Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Six Months Ended September 30, 2019
(Based on Japanese GAAP)
November 1, 2019
Company name:
ARGO GRAPHICS Inc.
Stock exchange listing: Tokyo
Stock code:
Representative:

7595
URL http://www.argo-graph.co.jp
Chairman and CEO
Yoshimaro Fujisawa

Inquiries:

Managing Director, Administration ControlDivisionKunio Hasebe

TEL

Scheduled date to file Quarterly Securities Report:
Scheduled date to commence dividend payments:

November 8, 2019
December 6, 2019

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:

Yes
Yes

03-5641-2018(for institutional investors and analysts)(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended September 30, 2019 (from April 1, 2019 to September 30, 2019)(1) Consolidated operating results (cumulative)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%Six months ended September 30, 201924,151
9.7
3,305
40.3
3,451
37.5
2,231
32.1
Six months ended September 30, 2018
22,017
16.0
2,355
30.2
2,511
30.7
1,688
37.3
Earnings per share

Diluted earnings per shareYen
104.4979.09

Six months ended September 30, 2019
Six months ended September 30, 2018

Yen
104.4979.08(2) Consolidated financial position
Total assets

Net assets

Millions of yen
43,66744,918

As of September 30, 2019
As of March 31, 2019

Equity ratio

Millions of yen
31,26929,331

Net assets per share
%
67.4
61.3

Yen
1,379.10
1,289.61

2. Cash dividends
Annual dividends per share

Year ended March 31, 2019Year ending March 31, 2020

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
40.00
25.00

Yen–

Yen
50.00

Yen
90.00

–

25.00

50.00

Year ending March 31, 2020 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2020 (from April 1, 2019 to March 31, 2020)
Net sales
Full year

Millions of yen
46,400Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen
%
Yen
2.7
5,130
3.6
5,380
2.5
3,550
0.6
166.251

4. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2019(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

No(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 201922,354,000 shares As of March 31, 201922,354,000 shares

Number of treasury shares at the end of the period
As of September 30, 2019998,274 shares As of March 31, 2019

1,000,440 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2019

21,354,565 shares Six months ended September 30, 2018

221,353,160 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Thousands of yen)
As of March 31, 2019

As of September 30, 2019

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Investments in leases
Securities
MerchandiseWork in process
Raw materials and supplies

16,944,905
11,136,789

18,010,910
8,743,065

415,167
765,829

1,008,588
719,624

17,4991,290,049

18,073
697,123

180,281
4,210

116,769
2,842

Other

1,104,279

725,971

Total current assets

31,859,011

30,042,967

232,612229,030

Goodwill
Other

1,156,480
59,3301,033,038
50,392

Total intangible assets

1,215,811

1,083,431

Investments and other assets
Investment securities

10,833,276

11,537,062

778,167

775,349

Non-current assets
Property, plant and equipment
Intangible assets

Other
Total investments and other assets

11,611,443

12,312,412

13,059,868

13,624,873

44,918,879

43,667,841

7,497,955
1,072,115

4,638,394
866,855

582,599
110,000

573,51145,000Other

3,202,769

2,827,936

Total current liabilities

12,465,440

8,951,698

2,648,012
151,871

2,742,162
179,257

67,631

78,842

Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and other officers)

Non-current liabilities
Retirement benefit liability
Provision for share-based remuneration
Provision for share-based remuneration for directors (andother officers)
Other
Total non-current liabilities
Total liabilities

3254,342

446,705

3,121,857

3,446,967

15,587,298

12,398,665

(Thousands of yen)
As of March 31, 2019

As of September 30, 2019

Net assets
Shareholders' equity
Share capital

1,873,136

1,873,136

Capital surplus
Retained earnings

2,073,167
21,417,044

2,073,167
23,104,465

Treasury shares(690,902)(689,163)

24,672,445

26,361,605

3,078,205(104,167)

3,269,816(86,375)

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans
Foreign currency translation adjustment(108,676)(93,260)

Total accumulated other comprehensive income

2,865,361

3,090,180

Share acquisition rights

208

208

Non-controlling interests

1,793,565

1,817,181

Total net assets

29,331,581

31,269,175

44,918,879

43,667,841

Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Thousands of yen)Six months ended

Six months ended

September 30, 2018

September 30, 2019

Net sales
Cost of sales

22,017,675
16,519,437

24,151,460
17,805,421

Gross profit

5,498,238

6,346,038

Selling, general and administrative expenses

3,142,863

3,040,713

Operating profit

2,355,374

3,305,325Interest income
Dividend income

19,322
67,911

19,54170,185

Share of profit of entities accounted for using equity method
Other

46,41824,061

52,713
6,813

Total non-operating income

157,714149,254

576

–

1,200
134

775
1,938

Non-operating income

Non-operating expenses
Interest expenses
Loss on investments in investment partnerships
Other

1,911

2,714

Ordinary profit

Total non-operating expenses

2,511,177

3,451,865

Profit before income taxes

2,511,177

3,451,865

754,319969,589

Income taxes - current
Income taxes - deferred(13,964)

107,785

Total income taxes

740,354

1,077,374

1,770,822

2,374,491

82,092

143,191

1,688,730

2,231,299

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

5

(Thousands of yen)
2nd quarter endedSeptember

2nd quarter endedSeptember

30, 2018

30, 2019

Net sales
Cost of sales

10,628,066
7,927,491

11,248,136
8,126,447

Gross profit

2,700,574

3,121,688

Selling, general and administrative expenses

1,585,311

1,506,425

Operating profit

1,115,263

1,615,263

Interest income
Dividend income

10,2987,329

12,313
6,682

Share of profit of entities accounted for using equity method
Gain on valuation of derivatives

53,640–38,121
11,919Other

10,054

2,547

Total non-operating income

81,322

71,584

227
1,914

–
377

Non-operating income

Non-operating expenses
Interest expenses
Loss on investments in investment partnerships
Other–

52

2,141

430

Ordinary profit

1,194,444

1,686,416

Profit before income taxes

1,194,444

1,686,416

Income taxes - current
Income taxes - deferred

403,801(31,223)

483,229
20,218

Total income taxes

372,577503,447

Profit821,866

1,182,969

Total non-operating expenses

Profit attributable to non-controlling interests

64,261

93,677

Profit attributable to owners of parent

757,604

1,089,292

6

Consolidated statements of comprehensive income (cumulative)(Thousands of yen)

ProfitOther comprehensive income

Six months ended

Six months ended

September 30, 2018

September 30, 2019

1,770,822

2,374,491

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

614,737(59,294)

191,61128,535Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted

17,576

17,792(34,352)(6,834)for using equity method

538,666

231,105

Comprehensive income

Total other comprehensive income

2,309,489

2,605,596

Comprehensive income attributable toComprehensive income attributable to owners of parent

2,242,078

2,456,119

67,410149,477

Comprehensive income attributable to non-controllinginterests7

(Thousands of yen)

ProfitOther 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

2nd quarter endedSeptember

2nd quarter endedSeptember

30, 2018

30, 2019
821,866

1,182,969

307,262(21,350)(69,778)(7,397)

8,787

8,895

(29,833)(11,021)264,866(79,300)

Comprehensive income

1,086,733

1,103,668

Comprehensive income attributable toComprehensive income attributable to owners of parent

1,026,335

1,013,030

60,397

90,638Comprehensive income attributable to non-controllinginterests8Consolidated statements of cash flows(Thousands of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors (andother officers)
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for share-based remuneration
Increase (decrease) in provision for share-based remuneration
for directors (and other officers)
Interest and dividend income

Six months ended

Six months ended

September 30, 2018

September 30, 2019

2,511,177

3,451,865

43,984
139,237

31,433140,343

1,819(9,088)(45,000)(65,000)

115,713

119,795

31,30627,385

12,408

11,211(87,234)(89,726)

Share of loss (profit) of entities accounted for using equity
method(46,418)(52,713)

Decrease (increase) in trade receivables
Decrease (increase) in investments in leases

157,923(731,167)

1,800,302
46,205Decrease (increase) in inventories
Decrease (increase) in advance payments - trade(34,242)
140,679

657,806
410,618

Decrease (increase) in other current assets
Increase (decrease) in trade payables

36,187
267,972(32,219)(2,859,560)

Increase (decrease) in advances received
Increase (decrease) in accrued consumption taxes

376,750
30,222

172,026(73,138)

Increase (decrease) in other current liabilities
Increase (decrease) in provision for loss on order received(323,082)
95,268(544,339)–

Other, net(5,815)

15,208Subtotal

2,687,693

3,158,413

Interest and dividends received

109,685

194,991

Interest paid
Income taxes paid

(576)
(899,011)–(1,109,191)

Net cash provided by (used in) operating activities

1,897,790

2,244,213(1,557,795)(1,146,937)

980,000(30,919)

1,007,752(20,390)(1,204,636)
1,200,000(500,543)–

1,704(5,034)(611,647)(665,154)

Repayments of short-term borrowings
Dividends paid

(75,000)(435,697)–(544,335)

Dividends paid to non-controlling interests
Other, net(64,516)–(125,862)(82)

Net cash provided by (used in) financing activities(575,213)(670,279)

Cash flows from investing activities
Payments into time depositsProceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of investment securities
Proceeds from redemption of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Effect of exchange rate change on cash and cash equivalents(23,630)

4,692

Net increase (decrease) in cash and cash equivalents

687,298

913,471

Cash and cash equivalents at beginning of period

12,723,527

15,676,249

Cash and cash equivalents at end of period

13,410,826

16,589,720

9