Consolidated Financial Results for the Six Months Ended September 30, 2017
[Japanese GAAP]
Date: November 9, 2017
Name of listed company:
Arisawa Mfg. Co., Ltd.
Listed on the Tokyo Stock Exchange (First Section)
Securities code:
5208(Website: http://www.arisawa.co.jp/)
Name and title of representative: Yuta Arisawa, President and Representative Director
Name and title of contact person: Takeshi Masuda, Operating Officer supervising Corporate Planning Dept.
Telephone: +81-25-524-7101
Scheduled date of filing Quarterly Report: November 14, 2017
Scheduled date of commencing dividend payments: --Preparation of supplementary briefing materials on the quarterly financial results:
No
Holding of a briefing session on the quarterly financial results:
Yes (For analysts)(Amounts of less than one million yen have been truncated.)

1.

Financial results for the consolidated cumulative second quarter of the fiscal year ending March 31, 2018
(From April 1, 2017 to September 30, 2017)(1) Consolidated results of operations(Percentage figures represent changes from the year-earlier quarter.)
Net sales(Millions of yen)

Operating income(%)(Millions of yen)

Ordinary income(%)(Millions of yen)Six months ended
19,30713.7
1,586 194.3
2,179
September 30, 2017
Six months ended
16,984 Δ11.3
539 Δ64.8
689
September 30, 2016
(Note)
Comprehensive income: 1,909 million yen (--- %) for the six months ended September 30, 2017
Δ1,786 million yen (---%) for the six months ended September 30, 2016
Net income per share
Six months ended
September 30, 2017
Six months ended
September 30, 2016

Profit attributable toowners of the parent(%)(Millions of yen)

(%)

216.1

1,557

195.1

Δ65.2

527

Δ66.9

Fully diluted net income per share

(Yen)

(Yen)

43.55

43.24

14.82

14.79

(2) Consolidated financial conditions
Total assets

Net assets(Millions of yen)

September 30, 2017
66,021March 31, 2017
63,808(Reference) Shareholders’ equity: 47,269 million yen as of September 30, 201746,051 million yen as of March 31, 20172.

Equity ratio(Millions of yen)

49,742
48,551

Net assets per share
(%)

(Yen)

71.6
72.2

1,318.59
1,290.93

Dividends
1st quarter end

Dividend per share
3rd quarter end

2nd quarter end(Yen)

Fiscal year end(Yen)

Annual

(Yen)

(Yen)

Fiscal year ended March 31, 2017--0.00--20.00
Fiscal year ending March 31, 2018--0.00Fiscal year ending March 31, 2018----(Forecast)(Note)
Revision of the most recently announced dividend forecast: No
No decision or forecast has hitherto been made regarding the dividend(s) for the fiscal year ending March 31, 2018.

20.00

3.

(Yen)

---

Forecast of consolidated results of operations for the fiscal year ending March 31, 2018
(From April 1, 2017 to March 31, 2018)
Net sales

Full fiscal year
(Note)(Percentage figures represent changes from the previous fiscal year.)Ordinary income
Profit attributable to
Net income
owners of the parent
per share

Operating income(Millions of yen)(%)

(Millions of yen)(%)

(Millions of yen)(%)

(Millions of yen)

(%)

(Yen)

39,300

14.1

3,400

89.9

4,100

52.4

2,900

42.4

80.90

Revision of the most recently announced forecast of the consolidated results of operations: Yes
For details, please refer to “1. Qualitative Information Concerning Quarterly Financial Results” on page 2 of the body of this summary.

*Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries entailing changes in thescope of consolidation): None
New companies: --- (Company name:)
Excluded companies: --- (Company name:)(2) Application of accounting treatments particular to preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies and accounting estimates, retrospective restatements
1) Changes in accounting policies due to revisions of accounting standards, etc.: None
2) Changes in accounting policies other than those falling under item 1): None
3) Changes in accounting estimates: None
4) Retrospective restatements: None
(4) Number of shares issued and outstanding (Common stock)1) Number of shares issued and outstanding as of the most recent quarter end and fiscal year end (including
treasury stock)
September 30, 201735,855,124 shares
March 31, 2017
35,679,624 shares
2)

Number of shares of treasury stock as of the most recent quarter end and fiscal year end
September 30, 2017
6,856 shares
March 31, 2017
6,536 shares

3)

Average number of shares during the most recent consolidated cumulative second quarters
Six months ended September 30, 2017
35,760,445 shares
Six months ended September 30, 2016
35,607,782 shares*This summary is not subject to quarterly review procedures.
*Proper Use of Forward-looking Statements and Other Matters to be Noted
Earnings forecasts and other forward-looking statements contained in this summary are based on information currently
available to Arisawa Mfg. Co., Ltd. (hereinafter referred to as the “Company”) and certain assumptions that the Company
deems to be reasonable. The actual business results, etc. may therefore differ materially from these statements for various
reasons.

Table of Contents
1.

2.

Qualitative Information Concerning Quarterly Financial Results ··········································· 2(1) Explanation Concerning Consolidated Results of Operations············································ 2(2) Explanation Concerning Financial Conditions ····························································· 2(3) Explanation Concerning Forecast of Consolidated Results of Operations ····························· 2
Quarterly Consolidated Financial Statements ·································································· 3(1) Quarterly Consolidated Balance Sheets ····································································· 3(2) Quarterly Consolidated Statements of Income andQuarterly Consolidated Statements of Comprehensive Income ······································· 5[Quarterly Consolidated Statements of Income] ························································· 5[Quarterly Consolidated Statements of Comprehensive Income] ····································· 6(3) Quarterly Consolidated Statement of Cash Flows ························································· 7(4) Notes Related to Going Concern Assumption ······························································ 9(5) Notes Related to Significant Changes in the Amount of Shareholders’ Equity ························ 9(6) Particular Accounting Treatments
Applied in Preparation of Quarterly Consolidated Financial Statements ····························· 9(7) Segment Information, etc. ···················································································· 9-1-1. Qualitative Information Concerning Quarterly Financial Results(1) Explanation Concerning Consolidated Results of Operations
The Japanese economy in the current consolidated cumulative second quarter, against the backdrop of thegovernment’s economic stimulus measures on the monetary and fiscal fronts, etc., remained on an overall slow
recovery track. While the economy in Western countries is making a slow recovery, a sense of uncertainty
regarding the economic outlook persisted due largely to the general misgivings about the apparent decelerationof growth in most major emerging economies.
Under such circumstances, our group (the Company, its consolidated subsidiaries and the companies
accounted for under the equity method) saw a year-on-year upturn in both net sales and operating income as aresult of the stagnant demand for electronic materials for use primarily in multifunctional mobile terminals andefforts to improve the profitability of industrial application structural materials.
Consequently, our group’s results of operations for the current consolidated cumulative second quarter
showed net sales of 19,307 million yen (a 13.7% increase as compared with the year-earlier quarter), an
operating income of 1,586 million yen (a 194.3% increase as compared with the year-earlier quarter), an
ordinary income of 2,179 million yen (a 216.1% increase as compared with the year-earlier quarter) and a profit
attributable to owners of the parent of 1,557 million yen (a 195.1% increase as compared with the year-earlier
quarter).
(2) Explanation Concerning Financial Conditions
Total assets as of the end of the current consolidated second quarter were 66,021 million yen (an increase of
2,213 million yen compared with the end of the fiscal year ended March 31, 2017). This was due largely to anincrease of 2,484 million yen in notes and accounts receivable-trade.
Total liabilities as of the end of the current consolidated second quarter were 16,278 million yen (an increaseof 1,021 million yen compared with the end of the fiscal year ended March 31, 2017). This was due largely to
an increase of 1,392 million yen in notes and accounts payable-trade.
Total net assets as of the end of the current consolidated second quarter were 49,742 million yen (a increaseof 1,191 million yen compared with the end of the fiscal year ended March 31, 2017). This was due largely to
an increase of 839 million yen in retained earnings and 329 million yen in valuation difference on availablefor-sale securities.
(3) Explanation Concerning Forecast of Consolidated Results of Operations
With the sales in electronic materials segment expected to increase more than initially anticipated, the forecastof the consolidated results of operations for the full fiscal year ending March 31, 2018 announced on August
3, 2017 has been revised as follows.
Revisions of forecast of consolidated results of operations for the full fiscal year ending March 31, 2018
(From April 1, 2017 to March 31, 2018)
Net sales(Millions ofyen)OperatingincomeOrdinary
income(Millions ofyen)(Millions ofyen)Profit attributableto owners of theparent(Millions of yen)

Net income per
share
(Yen)

Previously announced
forecast (A)37,900

2,650

3,550

2,650

74.09

Revised forecast (B)39,300

3,400

4.100

2,900

80.90

Difference

1,400

750

550

250

3.7

28.3

15.5

9.4

34,451

1,790

2,690

2,037

(B-A)

Percentage change (%)(Reference) Results for thefull fiscal year ended March
31, 2017

-2-

57.20

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousands of yen)Previous consolidated
fiscal year
(As of March 31, 2017)

Current consolidated
second quarter(As of September 30, 2017)

AssetsCurrent assets
Cash and deposits

7,667,985

5,586,187

Notes and accounts receivable-trade12,618,700

15,103,279

797,550

1,293,143

Merchandise and finished goods

2,602,353

3,267,216

Work in process

1,301,381

1,370,942

Raw materials and supplies

2,095,419

2,822,179

Other

1,331,705

1,439,808

Allowance for doubtful accounts△127,077△128,819

Total current assets

28,288,018

30,753,938

11,065,403

10,687,790

Other

65,486

62,106

Total intangible assets

65,486

62,10623,864,265

23,927,699

Securities

Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
Other

707,162

780,640

Allowance for doubtful accounts△181,927△190,748

Total investments and other assets

24,389,500

24,517,592

Total non-current assets

35,520,391

35,267,488

Total assets

63,808,409

66,021,427-3-

(Thousands of yen)
Current consolidated
second quarter(As of September 30, 2017)

Previous consolidated
fiscal year
(As of March 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable-trade

5,168,250

6,560,793

Short-term loans payable

2,908,630

2,514,822

Current portion of long-term loans payable

446,754487,368

Income taxes payable

362,974

522,713

Provision for bonuses

447,415

609,747

Provision for directors' bonuses

3,573

3,588

Provision for product warranties

169

127

Other

2,341,381

1,910,135

Total current liabilities

11,679,149

12,609,296

Long-term loans payable

1,836,093

1,738,651

Net defined benefit liability

558,112569,088

Non-current liabilities

Asset retirement obligations

57,44856,406

Other

1,126,306

1,305,286

Total non-current liabilities

3,577,960

3,669,433

15,257,109

16,278,729

Total liabilities
Net assets
Shareholders’ equity
Capital stock

7,317,019

7,382,125

Capital surplus

6,429,038

6,494,129

Retained earnings

30,740,318

31,579,857

Treasury stock△3,891△4,18944,482,485

45,451,922

942,763

1,272,457

5,153

164

Foreign currency translation adjustment

808,002723,399

Remeasurements of defined benefit plans△187,018△178,749

Total accumulated other comprehensive income

1,568,901

1,817,272

Subscription rights to shares

143,292

134,647

Non-controlling interests

2,356,620

2,338,855

Total net assets

48,551,300

49,742,697

63,808,409

66,021,427

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total liabilities and net assets-4-(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income[Quarterly Consolidated Statements of Income][Consolidated cumulative second quarter](Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2017
to September 30, 2017)

Previous consolidated
cumulative second quarter(From April 1, 2016
to September 30, 2016)
Net sales

16,984,702

19,307,076

Cost of sales

14,369,335

15,554,421

Gross profit

2,615,367

3,752,655

Selling, general and administrative expenses

2,076,338

2,166,268

539,029

1,586,387

Interest income

153,822

179,511

Dividends income
Share of profit of entities accounted for using equity
methodOther

51,99949,225

184,190

250,320

255,406

219,944

Total non-operating income

645,418

699,000

Interest expenses

24,66533,187

Foreign exchange losses

394,511－

Rent expenses

49,167

41,767

Other

26,52130,739Operating income
Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary income

494,866

105,694

689,581

2,179,693

Extraordinary income
Gain on sales of non-current assets

－

2,960

Gain on sales of investment securities

13,22090,291

Insurance income

129,723－

7,608

10,904

150,552

104,156

4,209－

Loss on valuation of investment securities－

63,595

Other

431

7,487

Total extraordinary losses

4,640

71,082

Income before income taxes

835,493

2,212,767

Income taxes

274,076

551,405

Profit561,416

1,661,361

Profit attributable to non-controlling interests

33,767104,040

Profit attributable to owners of the parent

527,649

1,557,321

Other
Total extraordinary income
Extraordinary losses
Loss on sales of investment securities-5-[Quarterly Consolidated Statements of Comprehensive Income][Consolidated cumulative second quarter](Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2017
to September 30, 2017)

Previous consolidated
cumulative second quarter(From April 1, 2016
to September 30, 2016)
Profit561,416

1,661,361△752,653

329,799－△4,989△1,167,804△20,765

4,642

4,825

△432,062△60,644△2,347,878

248,226

Comprehensive income△1,786,462

1,909,587(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests△1,279,374

1,805,692△507,087

103,895

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-6-(3) Quarterly Consolidated Statements of Cash Flows(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2017
to September 30, 2017)

Previous consolidated
cumulative second quarter(From April 1, 2016
to September 30, 2016)
Cash flows from operating activities
Income before income taxes

835,493

2,212,767

Depreciation

815,285

819,998

59－

Share-based compensation expenses

23,443

19,713Gain on reversal of subscription rights to shares△7,608△1,442

Increase ( decrease) in allowance for doubtful accounts△42,689

11,032

Increase ( decrease) in provision for bonuses△3,443

162,332△42

Amortization of goodwill

Increase ( decrease) in provision for product warranties

77

Increase ( decrease) in provision for directors' bonuses△5,04015

Increase ( decrease) in net defined benefit liability

14,773

17,939Insurance income△129,723－

Loss ( gain) on redemption of investment securities△61,146△23,029

Interest and dividends income△205,821△228,736Interest expenses

24,66533,187

Foreign exchange losses ( gains)Share of ( profit) loss of entities accounted for using
equity method
Loss ( gain) on change in equity
Loss ( gain) on sales of short-term and long-term
investment securities
Loss (gain) on valuation of investment securities

297,158△739△184,190△250,320－△9,462△9,011△90,235
63,595

Loss ( gain) on sales of golf club memberships

515－

Loss ( gain) on sales of non-current assets－△2,960Loss on retirement of property, plant and equipment

369

4,381

232,891△2,386,160

791,695△1,428,726△376,162

1,356,077

Decrease ( increase) in notes and accounts receivabletrade
Decrease ( increase) in inventories
Increase ( decrease) in notes and accounts payabletrade
Increase ( decrease) in accrued consumption taxes△145,816

5,022

Decrease ( increase) in other assets△476,664△227,813

Increase ( decrease) in other liabilities

142,313

159,325

1,531,425

215,717

SubtotalInterest and dividends income received

316,150

292,514

Interest expenses paid

△23,107△38,430

Proceeds from insurance income

129,723－

Income taxes paid

△49,653△367,380

Payments for loss on litigation△40,000－

Net cash provided by (used in) operating activities

1,864,538

102,420-7-

(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2017
to September 30, 2017)

Previous consolidated
cumulative second quarter(From April 1, 2016
to September 30, 2016)
Cash flows from investing activities
Payments into time deposits△294,815－

Proceeds from withdrawal of time deposits

403,205

229,918

Purchase of property, plant and equipment△693,448△949,181－

6,084△10,327△7,396△1,219,949△254,743

1,253,073

593,045

Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from liquidation of subsidiaries

31,096

Payments of loans receivable△153,820△105,742

Collection of loans receivable－

80,000

Other proceeds

300

8,390

△715,781△368,526

Net increase ( decrease) in short-term loans payable△227,185△444,132

Proceeds from long-term loans payable

1,434,100

482,698

Repayments of long-term loans payable△777,821△547,793△9,780△10,941

Proceeds from issuance of common stock

2,080

103,280

Purchase of treasury stock

△10

△298

Cash dividends paid

△815,579△711,355

Cash dividends paid to non-controlling interests△124,727△121,662

Net cash provided by (used in) financing activities△518,924△1,250,204△372,510

21,898257,321△1,494,413

Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation

4,901,124

7,026,200－△110,040

Cash and cash equivalents at end of period

5,158,445

5,421,746

Net cash provided by (used in) investing activities
Cash flows from financing activities

Repayments of lease obligations

Effect of exchange rate change on cash and cash equivalents
Net increase ( decrease) in cash and cash equivalents-8-(4) Notes Related to Going Concern Assumption
No applicable matter.
(5) Notes Related to Significant Changes in the Amount of Shareholders’ Equity
No applicable matter.
(6) Particular Accounting Treatments Applied in Preparation of Quarterly Consolidated Financial Statements<Calculation of tax expenses>
Tax expenses are calculated by multiplying the quarterly income before income taxes by an estimatedeffective tax rate. Such effective tax rate is reasonably estimated after applying tax effect accounting to theincome before income taxes for the consolidated fiscal year including the current consolidated second quarter.
(7) Segment Information, etc.
[Segment Information]
I Previous consolidated cumulative second quarter (From April 1, 2016 to September 30, 2016)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Other
Total
(See Note)

Reportable segment
Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Subtotal

Net sales
Net sales toexternal
9,786,504
3,936,175
1,460,478
1,287,138
16,470,296
514,406
16,984,702
customers
Inter-segment
sales or－－－－－
383,542
383,542transfers
Total
9,786,504
3,936,175
1,460,478
1,287,138
16,470,296
897,948
17,368,245
Segment income△115,999
756,003
200,535
237,625
1,078,165
106,892
1,185,057
or loss ()Note: The column “Other” represents business operations that do not fall under any of the reportable segments and includes therelated goods sales, the logistics-related operations and other businesses, etc.

2. Difference between the aggregate amount of income or loss of reportable segments and the pertinent amountshown on the quarterly consolidated statements of income as well as the key components of such difference(Matters concerning difference adjustment)(Thousands of yen)
IncomeAmountTotal of reportable segments

1,078,165

Income in the category “Other”

106,892

Elimination of inter-segment transactions

35,165

Amortization of goodwill

59

Unallocated corporate expenses (See Note)

592,013

Adjustment of inventories

18,789Operating income shown on the quarterly
539,029
consolidated statements of income
Note: Unallocated corporate expenses are mostly general and administrative
expenses that are not attributable to any of the reportable segments.

3. Information on impairment loss on non-current assets or goodwill, etc. with respect to each reportablesegment
No applicable matter.

-9-

II Current consolidated cumulative second quarter (From April 1, 2017 to September 30, 2017)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Other
(See Note)

Reportable segment
Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Total

Subtotal

Net sales
Net sales toexternal
12,575,626
3,383,148
1,611,855
1,340,027
18,910,658
396,418
19,307,076
customers
Inter-segment
sales or－－－－－409,534
409,534transfers
Total
12,575,626
3,383,148
1,611,855
1,340,027
18,910,658
805,952
19,716,611
Segment income△91,780
1,401,196
514,847
300,783
2,125,046
130,423
2,255,470
or loss ()Note: The column “Other” represents business operations that do not fall under any of the reportable segments and includes the related
goods sales, the logistics-related operations and other businesses, etc.

2. Difference between the aggregate amount of income or loss of reportable segments and the pertinent amountshown on the quarterly consolidated statements of income as well as the key components of such difference(Matters concerning difference adjustment)(Thousands of yen)
IncomeAmountTotal of reportable segments

2,125,046

Income in the category “Other”

130,423

Elimination of inter-segment transactions

40,772

Unallocated corporate expenses (See Note)

605,323

Adjustment of inventories

22,986
Operating income shown on the quarterly
1,586,387
consolidated statements of income
Note: Unallocated corporate expenses are mostly general and administrative
expenses that are not attributable to any of the reportable segments.

3. Matters concerning changes in reportable segments, etc.
The categorization, introduced in the consolidated first quarter, of reportable segments was changed dueto the liquidation of a subsidiary so that the “Related goods sales”, which was categorized as a reportablesegment, is incorporated into the “Other”.
In this regard, the segment information for the previous consolidated cumulative second quarter isreported on the basis of the reportable segments reflecting the said change in categorization.
4. Information on impairment loss on non-current assets or goodwill, etc. with respect to each reportablesegment
No applicable matter.

- 10 -