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 Six Months Ended September 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 six months ended September 30, 2018 has continued a recovery trend, buttrade frictions between the United States and China have caused concern, and economic sentiment has
weakened. The Japanese economy continued to expand moderately on the back of the favorable income
and employment environment. In the United States, the economy continued to expand on account of suchfactors as the improved employment and income environment and tax breaks from tax reform. In China,although robust conditions continued, the chances of downside risks occurring have become more likely
due to the trade friction concerns. The economies of other regions in Asia have been recovering overall.
In the automotive industry, in Japan, while sales were strong for light vehicles, the number of registeredvehicle declined. In North America, the shift in demand toward compact trucks continued and passenger
car sales declined. Strong sales continued in China, and sales remained firm overall in other Asianregions.
Under these circumstances, the Group has been working to provide its customers with new value, and has
made efforts to increase orders in accordance with the basic policies of “Back to Basics” and “Challengefor New” outlined in the 13th Mid-term plan.
The operating results for the Group during the six months under review are as follows. The Groupbenefited from favorable sales of major customers in the Chinese market and mass production effects ofproducts for newly awarded contracts in the North American market. Net sales rose by 7.3% year on year
to 115,393 million yen. While operating profit decreased by 23.3% year on year to 2,995 million yen
reflecting operating loss in North America, ordinary profit decreased by 20.9% year on year to 2,567
million yen, and profit attributable to owners of parent decreased by 29.0% year on year to 1,398 millionyen.
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 12.8% year on year to 15,108 million yen. However, the segment recorded an
operating profit of 232 million yen, down by 75.2% year on year due to a decrease in tooling sales foroverseas group companies.
(North America)
Net sales rose by 3.9% year on year to 66,855 million yen primarily due to the impact of the newly
awarded contracts that were concluded in the previous year and fully contributed to sales from the startof the current fiscal year. The segment recorded an operating loss of 319 million yen (an operating profitof 727 million yen was recorded in the same period of the previous year) primarily due to a decrease intooling sales, changes in sales composition of products of customers, rise in raw material costs due to theeffect of the U.S. trade policies, and an increase in cost associated with increased production for newmodels that were concluded in the previous year. However, compared to the second half of the previous
fiscal year, there were signs of a recovery as a result of initiatives to improve the production efficiency.
(Asia)
Due to firm sales mainly to major customers in China, net sales rose by 12.2% year on year to 33,429
million yen and operating profit rose by 22.3% year on year to 2,810 million yen.
(2) Information regarding financial position
As of September 30, 2018, total assets decreased by 7,037 million yen compared with the end of theprevious fiscal year to 143,388 million yen, mainly reflecting decreases in notes and accounts receivable- trade, merchandise and finished goods, and construction in progress.
Liabilities decreased by 8,658 million yen from the end of the previous fiscal year to 85,716 million yen
mainly reflecting decreases in notes and accounts payable - trade, short-term loans payable, and longterm loans payable.
Net assets increased by 1,620 million yen from the end of the previous fiscal year to 57,672 million yen
mainly reflecting an increase in retained earnings.

-1-(3) Information regarding differences between consolidated earnings forecasts and actual results andrevisions to earnings forecasts
Taking recent performance trends into consideration, the Company has revised its consolidated earnings
forecasts, which were announced on May 9, 2018, as described below.
(i) Differences between earnings forecasts and actual results
Differences between earnings forecasts and actual results in the six months ended September 30, 2018
(From April 1, 2018 to September 30, 2018)(Millions of yen)
ProfitBasic
Operating
Ordinary
attributableearnings perNet sales
profitprofitto owners ofshare (Yen)parentPrevious forecasts (A)111,000
2,500
2,000
900
48.18
Actual results (B)115,393
2,995
2,567
1,398
74.89
Difference (B-A)
4,393
495
567
498
26.71
Difference (%)
4.0
19.8
28.4
55.4
55.4
(Reference) Actual results forthe second quarter of theprevious fiscal year
107,511
3,902
3,248
1,969
114.89(Six months ended September30, 2017)
Reasons for the differences
In operating performance during the six months ended September 30, 2018, net sales increased owning
mainly to the effect of yen depreciation. Operating profit increased due primarily to cutting down on
expenses in Japan. Profit attributable to owners of parent increased due primarily to a decrease in profit
attributable to non-controlling interests in addition to the foregoing.
(ii) Earnings forecasts revisions
Revisions to consolidated earnings forecasts for the fiscal year ending March 31, 2019 (From April 1,2018 to March 31, 2019)(Millions of yen)
ProfitBasic
Operating
Ordinary
attributable
Net salesearnings perprofit
profitto owners ofshare (Yen)parentPrevious forecasts (A)226,000
7,500
6,600
4,000
214.15Current forecasts (B)233,000
6,500
5,600
3,100
165.97
Difference (B-A)
7,000(1,000)(1,000)(900)(48.18)Difference (%)
3.1(13.3)(15.2)(22.5)(22.5)(Reference) Actual results forthe previous fiscal year
226,060
6,856
5,924
4,709
262.98(Fiscal year ended March 31,2018)
Reasons for the revisions
The above-stated revisions to the Company’s consolidated earnings forecasts for the full fiscal year
ending March 31, 2019, take into account production volume changes at the Company’s major customers,
as well as the effect of yen depreciation. Compared with previous forecasts, the current forecasts show
net sales as higher, owing primarily to the effect of yen depreciation and increased production forproducts for newly awarded contracts that were concluded in the previous year. In Japan, the Company
expects operating profit to increase due primarily to the effect of the reduced expenses during the firsthalf of the fiscal year, while in North America, the costs of raw materials are expected to rise due to theeffect of the U.S. trade policies and labor costs are expected to rise in Canada due to measures to meetincreased production and the tightening labor market conditions. Primarily as a result of the above, theCompany expects consolidated operating profit to decrease.
The average exchange rate for the fiscal year is assumed at 107.86 yen to the U.S. dollar.

-2-Note: The above-stated earnings forecasts are based on information currently available to the Company
and are considered to be rational on this basis. However, as they include risks and uncertainties
which are subject to various future events, actual results may differ from forecasts.

-3-2. Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of September 30, 2018

5,871
39,209
5,406
4,740
9,321
4,139
68,6896,160
35,000
4,357
4,376
9,778
3,367
63,04218,01039,333
5,094
10,55972,998397

18,284
38,631
3,995
10,64371,555
376

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

6,277
2,150
(13)
8,414
80,346
143,388

22,32019,391
13,454791
98
9,193
65,25021,463
13,044
13,557489
69
8,893
57,51725,348
99
990
61
2,623
29,123
94,37424,311
96
986
58
2,745
28,19885,716

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-4-(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 adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-5-

As of September 30, 2018

6,790
7,22225,662(18)
39,656

6,790
7,222
26,874(18)
40,868

792

722

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

529
(370)
880
15,92357,672
143,388(2) Consolidated statements of income and comprehensive income(Millions of yen)Six months ended
September 30, 2017
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
methodOther
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
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-

Six months ended
September 30, 2018

107,511
95,164
12,347
8,444
3,902

115,393
104,134
11,259
8,264
2,995

37
25

44
29

153

142

103
320

122
338

504
373
97
974
3,248

607
127
31
766
2,567

55

12
12

0
35353,217
992
(300)
691
2,526

5
21
26
2,553
963
(66)
897
1,655

1,969
556

1,398
257

9869
69(67)
672
73(147)

10800
3,327

689
2,345

2,367

1,763

959

581

(3) Consolidated statements of cash flows(Millions of yen)Six months ended
September 30, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in assets and liabilities related toretirement benefits
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for directors’bonuses
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in notes and accounts receivable- tradeDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accrued expenses
Other, net
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 investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Repayments of installment payables
Dividends paid to non-controlling interests
Repayments of finance lease obligations
Proceeds from sales and leasebacks
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cashequivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-7-Six months ended
September 30, 2018

3,217
5,618
(2)

2,553
5,978
(2)

19

53(190)

(3)

(65)

(29)

(62)
504
115

(73)
607
13(153)

(142)

(5)
35

(6)
21(1,379)

4,588(1,032)

1,350(1,216)(1,072)

213(1,631)
3,985
99
(504)
(713)
2,866

101
(212)
13,724
111
(613)
(882)
12,339(6,443)
14
(36)
(17)
(13)
(6,495)(2,894)25(50)(18)(5)(2,943)

2,142
9,501
(5,337)
(0)
(284)
(225)
(868)
(407)
299
4,820

(6,794)
5,184(6,844)
(0)
(186)
(165)
(537)
(436)
686
(9,094)

(136)

(12)

1,054
5,719
6,773

289
5,871
6,160

(4) 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 second quarter ended September 30,
2018, and next by multiplying the quarterly profit (loss) before income taxes by such estimated effective
tax rate.
Segment information, etc.
Segment informationI.
Six months ended September 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
TotalSegment profit

2.

North America

Total

13,393
10,51464,322792

29,795
1,464

107,511
12,771

23,907

65,11431,260120,282

935

727

2,297

3,960

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)AmountProfitReportable segments total

3,960

Elimination of intersegment transactions(57)

Operating profit in the consolidated statements ofincome and comprehensive income

3.

Asia

3,902

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

-8-II. Six months ended September 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

15,1086,226

66,855740

33,4291,579

115,393
8,547

21,334

67,59635,009123,940

232

(319)

2,810

2,723

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)AmountProfitReportable segments total

2,723

Elimination of intersegment transactions

271

Operating profit in the consolidated statements ofincome and comprehensive income

3.

Asia

2,995

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

Significant events after reporting period
Not applicable.

-9-