February 13, 2024

Consolidated Financial Resultsfor Nine Months Ended December 31, 2023
(Japanese Accounting Standards)
Name of the Listed Company: Nitta Gelatin Inc.
Listing:Standard Market of Tokyo Stock Exchange
Stock code:
4977
URL:
http://www.nitta-gelatin.co.jp
Representative:
Koichi Ogata, Representative Director and President
Contact Person:
Norifumi Nagaoka, Director and Executive Officer;
General Manager of General Management Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: February 13, 2024
Scheduled date to commence dividend payments: ―Supplementary explanatory materials prepared:No
Explanatory meeting:
No(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for nine months ended December 31, 2023
(April 1, 2023 to December 31, 2023)(1) Consolidated operating results
Net sales
Nine months ended
December 31, 2023
December 31, 2022

Millions of yen%

Operating income

Ordinary income

Net income
attributable toowners of the parent

Millions of yen

Millions of yen%

Millions of yen

1,712
2,089

(18.0)
75.2(1,610)894%

30,0572.6
1,541(24.8)
29,285
26.8
2,050
102.9
Note: Comprehensive income (loss)
Nine months ended, December 31, 2023: ¥(137) million (–%)
Nine months ended, December 31, 2022: ¥1,601 million (18.7%)

Earnings per share
Nine months ended
December 31, 2023
December 31, 2022

Diluted earnings per share

Yen(88.72)
49.34

Yen

—
—

Note: Diluted earnings per share is not disclosed due to the absence of latent shares with dilution effect.

%

—
43.7

(2) Consolidated financial position
As ofDecember 31, 2023
March 31, 2023

Total assets

Net assets

Millions of yen

Millions of yen

40,13041,61421,754
22,256

Reference: Equity
As of December 31, 2023:
As of March 31, 2023:

Equity ratio
%

4
4

44.6
45.9

¥17,890 million¥19,097 million

2. Cash dividends
First quarter

Cash dividends per share
Second quarter
Third quarter Fiscal year-end

Yen

Fiscal year ended—
March 31, 2023
Fiscal year ending—
March 31, 2024
Fiscal year ending
March 31, 2024 (Forecasts)
Note: Changes to most recent dividend forecasts: None

Annual

Yen

Yen

Yen

Yen

7.00

—

9.00

16.00

8.00

—
8.00

16.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2024
(April 1, 2023 to March 31, 2024)(Percentages indicate year-on-year changes.)

Net sales
Millions of yen

Full-year

40,000Operating income% Millions of yen

2.1

1,700

Net income
Earnings per
attributable toshareowners of the parent

Ordinary income% Millions of yen(24.8)

1,700% Millions of yen(24.4)(2,400)%Yen—(132.23)

Note: Changes to most recent dividend forecasts: Yes

Note:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): None
New:
None
Excluded:None(2) Adoption of special accounting methods for the preparation of quarterly consolidated financial
statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting policies due to revisions to accounting standards and other guidelines: Noneb. Changes in accounting policies due to reasons other than a. above: Nonec. Changes in accounting estimates: None
d. Restatement of revisions: None(4) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of December 31, 2023:
18,373,974 shares
As of March 31, 2023:
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of December 31, 2023:
213,988 shares
As of March 31, 2023:
240,939 sharesc. Average number of shares
For the nine months ended December 31, 2023:
For the nine months ended December 31, 2022:

18,147,366 shares
18,119,135 shares* This financial report falls outside the scope of quarterly review procedures by Certified Public Accountants or
the independent auditor.
* Proper use of earnings forecasts, and other special matters(Note concerning forward-looking statements)
The forward-looking statements, including earnings forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable. Thesestatements do not guarantee that the Company will achieve its earnings forecasts. In addition, actual businessand other results may differ substantially due to various factors. For details on the conditions assumed andthe cautionary notes and items in the financial forecasts, please refer to “(3) Description of Consolidated
Business Forecasts and Other Forward-looking Information” in “1. Qualitative Information Concerning
Quarterly Financial Statements” on page 4 of the Attachment to this report.

Contents
1. Qualitative Information Concerning Quarterly Financial Statements········································· 2(1)Description of Business Results ·················································································2(2)Description of Financial Position(3)

Description of Consolidated Business Forecasts and Other Forward-looking Information ············· 4·············································································· 3

2. Basic Approach to Selection of Accounting Standard ···························································· 4
3. Quarterly Consolidated Financial Statements and Key Notes ···················································5(1)Consolidated Balance Sheets······················································································5(2)Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ········ 7
Consolidated Statements of Income(Third quarter consolidated cumulative accounting period)················································7Consolidated Statements of Comprehensive Income(Third quarter consolidated cumulative accounting period)················································8(3)Notes to Quarterly Consolidated Financial Statements ·······················································9(Note Concerning Going Concern Assumption) ······························································· 9(Note Concerning Significant Changes in Shareholders’ Equity) ············································ 9(Segment Information) ····························································································· 9(Subsequent Events)································································································ 9

11. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results
In the nine months ended December 31, 2023, Japan’s economy experienced a moderate recovery
owing to increased economic activity due to an uptick in personal consumption and growth in inboundtourism demand following the downgrading of COVID-19 under the Infectious Diseases Act. On theother hand, the environment surrounding the Group remains uncertain due to rising prices caused bysurging energy and raw materials prices, the slowdown in the global economy caused by inflation, andthe impacts of exchange rate volatility.
Within its business strategy, the Group has set forth a long-term vision of “Helping to improve
people’s quality of life with collagen” and declared as a specific measure a “Shift away fromgeneral-purpose gelatin products to high-value-added collagen peptides, concentrating resources onmarkets with high growth potential to improve profitability.”
Under this business strategy, the Group worked to expand sales in the Food Solutions, HealthSupport, and Specialties domains, and continued to take steps to revise product prices as appropriate in
response to rising raw material prices. Additionally, after Nitta Gelatin extensively deliberated andcarefully considered measures concerning its commitment to the North American market and therestructuring of operations there, a decision was made to discontinue production at Nitta Gelatin USA,
Inc. based on the assessment that streamlining North American operations and focusing resources on
future growth areas would contribute to the overall enhancement of the Group’s corporate value.
As a result of the above, net sales increased 2.6% year on year to ¥30,057 million. Operating
income decreased 24.8% to ¥1,541 million mainly due to deterioration in productivity at Nitta Gelatin
USA, while ordinary income decreased 18.0% to ¥1,712 million. In addition, primarily due to therecording of an impairment loss of ¥1,762 million resulting from the decision to discontinue
production at Nitta Gelatin USA, net loss attributable to owners of the parent was ¥1,610 million,
compared to net income attributable to owners of parent of ¥894 million in the same period of theprevious fiscal year.
The Nitta Gelatin Group’s collagen business is the Company’s only reporting segment. An
overview of the performance of each sales category is as follows:
Food Solutions
In the food solutions category, sales in Japan remained robust, and product prices were revised as
appropriate, leading to an increase in net sales overall.
In Japan, net sales increased thanks to continued strong demand for gummy candies. The otherfactor behind this was the recovery in demand from the food service industry that resulted in higher
sales of small-portion products for professional use as well as strong sales for professional-use soups
and seasonings, along with convenience store delicatessen items.
Overseas, net sales declined due to lower sales for food applications resulting from inflation andtougher price competition, despite firm demand for gummy candies in North America.
2

As a result, overall sales in the food solutions category increased 2.5% year on year to ¥11,807
million.
Health Support
In the health support category, overall net sales rose amid the increase in sales of gelatin for capsulesand price revisions.
In Japan, net sales of collagen peptide for beauty applications were down year on year due tosluggish sales of collagen products by customers, but net sales of gelatin for capsules increased.
Overseas, sales of gelatin for capsules were strong in North America, but demand for collagen
peptides was weak owing to inflation, resulting in decreased net sales. Asian markets were weak due
to inflation and tougher price competition, so sales of collagen peptide for health and beauty
applications declined. However, sales of gelatin for capsules remained steady in India, resulting in an
increase in net sales.
As a result, overall sales in the health support category increased 7.0% year on year to ¥14,919
million.
Specialties
In the specialties category, net sales decreased by 12.9% year on year to ¥3,331 million amid
decreased sales of calcium phosphate for feed and fertilizer applications resulting from lower market
prices, despite a continuation of strong sales of gelatin for photography applications.

(2) Description of Financial Position(Assets)
Total assets amounted to ¥40,130 million at December 31, 2023, ¥1,484 million lower than at March
31, 2023. This was mainly attributable decreases in other current assets and property, plant andequipment of ¥213 million and ¥1,890 million, respectively, compared to an increase in inventories of¥712 million.
(Liabilities)
Total liabilities stood at ¥18,375 million on December 31, 2023, ¥982 million lower than on March 31,
2023. This was mainly attributable to decreases in short-term loans payable of ¥426 million and othercurrent liabilities of ¥1,077 million, compared to increases in long-term loans payable of ¥600 million(including loans repayable within one year).
(Net assets)
Net assets amounted to ¥21,754 million on December 31, 2023, ¥502 million lower than on March 31,
2023. This was mainly attributable to a decrease of ¥1,918 million in retained earnings, compared toincreases of ¥155 million in valuation difference on other available-for-sale securities, ¥49 million indeferred gains on hedges, ¥478 million in foreign currency translation adjustment, and ¥704 million in3

non-controlling interests.
As a result, the equity ratio stood at 44.6% at December 31, 2023 compared with 45.9% at March
31, 2023.

(3) Description of Consolidated Business Forecasts and Other Forward-looking
Information
For consolidated business forecasts and dividend forecasts for the fiscal year ending March 31, 2024,
please refer to the “Notice Regarding Impairment Loss (Consolidated), Loss on Valuation of Shares of
Subsidiaries and Associates (Non-consolidated), and Revision of the Full-Year Business Forecasts”
released today.
Actual business and other results may differ substantially from projections due to various factors.

2. Basic Approach to Selection of Accounting Standard
The Nitta Gelatin Group plans to prepare its consolidated financial statements based on Japanese
accounting standards in the near future. This is in consideration of the need to ensure that theconsolidated financial statements can be readily compared between different periods and different
companies.
Looking ahead, considering its management policies and various conditions in Japan and abroad,
Nitta Gelatin plans to examine the adoption of International Financial Reporting Standards (IFRS). In
doing so, the Group will take into account trends such as the adoption of IFRS by its peer companies.

43. Quarterly Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

5

Fiscal 2023

3Q Fiscal 2024

(As of March 31, 2023)(As of December 31, 2023)

2,856
8,741
6,910
1,487
4,584
801
(6)
25,376

2,897
8,612
7,678
1,840
4,176
587
(6)
25,785

4,812
2,740
3,566
11,119

3,821
1,942
3,464
9,228

196
308
504

162
288
451

2,730
2,011
(127)
4,614
16,23841,614

3,028
1,770
(135)
4,664
14,344
40,130(Millions of yen)

Fiscal 2023
(As of March 31, 2023)
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

3Q Fiscal 2024
(As of December 31, 2023)

2,818
3,905
2,084
241
256
3,404
12,711

3,058
3,478
2,238
144
138
2,327
11,385

4,118
1,586
942
6,646
19,358

4,564
1,590
835
6,989
18,375

3,144
2,964
11,486(160)
17,434

3,144
2,966
9,567
(143)
15,535

842

998

(3)
841
(17)
1,662
3,159
22,256
41,614

45
1,320
(9)
2,354
3,864
21,754
40,130(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(Third quarter consolidated cumulative accounting period)(Millions of yen)

Nine Months Ended
December 31, 2022
(From April 1, 2022
to December 31, 2022)

Nine Months Ended
December 31, 2023
(From April 1, 2023
to December 31, 2023)

Net sales
Cost of sales

29,28522,26730,05723,750Gross profit on sales

7,018

6,306

Selling, general and administrative expenses

4,967

4,765

Operating income

2,050

1,541

2
59
43
60
50

28
48
45
160
52

Total non-operating income

217

335

Non-operating expenses
Interest expenses
Equity in losses of affiliates
Other

137
33
8

116
26
21

Total non-operating expenses

178

164

2,089

1,712

0
—
46

0
2
—

46

2

—
5

0
23

—

2

55
31

—
1,762

Non-operating income
Interest income
Dividend income
Rental income
Foreign exchange gains
Other

Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Gain on donation of noncurrent assets
Compensation for expropriation
Total extraordinary gains
Extraordinary losses
Loss on sale of noncurrent assets
Loss on retirement of noncurrent assets
Loss on tax purpose reduction entry of non-current
assetsExpenses related to relocation
Impairment loss
Total extraordinary losses

92

1,789

Income (loss) before provision for income taxes

2,043

(74)

Income taxes payable

605

881

Net income (loss)

1,437

(956)

Net income attributable to non-controlling interests

543

653

Net income (loss) attributable to owners of the parent

894(1,610)7

Consolidated Statements of Comprehensive Income(Third quarter consolidated cumulative accounting period)(Millions of yen)

Nine Months Ended
December 31, 2022
(From April 1, 2022
to December 31, 2022)
1,437

Net income (loss)
Other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains on hedges
Foreign currency translation adjustments
Pension liability adjustment
Share of other comprehensive losses of associates
accounted for using equity method
Total other comprehensive income
Total comprehensive income (loss)
Comprehensive income (loss) attributable to:
Owners of the parent
Non-controlling interests

8

Nine Months Ended
December 31, 2023
(From April 1, 2023
to December 31, 2023)
(956)

0

156

(53)
164
(74)

50
517
8

126

86

164
1,601

818
(137)

1,080
521

(917)
780

(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
The Company disposed of 31,200 shares of treasury stock effective August 4, 2023 as restricted
share-based remuneration based on a resolution at the Board of Directors meeting held on July 20,
2023. In addition, in the nine months ended December 31, 2023, the Company acquired 4,200
restricted shares. As a result of this, capital surplus increased by ¥2 million and treasury stock
decreased by ¥17 million in the third quarter under review. Capital surplus totaled ¥2,966 million andtreasury stock ¥143 million at December 31, 2023.
(Segment Information)
Ⅰ Nine Months Ended December 31, 2022 (From April 1, 2022 to December 31, 2022)
The Nitta Gelatin Group’s collagen business has become the Company’s only reporting
segment, so information is omitted.
Ⅱ Nine Months Ended December 31, 2023 (From April 1, 2023 to December 31, 2023)
The Nitta Gelatin Group’s collagen business has become the Company’s only reporting
segment, so information is omitted.
(Subsequent Events)
At a Board of Directors’ meeting held on January 25, 2024, the Company decided to discontinue
production activities at its consolidated subsidiary, Nitta Gelatin USA, Inc., and to close the plant.
1. Background to discontinuing production
Nitta Gelatin USA, Inc. was established in December 2004 in North Carolina, the United States, tomeet demand in the North American and Japanese markets, and has since been engaged in the
manufacture and sale of such products as gelatin and collagen peptides derived from porcine skin.
Despite past efforts to improve production structure and operational efficiency, the environment
has proven challenging, marked by declining productivity and the recent surge in energy costs andlabor expenses in the United States. Furthermore, the highly competitive market environment is
expected to exert downward pressure on product selling prices going forward.
Against this backdrop, Nitta Gelatin extensively deliberated and carefully considered measuresconcerning its commitment to the North American market and the restructuring of operations there.
Based on the assessment that streamlining North American operations and focusing resources on
future growth areas would contribute to the overall enhancement of the Group’s corporate value, adecision was made to discontinue production at Nitta Gelatin USA, Inc.
Note that Nitta Gelatin Canada, Inc. will continue to produce porcine gelatin. In addition, the sales
9structure in North America remains unchanged.
2. Date of discontinuation
January 31, 2024
3. Overview of Nitta Gelatin USA, Inc.
(1)

Company name

Nitta Gelatin USA, Inc.

(2)

Address

4341 Production Dr, Fayetteville, NC 28306, USA(3)

Representative

Keiji Suzuki, President and CEO(4)

Business

Production of porcine gelatin and porcine and bovine collagen peptides(5)

Capital stock$0 thousand(6)

Established

December 2004

Major shareholder andNitta Gelatin Holding, Inc. (wholly owned subsidiary of the Company)

shareholding ratio

100%

(7)

4. Impacts on performance
In the nine months ended December 31, 2023, an impairment loss of US$12,347 thousand (¥1,762
million) was recorded as an extraordinary loss.
In addition, as a result of the decision by the Board of Directors at the meeting held on January 25,
2024 to cease production, the Company intends to record a loss on liquidation of business, including
special retirement expenses and costs for the removal of production facilities, in the current fiscal year.
The amount of the impact is currently being investigated.

10