Consolidated Financial Results for the First Quarter of the Fiscal Year Ending December 31, 2019
(Japanese GAAP)May 14, 2019

Company name: Nishimoto Co., Ltd.
Listed exchange: Tokyo
Code:
9260
URL: http://www.wismettac.com/
Representative:
Takayuki Kanai, President
Contact:
Atsuhiko Kimura, Director and CFO(Phone) 03-6870-2015
Scheduled date of filing of quarterly report:
May 15, 2019
Scheduled date of commencement of dividend payments:—
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:No(Amounts are rounded down to the nearest million yen)

1.

Consolidated financial results for the first quarter of the fiscal year ending December 31, 2019(from January 1, 2019 to March 31, 2019)(1) Consolidated results of operations (cumulative)
Net sales
Million yen(Percentages denote year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income%

Million yen%

Million yen%

Million yen

%

1,452

(5.2)

1,017

(8.8)

1,531

—

1,115

—

First quarter of FY ending
43,742
2.2
1,428(13.1)
December 31, 2019
First quarter of FY ended
42,815—
1,643—
December 31, 2018
(Note) Comprehensive income
First quarter of FY ending December 31, 2019: (1,111) million yen (—%)
First quarter of FY ended December 31, 2018: (1,120) million yen (—%)
Diluted net income per
Net income per share
share
Yen

Yen

First quarter of FY ending
70.90—
December 31, 2019
First quarter of FY ended
77.73—
December 31, 2018
(Note) From the first quarter of the fiscal year ending December 31, 2019, the Company has changed the method for calculating
retirement benefit obligations for its domestic consolidated subsidiaries from the simplified method to the standard method.
Figures for the first quarter of the fiscal year ended December 31, 2018 have been adjusted as this change has been applied
retroactively. Year-on-year percentage changes for the first quarter of the fiscal year ended December 31, 2018 are not shownas this change has been applied retroactively.

(2) Consolidated financial position
Total assets

Net assets

Million yen

As of March 31, 201984,764(FY 2019 1Q)
As of December 31, 2018
83,719(FY 2018)(Reference)
Shareholders’ equity
First quarter of FY ending December 31, 2019:
FY ended December 31, 2018:(Note)

2.

Equity ratio

Million yen%

51,84361.2

51,521

61.5

51,843 million yen
51,521 million yen

From the first quarter of the fiscal year ending December 31, 2019, the Company has changed the method for calculating
retirement benefit obligations for its domestic consolidated subsidiaries from the simplified method to the standard method.
Figures for the fiscal year ended December 31, 2018 have been adjusted as this change has been applied retroactively.

Dividends
Annual dividends
First quarter-end
Yen

Secondquarter-end

Third quarter-end
Yen

FY ended December 31, 2018—
40.00
FY ending December 31, 2019—
FY ending December 31, 2019
40.00
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Year-end

Total

Yen

Yen

Yen

—

55.00

95.00

—

55.00

95.00

3.

Consolidated financial results forecast for the fiscal year ending December 31, 2019(from January 1, 2019 to December 31, 2019)

Net sales
Million yen(Percentages denote year-on-year changes)
Profit attributable to Net income per
Ordinary income
owners of parent
share

Operating income%

Million yen%

Million yen%

Million yen%

Yen

First half of FY ending
96,0286.4
2,953 (3.3)
2,982 (2.8)
2,128 (2.3)
148.27
December 31, 2019
FY ending December
193,000
5.9
6,000 (10.5)
6,052 (7.9)
4,337 (6.2)
302.2031, 2019(Note) 1. Revision to the forecast for financial results announced most recently: None
2. Since the Company has changed the method for calculating retirement benefit obligations for its domestic consolidated
subsidiaries from the simplified method to the standard method and this change has been applied retroactively, adjusted
figures have been used to show the year-on-year percentage changes.

* Notes(1) Changes in significant subsidiaries during the first three months of the fiscal year:
Yes(Changes in specified subsidiaries resulting in changes in the scope of consolidation)
New – companies(Company name) / Excluded 1 company (Company name) Wismettac Foods, Inc.
(Note) For details, please see the section titled "(3) Notes to the quarterly consolidated financial statements (Changes in significant subsidiaries
during the first three months of the fiscal year)" under the chapter titled "2. Quarterly consolidated financial statements and major notes"
on the page 8 of the attachment.

(2) Application of accounting treatment specific to the preparation of quarterly consolidated
financial statements:(3) Changes in accounting policies, changes to accounting estimates, and restatements(i) Changes in accounting policies due to revisions of accounting standards:

Yes

Yes

(ii) Changes in accounting policies other than (i) above:Yes(iii) Changes in accounting estimates:None(iv) Restatements:

None(4) Number of shares outstanding (common stock)(i) Number of shares outstanding at the end of the As of March 31,
December 31,
14,353,140 shares
14,353,140 shares
2019
2018
period (including treasury shares)(ii) Number of treasury shares at the end of the
As of March 31,
December 31,
112 shares
112 shares
2019
2018
period(iii) Average number of shares during the period
As of March 31,
14,353,028 shares March 31, 2018 14,353,100 shares
2019(three months ended March 31, 2019)* These quarterly financial results are not subject to quarterly review procedures.
* Explanation of the proper use of financial results forecasts and other notes(Cautionary note on forward-looking statements, etc.)
The forward-looking statements such as financial results forecasts contained in this document are based on information currently
available to the Company and certain reasonable assumptions. Thus, these statements are not intended for management to promise theachievement of the forecast. Actual financial results may differ materially due to various factors. For conditions of the assumptions in
the forecast and notes to use of the forecast, please see the section titled "(3) Explanation of future forecasts such as consolidated
financial results forecasts" under the chapter titled "1. Qualitative information on quarterly financial results" on the page 3 of theattachment.
(How to obtain the quarterly financial results supplementary materials)
The quarterly financial results supplementary materials will be disclosed on TDnet on May 14, 2019 and will also be posted on the
Company’s website.

 Attachment: Table of Contents
1. Qualitative information on quarterly financial results .............................................................................................. 2(1) Explanation of operating results ........................................................................................................................ 2(2) Explanation of financial position ....................................................................................................................... 3(3) Explanation of future forecasts such as consolidated financial results forecasts ................................................ 3
2. Quarterly consolidated financial statements and major notes .................................................................................. 4(1) Quarterly consolidated balance sheet ................................................................................................................. 4(2) Quarterly consolidated statements of income and comprehensive income ........................................................ 6(3) Notes to the quarterly consolidated financial statements ................................................................................... 8(Notes to assumption of going concern) ............................................................................................................ 8(Notes on significant changes in shareholders’ equity) ...................................................................................... 8(Changes in Accounting Policies) ...................................................................................................................... 8(Application of an accounting treatment specific to the preparation of the quarterly consolidated
financial statements) .......................................................................................................................................... 8(Changes in significant subsidiaries during the first three months of the fiscal year) ........................................ 8(Additional information) .................................................................................................................................... 8(Segment information) ....................................................................................................................................... 9–1–

1. Qualitative information on quarterly financial results(1) Explanation of operating results[Outline of the first three months of the fiscal year]
The overall world economy during the first quarter of the current consolidated fiscal year continued to recover moderately.
However, uncertainties still remain, such as the outlook for the Chinese economy, uncertainties about other nations’ policies,
and the potential impact of trade issues on the global economy.
Meanwhile, the overall Japanese economy remained on a moderate recovery trend as the employment environment steadily
improved while corporate performance remained unchanged.
Under such circumstances, the Company Group has been working on improving operating results by operating two main
businesses: the Asian Food Global Business, that distributes Asian food products and ingredients such as Japanese food aroundthe world with a focus on North America, as well as in Europe, China, South East Asia, Australia, etc., and Agricultural &Seafood Products Trading Business, that distributes fruits and vegetables, fishery products, etc., with a focus on domestic
markets, as well as in China, South East Asia, etc.
With regard to the Asian Food Global Business, in addition to the growth in the North American region, the Company Grouphas been aggressively developing markets, setting the strengthening of business bases in other regions as one of the Company
Group’s growth strategies. As for the Agricultural & Seafood Products Trading Business, in addition to the wholesale market,
which is the main distribution route, the Company Group has been working on developing other distribution routes (massretailers, restaurant chains, home-meal replacement industries, etc.) and overseas distribution routes (export of domestic fruits
and vegetables, offshore trading in fruits and vegetables, wholesale business in China, etc.).
As a result, with respect to the financial results for the first quarter of the current consolidated fiscal year, the Company had net
sales of 43,742 million yen (2.2% increase year-on-year), operating income of 1,428 million yen (13.1% decrease year-onyear), ordinary income of 1,452 million yen (5.2% decrease year-on-year), and profit attributable to owners of parent of 1,017
million yen (8.8% decrease year-on-year).
Financial results by segment are as follows: It is noted that net sales of segments are net sales to external customers.
[Outline of operating results by segment](i) Asian Food Global BusinessIn the Asian Food Global Business, for the first quarter of the current consolidated fiscal year, the Company had net salesof 31,077 million yen (4.1% increase year-on-year) and operating income of 1,200 million yen (9.9% decrease year-onyear).
Net sales in the North American region grew. Although purchase prices of some products, which rose during theconsolidated fiscal year ended December 31, 2018, are leveling off, expenses at the logistics department including laborcosts have still remained high. In this region, the Company incurred internal policy-related expenses for restructuring
purposes (profitability improvement and logistics expenses restraint) including investment in human resources. These
factors contributed to the decline in profit.
Net sales also grew in regions outside of North America. Overall profit slightly decreased due to a decline in profit at a
subsidiary in the U.K., Harro Foods Limited. The company was affected by temporary rises in purchase prices due tofluctuations in currency exchange rates amid the issue of Brexit.
(ii) Agricultural & Seafood Products Trading BusinessIn the Agricultural & Seafood Products Trading Business, for the first quarter of the current consolidated fiscal year, theCompany had net sales of 11,477 million yen (2.7% decrease year-on-year) and operating income of 126 million yen(50.8% decrease year-on-year).
Overall net sales declined as a Chinese subsidiary which imports and sells fruits and vegetables, Shanghai IPM Co., Ltd.,
was affected by weak sales of American citrus fruits due to U.S.-China trade conflicts although domestic sales remained
almost flat compared with the same period a year ago. Profits declined mainly due to a sluggish domestic market for citrus
fruits and vegetables.
(iii) Other businesses
In other businesses, for the first quarter of the current consolidated fiscal year, the Company had net sales of 1,186 million
yen (3.4% increase year-on-year) and operating income of 113 million yen (47.8% increase year-on year).
Net sales and operating income grew as sales of seasonal products and character products, etc. for Japan expanded.

–2–

(2) Explanation of financial position(Assets)
Total assets as of March 31, 2019 stood at 84,764 million yen, an increase of 1,045 million yen compared to December 31,
2018, and was mainly attributable to the following.
Total current assets as of March 31, 2019 amounted to 75,805 million yen, an increase of 865 million yen compared to
December 31, 2018. The increase in current assets is attributable to an increase of 2,573 million yen in inventories despitea decrease of 1,993 million yen in cash and deposits.
Total non-current assets as of March 31, 2019, came to 8,959 million yen, an increase of 179 million yen compared to
December 31, 2018. The increase in non-current assets is attributable to an increase of 257 million yen in leased assets(net) despite a decrease of 55 million yen in customer-related assets.
(Liabilities)
Total liabilities as of March 31, 2019 stood at 32,921 million yen, an increase of 723 million yen compared to December
31, 2018, and was mainly attributable to the following.
Total current liabilities as of March 31, 2019, amounted to 20,717 million yen, an increase of 541 million yen compared to
December 31, 2018. The increase in current liabilities is attributable to an increase of 785 million yen in accounts payable
despite a decrease of 348 million yen in income taxes payable.
Total non-current liabilities as of March 31, 2019 was 12,203 million yen (an increase of 182 million yen compared to
December 31, 2018). The increase in non-current liabilities is attributable to an increase of 129 million yen in leaseobligations.
(Net assets)
Total net assets as of December 31, 2019 amounted to 51,843 million yen, an increase of 322 million yen compared to
December 31, 2018. The increase in net assets is mainly attributable to an increase of 228 million yen in retained earnings.

(3) Explanation of future forecasts such as consolidated financial results forecasts
Financial results forecasts for the fiscal year ending December 31, 2019, are as stated in the Consolidated Financial Results for
the Fiscal Year Ended December 31, 2018, (Japanese GAAP) announced on February 14, 2019 and no changes have been
made to the forecasts.

–3–

2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet
FY 2018(As of December 31, 2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Leased assets, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress
Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–4–(Millions of yen)First quarter of FY 2019
(As of March 31, 2019)28,52019,54725,425
1,604(158)
74,93926,526
19,32827,9982,116(164)75,805

1,857
374
75
185
279
2,771

1,799
376
166
442
458
3,244

671
168
303
815
69
2,028

651
439
—
759
68
1,918

1,255
1,058
1,035
810
(178)
3,979
8,779
83,719

1,235
895
1,044
697
(76)
3,796
8,959
84,764

FY 2018(As of December 31, 2018)(Millions of yen)First quarter of FY 2019
(As of March 31, 2019)11,540
2,640
140
52
2,740
700
538
5
1,816
20,176

11,258
2,729
144
180
3,525
352
481
4
2,040
20,717

9,351
135
126
560
1,467
378
12,02132,197

9,326
265
118
579
1,485
428
12,20332,921

2,646
6,531
41,983(0)51,1602,646
6,531
42,211(0)51,388

6
(3)
360
(2)
360
51,521
83,719

7
(0)
450
(2)
455
51,84384,764

Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable—other
Income taxes payable
Provision for bonuses
Provision for shareholders’ benefits
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors’ retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets–5–(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income
First three months ending March 31, 2019

Net sales
Cost of sales

42,81535,063(Millions of yen)First three months of FY 2019
(January 1, 2019
to March 31, 2019)43,74235,821Gross profit

7,751
6,107

7,920
6,491

1,643

1,428

24

54

14

2

167
8

—
17

213

73

43

30

279
2

18
0

325
1,531

49
1,452

Total extraordinary income
Extraordinary losses——

Total extraordinary losses
Profit before income taxes—

Income taxes—current
Income taxes—deferred

—
1,531
511
(95)

1,452
457
(22)

Total income taxes
Net income

415
1,115

434
1,017

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

—
1,115

—
1,017

First three months of FY 2018
(January 1, 2018
to March 31, 2018)

Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividend income
Share of profit of entities accounted for using equity
methodInsurance benefits received
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income–6–Quarterly consolidated statement of comprehensive income
First three months ending March 31, 2018

1,115

(Millions of yen)First three months of FY 2019
(January 1, 2019
to March 31, 2019)
1,017

2
(34)

0
3

(2,162)
—

112
0

(41)

(22)

(2,236)(1,120)94
1,111(1,120)

1,111

—

—

First three months of FY 2018
(January 1, 2018
to March 31, 2018)
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests–7–

(3) Notes to the quarterly consolidated financial statements(Notes to assumption of going concern)
No relevant items.
(Notes on significant changes in shareholders’ equity)
No relevant items.
(Changes in Accounting Policies)
Changes in the method for calculating retirement benefit obligations
Starting from the first quarter of the current consolidated fiscal year, the Company has changed the method for calculating
retirement benefit obligations for its domestic consolidated subsidiaries from the simplified method to the standard method. In orderto respond to changes in the business environment, two domestic consolidated subsidiaries were merged in January 2019. The
number of employees is expected to increase due to further expansion of operations in the future. In light of this, the Company
verified the reliability of retirement benefit estimates based on actuarial calculations and concluded that adopting the standard
method will improve the accuracy of the calculation of retirement benefit obligations and enable more appropriate periodic
accounting of profit and loss regarding retirement benefit expenses, because of which the Company has applied such a change.
This change in accounting standards is applied retroactively. Consolidated financial statements for the first three months of the
fiscal year ended December 31, 2018 and the consolidated fiscal year ended December 31, 2018 have been adjusted retroactively.
As a result, compared with before the retroactive change, operating income, ordinary income, and profit before income taxes forthe first three months of the fiscal year ended December 31, 2018 each decreased by 3 million yen. The cumulative effect on net
assets at the beginning of the fiscal year decreased the retained earnings balance at the beginning of the fiscal year by 235 million
yen.
Application of IFRS 16 Leases
Starting from the first quarter of the current consolidated fiscal year, the Company and some of its overseas consolidated
subsidiaries, which adopt Japanese and U.S. standards, have applied IFRS 16 Leases. IFRS 16 Leases introduces a single lessee
accounting model and, in principle, requires a lessee to recognize assets and liabilities for all leases. The impact of the application ofthis accounting standard on the quarterly consolidated financial statements is minimal.
(Application of an accounting treatment specific to the preparation of the quarterly consolidated financial statements)
Calculation of tax expenses
The tax expenses of some of non-Japan consolidated subsidiaries were calculated by multiplying net income before taxes by aneffective tax rate, which was estimated as the rate after the application of tax effect accounting to net income before taxes for the
fiscal year including the first quarter of the fiscal year.
(Changes in significant subsidiaries during the first three months of the fiscal year)
During the first quarter of the current consolidated fiscal year, an absorption-type merger was implemented between the
Company’s consolidated subsidiaries, Nishimoto Trading Co., Ltd. as the surviving company and Wismettac Foods, Inc. as theabsorbed company. Due to this absorption-type merger, Wismettac Foods, Inc. has been excluded from the scope of consolidationfrom the first quarter of the current consolidated fiscal year. Nishimoto Trading Co., Ltd., the surviving company, changed its tradename to Wismettac Foods, Inc. as of January 1, 2019.
(Additional information)
Application of Partial Amendments to Accounting Standard for Tax Effect Accounting
Starting from the beginning of the first quarter of the current consolidated fiscal year, the Partial Amendments to AccountingStandard for Tax Effect Accounting (ASBJ Statement No. 28, February 16, 2018) has been applied. As a result, deferred tax assets
are indicated in the category of investments and other assets while deferred tax liabilities are indicated in the category of non-current
liabilities.

–8–

(Segment information)
First three months of the fiscal year (from January 1, 2018 to March 31, 2018)
1.

Information related to net sales and profits/losses by reporting segment(Millions of yen)
Reporting segment
Agricultural &Asian Food
Seafood Products Other business
Global BusinessTrading BusinessNet sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit

29,866
4,425
34,291
1,332

11,801
41
11,842
258

1,147
—
1,147
76

Total

Adjustment(Note 1)42,815
4,467
47,282
1,667

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)—
(4,467)(4,467)(23)

42,815—42,815
1,643(Note) 1. "Adjustment" for segment profit in the amount of (23) million yen includes (1,204) million yen for elimination ofintersegment transactions and 1,180 million yen for company profit/loss not allotted to reporting segments (netcompany profits and net company expenses). Company profits consist mainly of dividend income from reporting
segments, and company expenses mainly comprise general and administrative expenses not attributed to reporting
segments.
2. The segment profit is reconciled with the operating income on the Quarterly Consolidated Statement of Income.
2.

Information related to impairment loss of non-current assets and goodwill by reporting segment
No relevant items.

First three months of the fiscal year (from January 1, 2019 to March 31, 2019)1.

Information related to net sales and profits/losses by reporting segment(Millions of yen)
Reporting segment
Agricultural &Asian Food
Seafood Products Other business
Global BusinessTrading BusinessNet sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit

31,077
4,218
35,295
1,200

11,477
0
11,478
126

1,186
—
1,186
113

Total

Adjustment(Note 1)

43,742
4,219
47,961
1,441

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)—
(4,219)(4,219)(12)

43,742—
43,742
1,428(Note) 1. "Adjustment" for segment profit in the amount of (12) million yen includes (1,396) million yen for elimination ofintersegment transactions and 1,384 million yen for company profit/loss not allotted to reporting segments (netcompany profits and net company expenses). Company profits consist mainly of dividend income from reporting
segments, and company expenses mainly comprise general and administrative expenses not attributed to reporting
segments.
2. The segment profit is reconciled with the operating income on the Quarterly Consolidated Statement of Income.
2.

Information related to impairment loss of non-current assets and goodwill by reporting segment
No relevant items.

3.

Changes to reportable segments and others
As stated in "Changes in Accounting Policies," starting from the first quarter of the current consolidated fiscal year, the method

for calculating retirement benefit obligations for the Company’s domestic consolidated subsidiaries has been changed from thesimplified method to the standard method. As a result, the measurement method for segment income or loss has also been changed.
Segment information for the first three months of the fiscal year ended December 31, 2018 is based on the measurement method
for income or loss to which the change has been applied.

–9–