Furusato Announces Financial Results for the Second Quarter Ended September 30, 2018[Japan GAAP]

Transcription

1 FOR IMMEDIATE RELEASE: Furusato Announces Financial Results for the Second Quarter Ended September 30, 2018[Japan GAAP] Osaka, Japan, October 31, 2018 Furusato Industries, Ltd. announced its consolidated financial results in the first half of the year ending March 31, All financial information has been prepared in accordance with accounting principles generally accepted in Japan. The following summary of the financial results is unaudited and for reference only. Securities Traded : The First Section of the Tokyo Stock Exchange Code Number : 8087 CONSOLIDATED FINANCIAL RESULTS 1. Business Results Six Months Ended September 30, 2018 All figures are rounded down to the nearest million yen. Six Months Ended September 30, 2017 Operating Results: (Millions of Yen) (Millions of Yen) Net Sales \ 51,343 \ 47,418 Operating Income 1,677 1,217 Ordinary Income 1,882 1,378 Net Income Attributable to Owners of Parent 1, Per Share Data: Net Income Attributable to Owners of Parent \ \ As of September 30, 2018 As of March 31, 2018 Financial Position: (Millions of Yen) (Millions of Yen) Total Assets \ 64,563 \ 63,283 Net Assets 39,495 39,085 Net Assets to Total Assets 61.2% 61.8% Per Share Data: Net Assets \ 2, \ 2, Notes: 1. Comprehensive income (loss) September 30, ,034 million, (18.2)% September 30, ,264 million, 33.5% 2. Changes in major subsidiaries during the period under review (change in specific subsidiaries due to changes in the scope of consolidation): No 3. Adoption of special accounting methods for the preparation of quarterly consolidated financial statements: No 4. Changes in accounting principles, changes in accounting estimates, and retrospective restatements 1) Changes in accounting principles resulting from revisions in accounting standards: No 2) Changes other than those in 1) above: No 3) Changes in accounting estimates: No 1/9 CONSOLIDATED

2 4) Retrospective restatements: No 5. Number of shares Issued and outstanding (common stock) 1) Number of shares issued and outstanding at the end of period (including treasury stock) September 30, 2018: 14,574,366 shares March 31, 2018: 14,574,366 shares 2) Number of treasury stock at the end of period September 30, 2018: 77,473 shares March 31, 2018: 77,367 shares 3) Average number of shares issued and outstanding for the period (consolidated, cumulative) September 30, 2018: 14,496,936 shares September 30, 2017: 14,497,238 shares 2. Dividends 1Q 2Q 3Q Year-end Annual Fiscal Year Ended March 31, Fiscal Year Ending March 31, Dividends Per Share Fiscal Year Ending March 31, 2019 (Forecast) CONSOLIDATED EARNINGS FORCAST FOR FISCAL 2018, ENDING MARCH 31, 2019 Full-Year % Change Operating Results: (Millions of Yen) Net Sales \ 104, % Operating Income 3, % Ordinary Income 4, % Net Income Attributable to Owners of Parent 2, % Per Share Data: Net Income Attributable to Owners of Parent \ *The forecasts involve our management s assumptions, prospects and plans based on the information currently available. Actual results may differ materially from the expectations depending on various factors. 2/9 CONSOLIDATED

3 RESULTS OF OPERATIONS AND FINANCIAL POSITION (SIX MONTHS ENDED SEPTEMBER 30, 2018) 1. Analysis of Operating Results (1) Overview of Results During the six months ended September 30, 2018, the Japanese economy showed continued favorable trend overall, while there were concerns including trade conflicts the United States and China and the market trend of the share price. The capital investment increased, and the industrial production continued a moderate upward trend including a year-over-year growth in domestic demand for machine tools according to the Statistics of Orders Received for Machine Tools. Meanwhile, the construction industry remained steady, while demand for the steel frame building was almost flat due to short of labor and some supplies. Under this environment, this fiscal year is the middle-year of the medium-term management plan, Design the Future We recognize this is a key point to achieve the target in the year ending March 31, 2020, and we take actions considering steady progress of each measure. During the period under review, consolidated net sales increased by 8.3% year over year to 51,343 million due to continued sales growth in all segments following the first quarter of FY2018. Gross profit increased by 11.3% year over year to 7,235 million based on improved profitability. Operating income increased by 37.7% year over year to 1,677 million due to an increase in selling, general and administrative expenses by 5.3% year over year. Ordinary income increased by 36.5% year over year to 1,882 million. Consequently, net income attributable to owners of parent was 1,236 million, up 42.6% year over year. Analysis of Results by Segment Equipment and Tools Segment In the Equipment and Tools Segment, the Industrial Equipment Business increased by 4.4% year over year and the Machine and Tools for Automotive Business increased by 15.2% year over year due mainly to a continued recovery in the Index of Industrial Production. Meanwhile, the Housing Equipment Business slightly increased by 0.4% year over year. Accordingly, overall net sales increased by 3.6% year over year to 24,283 million. Overall operating income was 597 million, up 31.4% year over year. Machine and Facility Segment In the Machine and Facility Segment, the Machine Tools Business increased by 10.8% year over year, and the Factory Automation Business increased by 35.8% year over year due to favorable domestic demand of the Statistics of the Orders Received for Machine Tools. Accordingly, overall net sales increased by 14.0% year over year to 10,562 million. Overall operating income was 160 million, down 15.7% year over year due mainly to recording the provision of allowance for doubtful accounts under selling, general and administrative expenses. Construction and Piping Products Segment In the Construction and Piping Products Segment, the Steel Frame Building Supplies Business increased by 14.4% year over year, based on favorable demand for steel frame buildings and continued price hike of steel products while the Piping Products Business increased by 4.5% year over year. Accordingly, net sales increased by 12.1% year over year to 16,496 million. Consequently, overall operating income was 860 million, up 46.0% year over year. (2) Earnings Forecast for fiscal 2018, ending March 31, 2019 Furusato revised consolidated earnings forecasts for the year ending March 31, 2019, announced on May 7, 2018 considering financial results in the first half of fiscal 2018 and the future prospects. Please see a press release Notice Regarding Differences Between Consolidated Earnings Forecasts and Actual Results for the First Half of FY2018, and Revisions to Consolidated Earnings and Dividends Forecasts for the Full-year of FY2018 announced today. 3/9 CONSOLIDATED

4 CONSOLIDATED BALANCE SHEETS (UNAUDITED) Assets Current assets: March 31, 2018 September 30, 2018 Cash and deposits \ 11,112,150 \ 11,639,185 Notes and accounts receivable-trade 24,810,510 25,074,705 Electronically recorded monetary claims-operating 3,196,343 3,619,283 Securities 200,000 - Merchandise and finished goods 3,737,181 3,723,226 Work in process 310, ,983 Raw materials and supplies 140, ,456 Other 778, ,311 Allowance for doubtful accounts (12,956) (54,708) Total current assets 44,272,565 45,269,443 Noncurrent assets: Property, plant and equipment: Buildings and structures, net 3,831,013 4,662,447 Machinery, equipment and vehicles, net 822, ,379 Land 7,203,691 7,304,033 Construction in progress 601,379 39,880 Other, net 171, ,398 Total property, plant and equipment 12,629,494 13,146,139 Intangible assets: Total intangible assets 204, ,867 Investments and other assets: Investment securities 4,430,343 4,136,877 Net defined benefit asset 770, ,475 Other 1,063,684 1,256,285 Allowance for doubtful accounts (87,888) (230,128) Total investments and other assets 6,176,708 5,946,508 Total noncurrent assets 19,010,810 19,294,516 Total assets \ 63,283,376 \ 64,563,959 4/9 CONSOLIDATED

5 Liabilities Current liabilities: March 31, 2018 September 30, 2018 Notes and accounts payable-trade \ 18,317,154 \ 18,743,874 Electronically recorded obligations - operating 1,852,665 2,171,727 Current portion of long-term loans payable 100, ,000 Income taxes payable 642, ,236 Provision for bonuses 595, ,403 Provision for directors' bonuses 25,677 12,840 Provision for environmental measures 33,000 - Provision for removal expenses of noncurrent assets 16,503 - Other 1,555,501 1,689,381 Total current liabilities 23,138,404 24,130,463 Noncurrent liabilities: Long-term loans payable 125,000 75,000 Deferred tax liabilities 764, ,582 Net defined benefit liability 45,070 49,336 Other 124, ,129 Total noncurrent liabilities 1,059, ,048 Total liabilities 24,197,696 25,068,511 Net Assets Shareholders' equity: Capital stock 5,232,413 5,232,413 Capital surplus 5,997,217 5,997,217 Retained earnings 25,999,618 26,611,678 Treasury stock (83,785) (83,975) Total shareholders' equity 37,145,464 37,757,334 Accumulated other comprehensive income: Valuation difference on available-for-sale securities 1,784,457 1,593,908 Deferred gains or losses on hedges (495) 1,097 Remeasurements of defined benefit plans 156, ,106 Total accumulated other comprehensive income 1,940,216 1,738,113 Total net assets 39,085,680 39,495,447 Total liabilities and net assets \ 63,283,376 \ 64,563,959 5/9 CONSOLIDATED

6 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) September 30, 2017 September 30, 2018 Net sales \ 47,418,587 \ 51,343,091 Cost of sales 40,920,141 44,107,527 Gross profit 6,498,446 7,235,564 Selling, general and administrative expenses 5,280,577 5,558,151 Operating income 1,217,868 1,677,412 Non-operating income: Interest income 2,227 2,633 Dividends income 35,334 39,056 Purchase discounts 255, ,275 Rent income 21,216 23,953 Other 11,251 43,615 Total non-operating income 325, ,534 Non-operating expenses: Interest expenses Sales discounts 145, ,386 Cost of lease revenue 620 2,379 Other 18,314 15,812 Total non-operating expenses 164, ,939 Ordinary income 1,378,840 1,882,008 Extraordinary income: Gain on sales of investment securities 9,782 18,982 Reversal of provision for environmental measures - 4,725 Total extraordinary income 9,782 23,707 Extraordinary loss: Provision for removal expenses of noncurrent assets 28,000 - Total extraordinary loss 28,000 - Income before income taxes 1,360,623 1,905,716 Income taxes-current 498, ,375 Income taxes-deferred (5,206) (43,087) Total income taxes 493, ,287 Net income 867,321 1,236,428 Net income attributable to owners of parent \ 867,321 \ 1,236,428 6/9 CONSOLIDATED

7 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) FURUSATO INDUSTRIES September 30, 2017 September 30, 2018 Net income \ 867,321 \ 1,236,428 Other comprehensive income: Valuation difference on available-for-sale securities 416,338 (190,548) Deferred gains or losses on hedges 1,046 1,593 Remeasurements of defined benefit plans, net of tax (19,855) (13,148) Other comprehensive income 397,529 (202,103) Comprehensive income: 1,264,851 1,034,325 Comprehensive income attributable to Comprehensive income attributable to owners of parent 1,264,851 1,034,325 Comprehensive income attributable to non-controlling interests \ - \ - 7/9 CONSOLIDATED

8 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Net cash provided by (used in) operating activities: Income before income taxes \ 1,360,623 \ 1,905,716 Depreciation and amortization 366, ,917 Increase (decrease) in provision for directors' bonuses (13,837) (12,837) Increase (decrease) in net defined benefit liability 6,577 4,266 Decrease (increase) in net defined benefit asset (50,542) (12,906) Increase (decrease) in provision for bonuses 18,128 34,565 Increase (decrease) in allowance for doubtful accounts 2, ,992 Interest and dividends income (37,561) (41,690) Interest expenses Loss (gain) on sales of investment securities (9,782) (18,982) Decrease (increase) in notes and accounts receivable-trade (1,018,615) (883,324) Decrease (increase) in inventories (12,101) 43,780 Increase (decrease) in notes and accounts payable-trade (736,071) 737,412 Other (40,981) (33,909) Subtotal (165,462) 2,186,360 Interest and dividends income received 39,847 43,369 Interest expenses paid (270) (387) Income taxes paid (398,595) (579,971) Net cash provided by (used in) operating activities (524,482) 1,649,370 Net cash provided by (used in) investing activities: Purchase of property, plant and equipment (454,519) (597,686) Payments for removal of noncurrent assets - (16,503) Purchase of investment securities (6,480) (6,993) Proceeds from sales of investment securities 23,669 43,142 Payments for guarantee deposits (7,855) (61,657) Other (15,178) (10,226) Net cash provided by (used in) investing activities (460,364) (649,924) Net cash provided by (used in) financing activities: September 30, 2017 September 30, 2018 Proceeds from long-term loans payable 300,000 - Repayments of long-term loans payable (125,000) (50,000) Purchase of treasury stock (423) (189) Cash dividends paid (628,525) (622,221) Net cash provided by (used in) financing activities (453,948) (672,411) Net increase (decrease) in cash and cash equivalents (1,438,795) 327,034 Cash and cash equivalents at beginning of the period 11,637,850 11,312,150 Cash and cash equivalents at end of the period \ 10,199,054 \ 11,639,185 8/9 CONSOLIDATED

9 SEGMENT INFORMATION 1. September 30, 2017 (from April 1 to September 30, 2017) (1) Information on net sales and operating income (loss) by business segment reported Business segment reported Net sales To customers Intersegment Total () Operating income Equipment and Tools \ 23,445,675 \ 563,785 \ 24,009,461 \ 454,850 Machine and Facility 9,263, ,239 9,400, ,610 Construction and Piping Products 14,709,785 4,351 14,714, ,154 Subtotal 47,418, ,377 48,123,965 1,234,615 Adjustment (*1) - (705,377) (705,377) (16,746) Total amounts on the consolidated statements of income (*2) \ 47,418,587 - \ 47,418,587 \ 1,217,868 Note: 1. Adjustment of operating income, (16,746) thousand, incorporates elimination of intersegment transaction, (13,565) thousand, and adjustment of inventory, (4,378) thousand, and adjustment of noncurrent assets, 1,197 thousand. 2. Operating income for segment is adjusted on operating income on the quarterly consolidated statements of income. 2. September 30, 2018 (from April 1 to September 30, 2018) (1) Information on net sales and operating income (loss) by business segment reported Business segment reported Net sales To customers Intersegment Total () Operating income Equipment and Tools \ 24,283,703 \ 515,149 \ 24,798,852 \ 597,895 Machine and Facility 10,562, ,984 10,811, ,765 Construction and Piping Products 16,496,479 6,978 16,503, ,070 Subtotal 51,343, ,111 52,114,203 1,618,731 Adjustment (*1) - (771,111) (771,111) 58,681 Total amounts on the consolidated statements of income (*2) \ 51,343,091 - \ 51,343,091 \ 1,677,412 Note: 1. Adjustment of operating income, 58,681 thousand, incorporates elimination of intersegment transaction, 62,629 thousand, and adjustment of inventory, (5,145) thousand, and adjustment of noncurrent assets, 1,197 thousand. 2. Operating income for segment is adjusted on operating income on the quarterly consolidated statements of income. 9/9 CONSOLIDATED