Consolidated Financial Results for the Nine Months Ended December 31, 2017
[Japanese GAAP]
Date: February 8, 2018
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: February 14, 2018
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:
No(Amounts of less than one million yen have been truncated.)

1.

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

Operating income(Millions of yen)

Nine months ended
December 31, 2017
Nine months endedDecember 31, 2016
(Note)
Comprehensive income:(%)(Millions of yen)(%)

Ordinary income(Millions of yen)

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

30,325

17.7

2,636

129.0

3,193

58.6

2,655

79.6

25,754

Δ10.1

1,151

Δ50.9

2,013

Δ36.0

1,478

∆33.5

4,708 million yen (- %) for the nine months ended December 31, 2017
258 million yen (∆82.8%) for the nine months ended December 31, 2016
Net income per share

Nine months endedDecember 31, 2017
Nine months ended
December 31, 2016

Fully diluted net income per share

(Yen)

(Yen)

74.18

73.52

41.53

41.46

(2) Consolidated financial conditions
Total assets

Net assets(Millions of yen)

December 31, 2017
March 31, 2017
(Reference) Shareholders’ equity:

2.

Equity ratio(Millions of yen)

72,64863,80849,919 million yen as of December 31, 201746,051 million yen as of March 31, 2017

52,64448,551

Net assets per share
(%)

(Yen)

68.7
72.2

1,388.54
1,290.93

Status of dividends
1st quarter end

Cash 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--0.00--Fiscal 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, 2017.

20.00

3.

(Yen)

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

(Percentage figures represent year-on-year changes.)
Ordinary income
Profit attributable to owners
Net incomeof the parent
per share

Operating income(%)(Millions of yen)(%)

(Millions of yen)(%)

Full fiscal
39,300
14.1
3,400
89.9
4,100
52.4
year
(Note) Revision of the most recently announced forecast of the consolidated business results: No(Millions of yen)

(%)

(Yen)

2,900

42.4

80.67

* Notes(1) Changes in significant subsidiaries during the current consolidated cumulative quarter (changes in specified
subsidiaries entailing changes in the scope of consolidation): YesNew companies: 1 (Company name: Satosen Co., Ltd.)
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 (includingtreasury stock)
December 31, 201735,957,924 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
December 31, 2017
7,015 shares
March 31, 2017
6,536 shares

3)

Average number of shares during the consolidated cumulative third quarter
Nine months ended December 31, 201735,802,682 shares
Nine months ended December 31, 2016
35,608,925 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 variousreasons.

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) Notes Related to the Going Concern Assumption ························································· 7(4) Notes Related to Significant Changes in the Amount of Shareholders’ Equity ························ 7(5) Particular Accounting Treatments Applied in Preparation ofQuarterly Consolidated Financial Statements ···························································· 7(6) Segment Information, etc. ···················································································· 7-1-

1. Qualitative Information concerning Quarterly Financial Results(1) Explanation Concerning Consolidated Results of Operations
The Japanese economy in the current consolidated cumulative third quarter, against the backdrop of thegovernment’s economic stimulus measures on the monetary and fiscal fronts, etc., remained on an overallslow 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 theapparent deceleration of 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 a result of the stagnant demand for electronic materials for use primarily in multifunctional mobileterminals and efforts to improve the profitability of industrial application structural materials.
As a result, the business results for the current consolidated cumulative third quarter showed net sales of
30,325 million yen (representing a 17.7% increase as compared with the year-earlier quarter), an operating
income of 2,636 million yen (representing an 129.0% increase as compared with the year-earlier quarter), an
ordinary income of 3,193 million yen (representing a 58.6% increase as compared with the year-earlier quarter)
and a profit attributable to owners of the parent of 2,655 million yen (representing a 79.6% increase ascompared with the year-earlier quarter).
(2) Explanation Concerning Financial Conditions
Total assets as of the end of the current consolidated third quarter were 72,648 million yen (an increase of8,840 million yen compared with the end of the fiscal year ended March 31, 2017). This was due largely to anincrease of 3,161 million yen in notes and accounts receivable-trade.
Total liabilities as of the end of the current consolidated third quarter were 20,003 million yen (an increaseof 4,746 million yen compared with the end of the fiscal year ended March 31, 2017). This was due largely to
an increase of 1,609 million yen in notes and accounts payable-trade.
Total net assets as of the end of the current consolidated third quarter were 52,644 million yen (an increaseof 4,093 million yen compared with the end of the fiscal year ended March 31, 2017). This was due largely to
an increase of 1,955 million yen in retained earnings.
(3)

Explanation Concerning Forecast of Consolidated Results of Operations
As for the consolidated business results of the year ending March 31, 2018, there is no change in theconsolidated business results forecast as announced on November 9, 2017.

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

Current consolidated
third quarter(As of December 31, 2017)

AssetsCurrent assets
Cash and deposits

7,667,985

8,156,961

Notes and accounts receivable-trade12,618,70015,780,632

797,550

1,463,181

Merchandise and finished goods

2,602,353

2,813,907

Work in process

1,301,381

1,842,975

Raw materials and supplies

2,095,419

2,998,427

Other1,331,705

1,912,562

Allowance for doubtful accounts△127,077△703,534

Total current assets

28,288,018

34,265,114

11,065,403

11,658,988

Other

65,486473,665

Total intangible assets

65,486473,665

23,864,265

25,566,346

Securities

Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets
Investment securities

707,162

890,661

Allowance for doubtful accounts△181,927△206,240

Total investments and other assets

24,389,500

26,250,766

Total non-current assets

35,520,391

38,383,420

Total assets

63,808,409

72,648,535

Other-3-(Thousands of yen)
Current consolidated
third quarter(As of December 31, 2017)

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

5,168,250

6,777,583

Short-term loans payable

2,908,630

3,888,563

446,754586,789－36,800

Income taxes payable

362,974

519,830

Provision for bonuses

447,415

312,442

Provision for directors' bonuses

3,573

5,058

Provision for product warranties

169

126

Other

2,341,381

2,615,511

Total current liabilities

11,679,149

14,742,704－

164,800

Long-term loans payable

1,836,093

2,048,725

Net defined benefit liability

558,112583,249

Asset retirement obligations

57,44892,729Other

1,126,306

2,371,573

Total non-current liabilities

3,577,960

5,261,078

15,257,109

20,003,783

Capital stock

7,317,019

7,428,353

Capital surplus6,429,038

6,540,332

Retained earnings

30,740,318

32,695,536

Treasury stock△3,891△4,38644,482,485

46,659,835

942,7632,516,660

5,153

－

Foreign currency translation adjustment

808,002917,079

Remeasurements of defined benefit plans△187,018△174,327

Total accumulated other comprehensive income

1,568,901

3,259,411

Subscription rights to shares

143,292

128,418

Non-controlling interests

2,356,620

2,597,086

Total net assets

48,551,300

52,644,752

63,808,409

72,648,535

Current portion of long-term loans payableCurrent portion of bonds

Non-current liabilities
Bonds payable

Total liabilities
Net assets
Shareholders’ equity

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 third quarter](Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2017to December 31, 2017)

Previous consolidated
cumulative third quarter(From April 1, 2016
to December 31, 2016)
Net sales

25,754,579

30,325,502

Cost of sales

21,506,013

24,382,712

Gross profit

4,248,566

5,942,789

Selling, general and administrative expenses

3,097,030

3,306,235

Operating income

1,151,535

2,636,553

Interest income

250,158

237,864

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

88,66488,389335,408

382,051

Non-operating income

Total non-operating income

326,840

340,889

1,001,0711,049,193

Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts

36,31450,522－

329,049

Other

103,214112,652

Total non-operating expenses

139,529492,224

2,013,077

3,193,522

2

2,960

Gain on sales of securities

13,222

507,155

Insurance income

129,723－

9,675

10,904

152,623

521,020

Ordinary income
Extraordinary income
Gain on sales of non-current assets

Other
Total extraordinary income
Extraordinary losses－63,595

Other

33,605

7,967

Total extraordinary losses

33,60571,562

Income before income taxes

2,132,094

3,642,980

561,669

759,050

1,570,425

2,883,929

Loss on valuation of investment securities

Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of the parent-5-

91,554228,230

1,478,870

2,655,699

[Quarterly Consolidated Statements of Comprehensive Income][Consolidated cumulative third quarter](Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2017
to December 31, 2017)

Previous consolidated
cumulative third quarter(From April 1, 2016
to December 31, 2016)
Profit1,570,425

2,883,929

515,800

1,574,004

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 theparent
Comprehensive income attributable to non-controllinginterests-6-－△5,153△1,367,649

288,024

6,964

7,238

△467,142△39,705△1,312,027

1,824,407

258,397

4,708,337

701,137

4,346,209△442,740

362,127

(3) Notes Related to the Going Concern Assumption
No applicable matter.
(4) Notes Related to Significant Changes in the Amount of Shareholders’ Equity
No applicable matter.
(5) 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 third quarter.
(6) Segment Information, etc.
[Segment Information]
I Previous consolidated cumulative third quarter (From April 1, 2016 to December 31, 2016)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Reportable segment
Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Subtotal

Other(See Note)

TotalNet sales
Net sales toexternal
15,082,400
5,639,261
2,324,953
1,981,078
25,027,694
726,884
25,754,579
customers
Inter-segment
sales or566,198
566,198－－－－－transfers
Total
15,082,400
5,639,261
2,324,953
1,981,078
25,027,694
1,293,083
26,320,777
Segment income
1,264,775
414,563424,358
1,926,286
156,482
2,082,768△177,411
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)
IncomeAmount

Total of reportable segments

1,926,286

Income in the category “Other”

156,482

Elimination of inter-segment transactions△52,270

Amortization of goodwill△89

Unallocated corporate expenses (See Note)△859,993

Adjustment of inventories△18,879

Operating income shown on the quarterly
1,151,535consolidated 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.

-7-

II Current consolidated cumulative third quarter (From April 1, 2017 to December 31, 2017)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Reportable segment
Electronicmaterials

Industrial
application
structuralmaterials

Electricalinsulating
materials

Displaymaterials

Subtotal

Other(See Note)

Total

Net sales
Net sales to
19,896,877
5,326,627
2,425,983
2,110,567
29,760,055
565,446
30,325,502
externalcustomers
Inter-segment
625,277625,277－－－－－
sales ortransfers
Total
19,896,877
5,326,627
2,425,983
2,110,567
29,760,055
1,190,723
30,950,779
Segment income
2,332,550
804,644455,288
3,480,730
181,340
3,662,070△111,752
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

3,480,730

Income in the category “Other”

181,340

Elimination of inter-segment transactions△68,191

Amortization of goodwill△931,336

Unallocated corporate expenses (See Note)△25,988

Adjustment of inventories

2,636,553

Operating income shown on the quarterly
3,480,730
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 third quarter is reported
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(Material change of the amount of goodwill)
Regarding the "Electronic materials" segment, Satosen Co., Ltd. is included in the scope of consolidation,
due to the acquisition of stock of the said company, from the consolidated third quarter. The increased
amount of goodwill by the said event is 407,899 thousand yen for the current consolidated cumulative
third quarter. The amount of goodwill is calculated tentatively because the distribution of acquisition costhas not been completed.

-8-