,393 million, an increase of ¥593 million compared with the corresponding
period of the previous fiscal year. The major inflow was proceeds from long-term loans payable of ¥5,501 million, while themajor outflows were repayments of short-term loans payable of ¥1,200 million, repayments of long-term loans payable of¥2,021 million, cash dividends paid of ¥361 million and purchase of treasury shares of ¥649 million.

(3) Outlook
Earlier, we did not release a full-year consolidated forecast for the fiscal year ending March 31, 2021 due to the difficulty inmaking a rational calculation of the impact of the COVID-19 pandemic on the Group’s business activities. Now, based on
the operating results calculated for the second cumulative consolidated quarter and data on demand trends based on
currently available information, we intend to release a forecast.
Regarding forecasts going forward, we expect the downward trend in private capital investment to continue
worldwide due to the still unclear outlook for the global economy amid a re-expansion in COVID-19 infections andU.S.-China trade tensions. In light of these conditions, the Group is forecasting consolidated net sales of ¥41,500 million,
operating loss of ¥1,000 million, ordinary loss of ¥800 million and loss attributable to owners of the parent of ¥640 million
for the year ending March 31, 2021.

6

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

6. Consolidated Financial Statements(1) Consolidated Balance Sheets

As of September 30, 2020 and March 31, 2020
Millions of yen
March 31,
September 30,
2020
2020

ASSETS
Current Assets:
Cash and deposits
Notes and accounts receivable-tradeFinished 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

15,402
10,65016,023
10,808
6,651
1,200
(20)
60,717

12,924
11,671
16,196
11,122
6,414
2,624
(14)
60,94011,752
13,291
25,044
1,883

11,50013,242
24,742
2,107

7,919
3,450
(55)
11,31338,242

6,708
3,675
(56)
10,32837,17898,96098,118NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

Millions of yen
March 31,
September 30,
2020
2020

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

6,599
－
5,000
4,846
196
31
－
4,491
21,167

7,832
1,200
－
4,130
225
63
170
4,132
17,754

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

10,000
9,639
17
1,346
21,00415,000
6,876
33
1,014
22,92442,171

40,679

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

9,533
12,88633,957(1,135)55,241

9,533
12,88634,988(828)
56,579

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

2,233
―
(719)
(115)
1,399
148

1,365
0
(494)
(160)
711
148

TOTAL NET ASSETS

56,78857,439TOTAL LIABILITIES AND NET ASSETS

98,96098,118TOTAL LIABILITIESNET ASSETS

8

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

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

For the six-month period ended September 30, 2020 and 2019
Millions of yen
September 30,
September 30,
2019
2020
Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Profit (Loss)
Non-Operating Income:Interest income
Dividend income
Subsidies for employment adjustment
Others

Non-Operating Expenses:
Interest expenses
Sales discounts
Foreign exchange loss
Furlough expenses
OthersOrdinary Profit (Loss)

Extraordinary Income:Gain on sales of investment securities

Profit (Loss) Before Income Taxes
Income Taxes
Profit (Loss)
Profit (Loss) attributable to non-controlling interests
Profit (Loss) attributable to owners of parent

920,25814,786
5,471
6,219

25,443
17,172
8,270
7,059

(748)

1,210

5
92
97
152
348

7
129
－
241
377

59
22
108
124
42
357

44
29
549
―
22
645

(757)

942

4
4

－
－

(752)

942

(164)
(588)
―
(588)

636
305
8
297

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

Consolidated Statements of Comprehensive Income

For the six-month period ended September 30, 2020 and 2019
Millions of yen
September 30,
September 30,
2019
2020
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 interests

10

(588)

305

868
(0)
(224)
44
687
99

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

99
―

(157)
9

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

(3) Consolidated Statements of Cash Flows

For the six-month period ended September 30, 2020 and 2019
Millions of yen
September 30,
2020

September 30,
2019

Profit (Loss) before Income Taxes

(752)

942

Depreciation and amortization

1,945

1,895

Decrease in account reserve

(25)

(27)

Decrease in net defined benefit liabilities

(23)

(25)

Interest and dividend income

(98)

(136)

Interest expenses

59

44

Foreign exchange gains

92

247

Loss on retirement of fixed assets

19

14

Decrease(Increase) in notes and accounts receivable-trade

1,026

2,522

Decrease(Increase) in inventories

176(3,477)(1,270)(865)

Increase(Decrease) in accrued expenses

46

(56)

Others-net

638

(200)

Subtotal

1,833

876

Interest and dividend income received

98

136

Interest expenses paid

(55)

(44)

Income taxes paid (refund)624(1,493)

Net cash provided by (used in) operating activities

2,500

(525)

(1310)(3,226)

Purchase of intangible assets

(81)

(91)

Others-net

35

(114)

(1,355)(3,432)

Cash Flows from Operating Activities:

Increase(Decrease) in notes and accounts payable-trade

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, 2020

Millions of yen
September 30,
2020

September 30,
2019

Net decrease in short-term loans payable(1,200)―

Proceeds from long-term loans payable

5,501

3,000

Repayments of long-term loans payable(2,021)(1,678)Cash dividends paid

(361)

(539)

Purchase of treasury shares

(649)

(0)

Others-net

124

18

Net cash provided by (used in) financing activities

1,393

800

Effect of exchange rate change on cash and cash equivalents

(61)

(114)

Net decrease in cash and cash equivalents

2,476(3,272)

Cash and cash equivalents at beginning of year

12,847

17,023

Cash and cash equivalents at end of period

15,324

13,751

Cash Flows from Financing Activities:

12

NIPPON THOMPSON CO., LTD. (6480)
Financial Results for the Second Quarter Ended September 30, 2020

(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. However, in cases where tax expenses calculations using theestimated effective tax rate produce results that are notably unreasonable, tax expenses are calculated by multiplying profit(loss) before income taxes by the statutory tax rate, with consideration given to the recoverability of deferred tax assets.

(7) Additional Information
Accounting Estimates on the Impact of COVID-19
As COVID-19 infections spread, we experience a decline in net sales due to lower orders throughout theGroup. Nevertheless, we have made various accounting estimates assuming that the effects of COVID-19
will be gradually eased in for the most part during the fiscal year ending March 31, 2021.

13