Kobayashi Pharmaceutical : FY2017 1Q Financial Statement

Summary of Financial Statements (Japanese GAAP) (Consolidated) Financial Results for the 1st Quarter of the Fiscal Year Ending December 31, 2016

July 28, 2016

Listed exchanges : Tokyo

Listed company name: Kobayashi Pharmaceutical Co., Ltd. Code : 4967

URL : http://www.kobayashi.co.jp/ Representative officer: Akihiro Kobayashi, President & COO Contact : Satoshi Yamane,

Senior Executive Director & Senior General Manager, Corporate Administration Headquarters

Tel : [phone]

Expected date for submitting quarterly securities report : August 9, 2016 Preparation of supplementary explanation documents for quarterly financial results : None

Holding of an analyst meeting for quarterly financial results : None

(Any fraction less than 1 million yen is rounded down to the nearest million yen.)

1. Consolidated Results for 1st Quarter of Fiscal Year Ending December 31, 2016 (April 1, 2016 to June 30, 2016)

(1) Consolidated Operating Results (accumulation)

(% figures represent changes from same period in previous year)

Q1 of FY ending December 31, 2016 Q1 of FY ended March 31, 2016

Net sales	36,767	millions of yen	 %	29,971	millions of yen	10.3	%
Operating income	7,299		4,453	33.8
Ordinary income	7,142		4,632	28.6
Net income attributable to owners of the parent	5,219		2,884	19.3
Net income per share	64.97	yen	35.43	yen
Net income per share after full dilution	64.92	

(Note) Comprehensive income: Q1 of FY ending December 31, 2016: 1,243 million yen (%)

Q1 of FY ended March 31, 2016 : 4,874 million yen (192.6%)

1. Following the approval of the proposal "Partial Amendment to the Articles of Incorporation" at the 98th Ordinary General Meeting of Shareholders held on June 29, 2016, the Company changed the book-closing date from March 31 to December 31, effective from FY 2016. Accordingly, the current consolidated fiscal year is a transitional period for the change in accounting period, meaning an irregular period, in which the consolidated operating results cover three months (April 1, 2016 to June 30, 2016) for the Company and its consolidated subsidiaries that close their accounts in March, as opposed to six months (January 1, 2016 to June 30, 2016) for consolidated subsidiaries that close their accounts in December. Therefore, the percentage of year-on-year changes has been omitted in the tables above.

2. The Company implemented a two-for-one common stock split effective July 1, 2016. Net income per share and net income per share after full dilution were calculated on the assumption that the relevant stock split had been implemented at the beginning of the previous consolidated fiscal year.

(2) Consolidated Financial Position

Q1 of FY ending December 31, 2016		As of March 31, 2016
Total assets	188,754	millions of yen	188,997	millions of yen
Net assets	141,378	142,023
Shareholders' equity ratio	74.8	%	75.1	%
Net assets per share	1,758.24	yen	1,766.06	yen

(Reference) Shareholders' equity

Q1 of FY ending December 31, 2016: 141,257 million yen As of March 31, 2016: 141,873 million yen

The Company implemented a two-for-one common stock split effective July 1, 2016. Net assets per share were calculated on the assumption that the relevant stock split had been implemented at the beginning of the previous consolidated fiscal year.

2. Dividends

Year ended March 2016		FY ending December 2016	FY ending December 2016 (forecasts)
Dividends per share
Q1 end		
Q2 end	48.00	yen	24.00	yen
Q3 end		
Year-end	48.00	24.00
Total	96.00	48.00

(Note) Revision of the latest dividend forecast: None

The Company implemented a two-for-one common stock split effective July 1, 2016. The Q2-end and year-end dividends per share for the consolidated fiscal year ending December 31, 2016 (forecast) are stated taking into consideration the relevant stock split.

3. Forecasts of Consolidated Operational Results for Fiscal Year Ending December 31, 2016 (April 1, 2016 to December 31, 2016)

(% figures represent changes from same period in previous year) 6-month period ending September 30, 2016

(accumulation) FY ending December 31, 2016

Net sales	73,000	millions of yen	 %	117,300	millions of yen	 %
Operating income	10,600		16,900	
Ordinary income	10,600		18,800	
Net income attributable to	7,000		13,500	
owners of the parent
Earnings per share	87.13	yen	168.04	yen

(Note) Revision of the latest forecasts of operational results: Yes

1. Following the approval of the proposal "Partial Amendment to the Articles of Incorporation" at the 98th Ordinary General Meeting of Shareholders held on June 29, 2016, the Company changed the book-closing date from March 31 to December 31, effective from FY 2016. Accordingly, the consolidated fiscal year ending December 31, 2016 is a transitional period for the change in accounting period, covering nine months (April 1, 2016 to December 31, 2016) for the Company and its consolidated subsidiaries that close their accounts in March. The consolidated accounting period for the consolidated subsidiaries that close their accounts in December covers 12 months (January 1, 2016 to December 31, 2016) as in the previous year.

   [Reference]

   Net sales	Operating income		Ordinary income		Net income attributable to owners of the parent		(Millions of yen)
   117,300	4.3%	16,900	(1.9%)	18,800	10.0%	13,500	5.8%

   The percentages shown below (adjusted changes) represent ratios of change by comparing the nine-month results for the previous fiscal year for the Company and its consolidated subsidiaries that close their accounts in March (April 1, 2015 to December 31, 2015) and 12-month results for the previous fiscal year for the consolidated subsidiaries that close their accounts in December (January 1, 2015 to December 31, 2015) with the full-year forecasts for the fiscal year ending December 31, 2016.

2. The Company implemented a two-for-one common stock split effective July 1, 2016. Net income per share for the first six-month period and the full-year for the consolidated fiscal year ending December 31, 2016 is stated taking into consideration the relevant stock split.

* Notes

1. Changes in significant subsidiaries during the period (Changes in specified subsidiaries accompanying changes of the scope of consolidation): None

   Newly consolidated: - (company name: ), Eliminated from the scope of consolidation: - (company name: )

2. Adoption of special accounting methods for preparing quarterly consolidated financial statements: None

3. Changes in accounting policies, changes in accounting estimates and retrospective restatement

    Changes in accounting policies due to revisions of accounting standards: None

    Changes of accounting policies other than the above: None

    Changes in accounting estimates: None

    Retrospective restatement: None

   Q1 of FY ending December 31, 2016	85,050,000 shares	FY ended March 31, 2016	85,050,000 shares
   Q1 of FY ending December 31, 2016	4,709,426 shares	FY ended March 31, 2016	4,716,626 shares
   Q1 of FY ending December 31, 2016	80,335,996 shares	Q1 of FY ended March 31, 2016	81,434,432 shares

4. Issued shares (common shares)

 Number of shares issued at period-end (including treasury stock):

 Number of shares of treasury stock at period-end

 Average number of shares outstanding during period (consolidated cumulative quarters)

The Company implemented a two-for-one common stock split effective July 1, 2016. Number of issued shares (common shares) was calculated on the assumption that the relevant stock split had been implemented at the beginning of the previous consolidated fiscal year.

• Information on implementation of quarterly review procedures

  This brief report of quarterly financial statements is not subject to audit procedures under the Financial Instruments and Exchange Act. Audit procedures concerning quarterly financial statements have not been completed under the Financial Instruments and Exchange Act at the date of disclosure of this brief report of quarterly financial statements.

• Explanation on appropriate use of forecasts of business results and other special items

The forward-looking statements in this document concerning forecasting of operational results, etc. are based on currently available information and assumptions considered reasonable by the Company. Actual operational results may be significantly different from these statements due to various factors. For the assumptions used as the basis for forecasts of operational results and important matters when using the forecast of performance, please refer to "1. Qualitative Information on Quarterly Results, (3) Explanation of future forecast information, such as forecast of consolidated results" on page 4 of the attachment.

Kobayashi Pharmaceutical Co., Ltd. (4967)

Summary of Financial Statements 1st Quarter of the Fiscal Year Ending December 31, 2016

Table of Contents for Attachment

1. Qualitative Information on Quarterly Results 2

2. Explanation of operational results 2

3. Explanation of financial position 3

4. Explanation of future forecast information, such as forecast of consolidated results 4

5. Matters concerning Summary Information (Notes) 4

6. Changes in significant subsidiaries during the period 4

7. Adoption of special accounting methods for preparing quarterly consolidated financial statements 4

8. Changes in accounting policies 4

9. Additional information 4

10. Quarterly Financial Statements 5

11. Consolidated quarterly balance sheet 5

12. Consolidated quarterly statements of income and consolidated quarterly statements of comprehensive income 7

    Consolidated quarterly statements of income

    Three-month period ended June 30, 2016 7

    Consolidated quarterly statements of comprehensive income

    Three-month period ended June 30, 2016 8

13. Notes on quarterly consolidated financial statements 9

14. (Notes on assumption of going concern) 9

    (Notes on a significant change in shareholders' equity) 9

    (Segment information, etc.) 9

    (Significant subsequent events) 10

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