(Unaudited)

July 11, 2018
MORITO CO., LTD.
Financial Statement (Unaudited)
For the Second Quarter of the Fiscal Year ended November 30, 2018
(Translated from the Japanese original)
Corporate Information
Code：9837 Listings in First Section of the Tokyo Stock Exchange(URL http : www.morito.co.jp/english/index.html )Representative： Takaki Ichitsubo
Representative Director and President
Contact：Kenji Kojima
Director, Corporate management
Telephone: +81-6-6252-3551
July 13, 2018
August 8, 2018
YesYes(Amounts rounded down)
1. Consolidated Financial Results for the Second Quarter of the Fiscal Year 2018(December 1, 2017
through May 31, 2018)(1) Consolidated Financial Results(Percentages indicate year-on-year changes)
Net sales
Operating income
Ordinary income
Net income%%%%Millions of yen
Millions of yen
Millions of yen
Millions of yen
2Q of FY 2018
20,922
4.3
793
20.2
759
12.8
561 △82.5
2Q of FY 2017
20,057 △1.4659
673
16.1
3,217
804.6
△6.6
Scheduled date of filing of Quarterly Report:

Scheduled date of dividend payment:
Supplementary explanation material for quarterly financial results:
Presentation meeting for quarterly financial results:(Note) Comprehensive income : 40million yen (△99.1%) (2Q of FY 2018)

2Q of FY 2018
2Q of FY 2017

Net incomePer share
Yen
20.42
115.26

4,323million yen ( -%)(2Q of FY 2017)

Fully diluted net
Income per share
Yen
20.37
－(2) Consolidated Financial Position
Total assets
Millions of yen
2Q of FY 2018
46,686
FY 2017
43,473

Net assets
Millions of yen
32,27432,615(Reference) Equity capital : 32,231million yen (2Q of FY 2018)

Equity ratio%
69.0
74.9
32,581million yen (FY 2017)

2. DividendsFirstquarter-end
Yen

Dividends per share
SecondThird
Fiscalquarter-end
quarter-end
year-end
Yen
Yen
Yen
14.00
14.00
12.50

FY 2017
FY 2018
FY 2018
12.50(Forecast)(Note) Revisions of dividend forecast to the latest announcement: None

1

Annual
Yen
28.00
25.00

(Unaudited)

3. Consolidated Forecast for FY 2018 (December 1, 2017 through November 30, 2018)(Percentages represent changes from corresponding period of previous year)
Net Sales
Millions ofyen

Full year

44,000Ordinary profit

Operating income%
6.3

Millions ofyen

2,000Millions ofyen%
17.1

1,900%Net income
per share

Net income
Millions ofyen

11.5

1,300%
△60.7

Yen
47.27

*Notes(1) Changes of important subsidiaries during the period (changes of specific subsidiaries in accordance withchanges in the scope of consolidation) : Yes
Newly included : Maneuverline Inc.
Extended company : None
(2) Adoption of special accounting treatment for preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies and changes or restatement of accounting estimates(i)
Changes in accounting policies caused by revision of accounting standards:(ii)
Changes in accounting policies other than (i):(iii)
Changes in accounting estimates:(iv)
Restatements:

None
None
None
None

(4) Number of outstanding shares (common shares）(i) Number of outstanding shares, including treasury shares at end of period:
30,800,000 shares(as of May 31, 2018)30,800,000 shares(as of November 30, 2017)(ii) Number of shares of treasury stock at end of period:
3,294,100 shares(as of May 31, 2018)
3,300,100 shares(as of November 30, 2017)(iii) Average outstanding number of shares during the period:
27,501,883 shares(the 2Q of FY2018)
27,915,850 shares(the 2Q of FY2017)*This quarterly financial summary does not need to undergo an audit.
*Disclosure and other special notes regarding performance forecasts
The forecast in this quarterly statement is based on information available to management as of the date on
which these performance-related figures were disclosed, and various factors may cause actual results to differ
from these forecasts.
For issues to keep in mind when using the forecasts and criteria conditioned upon the forecasts, please refer to“1. Qualitative Information for the Period under Review (2) Forecast of Consolidated Business Results and Other
Forward-looking Information.” on page 5.
We have also introduced “Stock Granting Trust (J-ESOP)” and “Board Incentive Plan (BIP)”. Consequently, theshares held by Trust and Custody Service Bank, ltd. and The Master Trust Bank of Japan, ltd. are included in thetreasury stock.

2

(Unaudited)Index
1. Qualitative Information for the Period under Review ......................................................................................4(1) Overview of Business Performance .............................................................................................................4(2) Forecast of Consolidated Business Results and other Forward-looking Informantion ........................5
2. Matters Concerning Summary Information ......................................................................................................5(1) Changes in Important Subsidiaries during the period under Review ......................................................5(2) Adoption of Special Accounting Treatment for Preparing Quarterly Consolidated Financial
Statement ..............................................................................................................................................................5(3) Changes in Accounting Policies, Changes in Accounting Estimates and Revision Restated..............5(4) Additional Information ...................................................................................................................................5
3. Quarterly Consolidated Financial Statements .................................................................................................6(1) Quarterly Consolidated Balance Sheets......................................................................................................6(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income...................................................................................................................................................................8(3) Consolidated Cash Flows............................................................................................................................10(4) Notes regarding Quarterly Consolidated Financial Statements ............................................................. 11[Notes on assumption of going concern] ............................................................................................................. 11[Notes on a Significant Change in Shareholders’ Equity] ....................................................................................... 11[Segment Information] ............................................................................................................................................. 11(Segment Information) ............................................................................................................................................. 11(Business Combinations) ........................................................................................................................................123

(Unaudited)

1. Qualitative Information for the Period under Review(1) Overview of Business Performance
In the second quarter (From 1st December, 2017 to 31st May, 2018) of the fiscal year ended November 30th,2018 (From 1st December, 2017 to 30th November, 2018), the Japanese economy has shown signs of gradual
recovery by improving employment situation and capital investment because corporate performance hascontinued stable.
In the global economy, the uncertain situation continued due to the uncertainty of overseas economies andinstability of raw material prices, and increase of uncertain international circumstances in Asia although theimproving economic in the U.S. was progressing.
In such a situation, our group is accelerating a growth strategy by the development of value-added Japanese
items, expansion of a global sales channel under the 7th mid-term management plan, and will promote therealization of value creation which the era seeks, expand our business in not only existing market such ASEAN,
china, western, but also in untapped market.
As a result, in the current quarterly performance reaches net sales ¥20,922 million (increased by 4.3% from ayear earlier), operating income ¥793 million (increased by 20.2% from a year earlier), ordinary income ¥759million (increased by 12.8% from a year earlier), net income ¥561 million (decreased by 82.5% from a yearearlier).
The exchange rate used for the oversea subsidiaries’ consolidated financial statement of the current quarterend as below:
USD
EUR
RMB
HKD
TWD
VND
THB

1Q Oct-Dec
112.98 (109.43)
133.01 (117.86)
17.08 (15.99)
14.47 (14.11)
3.75 (3.45)
0.0050 (0.0048)
3.43 (3.09)

2Q Jan-Mar
108.23 (113.61)
133.15 (121.04)
17.04 (16.56)
13.83 (14.64)
3.70 (3.66)
0.0048 (0.0050)
3.43 (3.24)*() is the exchange rate of the quarter of FY2017.
Segment information as below[Japan]As for the apparel division, sales of the accessories for sports apparel manufacturer was decreased, however
sales of the accessories for uniform/working wear and mass retailer were increased.
In the consumer product division, sales of accessories for health-related items such as medical supporters,
sales of products for footwear-related, hardware store/working wear store, retailers and automobile interior
components, and rental/cleanup of kitchen supplies were increased.
As a result, net sales were ¥14,804 million (increased by 6.6% from a year earlier).
[Asia]
As for the apparel division, sales of the accessories for Japanese apparel manufacturers in Shanghai wereincreased, however sales of the accessories for Europe and the US apparel manufacturers in Hong Kong weredecreased.
In the consumer product division, sales of the automobile interior component for Japanese auto makers inShanghai were increased, however sales of accessories for video equipment in Hong Kong and Thailand weredecreased.
As a result, net sales were ¥3,093 million (decreased by 9.6% from a year earlier).
[Europe and the U.S.]
As for the apparel division, sales of the accessories in Europe and the US were increased.
In the consumer product division, sales of accessories for video equipment in Europe were decrease ,however sales of automobile interior component for Japanese auto maker in Europe and the US wasincreased.
As a result, net sales were ¥3,023 million (increased by 10.0% from a year earlier).
4

(Unaudited)(2) Forecast of Consolidated Business Results and other Forward-looking Informantion
Currently, there has been no change in the consolidated forecast of FY2018 which was announced in 12thJanuary, 2018.

2. Matters Concerning Summary Information(1) Changes in Important Subsidiaries during the period under Review
In Consolidated Financial Resulets of the Second Quarter of the Fiscal Year 2018, as a result of acquiring ofshares of Manueverline Inc., Manueverline Inc. and its 3 subsidiaries are included in the scope of Consolidated
Financial Resulets of the Second Quarter of the Fiscal Year 2018.
Since the date of the fiscal year end of these subsidiaries and our consolidated closing date are different, only
the balance sheet is consolidated using the financial statements based on the provisional settlement thatconsiders March 31, 2018 as the settlement date of the Second Quarter of the Fisccal Year 2018.
(2) Adoption of Special Accounting Treatment for Preparing Quarterly Consolidated Financial Statement
Not applicable(3) Changes in Accounting Policies, Changes in Accounting Estimates and Revision Restated
Not applicable(4) Additional Information

Not applicable5

(Unaudited)

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets
FY 2017(As of November 30, 2017)
Thousands of yen

FY 2018(As of May 31, 2018)
Thousands of yenAssets
Current assets
Cash and deposits
Notes and accounts receivable
Inventory
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Land
Other tangible fixed assets
Total tangible fixed assets
Intangible fixed assets
Goodwill
Other Intangible fixed assets
Total intangible fixed assets
Investments and other fixed assets
Investment securities
Net defined benefit asset
Other fixed assets
Allowance for doubtful accountTotal investments and other fixed assets
Total fixed assetsDeferred assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable
Short-term loans payable
Current portion of bonds
Current portion of long-term debt
Accrued tax payable
Reserve for bonuses
Reserve for director’s bonuses
Other current liabilities
Total current liabilities
Fixed liabilities
Bonds payable
Long-term debt
Provision for retirement benefit by stock
Provision for director’s retirement benefit
Provision for director's retirement benefit by stock
Provision for environmental measures
Net defined benefit liability
Other fixed liabilities

12,235,613
10,797,872
4,305,396
730,080

10,284,228
11,011,347
5,115,107
1,005,413△35,215
28,033,747△39,906
27,376,189

2,526,981
3,356,661
5,883,643

3,173,309
5,046,804
8,220,114

2,728,172
1,276,348
4,004,521

3,716,210
1,147,180
4,863,390

4,551,840
289,728
765,704

4,831,755
290,309
1,167,723△70,037
5,537,236
15,425,400
14,00443,473,152△75,155
6,214,632
19,298,137
11,903
46,686,230

4,317,325
50,000400,000
161,081
481,935
208,130
66,7991,266,606
6,951,879

4,424,001
200,000
400,000
616,519
283,542
169,147
56,2281,402,526
7,551,965

1,000,000

800,000
2,695,423
27,86944,833
61,296
19,057
906,8902,304,264
6,859,632
14,411,597－
24,761
41,08351,552
20,217
916,630
1,851,890
3,906,135
10,858,014

Total fixed liabilities
Total liabilities

6

(Unaudited)7

(Unaudited)(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income
The Second Quarter accounting period8

(Unaudited)

Quarterly Consolidated Statements of Comprehensive Income
The Second Quarter accounting period9

(Unaudited)(3) Consolidated Cash Flows10

(Unaudited)(4) Notes regarding Quarterly Consolidated Financial Statements[Notes on assumption of going concern]
Not applicable.
[Notes on a Significant Change in Shareholders’ Equity]
Not applicable[Segment Information](Segment Information)
1. The Second quarter of FY 2017 (December 1, 2016 through May 31, 2017)(1) The information on net sales, income or loss by reportable segment
Reportable Segment

Net Sales
Sales to externalcustomersInter segment sales
and transfer
Total
Segment income(Thousands of yen)
Consolidated
Adjustment
Statement(Note 1)
Amount(Note 2)

JapanAsia

EU and US

Total

13,883,590

3,423,616

2,749,836

20,057,043－

20,057,043

1,136,080

1,197,574

30,7392,364,394△2,364,394－

15,019,670
567,395

4,621,190
172,118

2,780,576
70,6382,241,437
810,152△2,364,394△150,232

20,057,043
656,919(Notes)Adjustment of △150,232 thousand yen includes △154,263 thousand yen-corporate expenses that are notdistributed to each reportable segment and other 4,030 thousand yen.
The amounts for income or losses in the reportable segments were subsequently adjusted with the amount ofoperating income on the quarterly consolidated profit and loss statement.

2. The Second Quarter of FY 2018 (December 1, 2017 through May 31, 2018)(1) The information on net sales, income or loss by reportable segment
Reportable Segment

Net Sales
Sales to externalcustomers
Inter segment sales
and transfer
Total
Segment income(Thousands of yen)
Consolidated
Adjustment
Statement(Note 1)
Amount(Note 2)

JapanAsia

EU and US

Total

14,804,879

3,093,7533,023,467

20,922,099－

20,922,099

1,234,781

1,594,290

28,8702,857,943△2,857,943－

16,039,660
674,1034,688,043
199,292

3,052,338
80,20623,780,042
953,602△2,857,943△160,448

20,922,099
793,154(Notes)1. Adjustment of △160,448 thousand yen includes △143,858 thousand yen-corporate expenses that are notdistributed to each reportable segment and other △16,589 thousand yen.
2. The amounts for income or losses in the reportable segments were subsequently adjusted with the amountof operating income on the consolidated profit and loss statement.

(2) Impairment loss on fixed assets or information on goodwill for each reporting segment(Significant fluctuation in the amount of goodwill)
Goodwill is posted in Japan segment by acquiring Manueverline Inc.
The increase in goodwill due to this event is 1,218,724 thousands yen in Consolidated Financial Resultsof the Second Quarter of FY2018. However, the above amount is the provisionally calculated amount.

11

(Unaudited)(Business Combinations)<Buiness combinations through acquisition>
1. Outline of business combination(1) Name of the acquired company and its business
Manueverine Inc.

Import and sell of goods for Marine leisure, Snowboarding, and apparel supplies.
(2) Main reasons for the business combination
Morito Group has been steadily developing business so far with its basic policy of management
specializing in apparel-related accessories for clothing and footwear, and consumer products for personalbelongings.
We position M&A as one of the priority measures under the 7th mid-term management plan. Our target ofM&A is that the business of the target company are within the scope of our organic business area or its
surrounding area, a niche top, its stability, and some synergies with our business.
On the other hand, although the Company is maintaining a very stable achievement in the wholesaleindustry as a top runner in importing and selling goods for marine leisure, snowboarding, apparel supplies,etc., the Company was heirless. Then, as a result of these, the speculation of two companies matched.
In addition, we anticipate the synergy of switching accessories used for products that the Company
purchases from third-party to our core products such as metal, plastic and fiber accessories, or of anincrease opportunities for sales at each other's sales channels.
(3) Date of business combination
April 2, 2018(4) Legal form of the business combinations
Acquisition of 100% share of Maneuverline Inc.

(5) Name of the entity after the business combination
No changes(6) Percentage share of voting rights of acquired entity
100%(7) Main reason for deciding to acquire the company
It is because Morito Co., Ltd. has acquired 100% share of Maneuverline Inc. in cash.
2. Period of the acquired company’s financial results included in the consolidated statements of income

The results of Manueverline Inc. are not included in the consolidated income statement for Consolidated
Financial Results of the Second Quarter of FY2018.
3. Acquisition cost of the acquired company(thousands of yen)

Consideration for the acquisition company

Cash (incl. accounts payable)

Acquisition cost of the acquired company

3,542,715
3,542,715

Based on the share transfer agreement, the acquisition cost may fluctuate with the occurrence ofcertain events in the future.
4. Goodwill, reason for recognizing goodwill, amortization method and amortization period(1) Amount of goodwill
1,218,724 thousand yen
This amount is the provisionally calculated amount.
(2) Reason for recognizing goodwill
We accounted for the difference between the acquisition cost and Net assets of Maneuverline Inc.
as goodwill.
(3) Method and term to amortize goodwill
Straight-line method over 10 years

12