Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2017
(Japanese GAAP)
November 13, 2017
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, 2017
Scheduled date of commencement of dividend payments:－
Preparation of supplementary materials for quarterly financial results:
No
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, 2017(from January 1, 2017 to September 30, 2017)(1) Consolidated results of operations (cumulative)
Net sales

Operating income

Million yen%(Percentages denote year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Million yen%

Million yen%

Million yen%

Third quarter of FY ending December 31, 2017
128,995－
4,820
Third quarter of FY ended December 31, 2016－－－
(Note) Comprehensive income
Third quarter of FY ending December 31, 2017: 1,625 million yen (–%)
Third quarter of FY ended December 31, 2016: – million yen (–%)

－
－

4,468
－

－
－

2,359
－

－
－

Net income per
share

Diluted net income
per share

Yen

Yen

Third quarter of FY ending December 31, 2017188.55－
Third quarter of FY ended December 31, 2016－－
(Note) 1. Figures for the third quarter of the fiscal year ended December 31, 2016 and year-on-year percentage changes are notshown since the Company did not prepare quarterly consolidated financial statements for the period.
2. The Company conducted a five-for-one common stock split on June 1, 2017 pursuant to the resolution of a Board of
Directors meeting held on May 15, 2017. Net income per share for the third quarter was calculated on the assumption thatthe stock split had been conducted at the beginning of the fiscal year ending December 31, 2017.

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of September 30, 2017 (FY 2017 3Q)
86,519As of December 31, 2016 (FY 2016)
72,721(Reference)
Shareholders’ equity
Third quarter of FY ending December 31, 2017:
FY ended December 31, 2016:

48,87638,97956.5
53.6

48,876 million yen
38,979 million yen

2. Dividends
First quarterend

Secondquarter-end

Yen

Yen

Annual dividends
Third quarterend
Yen

Year-end
Yen

Total
Yen

FY ended December 31, 2016
－
0.00
－
2.00
2.00
FY ending December 31, 2017－
0.00－
FY ending December 31, 2017 (Forecast)－－(Note) 1. Revision to the forecast for dividends announced most recently: None
2. The Company conducted a five-for-one common stock split on June 1, 2017 pursuant to the resolution of a Board of
Directors meeting held on May 15, 2017.
The Company has not yet determined a forecast for dividends for the fiscal year ending December 31, 2017.

―1―

3. Consolidated financial results forecast for the fiscal year ending December 31, 2017(from January 1, 2017 to December 31, 2017)
Net sales
Million yen

Operating income%

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

Million yen%

Yen

FY ending December
169,434
7.0
6,835
(6.7)
6,306
(8.9)
3,349
17.6
258.0831, 2017(Note) 1. Revision to the forecast for financial results announced most recently: None
2. The Company conducted a five-for-one common stock split on June 1, 2017 pursuant to the resolution of a Board of
Directors meeting held on May 15, 2017. Net income per share in the forecast of financial results for the fiscal year
ending December 31, 2017 is shown in an amount reflecting the effect of the stock split.

* Notes(1) Changes in significant subsidiaries during the first nine months of the fiscal year:(Changes in specified subsidiaries resulting in changes in the scope of consolidation)

None(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:

None

(ii)

Changes in accounting policies other than (i) above:

None

(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 period (including treasury shares)(ii) Number of treasury shares at the end of theperiod(iii) Average number of shares during the period(nine months ended September 30, 2017)

As of September
30, 2017

14,343,240 shares

December 31,
2016

13,213,240 shares

As of September
30, 2017－ sharesDecember 31,
2016

720,000 shares

As of September
30, 2017

12,513,569 shares

September 30,
2016

12,493,240 shares(Note) The Company conducted a five-for-one common stock split on June 1, 2017 pursuant to the resolution of a Board of
Directors meeting held on May 15, 2017. The number of shares outstanding at the end of the period, number of treasury
shares at the end of the period and the average number of shares outstanding during the period were calculated based on theassumption that the stock split had been conducted at the beginning of the fiscal year ended December 31, 2016.

**

These quarterly financial results are not subject to quarterly review procedures.
Explanation of the proper use of financial results forecasts and other notes
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 the achievement 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) Explanationof future forecasts such as consolidated financial results forecasts” under the chapter titled “1. Qualitative information onquarterly financial results” on the attachment.

―2― Attachment: Table of Contents

1. Qualitative information on quarterly financial results .............................................................................................. 4(1) Explanation of operating results ........................................................................................................................ 4(2) Explanation of financial position ....................................................................................................................... 4(3) Explanation of future forecasts such as consolidated financial results forecasts ................................................ 5
2. Quarterly consolidated financial statements and major notes ..................................................................................... 6(1) Quarterly consolidated balance sheet ................................................................................................................. 6(2) Quarterly consolidated statements of income and comprehensive income ........................................................ 8(3) Notes to the quarterly consolidated financial statements ................................................................................. 10(Changes in significant subsidiaries during the first nine months of the fiscal year) ....................................... 10(Notes to assumption of going concern) .......................................................................................................... 10(Notes on significant changes in shareholders’ equity) .................................................................................... 10(Application of an accounting treatment specific to the preparation of the quarterly consolidated
financial statements) ........................................................................................................................................ 10(Changes in accounting policies, changes in accounting estimates, and restatements) .................................... 10(Additional information） ............................................................................................................................... 10(Segment information) ..................................................................................................................................... 11(Business combination).................................................................................................................................... 12(Significant subsequent events) ....................................................................................................................... 12―3―

(i) 1.

Qualitative information on quarterly financial results(i) (1) Explanation of operating results[Outline of the first nine months of the fiscal year]
During the first nine months of the fiscal year ending December 31, 2017 (from January 1, 2017 to September 30, 2017), theoverall world economy continued in its ongoing moderate recovery. However, future outlook was still uncertain for places suchas China and other emerging market economies in Asia, as well as the developments and effects of U.S. government policies.
Meanwhile, the overall Japanese economy kept on its moderate recovery track as corporate business results and theemployment situation improved.
Under these circumstances, net sales for the first nine months of the fiscal year stood at 128,995 million yen and operating
income amounted to 4,820 million yen. Ordinary income totaled 4,468 million yen and profit attributable to owners of parent
came to 2,359 million yen.
Operating results by segment are as follows:[Outline of operating results by segment](i) Asian Food Global BusinessIn the Asian Food Global Business, net sales stood at 94,553 million yen and operating income amounted to 4,449 million
yen for the first nine months of the fiscal year.
Although net sales in North America grew steadily on a local currency basis, profits declined as selling, general andadministrative expenses climbed due to a headcount expansion aimed to bolster the logistics business unit.
In regions outside of North America, both net sales and operating income saw a marked increase because we converted
Harro Foods Limited in the U.K. and Wismettac Nippon Foods Co., Ltd. in Hong Kong (the company’s name waschanged from “Nippon Foods Co., Ltd.” as of September 29, 2017) into consolidated subsidiaries of the Group, as well as
business expansion and strengthening of earning power at existing facilities.
(ii) Agricultural & Seafood Products Trading BusinessIn the Agricultural & Seafood Products Trading Business, net sales stood at 39,301 million yen and operating income
amounted to 341 million yen for the first nine months of the fiscal year.
Although net sales exceeded that of the previous fiscal year, operating income declined year on year as we had noalternative but to engage in below-cost sales as a result of a spike in the cost of citrus and tropical commodities since thefourth quarter of the fiscal year ended December 31, 2016.
(iii) Other businesses
In other businesses, net sales stood at 2,584 million yen and operating loss amounted to 7 million yen for the first ninemonths of the fiscal year.
(Note 1) Net sales figures shown in the “Outline of operating results by segment” section above include intersegment sales andtransfers.
(Note 2) Since the Company did not prepare quarterly consolidated financial statements for the first nine months of the fiscal
year ended December 31, 2016, an analysis was not performed compared to the same period in the previous fiscal
year.

(ii) (2) Explanation of financial position(Assets)
Total assets as of September 30, 2017 stood at 86,519 million yen, an increase of 13,798 million yen compared to
December 31, 2016, and was mainly attributable to the following.
Total current assets as of September 30, 2017 amounted to 77,774 million yen, an increase of 12,637 million yen
compared to December 31, 2016, which was chiefly due to an increase of 10,305 million yen in cash and deposits and anincrease of 1,470 million yen in inventories.

―4―

Total non-current assets as of September 30, 2017 came to 8,744 million yen, an increase of 1,161 million yen compared
to December 31, 2016, which was caused by an increase of 1,151 million yen in investment securities that were newly
acquired by the Company.
(Liabilities)
Total liabilities as of September 30, 2017 stood at 37,642 million yen, an increase of 3,900 million yen compared to
December 31, 2016, and was mainly attributable to the following.
Total current liabilities as of September 30, 2017 amounted to 22,688 million yen, an increase of 3,857 million yen
compared to December 31, 2016, which was chiefly due to an increase of 2,577 million yen in short-term loans payable
and a rise of 2,225 million yen in notes and accounts payable—trade in relation to increased net sales.
Total non-current liabilities as of September 30, 2017 came to 14,954 million yen, an increase of 43 million yen compared
to December 31, 2016, which was caused by an increase of 93 million yen in long-term loans payable.
(Net assets)
Total net assets as of September 30, 2017 stood at 48,876 million yen, an increase of 9,897 million yen compared to
December 31, 2016, which was due to an increase of 2,524 million yen in capital stock and an increase of 5,734 million
yen in capital surplus resulting from the issuance of new shares and the disposal of treasury shares in relation to the listingof the Company’s stock on the First Section of the Tokyo Stock Exchange, as well as an increase of 2,366 million yen inretained earnings.

(iii) (3) Explanation of future forecasts such as consolidated financial results forecasts
Forecasts of financial results for the fiscal year ending December 31, 2017 are described in the Notification on Financial
Results and Related Information of Nishimoto Co., Ltd. Associated with the Listing of its Stock on the First Section of theTokyo Stock Exchange published on September 29, 2017. The forecasts remain unchanged.

―5―

(ii)

2. Quarterly consolidated financial statements and major notes(iv) (1) Quarterly consolidated balance sheet(Millions of yen)
FY 2016

Third quarter of FY 2017

(As of December 31, 2016)(As of September 30, 2017)

Cash and deposits

24,452

34,757

Notes and accounts receivable—trade

17,633

17,599Inventories

21,266

22,736

872

805

Other

1,248

2,143

Allowance for doubtful accounts

(335)

(268)

65,137

77,774

2,356

2,274

Machinery, equipment and vehicles, net

417

407

Tools, furniture and fixtures, net

109

117

Leased assets, net

298

260

Other, net

318

547

3,499

3,606

Goodwill

919

778

Software

149

193

Other

2,101

1,337

Total intangible assets

3,170

2,308

Investment securities

129

1,280

Guarantee deposits

361

361

Deferred tax assets

408

488

Other

50

731

Allowance for doubtful accounts

(35)

(34)

Total investments and other assets

914

2,828

7,583

8,744

72,721

86,519AssetsCurrent assets

Deferred tax assets

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net

Total property, plant and equipment
Intangible assets

Investments and other assets

Total non-current assets
Total assets―6―

(Millions of yen)
FY 2016

Third quarter of FY 2017

(As of December 31, 2016)(As of September 30, 2017)

Notes and accounts payable—trade

8,772

10,997

Short-term loans payable

4,194

6,771

Current portion of long-term loans payable

143

151

Lease obligations

62

59

Accounts payable—other

3,111

2,708

Income taxes payable

367

139

Provision for bonuses

540

426

Other

1,638

1,433

Total current liabilities

18,83022,68812,542

12,636

Lease obligations

237

205

Deferred tax liabilities

369

242

Provision for directors’ retirement benefits

502

478

Net defined benefit liability

897

981

Other

361

409

14,911

14,95433,74137,642

Capital stock

100

2,624

Capital surplus

774

6,509

Retained earnings

36,111

38,477(5)－

36,98047,611

Valuation difference on available-for-sale securities

11

12

Deferred gains or losses on hedges

42

6Foreign currency translation adjustment

1,945

1,246

Total accumulated other comprehensive income

1,999

1,265

38,97948,87672,721

86,519Liabilities
Current liabilities

Non-current liabilities
Long-term loans payable

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

Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income

Total net assets
Total liabilities and net assets―7―

(v) (2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income

First nine months ending September 30, 2017
(Millions of yen)First nine months of FY 2017
(January 1, 2017 to September
30, 2017)
Net sales

128,995

Cost of sales

106,953

Gross profit

22,041

Selling, general and administrative expenses

17,221

Operating income

4,820

Non-operating income
Interest and dividend income

72

Share of profit of entities accounted for using equity
method

29

Other

17

Total non-operating income

119Non-operating expenses
Interest expenses

148

Listing-related expenses

99

Foreign exchange losses

221

Other

1

Total non-operating expenses

471

Ordinary income

4,468

Extraordinary income－

Total extraordinary income
Extraordinary losses
Impairment loss

514

Total extraordinary losses

514

Profit before income taxes

3,954

Income taxes—current

1,695

Income taxes—deferred(100)

Total income taxes

1,594

Net income

2,359
－

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

2,359

―8―

Quarterly consolidated statement of comprehensive income

First nine months ending September 30, 2017
(Millions of yen)First nine months of FY 2017
(January 1, 2017 to September
30, 2017)
Net income

2,359

Other comprehensive income
Valuation difference on available-for-sale securities

1

Deferred gains or losses on hedges(35)

Foreign currency translation adjustment(792)

Share of other comprehensive income of entities
accounted for using equity method

93

Total other comprehensive income(733)

Comprehensive income

1,625(Breakdown)Comprehensive income attributable to owners of parent

1,625

Comprehensive income attributable to non-controllinginterests－―9―

(vi) (3) Notes to the quarterly consolidated financial statements(Changes in significant subsidiaries during the first nine months of the fiscal year)
No relevant items.

(Notes to assumption of going concern)
No relevant items.

(Notes on significant changes in shareholders’ equity)
The Board of Directors of the Company made a resolution at the meeting held on August 25, 2017 to issue 1,130,000 shares ofcommon stock and dispose of 720,000 treasury shares of the Company through general offering in Japan (an offering through abook building method) and an offering in overseas markets (excluding the U.S. and Canada). The payment was completed on
September 28, 2017. As a result, during the first nine months of the fiscal year, capital stock increased by 2,524 million yen,capital surplus increased by 5,734 million yen, while treasury shares decreased by 5 million yen, and therefore, as of
September 30, 2017, capital stock stood at 2,624 million yen and capital surplus amounted to 6,509 million yen.

(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 income before taxes by aneffective tax rate, which was estimated as the rate after the application of tax effect accounting to income before taxes for the
fiscal year including the third quarter of the fiscal year.

(Changes in accounting policies, changes in accounting estimates, and restatements)
No relevant items.

(Additional information）(Application of the application guidelines regarding the recoverability of deferred tax assets)
Starting from the first quarter of the fiscal year ending December 31, 2017, the Application Guidelines regarding the
Recoverability of Deferred Tax Assets (Application Guidelines for Business Accounting Standards No. 26 of March 28, 2016)
were applied.

―10―

(Segment information)
First nine months of the fiscal year (from January 1, 2017 to September 30, 2017)
1. Information related to net sales and profits/losses by reporting segment(Millions of yen)
Reporting segment
Adjustments(Note 1)

Amounts
recorded in thequarterly
consolidated
statement ofincome(Note 2)

128,995－

128,995－

7,443(7,443)－39,301

2,584

136,439(7,443)

128,995

341

(7)

4,783

36

4,820

Asian Food
GlobalBusiness

Agricultural& Seafood
Products
Trading
Business

Sales to external customers

87,37739,033

2,584Intersegment sales or transfers

7,175

267

Total

94,553
4,449

Otherbusiness

Total

Net sales

Segment profits (losses)(Note) 1. Adjustments are as follows:
The intersegment sales or transfers of (7,443) million yen are the elimination of intersegment transactions.
The adjustments to segment profits (losses) include the elimination of intersegment transactions and the expensesof all group companies. The expenses of all group companies mainly consist of selling, general and administrative
expenses, and are not attributable to any reporting segments.
2. The segment profits (losses) are adjusted with operating income in the quarterly consolidated statement of income.

2. Information related to impairment loss of non-current assets and goodwill by reporting segment
In the Asian Food Global Business segment, we reviewed the use of some customer-related assets. As a result, regarding
the business-use assets of a Hong Kong subsidiary for its import and wholesale of Japanese ingredients and food products,
we estimate that the recoverable amount is nil and will record it as an impairment loss.
The said impairment loss recorded is 514 million yen in the first nine months of the fiscal year.

―11―

(Business combination)
Determination of a provisional accounting treatment for business combinations
Regarding Wismettac Nippon Foods Co., Ltd. in Hong Kong (the company’s name was changed from “Nippon Foods Co.,
Ltd.” as of September 29, 2017) acquired in the previous fiscal year, we had applied a provisional accounting treatment to theallocation of its acquisition cost in the previous fiscal year, but the final accounting treatment was determined in the second
quarter of the current fiscal year.
As for the goodwill of 1,640 million yen calculated on a temporary basis in the previous fiscal year, it was settled as such that
goodwill decreased by 721 million yen, intangible assets and deferred tax liabilities increased by 863 million yen and 142
million yen, respectively, using the straight-line method of depreciation over 11 years.

(Significant subsequent events)(Issuance of new shares by allotment to a third party, and issuance of new shares related to the secondary offering of sharesthrough over-allotment)
The Board of Directors of the Company made resolutions at the meetings held on August 25, 2017 and September 11, 2017 toissue new shares by allotment to a third party, in which Nomura Securities Co., Ltd. is the underwriter, in relation to thesecondary offering of shares of the Company stock through an over-allotment conducted by Nomura Securities Co., Ltd. The
payment was completed on October 30, 2017.

(1) Class and number of shares issued:

9,900 shares of common stock of the Company(2) Allotment price:

4,467.37 yen per share(3) Amount incorporated into capital stock:2,233.685 yen per share(4) Total allotment price:

44 million yen(5) Total amount incorporated into capital stock:

22 million yen(6) Payment date:

October 30, 2017

(7) Underwriter:

Nomura Securities Co., Ltd.

(8) Use of proceeds:

The proceeds will be used to establish a product standard management
system in the Asian Food Global Business to comply with the laws andregulations of each country, develop a system platform for the purpose ofrenovating workflows and strengthening cooperation among locations,establish an automatic ordering system using product sales data, prepare
for the automation of logistics facilities, as well as relocate and upgrade
warehouses in the North American region. They will also be used asworking capital and for the repayment of loans.

―12―