Three-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2017 [Japan GAAP]
March 10, 2017
Listed Company Name
Company Code Number

Kanamoto Co., Ltd.
9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

URL
Representative

http://www.kanamoto.co.jp
Tetsuo Kanamoto
President and CEO

Inquiries

Nobuhito Utatsu

Director & Senior Executive Corporate Officer, Division
Manager, Accounting Division

TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp
Scheduled date for submission of Quarterly Report

March 16, 2017

Scheduled date for commencement of dividend payments–

Preparation of Quarterly Settlement Supplementary Explanatory Materials

No

Quarterly Earnings Briefings

No(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Three-Month Period of the Fiscal Year Ending October 31, 2017
(November 1, 2016 – January 31, 2017)(1) Consolidated Operating Results (Cumulative)(Percentages show the change from the prior year)
Net Sales

Operating Income

Millions of yen

Fiscal Year ending October 31, 2017:
38,937First quarter
Fiscal Year ended October 31, 2016:
35,079First quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2017, First Quarter
Fiscal Year Ended October 31, 2016, First Quarter

Profit Attributable to
Owners of Parent%

Millions of yen%

Millions of yen%

Millions of yen

%

11.0

4,490

10.3

4,848

19.3

3,128

23.5

−3.4

4,069

−35.5

4,063

−36.2

2,533

−37.6

3,662
2,286

(60.2%)(−49.6%)Net Income per
Share
Fiscal Year ending October 31, 2017:
First quarter
Fiscal Year ended October 31, 2016:
First quarter

Ordinary Income

Net Income per
Share on a Fully
Diluted Basis

Yen

Yen

88.52

－

71.70

－

(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Fiscal Year ending October 31, 2017:
226,872First quarter
220,836
Fiscal Year ended October 31, 2016
(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2017 First Quarter
Fiscal Year Ended October 31, 2016－

Millions of yen%

84,01334.8

81,43434.7

78,994
76,6831 －Equity Ratio

2. Dividends
Annual Dividends per Share
End of firstquarter
Fiscal year ended October 31, 2016
Fiscal year ending October 31, 2017

End of second
quarter

End of third
quarterYear-end

Full-year

Yen

Yen

Yen

Yen

Yen

－
－

15.00

－

30.00

45.00

15.00

－

35.00

50.00

Fiscal Year ending October 31, 2017
(Projected)(Note) 1. Has the Company revised its most recently released dividend projection:

No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2017
(November 1, 2016 – October 31, 2017)(Percentages show the change from the prior year)

Net Sales
Millions of yen

Interim (cumulative)
Full year

77,000153,000

%

12.2
5.6

Operating Income

Ordinary Income

Millions of yen

Millions of yen

8,410
15,820

%

−2.3
4.5

8,190
15,580

%

−0.7
8.2

Profit Attributable to
Owners of Parent
Millions of yen

4,950
9,460

Net Income per
Share

%

−0.4
16.8

%

140.07267.69(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter: No－

2 －4. Notes(1) Changes in material subsidiaries during the period under review (Changes in specific subsidiaries in conjunction
with a change in the scope of consolidation): No
Company newly included (Company name)─
Company newly excluded (Company name)─(2) Application of special accounting method in the preparation of quarterly consolidated financial statements:(3) Changes in accounting principles, changes in accounting estimates, and restatements(a) Changes in accounting policy in conjunction with revision of accounting standards:(b) Changes other than the above:(c) Changes in accounting estimates:(d) Restatements:

No

No

No
Yes

No

(4) Number of shares issued (common shares)(a) Number of shares outstanding at the end of the period (including treasury shares)
Fiscal year ending October 31, 2017 First Quarter:
36,092,241 sharesFiscal year ended October 31, 2016:
36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2017 First Quarter:
753,179 sharesFiscal year ended October 31, 2016:
753,079 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2017 First Quarter:
35,339,129 sharesFiscal year ended October 31, 2016:
35,339,300 shares
Note: This quarterly earnings report is exempt from the quarterly review procedure
Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The forward-looking statements, including business results forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable. The
Company does not guarantee the achievement of the projections. Actual operating results may differ substantially
due to a number of factors. Please refer to “1. Qualitative Information Concerning Quarterly Consolidated
Operating Results (3) Qualitative Information Concerning Projected Consolidated Operating Results” on Page 7of the Attachments for the conditions used as assumptions for the projected operating results and matters to note
before using the projected operating results.

－

3 －〇Attachments Table of Contents
1. Qualitative Information Concerning Quarterly Consolidated Operating Results ……………………………………

5(1) Qualitative Information Concerning Consolidated Operating Results ……………………………………………

5(2) Qualitative Information Concerning Consolidated Financial Position ……………………………………………

7(3) Qualitative Information Concerning Projected Consolidated Operating Results ……………………………….

7

2. Matters Concerning Summary Information (Notes) ……………………………………………………………………

7(1) Changes to Material Subsidiaries during the Consolidated Period under Review ……………………………..
(2) Application of Special Accounting Method in the Preparation of the Quarterly Consolidated Financial
Statements …………………………………………………………
(3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements ………………………..

77(4) Supplemental Information …………………………………………………………………………………………….

7

3. Quarterly Consolidated Financial Statements ………………………………………………………………………….

8(1) Quarterly Consolidated Balance Sheets ……………………………………………………………………………
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income ………………………………………………………………………………………………………………….
Quarterly Consolidated Statements of Income

810Consolidated Three-month Period ended January 31, 2017 ………………………………………………

10

7

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Three-month Period ended January 31, 2017 ………………………………………………

11(3) Notes Concerning Quarterly Consolidated Financial Statements ………………………………………………..

12(Notes Relating to the Going Concern Assumption) ………………………………………………………………

12(Notes on Significant Changes in Shareholders’ Equity) …………………………………………………………

12(Business Segment Information) ……………………………………………………………………………………

12

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results
Management Environment (From November 1, 2016 to January 31, 2017)
During the consolidated three-month period ended January 31, 2017, Japan’s economy overall maintained its
gradual recovery trend. Various government stimulus policies had the intended positive effect, despite weakness
evident in some areas such as personal consumption, which remained flat. On the other hand, the effect on thedomestic economy from various external events, including the change in political administration in the UnitedStates, the economic slowdown in China and newly developing countries, and Great Britain’s pending withdrawal
from the EU, remained a concern, and circumstances that demanded a prudent stance continued.
< First Quarter Operating Results > (From November 1, 2016 to January 31, 2017)
In the construction industry related to the Kanamoto Group, demand generally remained brisk, as private
sector capital investment was driven by improved corporate earnings, and spending on public works projects
continued at a steady pace as the result of the government’s economic policy.
Given such circumstances, the Kanamoto Group resolutely executed the various measures in its Long-term
Corporate Management Plan BULL55 (FY2014 - FY2018), its action plan aimed at achieving the Group’s
continuous growth. In conjunction with this effort, to ensure strong earnings Kanamoto also repositioned existing
assets while working to create its new system for utilizing rental assets even more efficiently, which will further
ensure the certainty of these measures.
As a result, net sales for the consolidated three-month period increased 11.0% compared with the same period
one year earlier to ¥38,937 million. In terms of earnings, operating income increased 10.3% from the same
period of the previous consolidated fiscal year to ¥4,490 million, ordinary income increased 19.3% year-on-yearto ¥4,848 million, and first quarter profit attributable to owners of parent rose 23.5% year-on-year to ¥3,128
million.
Results for each of the Company’s business segments were as follows.
< Business related to the Construction Equipment Rental Division >In the construction-related business that is Kanamoto’s primary business focus, construction equipment rental
demand remained strong in the Tokyo metropolitan area, centered on infrastructure reconstruction and repairs for
the Tokyo Olympics. The Kanamoto Group also worked to assist disaster recovery efforts following theearthquake in Kumamoto and heavy rainfall damage in Hokkaido, twin disasters that occurred last year. In the
Kyushu Region, both net sales and operating income for the consolidated three-month period expanded
substantially, boosted by the addition of Nishiken Co., Ltd. to consolidated operating results from the third quarterof the prior consolidated fiscal year.
To maintain an appropriate asset portfolio, Kanamoto systematically and continuously sells rental equipment
after a set number of years has passed since the assets were placed in service. Because the Company hasdeferred asset sales until the second quarter or later in order to respond to disaster recovery efforts, net sales in
conjunction with asset sales in the consolidated three-month period fell 56.2% from the same period of the priorconsolidated fiscal year.
As a result of the above factors, first quarter net sales for Kanamoto’s construction-related businesses
improved 9.2% from the same period of the prior consolidated fiscal year to ¥35,538 million, and operating
income increased 4.4% year-on-year to ¥4,070 million.
< Other businesses >In the Company’s other businesses, both steel products-related sales and sales in the information andtelecommunications-related division were roughly in line with the same period one year earlier, but net sales rose
33.8% from the same period of the previous consolidated fiscal year to ¥3,399 million and operating income
jumped 372.3% year-on-year to ¥317 million, reflecting the new addition of the welfare-related business.
－

5 －< Change in number of branches >The Company opened one new branch during the first quarter consolidated accounting period. The Company
did not close any branches.
Newly established: Kuji Branch (Kuji City, Iwate Prefecture)－

6 －(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the first quarter under review increased by ¥6,036 million compared with the end of theprior consolidated fiscal year to ¥226,872 million. This change mainly reflected an increase of ¥936 million in cash
and deposits, an increase of ¥3,816 million in rental equipment, and an increase of ¥845 million in construction
machine parts.
Total liabilities were ¥142,859 million, an increase of ¥3,457 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥2,238 million in longterm accounts payable-other, an increase of ¥955 million in accounts payable-other, and an increase of ¥940
million in notes and accounts payable-trade, respectively, and a decrease of ¥700 million in income taxes payable.
Total net assets were ¥84,013 million, ¥2,579 million higher than at the end of the prior consolidated fiscal year.
This was mainly because of profit attributable to owners of parent for the first quarter of ¥3,128 million, and adecrease of ¥1,060 million for dividends from surplus.

(3) Qualitative Information Concerning Projected Consolidated Operating Results
There are no revisions to the full-year projected operating results that the Company announced in the Financial
Statements Bulletin for the Fiscal Year Ended October 31, 2016 (Japan GAAP) released on December 9, 2016.

2. Matters Concerning Summary Information (Notes)(1) Changes to Material Subsidiaries during the Consolidated Period under Review
The Company had no material items to report.

(2) Application of Special Accounting Method in the Preparation of the Quarterly Consolidated Financial Statements
The Company had no material items to report.

(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Restatements(Changes in Accounting Estimates)
Beginning from the first quarter of the current consolidated fiscal year, Nishiken Co., Ltd., a consolidated
subsidiary, has modified the useful lives it applies to its rental equipment.
This change has been applied because Nishiken Co., Ltd. has become a consolidated subsidiary of Kanamoto,and is based on comprehensive consideration of the economic useful lives and equipment repair and renewal
cycles of similar types of rental equipment that are used under identical circumstances, and brings the useful
lives into uniformity with the standard applied in the Kanamoto Group.
As a result of this change, operating income, ordinary income and profit before income taxes for the firstquarter of the fiscal year ending October 2017 decreased by ¥33 million, respectively, compared with what they
otherwise would have been had the useful lives applied in past periods been applied.
The effect of this change on the Company’s information by segment is described in the relevant section.

(4) Supplemental Information(Application of the Implementation Guidance on Recoverability of Deferred Tax Assets)
Beginning from the first quarter of the current consolidated fiscal year, the Company will apply the
Implementation Guidance on Recoverability of Deferred Tax Assets (Accounting Standards Board of Japan
Financial Accounting Standards Implementation Guidance No. 26, revised March 28, 2016).

－

7 －3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of October 31, 2016
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Securities
Merchandise and finished goods
Raw materials and supplies
Construction machine parts
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment, net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets－

8 －As of January 31, 201733,20936,502
3,718
200
693
379
10,265
604
1,059
−689
85,94534,14635,659
4,437
200
751
356
11,111
386
1,164
−741
87,471

189,549−114,596
74,95331,029−18,883
12,145
6,999−5,963
1,036
35,6302,343−1,332
1,011
124,776

197,486−118,716
78,76931,463−19,129
12,333
7,053−6,021
1,031
35,623
2,623−1,3521,270
129,029

628
664
1,292

592
670
1,262

6,911
419
2,216
−406
−320
8,821
134,891
220,836

7,386
444
1,829
−231
−320
9,108
139,400
226,872(Millions of yen)
As of October 31, 2016
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of bonds
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Accounts payable-other
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Long-term accounts payable - other
Provision for directors’ retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated 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
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－

9 －As of January 31, 2017

26,986
1,194
40
13,951
1,357
2,052
1,091
21,0792,399
70,152

27,9271,111
40
13,734
1,362
1,352
489
22,034
2,708
70,76026,6442,700
38,870
94
234
384
321
69,249139,402

27,103
2,701
41,108
97
238
422
426
72,098142,859

13,652
14,91648,017−2,12974,45813,652
14,91650,085−2,12976,526

2,051
－
164
8
2,225
4,750
81,434
220,836

2,349
0
110
8
2,468
5,018
84,013226,872

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Three-month Period ended January 31, 2017)(Millions of yen)Three months ended
January 31, 2016
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Rent income
A receipt bonus
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of notes receivable - trade
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on donation of non-current assets
Subsidy income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

－

10 －

Three months ended
January 31, 201735,07924,782
10,297
6,228
4,069

38,93726,806
12,130
7,640
4,490

1
52
12
16
9
－
18
53
164

0
54
10
19
0
204
29
140
459

93
3
72
170
4,063

59
2
38
100
4,848

3
－
2
－
5

3
13
－
0
17

15
15
4,053
1,072
325
1,397
2,655
121
2,533

29
29
4,837
1,259
165
1,425
3,412
283
3,128

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Three-month Period ended January 31, 2017)(Millions of yen)Three months ended
January 31, 2016
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests－

11 －Three months ended
January 31, 2017

2,655

3,412

−401
0
32
－
−368
2,286

304
0
−54
−0
250
3,662

2,165

3,371

121

290

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Notes on Significant Changes in Shareholders’ Equity)
The Company had no material items to report.
(Business Segment Information)[ Segment information ]I First quarter of the prior consolidated fiscal year (From November 1, 2015 to January 31, 2016)
1. Information on the amount of net sales and profit or loss by reporting segment(Millions of yen)
Reportable segments
Business related to theConstruction Equipment
Rental Division
Sales
Revenues from externalcustomers
Transactions with othersegments
Net sales
Operating income (loss)

OthersTotal

32,5402,539

35,079－－－32,5402,539

35,079

3,900

67

3,967

(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and business related to the
Information Products Division and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

3,900
67
101

Operating income reported on the Consolidated
Quarterly Statements of Income

4,069

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.

－

12 －

II First quarter of the current consolidated fiscal year (From November 1, 2016 to January 31, 2017)
1. Information on the amount of net sales and profit or loss by reporting segment(Millions of yen)
Reportable segments
Business related to theConstruction Equipment
Rental Division
Sales
Revenues from externalcustomers
Transactions with othersegments
Net sales
Operating income (loss)

OthersTotal

35,5383,399

38,937－－－35,5383,399

38,937

4,070

317

4,388

(Note) The "Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division, the Information Products Division,
welfare-related businesses, and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

4,070
317
101

Operating income reported on the Consolidated
Quarterly Statements of Income

4,490

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.
4. Information concerning changes in reporting segments etc.
(Changes in useful lives)
As described in “Change in Accounting Estimates”, the Company has changed the useful lives of rental
equipment owned by Nishiken Co., Ltd., a consolidated subsidiary of Kanamoto. As a result, the income
for the “Business related to the Construction Equipment Rental Division” for the first three months of thecurrent consolidated fiscal year decreased by ¥33 million compared with what it otherwise would havebeen had the useful lives applied in past periods been applied.

－

13 －