Consolidated Financial Results for the Six Months Ended June 20, 2012
[Japanese GAAP]
June 27, 2012
Tokyo Stock Exchange, First Section

Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
Scheduled filing date for quarterly report: July 27, 2012
Scheduled date for commencement of dividend payments: August 10, 2012
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: Yes (for institutional investors and analysts)

TEL: +81-6-6928-2331(Amounts of less than one million yen have been omitted)

1.

Consolidated financial results for the six months ended June 20, 2012 (December 21, 2011- June 20, 2012)(1) Consolidated operating results
Six months ended June 20, 2012
Six months ended June 20, 2011
(Note) Comprehensive income

Net sales
Operating income
Million yen%
Million yen%
10,548
7.8
1,965
12.4
9,786
3.8
1,747
1.3
Six months ended June 20, 2012: 1,099 million yen [23.9%]

Six months ended June 20, 2012
Six months ended June 20, 2011

Net income per share
Diluted net income per share
Yen
Yen
77.59
65.43
-

(Percentages show year on year changes)
Ordinary income
Net income
Million yen%
Million yen
%
1,820
12.2
1,069
18.6
1,622
0.2
901
(3.9)
Six months ended June 20, 2011: 887million yen [―%]

(2) Consolidated financial position
Total assets
Million yen
23,234As of June 20, 2012
As of December 20, 2011
(Reference)

EquityNet assets
Million yen
19,68822,592Equity ratio%
84.7

19,059As of June 20, 2012: 19,688 million yen

84.4

As of December 20, 2011: 19,059 million yen

2. Payment of dividends
Annual dividend
End of 1st quarterEnd of 2nd quarterEnd of 3rd quarterEnd of fiscal year

Yen

Yen

Yen

Yen

Yen

-

34.00

64.00

-

32.00

64.00

Year ended
December 20, 2011
Year ending
December 20, 2012
Year ending
December 20, 2012
(forecast)

-

30.00

-

32.00

Total

Note: Changes to latest dividends forecast: None
3. Consolidated operating forecasts for the year ending December 20, 2012 (December 21, 2011 - December 20, 2012)(Percentages show year on year changes)

Year ending December 20, 2012

Net sales
Million yen
21,470%4.6

Note: Changes to latest operating forecasts: None

Operating income
Million yen
%
3,880
2.3

Ordinary income
Million yen
%
3,610
1.8

Net income
Million yen%
2,050(11.1)Net income per shareYen
148.74

*Notes(1) Significant changes in subsidiaries during the period(changes in specific subsidiaries accompanied by changes in the scope of consolidation)
New: 1 company (Company name: MILBON (THAILAND) CO., LTD.): Yes
Exclude: 0 companies (Company name: )(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: Yes2) Changes in accounting policies other than those in 1) above: None3) Changes in accounting estimates: None4) Retrospective restatements: None(4) Number of shares issued (common stock)1) Number of shares outstanding at the end of theperiod (including treasury stock)2) Number of treasury stock at the end of the period

Six months ended
13,798,848 shares Year ended March 20,
13,798,848 shares
June 20, 20122011
Six months ended
18,434 shares Year ended March 20,
17,728 shares
June 20, 2012
20113) Average number of shares during the period
Six months ended
13,780,783 shares Six months ended
13,782,660 shares(cumulative)
June 20, 2012
June 20, 2011
*Status of execution of quarterly review of financial statements
As these consolidated financial statements are not subject to the review of the quarterly financial statements pursuant to the Financial Instruments andExchange Act, procedures for said review were not completed at the time of disclosure of this report.
*Explanation on the appropriate use of operating forecasts and other special instructions
Operating forecasts and other statements regarding the future presented in these materials are based on information currently available and certain
assumptions deemed to be reasonable, and actual performance may differ substantially due to various factors.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

Contents of supplementary materials
1. Qualitative information on consolidated financial results for the current period ....................................................................... 2(1)

Qualitative information on consolidated operating results ................................................................................................ 2(2)

Qualitative information on consolidated financial conditions........................................................................................... 2(3)

Qualitative information on consolidated operating forecasts ............................................................................................ 3

2. Summary information (Others) .................................................................................................................................................. 3(1)

Changes in significant subsidiaries during the period ....................................................................................................... 3(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements ............... 3(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements ................................... 3(4)

Additional information ..................................................................................................................................................... 3

3. Quarterly Consolidated Financial Statements ............................................................................................................................ 4(1)

Quarterly Consolidated Balance Sheets ............................................................................................................................ 4(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ...................... 6
Quarterly Consolidated Statements of Earnings
Quarterly Consolidated Six Month Periods Ended June 20, 2011 and 2012 ..................................................................... 6
Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Six Month Periods Ended June 20, 2011 and 2012 ..................................................................... 7(3)

Quarterly Consolidated Statements of Cash Flows ........................................................................................................... 8(4)

Notes regarding going concern assumption ...................................................................................................................... 9(5)

Segment information ........................................................................................................................................................ 9(6)

Notes in case of any significant changes in shareholders’ equity ...................................................................................... 9-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

1.
(1)

Qualitative information on consolidated financial results for the current period
Qualitative information on consolidated operating results
During the six month period ended June 20, 2012, the nation’s economy continued to be mired in uncertainty due to therenewed European debt crisis and the effects of the prolonged appreciation of the yen. The climate in the beauty industry also
remained harsh.
Under such circumstances, the Milbon Group promoted initiatives in order for salons to realize sustainable growth as well as
increased revenues and profits, under the theme of “Nurturing ‘personal production capabilities’ that meet diverse value andsupporting ‘an increase in yearly usage amounts per customer’”Consolidated net sales during the six month period ended June 20, 2012 increased by 7.8% compared to the same period of theprevious consolidated fiscal year to 10,548 million yen. This was primarily due to expanded sales of permanent andsemi-permanent hair coloring products; “Ordeve Beaute,” product line specialized for gray hair and “Pearl and Whity Line,”
additional color lines for hair coloring brand “Ordeve.” The strong sales of DEESSE’S Elujuda, leave-in treatment which waslaunched in February also contributed to the sales increase. Favorable sales growth of the overseas subsidiaries results from theproactive educational activities conducted in the salons was another factor of the increase.
Operating income stood at 1,965 million yen (an increase of 12.4% compared to the same period of the previous consolidated
fiscal year), which was primarily due to the effects of increased revenues and the improvements in the cost-to-sales ratio. As aresult, ordinary income also increased by 12.2% compared to the same period of the previous consolidated fiscal year to 1,820
million yen. And net income increased to 1,069 million yen (an 18.6% increase compared to the same period of the previous
consolidated fiscal year).
Breakdown of net sales by product category is shown below:[Breakdown of consolidated net sales by product category]Previous Consolidated Second Quarter Current Consolidated Second Quarter Increase (Decrease)
Product Category
Amount (Million yen)
Ratio (%)
Amount (Million yen)
Ratio (%) Amount (Million yen)
Hair care products
4,983
50.9
5,300
50.3
317
Hair coloring products
3,755
38.4
4,266
40.4
510
Permanent wave products
924
9.4
860
8.2
(64)
Others
122
1.3
120
1.1
(1)
Total
9,786
100.0
10,548
100.0
762
(2)

Qualitative information on consolidated financial conditions
1) Assets, liabilities and net assets
Total assets at the end of the six month period ended June 20, 2012 increased by 641 million yen compared to the end of theprevious consolidated fiscal year to 23,234 million yen.
Current assets increased by 359 million yen compared to the end of the previous consolidated fiscal year to 10,976 million yen.
This was due mainly to the increases in cash and bank deposits and in merchandise and finished goods by 403 million yen and95 million yen, respectively; as well as the decrease in notes and accounts receivable-trade by 154 million yen.
Fixed assets increased by 282 million yen compared to the end of the previous consolidated fiscal year to 12,258 million yen.
There were no material changes in current and fixed liabilities from the end of the previous consolidated fiscal year.
Net assets increased by 629 million yen compared to the end of the previous consolidated fiscal year to 19,688 million yen.
This was due mainly to the increase of 600 million yen in retained earnings.
As a result, the company's equity ratio changed from 84.4% at the end of the previous consolidated fiscal year to 84.7%. Net
assets per share based on total outstanding shares as of the end of the accounting period increased from 1,383.02 yen per shareat the end of the previous consolidated fiscal year to 1,428.75 yen per share.
2) Cash flows(Cash flows from operating activities)
Net cash provided by operating activities during the six month period ended June 20, 2012 decreased by 200 million yen
compared to the same period of the previous consolidated fiscal year to 1,585 million yen. This was mainly the result of theincreases of 280 million and 378 million yen compared to the same period of the previous consolidated fiscal year in quarterly-2-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

net income before income taxes and minority interests and the payment of corporate and other taxes, respectively.
(Cash flows from investing activities)
Net cash used investing activities during the six month period ended June 20, 2012 decreased by 485 million yen compared tothe same period of the previous consolidated fiscal year to 735 million yen. This was mainly the result of the increase of 235
million compared to the same period of the previous consolidated fiscal year in expenditures on the acquisition of property,
plant and equipment.
(Cash flows from financing activities)
Net cash used in financing activities during the six month period ended June 20, 2012 decreased by 47 million yen compared tothe same period of the previous consolidated fiscal year to 469 million yen. This was mainly the result of the increase of 55
million compared to the same period of the previous consolidated fiscal year in dividend payments for shareholders.
As a result, cash and cash equivalents at the end of the six month period ended June 20, 2012 increased by 402 million yen
compared to the end of the previous consolidated fiscal year to 5,478 million yen.
(3)

Qualitative information on consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced
on January 18, 2012.

2.
(1)

Summary information (Others)
Significant changes in subsidiaries during the period
Starting from the second quarter ended June 20, 2012 the newly-established MILBON (THAILAND) CO., LTD. has been
included in the scope of consolidation.

(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements
No(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements(Changes in accounting policies which are difficult to distinguish from changes in accounting estimates)
Starting from the second quarter ended June 20, 2012 the Company, in conjunction with revision of the Corporate Tax Law, hasapplied the depreciation method pursuant to the revised Corporate Tax Law to property, plant and equipment acquired on andafter April 1, 2012.
The effects of this change on the profit and loss of the six month period ended June 20, 2012 are minimal.

(4)

Additional information
In terms of changes in accounting policies and corrections of errors contained in reports from prior periods that are conducted
after the beginning of the three month period ended March 20, 2012 the Company has applied the “Accounting Standard for
Accounting Changes and Error Corrections” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 24, December 4,2009) and the “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24,
December 4, 2009).

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

3.
(1)

Quarterly Consolidated Financial Statements
Quarterly Consolidated Balance Sheets(Thousand yen)Previous Consolidated Fiscal Year Current Consolidated Second Quarter(As of December 20, 2011)(As of June 20, 2012)

AssetsCurrent assets
Cash and bank deposits
Notes and accounts receivable – trade
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and other structures, net
Machinery, equipment and vehicles fortransportation, net
LandConstruction in progress
Others, net
Total property, plant and equipment
Intangible fixed assets
Investments and other assets
Investment in securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-4-

5,079,642
3,031,626
1,678,930
16,428526,193295,403(11,616)
10,616,608

5,483,201
2,876,690
1,773,937
21,452518,856
339,981(37,964)
10,976,155

3,858,485

3,877,882

924,432

953,155

4,763,766
12,244
194,473
9,753,401
512,138

4,763,766
20,119201,9889,816,912
515,487

1,017,033
722,278(28,772)
1,710,540
11,976,079
22,592,688

996,700
1,005,755(76,408)
1,926,046
12,258,447
23,234,602

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012
(Thousand yen)Previous Consolidated Fiscal Year Current Consolidated Second Quarter(As of December 20, 2011)(As of June 20, 2012)
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Reserve for returned goods
Reserve for bonuses
OthersTotal current liabilities
Fixed liabilities
Reserve for retirement benefits
Reserve for loss on guarantees
OthersTotal fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains (losses) on available-for-salesecurities
Foreign currency translation adjustments
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-5-419,740
1,448,203
1,016,927
45,73568,354
329,065
3,328,026

519,260
1,682,526
764,965
13,14967,982
310,878
3,358,762

11,612
37,200156,276
205,088
3,533,115

31,189155,949
187,138
3,545,901

2,000,000
199,120
17,257,339(48,652)
19,407,806

2,000,000
199,120
17,858,027(50,299)
20,006,847(206,624)(219,739)(141,609)(348,233)
19,059,573
22,592,688(98,406)(318,145)
19,688,701
23,234,602

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Quarterly Consolidated Six Month Periods Ended June 20, 2011 and 2012

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Rent from company housing
Gain on cancellation of insurance
OthersTotal non-operating income
Non-operating expenses
Sales discount
OthersTotal non-operating expenses
Ordinary income
Extraordinary profit
Gain on sale of investment securities
Reversal of allowance for doubtful accounts
Reversal of reserve for loss on guarantees
Total extraordinary profits
Extraordinary loss
Loss on retirement of fixed assets
Loss on valuation of investments in securities
Provision of allowance for doubtful accounts
Effects of application of accounting standard for asset
retirement obligations
Total extraordinary losses
Income before income taxes and minority interests
Income taxes – current
Income taxes – deferred
Total income taxes
Income before minority interests
Net income

Six Months Ended
June 20, 2011
(December 21, 2010 June 20, 2011)
9,786,678
3,228,589
6,558,088
4,810,254
1,747,834(Thousand yen)
Six Months Ended
June 20, 2012
(December 21, 2011 June 20, 2012)
10,548,825
3,336,514
7,212,311
5,247,155
1,965,155

519
4,629
25,286
7,813
5,593
43,842627
5,044
28,797
3,662
38,131

165,795
3,088
168,883
1,622,793

180,585
2,204
182,790
1,820,496

1,555
179
1,200
2,935

-

4,972
67,090-1,705
12,64728,320-100,383
1,525,345
698,332(74,836)
623,496
901,849
901,849

14,352
1,806,143
745,853(8,970)736,883
1,069,260
1,069,260-6-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Six Month Periods Ended June 20, 2011 and 2012

Income before minority interests
Other comprehensive income
Net unrealized gains (losses) on available-for-salesecurities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests-7-

Six Months Ended
June 20, 2011
(December 21, 2010 June 20, 2011)
901,849(Thousand yen)
Six Months Ended
June 20, 2012
(December 21, 2011 June 20, 2012)
1,069,260(20,279)(13,115)

5,777(14,501)
887,347

43,20230,087
1,099,348

887,347-

1,099,348-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012(3)

Quarterly Consolidated Statement of Cash FlowsSix Months Ended
June 20, 2011
(December 21, 2010 June 20, 2011)
Cash flows from operating activities
Quarterly net income before income taxes and minority
interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in reserve for bonuses
Increase (decrease) in reserve for returned goods
Increase (decrease) in reserve for loss on guarantees
Increase (decrease) in reserve for retirement benefits
Decrease (increase) in the prepaid pension cost
Interest and dividends income
Foreign exchange loss (gain)
Loss (gain) on sale of investment in securities
Loss (gain) on valuation of investment in securities
Loss on sale/disposition of fixed assets
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Decrease (increase) in accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in accounts payable – trade
OthersSubtotalInterest and dividends income received
Payment of retirement benefits for directors
Payment of corporate and other taxes
Cash flows from operating activities
Cash flows from investing activities
Proceeds from sale of investment in securities
Payment for purchase of property, plant and equipment
Payment for purchase of intangible fixed assets
Payment for loan receivableCollection of loan receivable
Payment due to deposit of fixed term deposits
Payment for guarantee money
Collection of guarantee money
Payment into insurance reserve fund
Proceeds from insurance reserve fund
OthersCash flows from investing activities
Cash flows from financing activities
Net decrease (increase) in treasury stocks
Cash dividend paid
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period-8-(Thousand yen)
Six Months Ended
June 20, 2012
(December 21, 2011 June 20, 2012)

1,525,345

1,806,143

483,740(179)(42)
28,716(1,200)4,180
10,461(5,149)(1,937)(1,555)67,0904,972

455,186
72,838(487)(32,586)(37,200)
19,179(5,671)(5,105)
1,705

28,320-39,902(158,109)
118,793284,851
2,428,202
5,288(29,596)(618,497)
1,785,397

157,056(72,435)
91,371
126,189
2,576,184
5,708(996,851)
1,585,041

9,208(185,532)(90,427)(3,650)9,378(14,479)
18,469(1,319)12,081(3,501)(249,773)(420,773)(103,582)(1,690)7,160(615)(15,417)2,648(200,788)(2,290)(735,349)(9,752)(412,488)(422,240)
5,154
1,118,538
2,670,550
3,789,089(1,661)(467,748)(469,410)
22,253
402,535
5,076,356
5,478,891

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2012

(4)

Notes regarding going concern assumption
None

(5)

Segment information
The Company omits information on business segments, as it is engaged in the production and distribution of hair-care products
and related merchandise, all of which are deemed to belong to a single business segment.

(6)

Notes in case of any significant changes in shareholders' equityNone-9-