Note: This is an excerpt translation of the “Kessan Tanshin” for the convenience of overseas stakeholders.
In cases where any differences occur between the English version and the original Japanese version, theJapanese version shall prevail. F-TECH INC. assumes no responsibility for this translation or for direct,
indirect or any other forms of damages arising from the translation.

Consolidated Financial Results
for the Three Months Ended June 30, 2018
<under Japanese GAAP>

F-TECH INC.
19, Showanuma, Shobu-cho, Kuki City, Saitama, JAPAN1. Qualitative information regarding financial results for the period under review(1) Information regarding operating results
The global economy in the three months ended June 30, 2018 has continued a moderate recovery overall,
despite an increase of future uncertainty mainly due to concerns regarding the escalation of trade
conflicts. In the United States, the economy continued a gradual expansion due to improved employment
and income environment in addition to tax breaks from tax reform. In China, stable growth continued
despite signs of weakness in certain areas. The economies of other emerging countries also remainedgenerally firm. The Japanese economy has continued a moderate recovery supported by continuous
improvement in the employment and income environment.
In the automotive industry, while sales volumes increased in the United States, sales varied depending on
automobile models and demand continued to shift from passenger cars to compact trucks. A stable sales
increase continued in China, and also sales remained steady in Japan and other countries in Asia.
Under these circumstances, with the basic policies of “Back to Basics” and “Challenge for New” outlinedin the 13th Mid-term plan, which started in April 2017, the Group has been working to provide its
customers with new value, and has made efforts to increase orders.
The operating results for the Group during the three months under review are as follows. The Groupbenefited from continuing steady production in the North American market and favorable sales bycustomers in the Chinese market. Net sales rose by 10.2% year on year to 58,110 million yen. While
operating profit decreased by 14.9% year on year to 1,569 million yen due to operating loss in North
America, ordinary profit increased by 5.8% year on year to 1,581 million yen due to foreign exchange
gains, and profit attributable to owners of parent rose by 9.8% year on year to 780 million yen.
Operating results by segment are as follows.
(Japan)Favorable sales due to an increase in production volumes of the major customers of the Company led to
net sales rising by 10.3% year on year to 7,218 million yen. However, the segment recorded an operating
profit of 27 million yen, down by 96.7% year on year due to a decrease in tooling sales for overseasmarkets.
(North America)
In the North American market, net sales rose by 7.8% year on year to 34,095 million yen primarily due tothe impact of the newly awarded contracts that were concluded in the previous year and fully contributed
to sales from the start of the current fiscal year. The segment recorded an operating loss of 125 million
yen (an operating profit of 249 million yen was recorded in the same period of the previous year)
following the impact of the end of production of high-value-added products that occurred in the previousyear, a delay in a new customer’s plans for producing new models, and the increase in cost burden
resulting from said delay. However, compared to the fourth quarter of the previous fiscal year, there weresigns of a recovery.
(Asia)
Due to firm sales mainly to major customers in China, net sales rose by 15.6% year on year to 16,796
million yen and operating profit rose by 20.1% year on year to 1,477 million yen.
(2) Information regarding financial position
As of June 30, 2018, total assets decreased by 7,005 million yen compared with the end of the previous
fiscal year to 143,421 million yen, mainly reflecting decreases in notes and accounts receivable - tradeand construction in progress.
Liabilities decreased by 6,847 million yen from the end of the previous fiscal year to 87,527 million yen
mainly reflecting decreases in notes and accounts payable - trade, short-term loans payable, and longterm loans payable.
Net assets decreased by 157 million yen from the end of the previous fiscal year to 55,894 million yen
mainly reflecting decreases in valuation difference on available-for-sale securities, foreign currencytranslation adjustment, and non-controlling interests.

-1-(3) Information regarding consolidated earnings forecasts and other forward-looking statements
The consolidated earnings forecasts for the six months ending September 30, 2018, and the fiscal year
ending March 31, 2019, announced in “Consolidated Financial Results for the Fiscal Year Ended March31, 2018” on May 9, 2018, have not been changed.

-2-

2. Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Negative goodwill
Other
Total non-current liabilities
Total liabilities-3-

As of June 30, 2018

5,871
39,209
5,406
4,740
9,321
4,139
68,6896,030
34,467
5,202
4,413
9,032
3,981
63,12818,01039,333
5,094
10,55972,998397

17,88638,944
4,007
10,91371,752
372

6,240
2,115
(13)
8,341
81,737150,426

6,045
2,136(13)8,168
80,293
143,421

22,32019,391
13,454791
98
9,193
65,25020,50816,982
12,938516
46
8,502
59,49425,348
99
990
61
2,623
29,123
94,37423,987
91
990
60
2,902
28,03287,527

(Millions of yen)
As of March 31, 2018
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustmentRemeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-4-As of June 30, 2018

6,790
7,222
25,662(18)
39,656

6,790
7,222
26,255(18)
40,249

792

645

168
(445)
515
15,87956,051
150,426

(230)
(397)
17
15,62655,894143,421

(2) Consolidated statements of income and comprehensive income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest incomeDividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable toProfit attributable to owners of parent
Profit attributable to non-controlling interests-5-

Three months ended
June 30, 2017

Three months ended
June 30, 2018

52,72046,736
5,984
4,140
1,843

58,11052,400
5,710
4,140
1,569

17
18

27
26

13

88

–
49
98

106
100
349

227
140
77
446
1,495

313
–
23
336
1,581

1
1

9
9

0
13
13
1,483
563
(78)
485
997

0
1
2
1,588
522
45
567
1,021

710
287

780
241

(Millions of yen)Three months ended
June 30, 2017
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-6-

Three months ended
June 30, 2018

(69)
(232)
52

(116)
(281)
48

(39)

(103)

(288)
709

(453)
567

428

282

280

284

(3) Notes to quarterly consolidated financial statements
Uncertainties of entity’s ability to continue as going concern
Not applicable.
Substantial changes in the amount of shareholders’ equity
Not applicable.
Application of special accounting for preparing quarterly consolidated financial statements
Tax expenses in the quarterly consolidated financial statements for a portion of consolidated subsidiaries
are calculated first by reasonably estimating the effective tax rate after applying tax effect accounting
against profit before income taxes for the fiscal year including the first quarter ended June 30, 2018, andnext by multiplying the quarterly profit (loss) before income taxes by such estimated effective tax rate.
Segment information, etc.
Segment information
I.
Three months ended June 30, 2017
1. Disclosure of net sales and profit for each reportable segment(Millions of yen)
Reportable segments
Japan
Net sales
Net sales to external customers
Transactions with other segments
Total
Segment profit

2.

North America

Total

6,544
7,007

31,640395

14,534726

52,7208,129

13,552

32,036

15,26060,850

852

249

1,230

2,331

Differences between total amounts of profit (loss) for reportable segments and amounts in theconsolidated statements of income and comprehensive income and main details of these differences(matters relating to difference adjustments)(Millions of yen)AmountProfit

3.

Asia

Reportable segments total

2,331

Elimination of intersegment transactions(488)

Operating profit in the consolidated statements ofincome and comprehensive income

1,843

Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

-7-II. Three months ended June 30, 2018
1. Disclosure of net sales and profit for each reportable segment(Millions of yen)
Reportable segments
JapanNet sales
Net sales to external customers
Transactions with other segments
Total
Segment profit (loss)

2.

North America

Total

7,218
3,002

34,095
390

16,796
750

58,1104,143

10,22034,485

17,54762,25327(125)

1,477

1,380

Differences between total amounts of profit (loss) for reportable segments and amounts in theconsolidated statements of income and comprehensive income and main details of these differences(matters relating to difference adjustments)(Millions of yen)AmountProfit
Reportable segments total

1,380

Elimination of intersegment transactions

189

Operating profit in the consolidated statements ofincome and comprehensive income

3.

Asia

1,569

Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

Significant events after reporting period
Not applicable.
Additional information“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28,February 16, 2018) and relevant Guidances have been applied effective from the beginning of the firstquarter ended June 30, 2018. Accordingly, deferred tax assets were presented under “Investments andother assets” and deferred tax liabilities were presented under “Non-current liabilities.”-8-