March 10, 2011 Company name:

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1 Second Quarter Financial Results For the Six Months Ended January 31, 2011-[Japanese Standards]Consolidated March 10, 2011 Company name: Dr. Ci:Labo Co., Ltd. Shares listed on: The First Section of the Tokyo Stock Exchange Security code: 4924 URL: Representative: Tomomi Ishihara, President and COO Contact: Hiroyuki Kosugi, Executive Officer and General Manager of Financial Department Phone: Filing of quarterly financial report: March 11, 2011 Start of cash dividend payments: Supplementary quarterly materials prepared: Quarterly results information meeting held: Yes Yes (for analysts) (Amounts rounded down to the nearest million yen) 1. Consolidated Financial Results for the Six Months Ended January 31, 2011 (August 1, 2010 to January 31, 2011) (1) Operating Results Second quarter ended January 31, 2011 Second quarter ended January 31, 2010 (Percentage figures denote year-on-year change) Net sales Operating income Ordinary income Net income million yen % million yen % million yen % million yen % 17, , , , , , , , Second quarter ended January 31, 2011 Second quarter ended January 31, 2010 Net income per share Diluted net income per share yen yen 10, , , ,

2 (2) Financial Position Total assets Net assets Shareholders equity ratio Net assets per share million yen million yen % yen Second quarter ended January 31, ,332 17, , FY ended July 31, ,519 15, , (Reference)Shareholders equity: Second quarter ended January 31, 2011: 17,723 million yen Fiscal year ended July 31, 2010: 15,741 million yen 2. Dividends per share Period First Quarter Second Quarter Third Quarter Year-end Annual yen yen yen yen yen FY ended July 31, , , FY ended July 31, FY ending July 31,2011 (forecast) Note: Revision to quarterly dividend forecast: None - 3, , Forecast of Earnings for the Year Ending July 31, 2011 (August 1, 2010 to July 31, 2011) (Percentage figures denote year-on-year change) Net income Net sales Operating income Ordinary income Net income per share million yen % million yen % million yen % million yen % yen FY ending July 31, , , , , , Note: Revision to consolidated earnings forecast during period under review: None -2-

3 4. Other [For more details, refer to 2.Other information (page 8)] (1) Changes affecting the status of significant subsidiaries during the period (scope of consolidation): None Note: This refers to the existence of changes to specific subsidiaries due to changes in the scope of consolidation in the period under review. (2) Use of simplified accounting methods: Yes Note: This refers to the adoption of simplified accounting treatment or special accounting treatment for preparing quarterly consolidated financial statements. (3) Changes in accounting principles, procedures and presentation methods for quarterly financial statements Changes resulting from revisions to accounting standards: Yes Others: None Note: This refers to the existence of changes in accounting principles, processes, disclosure methods, etc., pertaining to the preparation of consolidated quarterly financial statements as stated in Changes in Accounting Principles, Processes, Disclosure Methods, etc. (4) Shares issued (common stock) Shares issued (including treasury stock) at end of term January 31,2011 : 280,520 July 31,2010 : 280,496 Treasury stock January 31,2011 : 9,813 July 31,2010 : 9,813 Average shares issued January 31,2011 : 270,691 January 31,2010 : 270,553 Implementation status of quarterly review procedures At the time of disclosure of this report, review procedures for quarterly financial statements pursuant to the Financial Products and Exchange Law had not been completed. Appropriate use of business forecasts other special items The above forecasts are based on information currently available. Actual results may differ from the above forecasts due to a range of factors. For matters relating to performance forecasts, refer to (3) Qualitative information regarding the consolidated performance forecast on page

4 Contents 1. Analysis of Operating Results 5 (1) Qualitative Information Regarding the Consolidated Management Performance 5 (2) Qualitative Information Regarding the Consolidated Financial Statements 7 (3) Qualitative Information Regarding the Consolidated Performance Forecast 8 2. Other Information 8 (1) Significant Changes in Subsidiaries 8 (2) Simplified Accounting Treatment or Special Accounting Treatment Adopted 8 (3) Changes in Accounting Principles, Processes, Disclosure Methods, etc Consolidated Quarterly Financial Statements 9 (1) Consolidated Quarterly Balance Sheets 9 (2) Consolidated Quarterly Statements of Income 11 (3) Consolidated Quarterly Statements of Cash Flows 12 (4) Notes on the going-concern assumption 14 (5) Segment Information 14 (6) Notes on material changes in shareholders' capital 14-4-

5 1. Analysis of Operating Results (1). Qualitative Information Regarding the Consolidated Management Performance During the consolidated first half fiscal year under review, Japan saw a recovery in corporate earnings and capital expenditures, while personal consumption was also on track for a recovery. However, due to the affects of the rapidly strengthening yen and persistently challenging nature of the employment environment, the economy continued to stagnate. Amid this environment, the Dr. Ci:Labo Group launched its 3 rd Mid-Term Business Plan under the basic policies of aim to meet the increasingly sophisticated needs and values of customers. As the beginning of the plan, we made efforts to grow sales revenues focused on its Aqua-Collagen-Gel BI-HA-KU and Aqua-Collagen-Gel Enrich-Lift- EX products. A review of our sales channels shows that each segment posted positive results. The mail order segment continued to see a strong performance attributed to television commercial and newspaper ad campaigns as well as infomercials capturing large numbers of new customers and sales promotion measures aimed at boosting repeat purchases from existing customers, including discount fukubukuro (grab-bags) and other promotional events. In addition, our regular delivery service began carrying all of our products at the end of November, which served to significantly boost the number of users and contributed to a stable revenue stream. As a result, sales revenues of the mail order segment totaled 10,477 million yen, or a 21.9% increase YoY. In the face-to-face retail segment, sales and marketing activities were stepped up centered on sales promotion initiatives at department stores in conjunction with the revamping of GENOMER Eye Care Cream and efforts to expand sales of the Aqua-Collagen-Gel Series. However, we were unable to capture as many new customers as anticipated, indicating that the department store sector remains challenging. On the other hand, the GMS sector saw solid performance as various in-store events helped to boost customer traffic. For these reasons, face-to-face retail sales revenues rose slightly by 1.0% on a year-on-year basis to 2,180 million yen. In the wholesale segment, the launch of new in-store furnishings and fixtures meant to boost sales of the Aqua-Collagen-Gel series and the reinforcement of sales promotion activities in conjunction with TV commercials for Super-Moist-Gel and the launch of Astamoisture-Gel-S, a jointly developed product with a major Japanese retailer, all helped to boost sales revenues. In addition, our catalogue sales channel such as the co-op continued to perform well, which helped contribute to sales revenue growth. As a result, sales revenues of the wholesale segment totaled 4,405 million yen, or a moderate 12.2% increase YoY. Internationally, in our core market of Taiwan, television shopping continued to perform well, while sales revenues from the department store segment were somewhat sluggish as earnings fell below figures from the previous second quarter. In Singapore and Malaysia, where business is conducted through our sales agent partners, local sales are performing robustly, so shipments and sales posted an increase. In the United States, we continued to step up sales and marketing activities in order to cultivate a core product, which has served to steadily increase the number of our customers in the country. In addition, Christmas sales promotions in Hong Kong performed strongly. Accordingly, sales revenues from our international operations grew to 429 million yen, despite the slight erosion in earnings due to the stronger yen. This marked a 2.4% increase YoY. -5-

6 In terms of profitability, our operating margin was 29.5% (28.4% YoY), while our net profit margin for this quarter was 16.3% (15.9% YoY). Despite advertising expenses increasing YoY due to more active investments in mass media advertising, such as TV commercials, we were still able to secure a high profit margin for the consolidated second quarter under review due primarily to an increase in sales revenues and the strong performance of high margin products centered on the Aqua-Collagen-Gel series. Based on the above, sales revenues for the first half under review totaled 17,463 million yen, up 15.8% YoY, ordinary income was 5,144 million yen, up 20.5% YoY, and net profit for the quarter came in at 2,853 million yen, up 18.8% YoY. For a review of each business segment, see the following. <Cosmetics Business> In our cosmetic products business, the Aqua-Collagen-Gel series continued to act as a key driver of sales revenues for the Dr.Ci:Labo brand. We launched a limited edition 200-gram version of Aqua-Collagen-Gel Super Moisture and Aqua-Collagen-Gel Enrich-Lift- EX, which significantly contributed to sales revenues. Aqua-Collagen-Gel BI-HA-KU, which went on sale through each of our sales channels on August 18, 2010, also performed solidly. In addition, we brought BB PERFECT CREAM Shiny to market for a limited time, while the BB PERFECT CREAM series continued to receive strong support from our customers. As for the Labo Labo brand, we were able to enhance the brand s visibility through using TV commercials, while Super-Moist-Gel continued to drive sales revenues. In addition, Astamoisture-Gel-S, a jointly developed product with a major Japanese retailer that was recently released, also contributed to sales revenues. In terms of the GENOMER brand, we saw strong sales for our four core products of Night-Up Cream, Moisture Lotion, 3GF Essence and Morning Cream. The re-launch of recently revamped Eye Care Cream also became a factor that boosted sales revenues. For the dr.brandt brand, we enhanced operating efficiencies by closing two underperforming retail stores, which reduced sales revenues somewhat. Overall, the cosmetics business experienced an increase in sales by 14.5% year on year to 16,845 million yen. <Health Foods Division > The health foods business posted a solid performance underpinned by robust demand for health foods from our growing number of customers in their 50s and 60s. We are also working to enhance the competitiveness of our health food products by revamping several existing products. Overall, sales for health foods increased by 70.1% year on year to 618 million yen. -6-

7 (Change in Segment Classification) The Financial Accounting Standard for Segment Information Disclosure (ASBJ Accounting Standard No. 17; March 27, 2009) and the Application Guideline for the Financial Accounting Standard for Segment Information Disclosure (ASBJ Application Guideline No. 20; March 21, 2008) have been applied to accounting procedures beginning from the consolidated first quarter accounting period. To date, the business operations have been classed into three segments: the cosmetic products business, health foods business and beauty device and other businesses. Due to this accounting change, however, the beauty device and other businesses segment have been consolidated with the cosmetic products business segment, starting in the consolidated first quarter accounting period. This has resulted in two segments for disclosure: the cosmetic products business and the health foods business. For year-on-year data comparisons appearing in this earnings report, the data from the same quarter of the previous year has been converted to match these changes. (2). Qualitative Information Regarding the Consolidated Financial Statements 1Changes in the Financial Position (Assets) Total assets increased by 813 million yen compared to the previous consolidated fiscal year end. The principal reason for this was a 1,031 million yen rise in cash and deposits thanks to our solid business performance. (Liabilities) Total liabilities fell by 1,168 million yen compared to the previous consolidated fiscal year end. This was primarily attributed to 471 million yen decrease in accrued liabilities centered on advertising expenses and income tax payments that resulted in a 471 million yen reduction in accrued income tax liabilities. (Net Assets) Total net assets rose by 1,981 million yen compared to the previous consolidated fiscal year end. While 866 million yen in accumulated income was used to make a dividend payment, the rise in total net assets was mainly attributed to a 1,987 million yen increase in accumulated income due to net profit during the consolidated first half fiscal year totalling 2,853 million yen. 2Cash Flow Cash and cash equivalents (hereafter referred to as cash ) at the end of the consolidated second quarter accounting period under review totaled 11,767 million yen, an increase of 1,031 million yen compared to the previous consolidated fiscal year end. The status of each cash flow and the principal factors are described below. (Cash Flow from Operating Activities) Cash flows from operating activities totaled 2,135 million yen. While cash decreased due to a 2,699 million yen income tax payment, 419 million yen payment for accrued liabilities, 139 million yen payment for trade accounts payable and a 141 million yen increase in inventory assets, this figure was mainly attributed to booking previous quarter net profit of 5,096 million yen in earnings before taxes and other adjustments as well as realizing 253 million yen from account receivables. -7-

8 (Cash Flow from Investment Activities) Cash flows from investment activities totalled 237 million yen. This was mainly attributed to spending 179 million yen on intangible fixed assets and 53 million yen on tangible fixed assets. (Cash Flow from Financial Activities) Cash flows used by financing activities totaled 857 million yen. This was mainly due in part to payment of dividends totaling 860 million yen. (3). Qualitative Information Regarding the Consolidated Performance Forecast Earnings performance for the consolidated first half fiscal year under review was in line with expectations. At present, there are no changes to the full-year consolidated performance forecast announced at the presentation of financial results for the fiscal year ended July 2010 held on September 9, Other information (1) Significant Changes in Subsidiaries None. (2) Simplified Accounting Treatment or Special Accounting Treatment Adopted We calculate tax expense by determining a reasonable estimate of our effective tax rate after applying tax-effect accounting to pretax net income for the fiscal year, which includes the second quarter under review, and multiplying quarterly pretax net income by said estimated effective tax rate. Income taxes are reported inclusive of income tax adjustments. (3) Changes in Accounting Principles, Processes, Disclosure Methods, etc. (i) Application of the Financial Accounting Standard for Asset Retirement Obligations The Financial Accounting Standard for Asset Retirement Obligations (ASBJ Accounting Standard No. 18; March 31, 2008) and the Application Guideline for the Financial Accounting Standard for Asset Retirement Obligations (ASBJ Application Guideline No. 21; March 31, 2008) have been applied to accounting procedures beginning from the consolidated first quarter accounting period. Due to this change, operating profits and ordinary profits have decreased by 1,827 thousand yen, while net profit for the quarter before taxes and other adjustments have decreased by 39,762 thousand yen. In addition, the change in asset retirement obligations due to this alteration in accounting standards is 58,152 thousand yen. -8-

9 3. Consolidated Financial Statements (1)Consolidated Balance Sheets Assets Current assets Second quarter ended January 31, 2011 (Thousands of yen) FY ended July 31,2010 Cash and time deposits 11,767,717 10,735,959 Accounts receivable-trade 4,193,371 4,449,456 Securities 290, ,844 Products and merchandise 1,453,547 1,483,596 Raw materials and stored goods 978, ,724 Other 594, ,382 Allowance for doubtful accounts 162, ,091 Noncurrent assets Tangible fixed assets Total current assets 19,116,743 18,250,873 Buildings 215, ,301 Accumulated depreciation 113, ,358 Buildings(Net) 101,973 94,942 Tools, furniture and fixture 1,011, ,302 Accumulated depreciation 718, ,980 Tools, furniture and fixture(net) 292, ,322 Construction in progress 7,140 - Intangible fixed assets Total tangible fixed assets 402, ,265 Software 793, ,078 Other 55,089 28,402 Investments and other assets Total intangible fixed assets 848, ,480 Investment real estate 1,628,634 1,628,634 Accumulated depreciation 66,103 62,448 Investment real estate(net) 1,562,530 1,566,185 Other 403, ,823 Total investments and other assets 1,965,789 1,980,009 Total noncurrent assets 3,216,130 3,268,755 Total assets 22,332,874 21,519,629-9-

10 Liabilities Current liabilities Second quarter ended January 31, 2011 (Thousands of yen) FY ended July 31,2010 Accounts payable-trade 512, ,912 Accounts payable-other 1,239,261 1,710,747 Income taxes payable 2,291,148 2,762,543 Reserve for bonuses 85,437 80,037 Allowance for bonus points redemption 126, ,730 Other 235, ,021 Long-term liabilities Net assets Total current liabilities 4,490,311 5,719,992 Reserve for retirement benefits 56,564 49,907 Other 62,570 8,065 Shareholders capital Total long-term liabilities 119,134 57,972 Total liabilities 4,609,446 5,777,965 Common stock 1,170,864 1,169,368 Additional paid-in capital 1,648,264 1,646,768 Retained earnings 16,666,430 14,678,661 Treasury stock 1,669,873 1,669,873 Valuation and translation adjustments Total shareholders capital 17,815,686 15,824,925 Net unrealized gains (losses) on available-for-sale securities 1,651 2,261 Foreign currency translation adjustments 93,910 85,522 Total valuation and translation adjustments 92,258 83,260 Total net assets 17,723,427 15,741,664 Total liabilities and net assets 22,332,874 21,519,

11 (2)Consolidated Statement of Income (FY11 2nd Quarter Consolidated Cumulative Period) Second quarter ended January 31, 2010 (Thousands of yen) Second quarter ended January 31, 2011 Net sales 15,077,448 17,463,255 Cost of sales 2,777,049 3,089,038 Gross profit 12,300,398 14,374,216 Selling, general and administrative expenses 8,021,676 9,225,650 Operating income 4,278,721 5,148,566 Non-operating revenues Interest income 350 1,949 Dividends received Commissions 7,511 4,724 Compensation for merchandise breakage - 4,862 Other 1,558 2,693 Total non-operating revenues 10,324 14,335 Non-operating expenses Foreign exchange losses 11,514 14,306 Depreciation and Amortization 9,115 3,654 Other Total non-operating expenses 20,668 18,003 Ordinary income 4,268,378 5,144,898 Extraordinary losses Effect of application of accounting standards for asset retirement obligations - 37,934 Impairment Losses - 4,372 Loss on disposal of fixed assets 7,674 3,469 Other - 2,238 Total extraordinary losses 7,674 48,015 Net income before taxes 4,260,703 5,096,883 Income taxes 1,858,150 2,242,928 Net income from minority interests prior to adjustments 2,402,552 2,853,954 Net income 2,402,552 2,853,

12 (3)Consolidated Statements of Cash Flows (Thousands of yen) Second quarter ended January 31, 2010 Second quarter ended January 31, 2011 Cash flows from operating activities Income before income taxes 4,260,703 5,096,883 Depreciation and amortization 244, ,939 Amortization of long-term prepaid expenses 12,234 8,272 Increase(decrease) in allowance for doubtful accounts 21,478 30,006 Increase(decrease) in reserve for employees bonuses 12,119 5,399 Increase (decrease) in allowance for bonus points redemption 36,928 13,090 Increase(decrease) in reserve for retirement benefits 2,953 6,657 Interest and dividend income 1,254 2,055 Effect of application of accounting standards for asset retirement obligations 37,934 Impairment Losses 4,372 Loss on disposal of fixed assets 7,674 3,469 Increase(decrease) in trade receivables 117, ,417 Increase (decrease)in inventories 78, ,234 Increase (decrease) in trade payables 130, ,652 Increase (decrease) in accounts payable-other 103, ,928 Increase (decrease) in consumption tax payable 56, ,800 Increase (decrease) in changes in deposits received 38,289 66,721 Other 23,764 1,786 Sub total 4,707,319 4,832,836 Interest and dividends received 1,045 1,949 Income taxes paid 1,397,441 2,699,511 Net cash provided by (used in) operating activities 3,310,923 2,135,

13 Cash flows from investing activities Acquisition of tangible fixed assets 66,369 53,786 Acquisition of intangible fixed assets 90, ,379 Payment of lease/guarantee deposits 2,840 1,012 Proceeds from collection of lease/guarantee deposits 1,800 1,295 Other - 4,470 Net cash provided by (used in) investing activities 157, ,353 Cash flows from financing activities Proceeds from share issuance 1,701 2,991 Dividend payment 722, ,855 Net cash provided by (used in) financing activities 720, ,863 Effect of exchange rate changes on cash and cash equivalents 6,661 8,297 Decrease in cash and cash equivalents 2,425,978 1,031,758 Cash and cash equivalents at the beginning of the period 5,330,500 10,735,959 Cash and cash equivalents at the end of the period 7,756,479 11,767,

14 (4) Notes on the going-concern assumption None (5) Segment Information [Segment Information] The Dr.Ci:Labo Group report segment focuses solely on the cosmetic products business and the health foods business. Since it accounts for a rather small percentage of all segments, however, the health foods business is considered to lack significant materiality for disclosure and therefore has been omitted. (Additional Information) The Financial Accounting Standard for Segment Information Disclosure (ASBJ Accounting Standard No. 17; March 27, 2009) and the Application Guideline for the Financial Accounting Standard for Segment Information Disclosure (ASBJ Application Guideline No. 20; March 21, 2008) have been applied to accounting procedures beginning from the consolidated first quarter accounting period. (6) Notes on material changes in shareholders' capital None -14-