Consolidated Financial Statements for First Quarter Ended March 20, 2011
(Japanese standard)
March 31, 2011
(First Section of the Tokyo Stock Exchange)(URL: http://www.milbon.co.jp)

Name of registrant:Milbon Co., Ltd.
Code Number:4919
Representative:Ryuji Sato, President
Officer in Charge of contact:Masahiro Murai, Executive Director
Scheduled filing date for quarterly report: April 28, 2011
Scheduled date for commencement of dividend payments:
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: No

TEL: 06 (6928) 2331

(Amounts of less than one million yen are rounded off.)

1. Consolidated financial results for first quarter ended March 20, 2011 (December 21, 2010 – March 20, 2011)(1) Consolidated Operating Results (Accumulative)
Sales(Percentages show year on year changes)
Ordinary income
Quarterly net income

Operating income

million yen%

million yen%

million yen%

million yen%

First quarter ended March 20, 2011

4,632

6.3

778

9.6

711

9.7

356

1.8

First quarter ended March 20, 2010

4,359

2.4

710

5.7

648

1.2

350

-4.5

Quarterly net income
per share

Quarterly diluted
earnings per share

yen

yen

First quarter ended March 20, 2011

25.87

-

First quarter ended March 20, 2010

27.94

-

(2) Consolidated Financial Conditions
Total Assets
million yen
20,524
20,843First quarter ended March 20, 2011
Year ended December 20, 2010
(Reference) Equity capital2.

Net assets
million yen
17,602
17,699Equity ratio (Ratio of
equity to total assets)
%
85.8
84.9

Net asset per shareyen
1,277.25
1,412.25

First quarter ended March 20, 2011 17,602; First quarter ended March 20, 2010 17,699

Payment of DividendsstYear ended December 20, 2010
Term ended December 2011
Term ended December 2011
(forecast)End of 1 quarteryen-

Annual dividend
End of 2 quarter End of 3rd quarter
yen
yen
27.00
nd

30.00

-

End of fiscal year
yen
33.00

30.00

Annual
yen
60.00

60.00

Note: Changes to dividends forecast for the current quarter: None
Breakdown of the term-end divided for the term ended December 2010 Normal dividend 28.00 yen Commemorative dividend 5.00 yen

3.

Financial Results Forecast for the Year Ending December 20, 2011 (December 21, 2010 – December 20, 2011)
Sales

2nd quarter (cumulative)
Full year

million yen
9,818
20,500(“%” indicates the increase or decrease against the same quarter in the previous fiscal year.)
Net income
Operating income
Ordinary income
Net income
per share% million yen% million yen% million yen
%
yen
4.1
1,482 -14.1
1,344 -17.0
764 -18.6
55.42
3.8
3,780
5.6
3,510
5.5
2,060
12.5
149.43

Note: Corrections of the results forecast during the current quarter: None4. Other (For details, please refer to “2. Other information”, p.4 of the Supplementary Materials.)(1) Transfer of significant subsidiaries during the quarter: None
New: 0 companies (Company name:), Excluded: 0 companies (Company name:)Note: This means whether or not there were any transfers of specific subsidiaries involving changes in the scope of consolidation
during the current quarterly accounting period.

(2) Application of simplified accounting methods and specific accounting methods: Yes
Note: This means whether or not simplified accounting methods or accounting methods specific to the preparation of quarterly
consolidated financial statements were applied.

(3) Changes in accounting policies, procedures and methods, etc.
1) Changes due to amendment to the accounting standards, etc.; Yes
2) Changes other than those in 1) above;
None
Note: This means whether or not there were any changes in accounting policies, procedures and methods, etc., related to the
preparation of the quarterly consolidated financial statements that were described in “Summary of Significant Accounting
Policies for the Preparation of Quarterly Consolidated Financial Statements”.

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at term-end (including treasury stock)
First quarter ended March 20, 2011, 13,798,848 shares; Year ended December 20, 2010, 12,544,408 shares
2) Number of treasury shares at term-end
First quarter ended March 20, 2011, 16,968 shares; Year ended December 20, 2010, 11,594 shares
3) Average number of shares through accounting period (quarterly consolidated accumulative period)First quarter ended March 20, 2011, 13,783,573 shares; First quarter ended March 20, 2010, 12,532,794 shares* Display of the state of implementation of quarterly review procedures• This quarterly financial statement is not subject to the quarterly review procedures based on the Financial Instruments andExchange Act and the company has not conducted quarterly financial statement review procedures based on the Financial
Instruments and Exchange Act.
* Proper use of earnings forecasts and other matters• Statements concerning the future such as the earnings forecasts given in this document are based on information currently inthe possession of the Company and on assumptions that the Company considers reasonable. Actual earnings, etc., maydiffer greatly due to various factors. For matters concerning the assumptions on which earnings forecasts are premised andthe use of earnings forecasts, refer to “1. Qualitative information on the consolidated results for the current quarter, etc. (3)Qualitative information on the consolidated earnings forecast” on p.3 of the “Consolidated Financial Statements for theFirst Quarter of the Fiscal Term Ended March 20, 2011 -Supplementary Materials”.
• The Company carried out a share split at a ratio of 1.1 shares for each ordinary share on December 21, 2010.

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011

Contents of the supplementary materials
1.

Qualitative information on the consolidated results for the current quarter, etc. ............................ 2(1) Qualitative information on consolidated operating results ........................................................... 2(2) Qualitative information on consolidated financial conditions ...................................................... 3(3) Qualitative information on consolidated earnings forecast .......................................................... 3
2.

Other information ............................................................................................................................ 4(1) Overview of transfers of significant subsidiaries ......................................................................... 4(2) Overview of simplified accounting methods and specific accounting methods ........................... 4(3) Overview of changes in accounting policies, procedures and methods, etc. ................................ 4
3.

Quarterly Financial Statements ....................................................................................................... 5(1) First Quarter Balance Sheet .......................................................................................................... 5(2) First Quarter Consolidated Statement of Earnings ....................................................................... 7[1st quarter consolidated fiscal period]......................................................................................... 7(3) Quarterly Consolidated Statement of Cash Flows ........................................................................ 8(4) Notes concerning the assumption of the business as a going concern .......................................... 9(5) Segment information .................................................................................................................... 9(6) Notes in cases of extreme variation in the amount of shareholders’ equity.................................. 9-1-

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011

1. Qualitative information on the consolidated results for the current quarter, etc.
(1) Qualitative information on consolidated operating results
Although the Japanese economy emerged from the temporary correction phase it was in from autumn last year
onwards and again showed signs of recovery during the first quarter consolidated fiscal period under review,
including a rally in exports following the recovery of overseas economies such as America and China, the country
continued to experience difficult conditions, with trends in personal consumption affected by the impact of thestrong yen and the prolongation of deflation.
It is estimated that the difficult environment continued in the beauty industry too, with no signs of recovery stillin regard to decreases in the number of customers due to the extension of the cycle of customer visits.
In these conditions, the company group worked on policy promotion activities for Milbon salons under thethemes of “Improvement of communication and technical quality as professionals for hair designs that makewomen light up even on the inside”, which takes “support for the creation of human resource cultivation systems
for professionals who pursue the heart of women” as its basic policy, and “Support for the creation of humanresource cultivation systems at Milbon salons that have incorporated the female perspective”. Furthermore,because we provided support for professional technology and sales of hair care products centered on DEESSE'S
NEU DUE and DEESSE'S LINKAGE-μ, which were newly launched as practical items that improve the qualityof menus because of the great-feeling sensation when running the fingers through the hair and the beauty of hair
texture, etc., and also because hair color products centered on dyes for grey hair performed well, group sales
overall produced results in excess of those for the same period of the previous year.
In regard to the situations at the company’s three wholly owned subsidiaries, sales at Milbon USA, Inc., werelower than sales for the same period of the previous year. This was because of a decrease in sales of straightperm products, which continue to face a serious challenge, and hair care product related sales, even though salesof salon treatment products, a new category in the North American market, performed well.
Furthermore, sales at Milbon Trading (Shanghai) Co., Ltd., finished higher than sales for the same period lastyear because of the development of new product-handling salons progressing as planned due to the deployment ofsales activities focused on top salons that have acquired wealthy customers in the east China region (Shanghai
City, Jiangsu and Zhejiang) and the south China region (Guangdong, Fukien).
Sales at Milbon Korea Co., Ltd., exceeded initial plans due to the company promoting the new introduction of
hair care products centered on salon treatments to hair color outlets acquired by positive educational support
activities for local hair designers.
Although the company was in a difficult environment, consolidated sales during the first quarter consolidated
period under review increased 272 million yen to 4,632 million yen (an increase of 6.3% in comparison to thesame period last year).
Operating income finished at 778 million yen (an increase of 9.6% in comparison to the same period last year),ordinary income at 711 million yen (an increase of 9.7% in comparison to the same period last year) and quarterly
net income at 356 million yen (an increase of 1.8% in comparison to the same period last year).
Breakdown of sales by product category is shown as follows:[Breakdown of consolidated sales by product category]
Product Category
Hair care products
Hair coloring products
Permanent wave products
OthersTotal

1st Quarter, Previous Term
Sales amount
Ratio (%)
(million yen)
2,251
51.6
1,635
37.5
416
9.6
55
1.3
4,359
100.0

Current 1st Quarter
Sales amount
Ratio (%)
(million yen)
2,332
50.3
1,843
39.8
403
8.7
53
1.2
4,632
100.0

Increase/(decrease)
Sales amount(million yen)
80
207
-13
-1
272

(Hair care products)
In an environment where competition among hair care products for the public market and the pro-use market of
specialist products for beauty salons continues to be severe, the industry overall is estimated to have grownslightly on account of positive efforts towards hair care, centered on salon treatments that repair hair damage.
In such circumstances, the Milbon Group saw sales in the hair care product sector exceed those for the same
period last year because sales of DEESSE'S NEU DUE, a texture care series launched in February that provides
an improved sensation when running the fingers through the hair and lets users experience more of the beauty ofcolor hair design, performed well and the creation of the market for highly effective salon treatment products,
including DEESSE'S LINKAGE-μ, a salon treatment system that increases the moisture of every strand of dry
hair right to its tip and realizes an impressive sensation when running the fingers through the hair, progressed well
too.

-2-

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011

(Hair coloring products)
Because of the increased impact of the desire of consumers to maintain their current standards of living andlessen expenses, the competition with home color products that allow users to dye their hair casually at homeintensified further and the size of the industry overall is estimated to have decreased slightly.
In such circumstances, the Milbon Group saw sales in the hair color segment exceed sales for the same period
last year because sales of fashion color products performed well through seasonal color (fashionable colors
matched to the seasons) promotional activities for customers based on additional colors in the ORDEVE line ofgeneral coloring products that the company launched in March, and also because grey coloring products centeredon LISEINTER continued to perform well too.
(Permanent wave products)
It is estimated that the industry overall contracted slightly due to a decrease in perm style needs associated withchanges in trends.
In such circumstances, the Milbon Group made efforts towards the creation of straight perm allure centered on
LISCIO GLANFE, a straight perm product that expresses a soft silhouette for a feeling of roundness depending on
hair quality. As a result, sales of straight perm products overall exceeded those for the same period last year, but
sales in the permanent wave product segment finished lower than the same period last year.
(Others)
There are no particular items to present.
(2) Qualitative information on consolidated financial conditions
1) Assets, liabilities and net assets
Total assets at the end of the 1st quarter consolidated fiscal period decreased by 319 million yen to 20,524
million yen compared to the end of the previous consolidated fiscal year.
Current assets decreased 60 million yen to 7,974 million yen compared to the end of the previous
consolidated fiscal year. Major variable factors included a decrease of 341 million yen in trade notes andaccounts receivable, although cash and deposits increased by 70 million yen, goods and products increased by
150 million yen and materials and inventory goods increased by 59 million yen.
Fixed assets decreased by 258 million yen to 12,549 million yen compared to the end of the previous
consolidated fiscal year. Major variable factors were a decrease of 151 million yen in tangible fixed assets inassociation with the posting of depreciation expenses, etc., and a decrease of 99 million yen in investment
securities in association with decreases in the market values of listed shares.
Current liabilities decreased 221 million yen to 2,503 million yen compared to the end of the previous
consolidated fiscal year. Major variable factors were an increase of 192 million yen in the reserve for bonus
payments and an increase of 90 million yen in accrued consumption tax, etc., while accrued liabilities decreased
333 million yen and accrued income tax, etc., decreased 280 million yen.
There was no great variation in mixed liabilities compared to the end of the previous consolidated fiscal year.
Net assets decreased 96 million yen to 17,602 million yen compared to the end of the previous consolidated
fiscal year. Major variable factors were a decrease of 57 million yen in retained earnings and a decrease of 17
million yen in the valuation difference of other securities.
As a result, the company’s equity ratio changed from 84.9% at the end of the previous consolidated fiscal year
to 85.8%. Net assets per share based on total outstanding shares as of the end of the accounting period
decreased from 1,412.25 yen per share at the end of the previous consolidated fiscal year to 1,277.25 yen per
share.
2)

Cash flows
Cash and cash equivalents (hereinafter referred to as “funds” ) at the end of the 1st quarter consolidated fiscal
period increased 70 million yen compared to the end of the previous consolidated fiscal year as a result of theuse of funds acquired through operating activities in the payment of corporate taxes, etc., and the payment ofdividends. The balance of funds at the end of the 1st quarter consolidated fiscal period was 2,740 million yen.
(Cash Flows from Operating Activities)
Funds obtained from operating activities were 554 million yen. This was mainly the result of 617 million
yen recorded in income before income taxes and minority interests, depreciation costs of 234 million yen andthe payment of corporate and other taxes of 618 million yen.
(Cash Flows from Investing Activities)
Funds used for investing activities were 84 million yen. The funds were mainly used for the purchase ofproperty and equipment worth 58 million yen and intangible fixed assets worth 31 million yen.
(Cash Flows from Financing Activities)
Funds used as a result of financing activities were 390 million yen. This was mainly the result of dividend
payments for shareholders of 381 million yen.
-3-

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011(3) Qualitative information on consolidated earnings forecast
No personnel of the Milbon Group were injured by the Great East Japan Earthquake that occurred on March 11,
2011. Furthermore, there was no significant damage at factories and sales bases either. The impact of thisdisaster on results is currently under investigation and the company shall make an announcement promptly if asignificant impact is expected.
2. Other information(1) Overview of transfers of significant subsidiaries
None(2) Overview of simplified accounting methods and specific accounting methods
1) Simplified accounting methods(Valuation methods for inventories)
The calculation of inventories at the end of the 1st quarter consolidated fiscal period is calculated by omitting
a physical inspection and using a rational method of calculation based upon the physical inspection amount for
the end of the previous consolidated fiscal year.
(Calculation methods for depreciation expenses for fixed assets)
Fixed assets using a fixed percentage depreciation method are calculated by dividing the amount ofdepreciation expenses for the consolidated fiscal year proportionally between the respective accounting periods.
2)

Accounting methods specific to the preparation of quarterly financial statements
None(3) Overview of changes in accounting policies, procedures and methods, etc.
Application of the “Accounting Standard for Asset Retirement Obligations”
The company is applying the “Accounting Standard for Asset Retirement Obligations” (ASBJ Statement No.18;
March 31, 2008) and the “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance
No.21; March 31, 2008) from the 1st quarter consolidated fiscal period under review.
By doing so, income before income taxes and minority interests has decreased by 29 million yen.

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011

3. Quarterly Financial Statements(1) First Quarter Balance Sheet(Unit: thousand yen)

End of 1st quarter consolidated
fiscal period under review(March 20, 2011)

Condensed consolidatedbalance sheet for previous
consolidated fiscal year
(December 20, 2010)

AssetsCurrent assets
Cash and bank deposits
Trade notes and accounts receivable
Goods and products
Work in progress
Raw materials and inventory goods
OthersAllowance for doubtful accounts
Total current assets

2,743,275
2,516,343
1,788,866
14,376
622,572
298,192-8,762
7,974,866

2,673,044
2,857,374
1,638,450
20,370563,184
293,220-9,9638,035,681

4,120,829

4,210,785

1,018,242

1,074,533

4,763,766
9,619
237,656
10,150,114
423,662

4,763,766
3,634
248,769
10,301,488
451,968

1,081,331
931,534-37,031
1,975,833
12,549,609
20,524,476

1,180,555
911,578-37,730
2,054,403
12,807,860
20,843,541

513,895
951,016
354,927
44,074
257,731
382,016
2,503,660

467,309
1,284,549
635,475
19,07565,453
253,5092,725,372

2,565
37,500377,858
417,924
2,921,584

1,138
38,400379,135
418,673
3,144,046

Fixed assets
Property and equipment
Buildings and other structures(net amount)
Machinery, equipment and vehicles for transportation(net amount)
Land
Construction in progress
Others (net amount)
Total tangible fixed assets
Intangible fixed assets
Investments and other assets
Investment in securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets
Liabilities
Current Liabilities
Accounts payable
Accrued expenses payable
Corporate taxes payable
Reserve for returned goods
Reserve for bonuses
OthersTotal current liabilities
Fixed Liabilities
Allowance for retirement benefits for employees
Reserve for loss on guarantees
OthersTotal fixed liabilities
Total liabilities-5-Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011
(Unit: thousand yen)

End of 1st quarter consolidated
fiscal period under review(March 20, 2011)

Condensed consolidatedbalance sheet for previous
consolidated fiscal year
(December 20, 2010)

Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

2,000,000
199,120
15,722,545-46,877
17,874,787

2,000,000
199,120
15,779,971-38,254
17,940,836-159,026-112,869-271,896
17,602,891
20,524,476-141,280-100,061-241,341
17,699,495
20,843,541

Valuation and translation adjustments
Net unrealized gains on other securities
Foreign currency translation adjustments
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets-6-

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011

(2) First Quarter Consolidated Statement of Earnings[1st quarter consolidated fiscal period](Unit: thousand yen)Previous 1st quarter
consolidated fiscal period(December 21, 2009 –March 20, 2010)
Sales
Cost of sales
Total sales revenues
Marketing and Administrative Expenses
Operating income

1st quarter consolidated fiscal
period under review(From December 21, 2010 –March 20, 2011)

4,359,837
1,450,340
2,909,497
2,199,038
710,458

4,632,671
1,512,091
3,120,579
2,341,812
778,767

358
192
9,511
4,753
14,815271
192
12,4292,864
15,75776,532
1
76,534
648,739

82,88385
82,968711,556

4,024
4,024

837
1,201
900
2,938

79
179
-

3,375
65,290-28,320259

96,986

652,503

617,508

260,089
42,239302,328
350,175

344,724-83,864
260,860
356,648

Non-operating Income
Interest income
Dividends income
Rent from company housing
OthersTotal non-operating income
Non-operating Expenses
Sales discount
OthersTotal non-operating expenses
Ordinary income
Extraordinary Profit
Gain on sale of investment securities
Release of allowance for doubtful accounts
Reversal of reserve for loss on guarantees
Total extraordinary profits
Extraordinary Loss
Loss on disposal of fixed assets
Loss on retirement of fixed assets
Loss on revaluation of investments in securities
Value of impact associated with the application of the“Accounting Standard for Asset Retirement Obligations”
Total extraordinary losses
Quarterly net income before income taxes and minority
interests
Income taxes-Current
Income taxes-Deferred
Total corporate and other taxes
Quarterly net income-7-Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011(3) Quarterly Consolidated Statement of Cash Flows(Unit: thousand yen)Previous 1st quarter
consolidated fiscal period(December 21, 2009 –March 20, 2010)
Cash flows from operating activities
Quarterly net income before income taxes and minority
interests
Depreciation and amortization expense
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in the provision for bonuses
Increase (decrease) in provision for returned productadjustment
Change (decrease) in value of the reserve for loss on
guarantees
Change in allowance for retirement benefits for employees
Decrease (increase) in the prepaid pension cost
Interest and dividends received
Foreign exchange loss (gain)
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Profit or loss on disposal of fixed assets
Loss from the sale/disposition of fixed assets
Value of impact associated with the application of the“Accounting Standard for Asset Retirement Obligations”
Decrease (increase) in accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in accounts payable related to
procurement transactions
OthersSubtotalInterest and dividends received
Payment of retirement benefits for directors
Payment of corporate and other taxes
Cash flows from operating activities
Cash flows from investing activities
Sale of investment securities
Purchase of property and equipment
Proceeds from sales of property, plant and equipment
Payment due to the acquisition of intangible fixed assets
Payment due to loans
Collection of the loan payment
Expenditure due to deposit of fixed term deposits
Payment due to the placement of guarantee money
Collection of guarantee money
Payment into insurance reserve fund
OthersCash flows from investing activities
Cash flows from financing activities
Net decrease (increase) in treasury stocks
Payment of dividends
Cash flows from financing activities
Effect of exchange rate fluctuations on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of current quarter-8-

1st quarter consolidated fiscal
period under review(From December 21, 2010 –March 20, 2011)

652,503

617,508

225,781-28,762
182,611

234,688-1,201
192,317-20,434

24,998

-

-900

303
11,095
-550
68
79
179

1,458
10,461
-463
2,513
-837
65,2903,375-

28,320231,088-179,295

340,656-206,980

434,541

47,643-103,89
1,405,313
648-194,441-544,161
667,358-157,620
1,201,231
553-29,596-618,118
554,069-62,480253-73,555
-350
5,088
-829
-5,9352,642-1,903-1,533-138,601

5,551-58,390-31,827-1,5004,744-2,4272,646-857-2,547-84,60765-319,878-319,813-9,114-381,278-390,392

8,599-8,777

217,543
1,666,170
1,883,713

70,2912,670,550
2,740,842

Milbon Co., Ltd. (4919) Consolidated Financial Statements for the First Quarter Ended March 20, 2011

(4) Notes concerning the assumption of the business as a going concern
None(5) Segment information
1st quarter consolidated fiscal period under review December 21, 2010 (To March 20, 2011) No statement isincluded because the Milbon Group has only the one segment of the manufacture and sale of hair products.
(Additional information)
The company is applying the “Revised Accounting Standard for Disclosures about Segments of an Enterprise andRelated information” (ASBJ Statement No.17; March 27, 2009) and the “Guidance on Revised AccountingStandard for Disclosures about Segments of an Enterprise and Related information” (ASBJ Guidance No.20; March
21, 2008) from the 1st quarter consolidated fiscal period under review.
(6) Notes in cases of extreme variation in the amount of shareholders’ equityNone-9-