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 Three Months Ended June 30, 2019
(Based on Japanese GAAP)
August 2, 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 Control
Division

Kunio Hasebe

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

August 9, 2019–

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

NoNo

TEL

03-5641-2018(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the three months ended June 30, 2019 (from April 1, 2019 to June 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%
Three months ended June 30, 201912,903
13.3
1,690
36.3
1,765
34.1
1,142
22.6
Three months ended June 30, 2018
11,389
17.9
1,240
37.8
1,316
37.6
931
51.6
Earnings per share

Diluted earnings per share

Yen
53.48
43.61

Three months ended June 30, 2019
Three months ended June 30, 2018

Yen––(2) Consolidated financial position
Total assets

Net assets

Millions of yen
44,16744,918

As of June 30, 2019
As of March 31, 2019

Equity ratio

Millions of yen
30,16729,331

Net assets per share
%
64.4
61.3

Yen
1,331.70
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

Yen–

Yen
50.00

Yen
90.00

25.00

–

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
2.75,130
3.6
5,380
2.5
3,550
0.6
166.251

4. Notes(1) Changes in significant subsidiaries during the three months ended June 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:

NoNo

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 June 30, 201922,354,000 shares As of March 31, 201922,354,000 shares

Number of treasury shares at the end of the periodAs of June 30, 2019

999,674 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)
Three months ended June 30, 2019

21,354,337 shares Three months ended June 30, 20182

21,353,160 shares

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

As of June 30, 2019

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

16,944,905
11,136,789

17,329,502
9,590,395

415,167
765,829

1,057,309
790,137

17,4991,290,049

17,963546,106

180,281
4,210

72,106
4,315

Other

1,104,279

1,423,501

Total current assets

31,859,011

30,831,338

232,612223,547

Goodwill
Other

1,156,480
59,3301,101,473
54,884

Total intangible assets

1,215,811

1,156,357

Investments and other assets
Investment securities

10,833,276

11,172,706

778,167

783,159

Non-current assets
Property, plant and equipment
Intangible assets

Other
Total investments and other assets
Total non-current assets
Total assets

11,611,443

11,955,866

13,059,868

13,335,770

44,918,879

44,167,108

7,497,955
1,072,115

5,881,421
401,348582,599
110,000

309,40322,500Liabilities
Current liabilities
Accounts payable - trade
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and other officers)
Other

3,202,769

3,981,556

Total current liabilities

12,465,440

10,596,230

2,648,012
151,8712,707,670
166,369

67,631

73,236

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

254,342456,165

3,121,857

3,403,442

15,587,298

13,999,673

Share capital
Capital surplus

1,873,136
2,073,167

1,873,136
2,073,167

Retained earnings
Treasury shares

21,417,044(690,902)

22,015,173(690,322)

Total shareholders' equity

24,672,445

25,271,154

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

3

(Thousands of yen)
As of March 31, 2019

As of June 30, 2019

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans

3,078,205(104,167)

3,339,595(95,271)

Foreign currency translation adjustment(108,676)(77,881)

Total accumulated other comprehensive income

2,865,361

3,166,442

Share acquisition rights

208

208

Non-controlling interests

1,793,565

1,729,629

Total net assets

29,331,581

30,167,435

44,918,879

44,167,108

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)Three months ended

Three months ended

June 30, 2018

June 30, 2019

Net sales
Cost of sales

11,389,609
8,591,945

12,903,324
9,678,974

Gross profit

2,797,663

3,224,350

Total selling, general and administrative expenses

1,557,552

1,534,287

Operating profit

1,240,111

1,690,062

Interest income
Dividend income

8,035
60,581

7,228
63,503

Share of profit of entities accounted for using equity method
Other–
15,71014,5923,639

Total non-operating income

84,32788,963

7,222––
483

11,292
2,283

Non-operating income

Non-operating expenses
Share of loss of entities accounted for using equity method
Loss on valuation of derivatives
Other

7,705

13,576

Ordinary profit

Total non-operating expenses

1,316,732

1,765,448

Profit before income taxes

1,316,732

1,765,448

350,518

486,360

Income taxes - current
Income taxes - deferred

17,25887,566

Total income taxes

367,776573,926

Profit948,956

1,191,522

Profit attributable to non-controlling interests

17,83049,514

Profit attributable to owners of parent

931,125

1,142,007

5Consolidated statements of comprehensive income (cumulative)(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

Three months ended

Three months ended

June 30, 2018

June 30, 2019
948,956

1,191,522

307,475(37,944)

261,389
35,9328,788

8,896(4,519)4,186

273,800

310,406

Comprehensive income

1,222,756

1,501,928

Comprehensive income attributable toComprehensive income attributable to owners of parent

1,215,743

1,443,088

7,012

58,839Comprehensive income attributable to non-controllinginterests

6

Consolidated statements of cash flows(Thousands of yen)

Cash flows from operating activities
Profit before income taxes

Three months ended

Three months ended

June 30, 2018

June 30, 2019

1,316,732

1,765,448

22,07469,697

15,38570,171

Loss (gain) on valuation of derivativesIncrease (decrease) in provision for bonuses–(271,849)

11,292(273,195)

Increase (decrease) in provision for bonuses for directors (andother officers)(72,497)(87,500)

Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for share-based remuneration

66,831
12,416

72,481
14,498Interest and dividend income
Share of loss (profit) of entities accounted for using equity(69,606)(70,731)

Depreciation
Amortization of goodwill

methodDecrease (increase) in trade receivables

7,222(14,592)

471,706

904,251

Decrease (increase) in investments in leases
Decrease (increase) in inventories(338,709)
552,820(24,308)
852,012

Decrease (increase) in advance payments - trade
Decrease (increase) in other current assets

20,324(59,728)(266,948)(51,907)(1,233,289)
551,883(1,616,533)
516,104

Increase (decrease) in accrued consumption taxes
Increase (decrease) in other current liabilities

115,982
191,088

10,032
178,127

Other, net(1,422)

2,048

Subtotal

1,351,678

2,006,138

79,534

113,898

Interest paid
Income taxes paid

(349)
(863,396)(3)(1,093,671)

Net cash provided by (used in) operating activities

567,467

1,026,361(510,435)(26,937)–(22,117)27,752(3,382)

Increase (decrease) in trade payables
Increase (decrease) in advances received

Interest and dividends received

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

6,062

(100)

(526,490)(2,668)(435,262)(18,598)(543,961)(122,775)

Cash flows from financing activities
Dividends paid
Dividends paid to non-controlling interests
Other, net–(82)Net cash provided by (used in) financing activities(453,860)(666,819)

Effect of exchange rate change on cash and cash equivalents(26,797)

14,546

Net increase (decrease) in cash and cash equivalents(439,680)

371,420

Cash and cash equivalents at beginning of period

12,723,527

15,676,249

Cash and cash equivalents at end of period

12,283,846

16,047,670

7