Summary of Financial Results for the Second Quarter of the Fiscal YearEnding March 31, 2018 (J-GAAP, Consolidated Results)
November 14, 2017
Name of listed company Tamagawa Holdings Co., Ltd.
Stock exchange listing
Tokyo Stock Exchange
Code number6838
URL http://www.tmex.co.jp/en/
Representative Designation of position: President & CEO
Name: Toru Masuzawa
Contact for
Designation of position: Finance and Accounting
Name: Katsuya Kubo
Tel: +81-03-6435-6933
inquiries
Division Manager
Scheduled date for the submission of quarterly financial statements: November 14, 2017
Scheduled date for the commencement of dividend payments:—Supplementary briefing materials on quarterly results:
Available
Quarterly results briefing:
Scheduled(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter of Fiscal Year Ending March 31, 2018
(April 1, 2017 – September 30, 2017)(1) Consolidated results of operations (aggregate)(Percentages indicate rates of change from the year-earlier period)
Profit attributable toOperating income
Ordinary income
owners of parent

Net Sales
Million yen%

2Q FY 2018
1,303
2Q FY 2017
1,813
Note: Comprehensive income 2Q FY 2018

Million yen%

(28.1)(65)
63.7
3(115) million yen (———%)Net income per share

Diluted net income pershare

YenYen(2.82)(0.09)——

2Q FY 2018
2Q FY 2017

Million yen%

Million yen%

(114)
(42)
2Q FY 2017—(118)—(3)(7) million yen (———%)(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Million yen

Million yen

2Q FY 2018
7,772
FY 2017
7,446
Supplementary information: Equity 2Q FY 2018

3,103
3,261
3,102 million yen%

39.943.8
3,259 million yen

FY 2017

2. Dividends
Dividends per share
1Q-endInterimYen

3Q-endYen

FY 2017—0.00
FY 2018—
0.00
FY 2018 (forecasts)
Note:
Revision of the latest announced dividend forecast: None

Year-end

Annual

Yen

Yen

Yen

—

1.00

1.00

—

1.00–3.00

1.00–3.00

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2018 (April 1, 2017 – March 31, 2018)

Net Sales
Million yen

Operating income%Million yen%

(Percentages indicate year-on-year changes)
Net income for
Profit attributable toOrdinary income
the period perowners of parent
shareMillion yen%

Million yen%

Yen

Year to March 31, 2018
4,237 (4.6)
202
7.2
107
Note:
Revision of the latest announced operating results forecast: None

0.957

28.1

1.36

* Notes(1) Changes in significant subsidiaries during the period under review:

None(Changes in specified subsidiaries involving changes in the scope of consolidation)
Newly added— Company (Company name), Removed— Company (Company name)(2) Application of special accounting treatment in the preparation of quarterly
consolidated financial statements: None
(3) Changes in accounting principles, estimates and restatement
1) Changes in accounting principles caused by revision of accounting standards: None
2) Changes in accounting principles other than those mentioned in 1):

None3) Changes in accounting estimates:

None4) Restatement:

None(4) Number of shares issued and outstanding (shares of common stock)1) Number of shares outstanding (including
2Q FY 2018
42,598,000 shares
treasury stock) at end of period
2Q FY 2018614,543 shares
2) Number of treasury stock at end of period
3) Average number of shares outstanding
2Q FY 2018
41,983,457 shares
during the period (three months)**FY 2017

42,598,000 shares

FY 2017614,543 shares

2Q FY 2017

41,983,755 shares

Summaries of quarterly financial results are not subject to quarterly review.
Disclaimer regarding the appropriate use of operating results forecasts and related points of noteStatements on future results projections, etc., contained in these materials are based on information currently available to theCompany as well as certain premises judged reasonable at that time. Actual results, etc., can significantly differ from projections dueto various factors. For important information concerning the assumptions that serve as premises of results projections and concerning
the use of results projection, refer to "Information concerning forward-looking statements such as consolidated results projections,etc." on page 4 of the attached materials.

1. Operating results and financial position in the period under review(1) Operating results
Operating results for the period under review
The Japanese economy in the period under review continued on a moderate recovery course accompanied by improvements incorporate profits and employment. However, the outlook remains uncertain amid concerns over labor shortages centering on small
and medium-sized companies as well as worries over an economic recession caused by effects from political and economic
developments in the US, Europe, and other regions.
In this operating environment, the Electronics and Communication Device Business of the Company concentrated on expanding
sales and marketing activities centered on the 4G mobile phone equipment market and the public sector market and strove to develop
new markets and customers to secure orders from new business fields. Moreover, efforts continued to further increase the highadded value element of products, expand and develop new business areas, and promote co-developments with business cooperation
partners, while strengthening in-house developed product propositions.
As a result, trade inquiries increased not only for conventional analog high-frequency products but also products for newly
developed customer strata and new markets, such as institutional-use wireless optical related products, digital signal processing
equipment required for high speed signal processing, and other products.
In the mobile telecommunications field, where telecommunications carriers had previously deferred capital investment plans forradio interference prevention equipment to improve communication quality, facility investment has been gradually resuming, withnew order receipts rebounding, albeit at a moderate pace. Operations for overseas mobile telecommunications equipment have been
seeing gradually increasing inquiries from new customers.
In the public sector, demand has been increasing for optical transmission equipment and digital signal processing equipment, etc.,
for applications in disaster countermeasures, institutional-use radio, and monitoring systems. Efforts will therefore continue tofurther expand demand in public sector fields and to engage in activities targeting future trends in next-generation mobile
telecommunications markets.
With new order receipts on an improvement trend overall, the group will continue to work to expand its business fields andstrengthen in-house developed product propositions with a view to establishing stable operating platforms, and in this way keep up
activities to enhance earnings.
In the renewable energy business, the Company has been actively promoting especially the Solar Power Plant Business. The
environment for Solar Power Plant Business of late has turned adverse due to developments such as the promulgation of the "Partial
Revision of the Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity
Utilities" enforced on April 1, 2017, along with the establishment of new certification regulations. Amid these conditions, the Grouphas been proactively reviewing renewable energy operations and environment related operations overall as the next businessmainstay with the objective of further business growth in these fields.
As a result of the forgoing, new orders received in the period under review totaled 1,048 million yen (down 50.5% from the yearearlier period), with sales of 1,303 million yen (down 28.1% from the year-earlier period). As in the previous fiscal year, earnings
at the Electronics and Communication Device Business and the Renewable Energy System Sales Business in the period underreview reflect fixed costs advancing ahead of projects concentrating on the second half or the fiscal year, resulting in an operating
loss of 65 million yen (compared with operating income of 3 million yen in the year-earlier period), ordinary loss of 114 million
yen (compared with an ordinary loss of 42 million yen in the year-earlier period), and net loss for the quarter attributable toshareholders of the parent company in the amount of 118 million yen (compared with a net loss of 3 million yen in the year-earlierperiod).
The Electronics and Communication Device Business has been concentrating on the development of new customers in addition
to activities surrounding sales expansion centered on the public sector market. Especially in the public sector, demand has beensteadily increasing and is forecast to remain firm. The Group will continue to expand its business fields and strengthen in-housedeveloped product proposition and in this way keep engaged in activities to increase earnings.
The Renewable Energy System Sales Business has been developing and examining various products and services related torenewable energy for further future business expansion. Operations will continue to enlarge sales networks and strengthen marketing
capabilities with the aim to maximize earnings.
Solar Power Plant Business and Geothermal Power Plant Business have been proactively developing new projects in order tosecure long-term stable earnings. April 3, 2017 marked the start of energy sales at the large scale solar energy power plant in
Kasumigaura city, Ibaraki prefecture, and on the site for the projected geothermal power plant in Ibusuki city, Kagoshima prefecture,
excavation work has been proceeding to enable the steam ejection required for geothermal binary power generation. As a policy, itis planned to further increase the number of Company-owned clean power plants using solar energy and other renewable energy
sources.
In addition to the renewable energy business mentioned above, as a new clean source of energy, the Company has been focusing
on hydrogen related business capable of generating and storing electricity without releasing CO2. Research and reviews surroundinghydrogen operations are being conducted at the Hydrogen Electric Power Business Preparatory Office of the Company.

Operating results by segment developed as follows.
(i) Electronics and Communication Device Business
Mobile network operators have resumed their capital investment plans for radio interference prevention equipment, resulting
in a moderate recovery in new order receipts. Moreover, efforts have concentrated on expanding new order receipts fromgovernment agencies and public sectors fields. At the same time, business efficiency gains and cost control measures werestrengthened. In the period under review, new order receipts totaled 940 million yen (down 29.8% from the year-earlierperiod) with sales of 1,061 million yen (up 12.1% from the year-earlier period) and segment income of 10 million yen (up60.8% from the year-earlier period).
(ii) Renewable Energy System Sales Business
Reflecting the fact that traditionally projects delivering full-scale sales revenues concentrate in the second half of the fiscal
year, new orders received totaled 108 million yen (down 86.1% from the year-earlier period), with sales of 37 million yen(down 95.2% from the year-earlier period), and a segment loss of 79 million yen (compared with segment income of 81
million yen in the year-earlier period).
(iii) Solar Power Plant BusinessSolar energy power plants in operation in Shimonoseki, Tateyama, and Sodegaura city have been steadily selling electricpower. Especially in the April - June 2017 period, favorable weather conditions with a large number of sunny days raised
electric power sales above the level of the year-earlier period. In addition, electric power sales at the large scale solar power
plant in Kasumigaura city started on April 3, 2017. As a result, sales posted 202 million yen (up 54.1% from the year-earlierperiod) with segment earnings of 90 million yen (up 66.3% over the year-earlier period).
(iv) Geothermal Power Plant BusinessCurrently no sales are recognized at these operations. Due to various expenses, a segment loss of 5 million yen resulted (nosales and expenses were recognized in the year-earlier period).

(Segment information, etc.)
Segment information
I. Second quarter of the previous fiscal year ended March 31, 2017 (April 1, 2016, to September 30, 2016)
Information on sales and gains or losses broken down by reportable segment(In thousand yen)
Reportable Segment
Electronic andCommunication
Device Business

Renewable
Geothermal
Solar Power
Energy System
Power Plant
Plant Business
Sales BusinessBusiness

Total

Amount as per
Adjustment consolidated
amount quarterly income(Note 1)statement(Note 2)Net Sales
Sales to external customers—

1,813,861

43,342(43,342)—

131,389— 1,857,203(43,342)

1,813,861

54,579—142,132 (138,774)

3,358

947,674

734,797

131,389—

43,342—

Total

947,674

778,139

Segment income

6,456

81,096

Internal sales or transfers
between segments— 1,813,861—

Note 1. The segment income adjustment amount of -138,774 thousand yen consists of an adjustment of -43,462 thousand yen for
unrealized income, etc., an adjustment of -70,000 thousand yen for dividends, and an amount of -25,312 thousand yen ingains and losses of the group administration division not attributed to business segments.
2. Segment income matches operating income stated on the quarterly consolidated statement of income.
II. Second quarter of the fiscal year ending March 31, 2018 (April 1, 2017, to September 30, 2017)
Information on sales and gains or losses broken down by reportable segment(In thousand yen)
Reportable Segment
Electronic andCommunication
Device Business

Renewable
Geothermal
Solar Power
Energy System
Power Plant
Plant Business
Sales BusinessBusiness

Total

Amount as per
Adjustment consolidated
amount quarterly income(Note 1) statement (Note2)

Net Sales
Sales to external customers
Internal sales or transfers
between segments
Total
Segment income (loss)

1,061,933

37,067

202,515———

1,061,933

37,067202,515

10,384(79,950)

90,744— 1,301,516

2,424

1,303,940———— 1,301,516

2,424

1,303,940(81,512)(65,442)—(5,108)16,070Note 1. The segment income (or loss) adjustment amount of -81,512 thousand yen consists of an adjustment of 2,493 thousand yen
for unrealized income, etc., an adjustment of -62,000 thousand yen for dividends from a consolidated subsidiary, and an
amount of -22,006 thousand yen in gains and losses of the group administration division not attributed to business segments.
2. Segment income (loss) matches the operating loss stated on the quarterly consolidated statement of income.

２．Quarterly Consolidated Financial Statements（１）Quarterly consolidated balance sheets(In thousand yen)
FY 2016 (consolidated)(As of March 31,2017)

2Q FY 2017 (consolidated) (As ofJune 30, 2017)

AssetsCurrent assets
Cash and deposits

2,155,286

2,132,651

1,456,254
77,731

985,234
96,153Work in process
Raw materials and supplies

156,735
108,699

168,618
121,889

Deferred tax assets
Other30,489
102,582

18,253341,014

Total current assets

4,087,780

3,863,815

Notes and accounts receivable - trade
Merchandise and finished goods

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net

458,035

458,394△314,285△321,619

143,750

136,774

Machinery, equipment and vehicles

1,540,903

2,590,906

Accumulated depreciation△219,485△296,479

Machinery, equipment and vehicles, net

1,321,418

2,294,427

727,831

699,156△653,695△628,590

74,13670,565

Land405,987

406,035

Construction in progress

638,817

176,928

Total property, plant and equipment

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

2,584,111

3,084,732

Intangible assets
Good will

212,124

209,839

SoftwareOther

66,519067,6880Total intangible assets

278,644277,527

Investments and other assets
Investment securities

22,772

26,813Long-term loans receivable
Deferred tax assets

103,61472,660106,174
78,979Other
Allowance for doubtful accounts

285,649

280,369△8,700△8,700Total investments and other assets

475,996483,637

3,338,752

3,845,897

1,7426,316

1,326
44,836

Business commencement expenses

11,666

16,618

Total deferred assets

19,72562,7807,446,258

7,772,493

Total non-current assets
Deferred assets
Share issuance cost
Development expenses

Total assets

(In thousand yen)
FY 2016 (consolidated)(As of March 31,2017)

2Q FY 2017 (consolidated) (As ofJune 30, 2017)

Liabilities
Current liabilities
Notes and accounts payable - trade523,660

312,917

Short-term loans payable
Current portion of bonds

404,800
20,000161,900
10,000Current portion of long-term loans payable
Lease obligations

561,353
74,220749,391
83,451

Accounts payable - other
Income taxes payable

164,730
57,787120,208
12,464

Advances received
Deferred tax liabilities

30,075
3,177

25,698-Provision for bonuses
Provision for product warranties

59,986
14,29562,816
14,856

Other

126,835

81,3142,040,922

1,635,018

Long-term loans payable
Lease obligations

614,329
1,245,516

707,069
1,205,107

Deferred tax liabilities
Net defined benefit liability

2,584
163,664

3,365
172,503

Asset retirement obligations
Long-term accounts payable - other

26,22590,17833,145
911,126

Total current liabilities
Non-current liabilities

Other

1,617

1,617

2,144,115

3,033,934

4,185,037

4,668,952

Capital stock
Capital surplus

1,677,088
994,039

1,677,088
994,039

Retained earnings
Treasury shares

655,150

494,547△61,312△61,312

Total shareholders' equity

3,264,965

3,104,362

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

329

2,646

△5,606△4,999Total accumulated other comprehensive income△5,276△2,353

Subscription rights to shares
Total net assets
Total liabilities and net assets

1,532

1,532

3,261,220

3,103,541

7,446,258

7,772,493

（２）Quarterly consolidated statements of income and Quarterly consolidated statements of comprehensive income QuarterlyConsolidated statements of income
Consolidated second quarter period
1Q FY2016(from April 1, 2016 toJune 30, 2016)
1,813,861(In thousand yen)
2Q FY2017(from April 1, 2017 toJune 30, 2017)
1,303,940

Cost of sales

1,288,130

887,869

Gross profit

525,730

416,071

Selling, general and administrative expenses

522,372

481,514

3,358△65,442Interest income
Dividend income
Share of profit of entities accounted for using equity
method
Other

2,384
190

4,415
320

-

2,962

4,676

4,625

Total non-operating income

7,250

12,32340,06855,206

4,039

-

7,215
2,262

1,765
3,913

Net sales

Operating profit（△）
Non-operating income

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equitymethod
Foreign exchange losses
Other
Total non-operating expenses
Ordinary loss（△）

53,58560,885△42,976△114,004

1,652
16,326

1,009-Extraordinary income
Gain on sales of non-current assets
Gain on reversal of subscription rights to shares
Other
Total extraordinary income
Extraordinary losses
Other
Total extraordinary losses-22

17,979

1,032

225

12225

12△25,223△112,984

Income taxes - current

8,513

3,170

Income taxes - deferred△29,799

2,463

Total income taxes△21,285

5,634

Loss（△）△3,937△118,619

Loss before income taxes（△）

Loss attributable to non-controlling interests（△）
Loss attributable to owners of parent（△）--△3,937△118,619

Quarterly consolidated statements of comprehensive income
Consolidated second quarter period(In thousand yen)
2Q FY2017(from April 1, 2017 toJune 30, 2017)

1Q FY2016(from April 1, 2016 toJune 30, 2016)△3,937△118,619

Other Comprehensive Income
Valuation difference on available-for-sale securities

899

2,316

Valuation difference on available-for-sale securities△4,695606

Total other comprehensive income△3,796

2,923

Comprehensive income△7,733△115,695（attributable to）
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests△7,733△115,695--

Net Loss for the Quarter（△）