DAIKYO INCORPORATED : 2Q Financial Results

Consolidated Financial Results for the Second Quarter Ended September 30, 2017 (J-GAAP) (Unaudited)

October 30, 2017

Listed company: DAIKYO INCORPORATED Listed stock exchange: Tokyo Securities code: 8840 URL: http://www.daikyo.co.jp Representative: Akira Yamaguchi, Representative Executive Officer, President

Contact: Koichi Hinago, General Manager, Group Corporate Planning Dept. Planned date of the filing of quarterly report: November 8, 2017

Planned dividends payment commencement date: -

2Q earnings presentation materials: Yes

Holding of earnings announcement: Yes (for institutional investors and analysts)

(Amounts of less than one million yen are truncated)

1. Consolidated Performance for the Six Months Ended September 30, 2017 (April 1, 2017 to September 30, 2017)

2. ) Consolidated operating results (Cumulative)

   (% figures show year-on-year change) (Millions of yen)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent
   Six months ended September 30, 2017	133,640	(8.9)%	1,550	(76.5)%	1,373	(78.3)%	650	(83.7)%
   Six months ended September 30, 2016	146,628	(13.5)%	6,592	(39.0)%	6,332	(39.2) %	4,001	(42.6)%

   (Note) Comprehensive income: Six months ended September 30, 2017: ¥686 million / (83.0)%

   Six months ended September 30, 2016: ¥4,034 million / (43.4)%

   Net income per share	Fully diluted net income per share
   Six months ended September 30, 2017	¥7.76	¥7.66
   Six months ended September 30, 2016	¥47.64	¥47.00

   (Note) The Company consolidated common stock and Class 1 preferred stocks at a ratio of ten shares to one with an effective date of October 1, 2017. As a result, net income per share and fully diluted net income per share were calculated on the assumption that this share consolidation took place at the beginning of the previous consolidated fiscal year.

3. ) Consolidated financial position (Millions of yen except for %)

4. Total assets	Net assets	Shareholders' equity ratio
   As of September 30, 2017	259,689	172,366	66.4%
   As of March 31, 2017	277,899	177,863	64.0%

   (Reference) Shareholders' equity:

   As of September 30, 2017: ¥172,366 million As of March 31, 2017: ¥177,863 million

5. State of Dividends

   Annual dividends (Yen)
   1Q-end	2Q-end	3Q-end	Year-end	Total
   Fiscal year ended March 31, 2017	-	0.00	-	6.00	6.00
   Fiscal year ending March 31, 2018	-	0.00
   Fiscal year ending March 31, 2018 (Forecast)	-	60.00	60.00

   (Notes) 1. Revisions to the latest performance forecast: None

6. The Company consolidated common stock at a ratio of ten shares to one with an effective date of October 1, 2017. The year-end dividends and total annual dividends for the fiscal year ending March 31, 2018 (forecasts) are noted here taking this share consolidation into account.

7. The above "State of Dividends" is only the status of dividends from common stock. Please refer to "State of Dividends from Class Stock" for the state of dividends from class stock (unlisted) issued by DAIKYO INCORPORATED ("the Company") with different rights from common stock.

8. Consolidated Performance Forecast for the Fiscal Year Ending March 31, 2018 (April 1, 2017 to March 31, 2018)

   (% figures show year-on-year change) (Millions of yen)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent		Net income per share
   Full-year	340,000	4.5%	19,000	(7.4)%	18,000	(9.9)%	12,000	(14.6)%	¥142.46

   (Note) 1. Revisions to the latest performance forecast: None

9. Net income per share in the consolidated performance forecast for the fiscal year ending March 31, 2018 (full-year) takes into account the impact of the share consolidation.

10. Disclaimer

    This document was prepared in English for convenience purposes only. The original Japanese document shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this document.

    * Notes

    New: -

    (Company name: )

    Excluded: -

    (Company name: )

11. Changes in significant subsidiaries during the six months under review (changes in specified subsidiaries resulting in change in scope of consolidation): None

12. Application of special accounting treatment for the preparation of quarterly consolidated financial statements: None

13. ) Changes in accounting policies and estimates, or retrospective restatements

14. Change in accounting policies in accordance with revision of accounting standards: None

15. Change in accounting policies other than item (i) above: Yes

16. Change in accounting estimates: None

17. Retrospective restatements: None

18. ) Number of shares issued (common stock)

19. (Unit: share)

    1) Number of issued shares at end of period (including treasury stock):	Sep. 30, 2017	84,354,273	Mar. 31, 2017	84,354,273
    2) Number of shares of treasury stock at end of period:	Sep. 30, 2017	854,405	Mar. 31, 2017	350,514
    3) Average number of shares during period	Apr.-Sep. 2017	83,884,168	Apr.-Sep. 2016	84,005,269

    (Note) The Company consolidated common stock at a ratio of ten shares to one with an effective date of October 1, 2017. As a result, number of issued shares at end of period, number of shares of treasury stock at end of period, and average number of shares during period were calculated on the assumption that this share consolidation took place at the beginning of the previous consolidated fiscal year.

    • The summary of financial statements is exempt from quarterly review procedures.

    • Explanation of the appropriate use of performance forecasts; other points to note

20. Forward-looking statements in this document, including the performance outlook, etc. were written based on information the Company has at this time and certain assumptions the Company considers to be reasonable. Actual performance may differ from the forecast figures due to various factors.

21. On October 30, 2017, the Company plans to hold an earnings announcement for institutional investors and analysts regarding results for the second quarter. The earnings presentation materials used on that day will be posted on the Company's website after the announcement.

State of Dividends from Class Stock

Annual dividends (Yen)
1Q-end	2Q-end	3Q-end	Year-end	Total
Fiscal year ended March 31, 2017	-	-	-	7.73	7.73
Fiscal year ending March 31, 2018	-	-
Fiscal year ending March 31, 2018 (Forecast)	-	75.12	75.12

The breakdown of the dividends per share from class stock with different rights from common stock is as follows. (Class 1 preferred stock)

The Company consolidated Class 1 preferred stocks at a ratio of ten shares to one with an effective date of October 1, 2017. Accordingly, year-end dividends per share and total annual dividends per share for the fiscal year ending March 31, 2018 (forecasts) take into account the effect of this share consolidation.