Summary of Consolidated Financial Statements
for the Third Quarter of the Fiscal Year Ending March 31, 2018 (Japan GAAP)
February 7, 2018
Name of Listed Company: TSUMURA & CO.

Exchange: Tokyo Stock Exchange

Code:

URL:

4540

Representative:
Contact:

http://www.tsumura.co.jp

Position: President & Representative Director
Position: Head of Corporate Communications Dept.
Telephone: 81-3-6361-7100

Name: Terukazu Kato
Name: Noboru Suzuki

Scheduled date of submission: February 8, 2018
Scheduled date of dividend payment commencement: Preparation of supplementary materials for the quarterly financial statements: Yes.
Holding of the quarterly results briefing: No(Figures are rounded down to the nearest one million yen.)

1. Consolidated business results for the third quarter of the fiscal year ending March 31, 2018
(From April 1, 2017 to December 31, 2017)(Figures in percentages denote the year-on-year change.)(1) Financial results (year to date)
Net sales
Nine month period ended
December 31, 2017
Nine month period ended
December 31, 2016
(Note) Comprehensive income

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

90,911

3.4

15,135

8.2

15,6847.2

12,302

10.2

87,9591.6

13,985-12.8

14,626-10.2

11,163

4.9

Nine month period ended December 31, 2017: 15,149 million yen (103.6%)
Nine month period ended December 31, 2016: 7,441 million yen (-33.0%)

Profit per share

Fully diluted profit per share
Yen

Nine month period ended
December 31, 2017
Nine month period ended
December 31, 2016

Yen

173.06－159.85－(2) Consolidated financial condition
Total assets
Million yen

As of December 31, 2017
As of March 31, 2017
(Reference) Shareholders’ equity:

Shareholders’equity ratio

Net assets
Million yen%

288,142
195,465
222,008
157,397
As of December 31, 2017: 192,559 million yen

66.8
69.7
As of March 31, 2017: 154,783million yen

2. Dividends
Dividend per share
End of firstquarter

End of second
quarterYen

End of third
quarterYen

FY 3/2017
32.00－
FY 3/2018
32.00－
FY 3/2018 (Projection)(Note) Revisions to dividends projection published most recently: No

End of fiscal year
Yen

Total

Yen

Yen

－

32.00

64.00

－

32.00

64.00

3. Projections of consolidated business results for the fiscal year ending March 31, 2018 (From April 1, 2017 to March 31, 2018)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year.)Net sales
Million yen

Operating profit%

Million yen

Profit attributable toowners of parent

Ordinary profit%

Million yen

Profit per share%

Million yen%

Yen

Full-year
120,700
5.0
17,600 10.1
18,10010.4(Note) Revisions to business results projection published most recently: No

12,7001.7

175.60Notes(1) Important changes of subsidiaries during the term(change of specified subsidiaries that lead to a change in the scope of consolidation): No(2) Application of special accounting practices in consolidated quarterly financial statements preparation: Yes(3) Changes in accounting principles and procedures and the method for indication, etc.
1) Changes associated with the revision of accounting principles, etc.:
No2) Change other than 1):
No3) Accounting estimate change:
No4) Retrospective restatement:No(4) Number of shares issued (common stock)1) Number of shares issued at the end of the term(including treasury stock) (shares)
2) Number of treasury stock at the end of the term
(shares)
3) Average number of shares during the term (shares)

FY 3/2018 3Q

76,758,362

FY 3/201770,771,662

FY 3/2018 3Q

300,282

FY 3/2017

1,989,282

FY 3/2018 3Q

71,085,085

FY 3/2017 3Q

69,835,972* This Summary of our Quarterly Consolidated Financial Statements is exempt from the quarterly audit review.

* Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
In these materials, earnings forecasts and other statements about the future are forward-looking statements based on theinformation currently available and certain assumptions that the company regards as reasonable. Accordingly, the Company
cannot make promises to achieve such forecasts. Actual financial results may differ materially from these forecasts depending
on a number of important factors. Please see “1.Qualitative information on quarterly results (3) Description of projections ofconsolidated business results” on page 2 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials

1. Qualitative information on quarterly results(1) Description of operating results…………………………………….………………………………………………

2(2) Description of financial condition………………………..……..…………………………………………………...

2(3) Description of projections of consolidated business results………………….…………………………………….

2

2. Quarterly Consolidated Financial Statements and Key Notes…………………………………………..…………....

3(1) Quarterly Consolidated Balance Sheets……………………………………………………………….……………

3(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

4

Quarterly Consolidated Statements of Income
For the Third Quarter Consolidated Accumulative Term……………………………………………….…………

4

Quarterly Consolidated Statements of Comprehensive Income
For the Third Quarter Consolidated Accumulative Term……………………………………………….…………

5(3) Quarterly Consolidated Statements of Cash Flows………………………………………………………………...

6(4) Notes to the Quarterly Consolidated Financial Statements………………………………………………………...

7(Notes on premise of a going concern)…………………………………………………………………………….

7(Notes on case of extreme change in shareholder's equity amount)……………………………………………….

7(Transfer of important subsidiaries during the quarter under review)……………………………………………..

7(Application of specific accounting treatment to the preparation of quarterly financial statements)……………...

7-1-

1. Qualitative information on quarterly results(1) Description of operating results
In the third quater of the consolidated fiscal year (from April 1 to December 31, 2017), net sales rose 3.4% year on
year, to 90,911 million yen.
Operating profit stood at 15,135 million yen, up 8.2% year on year, and ordinary profit at 15,684 million yen, up
7.2% year on year. Profit attributable to owners of parent was 12,302 million yen, up 10.2%. A gain on sales ofinvestment securities of 1,498 million yen was posted as extraordinary income. The cost of sales ratio declined 1.0
percentage point year on year, and the ratio of selling, general and administrative expenses fell 0.2 percentage point
year on year. The operating profit margin stood at 16.6%, up 0.7 percentage points from a year earlier.
Sales of prescription Kampo products increased 3.4% year on year. As healthcare professionals’ needs for Kampo
are diversified, the Company is focusing on meetings with doctors, presentations for medical institutions, and Kampo
seminars. The Company is providing appropriate information on evidence in basic and clinical medicine, medical
practice guidelines in which Kampo is described, and the use of different Kampo products.
The Company will provide more information on Kampo medicine and Kampo products and will seek to expand
the Kampo market, which has large potential, focusing on three fields: geriatric field, cancer domain (supportivecare), and gynecology field.
(2) Description of financial condition
The financial position at the end of the third quarter under review was as follows:
Total assets rose 66,134 million yen from the end of the previous fiscal year mainly due to an increase in cash anddeposits, to 288,142 million yen.
Liabilities increased 28,065 million yen chiefly due to the issuance of bonds, to 92,677 million yen.
Net assets rose 38,068 million yen from the end of the previous fiscal year, mainly due to the issuance of newshares and disposal of treasury share by way of third-party allotment, to 195,465 million yen.
As a result, the equity ratio declined 2.9 percentage points, to 66.8%.
Cash flows in the third quarter under review were as follows:
Cash provided by operating activities stood at 14,655 million yen. Compared with the third quarter of the previous
fiscal year, cash provided declined 677 million yen, mainly due to an increase in notes and accounts receivable-trade.
Cash used in investing activities came to 18,433 million yen. Cash used increased 13,356 million yen year on year.
Cash provided by financing activities was 50,416 million yen. Cash provided increased 59,912 million yen, mainlyreflecting proceeds from the issuing of new shares and disposal of treasury share through third-party allotment aswell as the issuing of bonds.
As a result, cash and cash equivalents at the end of the third quarter under review increased 46,672 million yen
from the end of the previous fiscal year, to 76,573 million yen.
(3) Description of projections of consolidated business results
The projections of consolidated business results for the fiscal year ending March 31, 2018 published on May 11,2017 remain unchanged.

-2-

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets

As ofMarch 31, 2017
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Other
Accumulated depreciation
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investment and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Income taxes payable
Provision for sales returns
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-3-(Unit: million yen)
As ofDecember 31, 2017

29,931
40,347－
8,122
14,547
29,467
12,266(4)
134,679

82,41644,05910,000
7,088
12,27130,37912,552(4)
198,763

64,42971,301(71,044)
64,686266

64,70278,557(74,938)
68,321441

17,530
1,058
3,786
(0)
22,37687,329222,008

15,625
1,617
3,373
(0)
20,61689,379288,142

6,696
12,5811,901
13
10,691
31,883

5,389
25,314
1,997
11
11,16443,875－24,37684
8,267
32,72764,611

30,000
9,376
92
9,332
48,801
92,677

19,4871,940
129,937(5,393)145,972

30,142
14,027
137,837(814)
181,194

3,845
925
2,673
1,470
(102)
8,811
2,613
157,397
222,008

5,762
1,204
2,673
1,686
38
11,365
2,906
195,465
288,142(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the Third Quarter Consolidated Accumulative Term

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Bond issuance cost
Share issuance cost
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on disaster
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent-4-

Nine month period ended
December 31, 2016
(From April 1, 2016
to December 31, 2016)
87,95937,42350,53536,55013,985(Unit: million yen)
Nine month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)
90,91137,755
53,15538,02015,135

49
382
44
－
317
793

107
379
37
177
273
974

104
－
－
35
13
153
14,626

140
143
108
－
33
426
15,684

1
873
874

5
1,498
1,503

14
26
5
46
15,453
4,072
11,381
218
11,1631234－
47
17,1404,570
12,569267
12,302

Quarterly Consolidated Statements of Comprehensive Income / For the Third Quarter Consolidated Accumulative Term

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) of entities accounted forusing equity method
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests-5-

Nine month period ended
December 31, 2016
(From April 1, 2016
to December 31, 2016)
11,381(Unit: million yen)
Nine month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)
12,569(213)
1,071(4,857)
153

1,917
279
236
141

(94)
(3,939)
7,441

5
2,579
15,149

7,802
(360)

14,856293

(3) Quarterly Consolidated Statements of Cash Flows

Nine month period ended
December 31, 2016
(From April 1, 2016
to December 31, 2016)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Bond issuance cost
Share issuance cost
Share of (profit) loss of entities accounted for using equity method
Loss (gain) on sales and retirement of property, plant and equipment
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Loss (gain) on sales of short-term and long-term investment securities
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales and redemption of short-term and long-term
investment securities
Payments for investments in capital of subsidiaries and associates
Payments of loans receivableCollection of loans receivable
Payments into time deposits
Proceeds from withdrawal of time deposits
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Decrease in short-term loans payable
Proceeds from issuance of bonds
Proceeds from issuance of common shares
Purchase of treasury shares
Proceeds from sales of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated subsidiary
Increase in cash and cash equivalents resulting from merger withunconsolidated subsidiaries
Cash and cash equivalents at end of period-6-(Unit: million yen)
Nine month period ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)15,453
4,039
(2)
(431)
104
－
－
(44)
40
(1,546)
(565)
1,369
(873)
(211)
(65)
3,077
20,343452(103)(5,360)15,332

17,140
4,586
0
(486)
140
143
108
(37)
42
(3,700)2,568(1,353)(1,498)
(307)
(40)
784
18,090492(132)(3,794)
14,655(6,926)
22
(23)
(8)

(8,527)12(214)(10,008)

1,874
(238)
(1)
3
(26)
24
222
(5,077)

6,154
－
(3)
4
(6,537)708(22)(18,433)－－－(5,001)－(4,413)(49)(33)(9,496)(1,497)(738)
25,128290(2,267)29,856
21,201(0)
6,012(4,303)(49)(33)
50,41634
46,672
29,901－28
24,709－76,573

(4)Notes to the Quaterly Consolidated Financial Statements(Notes on premise of a going concern)
No relevant items.
(Notes on case of extreme change in shareholder's equity amount)
The Company issued new shares and disposed of treasury share by way of third-party allotment on October 13, 2017, pursuant to a
resolution of a meeting of the Board of Directors held on September 22, 2017. As a result, during the first nine months of theconsolidated fiscal year under review, capital stock and capital surplus increased 10,654 million yen and 12,087 million yen,respectively, while treasury share declined 4,579 million yen. At the end of the first nine months of the consolidated fiscal year
under review, capital stock, capital surplus and treasury share stood at 30,142 million yen, 14,027 million yen and 814 million yen,respectively.
(Transfer of important subsidiaries during the quarter under review)Though not a transfer of a specified subsidiary, Tsumura China Inc. has been consolidated due to the completion of investment in
the company during the first quarter of the fiscal year under review.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of thecost accounting period, which is, therefore, deferred as “current liabilities (other).”-7-