Financial Results for the Six Months of Fiscal Year Ending March 31, 2017
<under Japanese GAAP>
November 10, 2016
Company name : NIKKO COMPANY
ID number: 5343 Stock listing : Nagoya Stock Exchange Second Section
URL: http://www.nikko-company.co.jp/
Representative : Akiko Mitani, Chief Executive Officer
Contact: Kazuya Nunokawa, Managing Officer (Phone: +81-76-276-2121)
Scheduled date to submit Securities Report: November 14, 2016
Scheduled date to begin dividend payments: Preparation of supplementary materials for quarterly financial results : None
Holding of quarterly financial results meeting : None
(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Six Months Ended September 30, 2016 (April 1, 2016 - September 30, 2016)(1) Consolidated operating results(Percentage figures represent changes from the same period of the previous year.)Net sales

Operating income％Millions of yen
Six months ended
September 30, 2016

6,289

％

Millions of yen(3.4)

Six months ended
6,508(17.0)
September 30, 2015
Note: Comprehensive income (Millions of yen) :％Profit (loss) attributableto owners of parent％
Millions of yen

Ordinary income
Millions of yen

(59)

-(77)

-(98)

-(437)-(413)-(435)-

September 30, 2016: (83) ( -%) September 30, 2015: (410) ( -%)Net income
per share

Diluted net income
per share
Yen

Yen
Six months ended
September 30, 2016

(4.21)-

Six months ended
September 30, 2015(18.66)-(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

Net assets per share%

Yen

As of September 30, 2016

9,047599

6.6

25.70

As of Mar. 31, 2016

9,317683

7.329.29

Reference: Shareholders' equity (Millions of yen) :September 30, 2016: 599

Mar. 31, 2016: 683

2. Dividends(Record date)1Q-end2Q-endYen

Dividend per share
3Q-endYen
Yen

Year ended Mar. 31, 2016

-0.00

Year ending Mar. 31, 2017-0.00

Year ending Mar. 31, 2017
(forecast)
Notes: Revision of dividend forecast during the period: None

Year-end

Annual
Yen

Yen

-0.00

0.00

-0.00

0.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2017 (April 1, 2016 - March 31, 2017)(Percentage figures represent changes from the same period of the previous year.)Net sales

Full year

Operating income

Profit (loss) attributableto owners of parent% Millions of yen%

Ordinary income

Millions of yen%

Millions of yen%

13,8001.1120-Millions of yen
100

Notes: Revision of projected consolidated performance during the period

1:None-40-

Net income
per shareYen
1.72

NIKKO COMPANY

4. Notes(1) Changes in significant subsidiaries during the period: Yes(Changes in specified subsidiaries accompanying changes in the scope of consolidation)
Newly added:- Excluded: 1 Nikko ME Co., Ltd.
(2) Application of special accounting methods for quarterly consolidated financial statements : None
(3) Changes in accounting policies, changes in accounting estimates, or restatement
1) Changes in accounting policies due to changes in consolidated accounting methods :2) Changes other than 1) above: None
3) Changes in accounting estimates : None
4) Restatement: None

Yes(4) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
September 30, 2016:24,172,000 sharesMar. 31, 2016:24,172,000 shares
2) Number of treasury stock at the end of the period
September 30, 2016:
855,673 sharesMar. 31, 2016:
853,064 shares
3) Average number of shares issued during the period (cumulative; consolidated)
Six months ended September 30, 2016 : 23,317,608 shares
Six months ended September 30, 2015 : 23,320,896 shares*Information regarding the implementation of quarterly review procedures
The current quarterly financial statements are exempted from quarterly review procedures based on the Financial Instruments andExchange Law. At the time of disclosure, we have not completed the review process for these consolidated statements.

*Appropriate use of business forecasts, other special items
Forecasts regarding future results in these materials are based on information available to the Company at the time the materials werecreated. Actual results may differ significantly from these forecasts for a number of reasons.

2NIKKO COMPANY

Consolidated Quarterly Financial Statements(Millions of yen)

(1) Consolidated Balance SheetAssets
Current assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Costs on uncompleted construction contracts
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Lease assets
Other
Total intangible assets
Investments and other assets
Investment securities
Claims provable in bankruptcy, claims provable inrehabilitation and other
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for product warranties
OtherTotal current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax ｌiabilities
Provision for directors' retirement benefits
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive incomeTotal net assets
Total liabilities and net assets

3

As of March 31, 2016

As of September 30, 2016

982
1,992
1,200632
282
228
1145(4)
5,460

1,086
1,764
1,306
546
366
217
―
86(2)
5,371

6,730
(4,783)1,946
4,600(4,296)
304
1,222
(1,101)121
1,121
251(173)
78
5
3,576

6,718
(4,856)
1,861
4,529(4,262)266
1,215(1,130)85
1,121247(190)
57
23
3,416

3
106
109

2
92
94

55

55

490

491

2112(491)
170
3,856
9,317

―
110(491)
165
3,676
9,047

2,387
2,540
382
46
45
44242
870
6,559

2,443
2,540362
37
26
40
237
896
6,584

565
37
6
48
1,282
133
2,075
8,634

391
25
6
21
1,284
133
1,863
8,448

3,470
1,584
(3,778)
(336)
939

3,470
1,584
(3,876)(337)
840

0(112)
(143)
(256)
683
9,317

0
(108)
(133)
(241)
599
9,047

NIKKO COMPANY(2) Consolidated Quarterly Statements of Income
and Consolidated Quarterly Statements of Comprehensive Income

Consolidated Quarterly Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Rent income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary Income
Gain on sales of investment securities
Outplacement bounty
Total extraordinary Income
Extraordinary loss
Loss on retirement of non-current assets
Loss on valuation of investment securities
Loss on fire
Total extraordinary losses
Income (loss) before income taxes
Income taxes-current
Income taxes-deferredTotal income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Six Months ended
September 30, 2015

Six Months ended
September 30, 2016

6,508
4,716
1,792
2,229(437)

6,289
4,473
1,815
1,875(59)

125
26
52

026
19
46

18―
1028(413)

2032
1163(77)

1―
1―
99―
2―
2(414)
20
020(435)―(435)

0―1112(79)
16218(98)―(98)

Six Months ended
September 30, 2015

Six Months ended
September 30, 2016

(435)

(98)

(0)
02424(410)(0)
41014(83)

(410)
―

(83)
―

Consolidated Quarterly Statements of Comprehensive Income(Millions of yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

4NIKKO COMPANY(3) Consolidated Statements of Cash Flows(Millions of yen)
Six Months ended
September 30, 2015

(Millions of yen)
Six Months ended
September 30, 2016

(414)
200(2)
(1)
(14)
38(1)
18
0
2(1)
―
――521

(79)
197
(1)
(3)
(5)
12(0)
20
15
―
―
0(9)
11
224

(0)

(0)

(292)
(241)
(180)
(370)
1(18)
(32)
――(418)

(96)
56
130
470
0(20)
(36)
9(5)
418

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

(5)
951
(128)
6(66)

(0)
――(93)(2)(96)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Repayments of lease obligations
Purchase of treasury stock
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

(25)
(184)
(55)
(0)
(265)
(0)
(751)
1,208
457

―(193)
(22)
(0)
(216)
(1)
104
912
1,017

Net cash provided by (used in) operating activities
Income (loss) before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for product warranties
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss on retirement of noncurrent assets
Outplacement bounty
Loss on fire
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in claims provable in bankruptcy, claims
provable in rehabilitation
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Outplacement bounty income received
Loss on fire paid
Net cash provided by (used in) operating activities

5

NIKKO COMPANY[Consolidated Segment Information]
Six Months ended September 30, 2015 (April 1, 2015 – September 30, 2015)
Functional
Ceramics
ProductHousing &Environmental
Equipment(Millions of yen, rounded down)Amounts on theSegment
Adjustment
consolidated
financial
total(Note)
statements

Tabletop

Net sales
Sales to Outside Customers

1,206

4,170

1,131

6,508

-

6,508

-

-----

1,206

4,170

1,131

6,508

-

6,508

145

(25)

(207)

(87)

(349)

(437)

Intersegment sales or Transfers
TotalSegment profit (loss)(Operating income (loss))

Notes: Segment income adjustment of 349 million yen consists of expenses related to departments that do not belong to the reportablesegments.

Six Months ended September 30, 2016 (April 1, 2016 – September 30, 2016)(Millions of yen, rounded down)Amounts on theSegment
Adjustment
consolidated
financialtotal(Note)statements

Functional
Ceramics
Product

Housing &Environmental
Equipment

1,099

4,259

929

6,289

-

6,289

-

-----

1,099

4,259

929

6,289

-

6,289

142

124

(89)

176

(236)

(59)Tabletop

Net sales
Sales to Outside Customers
Intersegment sales or Transfers
Total
Segment profit (loss)(Operating income (loss))

Notes: Segment income adjustment of 236 million yen consists of expenses related to departments that do not belong to the reportablesegments.

6