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

November 13, 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:
November 14, 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 third quarter of the fiscal year ending December 31, 2019(from January 1, 2019 to September 30, 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

%

3,674

(23.1)

2,548(24.4)

4,775

—

3,372

—

Third quarter of FY ending
137,049
1.1
3,571(25.2)
December 31, 2019
Third quarter of FY ended
135,548—
4,772—
December 31, 2018
(Note) Comprehensive income
Third quarter of FY ending December 31, 2019: 1,402 million yen (-59.9%)
Third quarter of FY ended December 31, 2018: 3,494 million yen (—%)
Diluted net income per
Net income per share
share
Yen

Yen

Third quarter of FY ending
177.58—December 31, 2019
Third quarter of FY ended
235.00—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 third 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 third quarter of the fiscal year ended December 31, 2018 are notshown as this change has been applied retroactively.

(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

As of September 30, 2019
97,612
51,56052.8(FY 2019 3Q)
As of December 31, 2018
83,71951,521
61.5(FY 2018)(Reference)
Shareholders’ equity
Third quarter of FY ending December 31, 2019:
51,560 million yen
FY ended December 31, 2018:
51,521 million yen(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 fiscal year ended December 31, 2018 have been adjusted as this change has been applied retroactively.

2.

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—
40.00
FY ending December 31, 2019
(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

FY ending December
183,000
0.4
4,500 (32.9)
4,618 (29.7)
3,227 (30.2)
224.8931, 2019(Note) 1. Revision to the forecast for financial results announced most recently: Yes
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:

Yes(3) Changes in accounting policies, changes to accounting estimates, and restatements(i) Changes in accounting policies due to revisions of accounting standards:

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 September
14,353,140 shares30, 2019
period (including treasury shares)(ii) Number of treasury shares at the end of the
As of September
112 shares30, 2019
period(iii) Average number of shares during the period
As of September
14,353,028 shares30, 2019(nine months ended September 30, 2019)

December 31,
2018

14,353,140 shares

December 31,
2018

112 shares

September 30,

2018

14,353,082 shares* 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 November 13, 2019 and will also be posted on
the Company’s website.

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019

 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–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019

1. Qualitative information on quarterly financial results(1) Explanation of operating results[Outline of the first nine months of the fiscal year]
The overall world economy during the first nine months of the current consolidated fiscal year continued to recovermoderately. However, uncertainties still remain, such as the outlook for the Chinese economy, uncertainties about othernations’ policies, and the potential impact of trade issues on the global economy.
Meanwhile, although exports and production remained weak, the overall Japanese economy remained on a moderate recovery
trend as the employment environment steadily improved.
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 third quarter of the current consolidated fiscal year, the Company had
net sales of 137,049 million yen (1.1% increase year-on-year), operating income of 3,571 million yen (25.2% decrease yearon-year), ordinary income of 3,674 million yen (23.1% decrease year-on-year), and profit attributable to owners of parent of
2,548 million yen (24.4% 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 third quarter of the current consolidated fiscal year, the Company had net salesof 95,266 million yen (3.6% increase year-on-year) and operating income of 3,371 million yen (10.7% decrease year-onyear).
Although net sales grew in the North America region, costs rose mainly due to higher additional tariffs on imports from
China and price hikes of national brand products. Expenses in departments such as the logistics department, including
labor costs, remained high. Additionally, the Company recorded expenses for structural changes (improvement of profit
margin and reduction of logistics expenses) and expenses for front-loaded recruitment for future growth. As a result,operating income decreased.
Net sales increased in regions outside of North America. However, in terms of profits, overall profits decreased partly due
to a decline in profit at a subsidiary in the UK, Harro Foods Limited. The company was affected by a continuous rise inpurchase prices due to fluctuations in currency exchange rates amid the issue of Brexit.
(ii) Agricultural & Seafood Products Trading BusinessIn the Agricultural & Seafood Products Trading Business, for the third quarter of the current consolidated fiscal year, theCompany had net sales of 39,129 million yen (4.1% decrease year-on-year) and operating income of 489 million yen(47.7% decrease year-on-year).
Net sales were affected by sluggish sales and falls in unit prices of fruits and vegetables (citrus, tropical commodities andvegetables) both in the domestic market and in China.
Profits declined affected by the decrease in domestic sales of fruits and vegetables as a whole, increase in costs, and othernegative impacts.
(iii) Other businesses
In other businesses, for the third quarter of the current consolidated fiscal year, the Company had net sales of 2,653
million yen (4.7% decrease year-on-year) and operating income of 58 million yen (23.6% increase year-on year).

–2–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019(2) Explanation of financial position(Assets)
Total assets as of September 30, 2019 stood at 97,612 million yen, an increase of 13,893 million yen compared to
December 31, 2018, and was mainly attributable to the following.
Total current assets as of September 30, 2019 amounted to 88,314 million yen, an increase of 13,375 million yen
compared to December 31, 2018. The increase in total current assets resulted from an increase of 13,904 million yen in
cash and deposits and an increase of 1,119 million yen in Other of current assets, including income taxes receivable andprepaid expenses, though there was a decrease of 1,831 million yen in notes and accounts receivable—trade.
Total non-current assets as of September 30, 2019, came to 9,298 million yen, an increase of 518 million yen compared to
December 31, 2018. The increase in total non-current assets was caused by an increase of 809 million yen in buildings andstructures (net) and an increase of 211 million yen in leased assets (net), although there was a decline of 241 million yen incustomer-related assets and a decrease of 237 million yen in software in progress.
(Liabilities)
Total liabilities as of September 30, 2019 stood at 46,052 million yen, an increase of 13,854 million yen compared to
December 31, 2018, and was mainly attributable to the following.
Total current liabilities as of September 30, 2019, amounted to 20,988 million yen, an increase of 811 million yen
compared to December 31, 2018. The increase in total current liabilities arose from an increase of 600 million yen in notes
and accounts payable—trade, an increase of 334 million yen in accounts payable—other, an increase of 207 million yen in
Other of current liabilities including accrued expenses, an addition of 165 million yen in provision for directors’ bonuses
and an increase of 125 million yen in lease obligations although there was a decrease of 575 million yen in income taxes
payable.
Total non-current liabilities as of September 30, 2019 was 25,064 million yen (an increase of 13,042 million yen
compared to December 31, 2018). The rise in total non-current liabilities was due to an increase of 12,881 million yen in
long-term loans payable.
(Net assets)
Total net assets as of September 30, 2019 amounted to 51,560 million yen, an increase of 39 million yen compared to
December 31, 2018. The increase in total net assets was mainly due to a rise of 1,185 million yen in retained earnings
despite a decrease of 1,144 million yen in foreign-currency translation adjustments.

(3) Explanation of future forecasts such as consolidated financial results forecasts
The Company revised numbers in the financial results forecasts, announced on February 14, 2019, in consideration of the trend
in earnings and the market environment in recent months. For details, please see "Notification Regarding Revision of FullYear Earnings Forecast," which was announced today.
The financial results forecasts are based on information currently available to the Company and certain reasonable assumptions.
Thus, actual financial results may differ from the forecast numbers due to various factors.

–3–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019

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)
Third quarter of FY 2019
(As of September 30, 2019)28,52019,54725,425
1,604(158)
74,93942,424
17,71625,6402,724(190)
88,314

1,857
374
75
185
279
2,771

2,667
431
198
397
175
3,870

671
168
303
815
69
2,028

597
376
65
573
64
1,677

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

1,114
931
979
798
(73)
3,750
9,298
97,612

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019

FY 2018(As of December 31, 2018)(Millions of yen)
Third quarter of FY 2019
(As of September 30, 2019)11,540
2,640
140
52
2,740
700
538
—
5
1,816
20,176

12,141
2,679
132
178
3,074
125
466
165
0
2,024
20,988

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

22,232
222
87
623
1,495
403
25,06446,052

2,646
6,531
41,983(0)51,1602,646
6,531
43,168(0)52,345

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

6
(5)
(783)
(2)
(785)
51,56097,612

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 directors’ 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–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income
First nine months ended September 30, 2019

Net sales
Cost of sales

135,548
112,201(Millions of yen)First nine months of FY 2019
(January 1, 2019
to September 30, 2019)
137,049
113,294

Gross profit

23,347
18,57523,75520,183

4,772

3,571

103

177

2

21

174

1
7

First nine months of FY 2018
(January 1, 2018
to September 30, 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
Reversal of allowance for doubtful accounts
Other

－
32

51

Total non-operating income

313

259

128

87

123
57

67
0

309
4,775

155
3,674

Total extraordinary income
Extraordinary losses——

Total extraordinary losses
Profit before income taxes

Total income taxes
Net income

—
4,775
1,518
(116)
1,402
3,372

—
3,674
1,109
15
1,125
2,548

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

—
3,372

—
2,548

Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income

Income taxes—current
Income taxes—deferred–6–Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019

Quarterly consolidated statement of comprehensive income
First nine months ended September 30, 2019

3,372

(Millions of yen)First nine months of FY 2019
(January 1, 2019
to September 30, 2019)
2,548

(1)
6

(0)
(1)

143
—

(1,064)
0

(25)

(79)

122
3,494

(1,146)
1,402

3,494

1,402

—

—

First nine months of FY 2018
(January 1, 2018
to September 30, 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–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019(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 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 order to respondto 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 thereliability 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 nine 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 nine months of the fiscal year ended December 31, 2018 each decreased by 11 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 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 of this 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 third quarter of the fiscal year.
(Changes in significant subsidiaries during the first three months of the fiscal year)
During the first quarter of the 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 the absorbed
company. Due to this absorption-type merger, Wismettac Foods, Inc. has been excluded from the scope of consolidation from thefirst quarter of the consolidated fiscal year. Nishimoto Trading Co., Ltd., the surviving company, changed its trade name to
Wismettac Foods, Inc. as of January 1, 2019.
(Additional information)
Starting from the beginning of the first quarter of the consolidated fiscal year, the Partial Amendments to Accounting Standard forTax Effect Accounting (ASBJ Statement No. 28, February 16, 2018) has been applied. As a result, deferred tax assets are indicatedin the category of investments and other assets while deferred tax liabilities are indicated in the category of non-current liabilities.

–8–Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2019

(Segment information)
First nine months of the fiscal year (from January 1, 2018 to September 30, 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

91,945
7,074
99,0203,774

40,820139
40,959
936

2,782
—
2,782
47

Total

Adjustment(Note 1)

135,548
7,213
142,762
4,758—(7,213)(7,213)
13

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)

135,548—
135,548
4,772(Note) 1. "Adjustment" for segment profit in the amount of 13 million yen includes (1,215) million yen for elimination ofintersegment transactions and 1,229 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 nine months of the fiscal year (from January 1, 2019 to September 30, 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 Business

Total

Adjustment(Note 1)

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)

Net sales
Sales to external customers

95,266
39,1292,653
137,049—
137,049
6,631
24
—
6,655
(6,655)—
Total
101,897
39,153
2,653
143,704(6,655)137,049
Segment profit
3,371
489
58
3,919
(348)
3,571
(Note) 1. "Adjustment" for segment profit in the amount of (348) million yen includes (1,396) million yen for elimination ofintersegment transactions and 1,048 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.
Intersegment sales or transfers

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 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 nine 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–