Nine-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2014 [Japan GAAP]
September 5, 2014
Listed Company Name
Kanamoto Co., Ltd.
Company Code Number
9678
Listing Exchanges
Tokyo Stock Exchange, Sapporo Stock Exchange(URL http://www.kanamoto.co.jp)
Representative
Kanchu Kanamoto President and CEO
Inquiries
Nobuhito Utatsu
Director and 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
September 11, 2014
Scheduled date for commencement of dividend payments–
Preparation of Quarterly Settlement Supplementary
No
Explanatory Materials:
Quarterly Earnings Briefings:
No
1. Consolidated Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2014
(November 1, 2013 - July 31, 2014)(1) Consolidated operating results (Cumulative)(Numbers less than one million yen have been rounded down)(Percentages shown are the percent increase or decrease compared to the prior consolidated fiscal year)

Net Sales
Fiscal Year ending October 31,
2014: Third quarter
Fiscal Year ended October 31,
2013: Third quarter

Operating Income

Net Income%

Millions of yen%

Millions of yen%

Millions of yen%

92,65715.4

12,81352.4

12,430

49.4

7,194

52.9

80,288

36.7

8,410

98.2

8,322

116.1

4,706

72.7

(Note) Comprehensive income
Fiscal Year Ending October 31, 2014, Third Quarter
Fiscal Year Ended October 31, 2013, Third Quarter
Net Income per
Share
Fiscal Year ending October 31,
2014: Third quarter
Fiscal Year ended October 31,
2013: Third quarter

Ordinary Income

Millions of yen¥7,992 million (29.4%)¥6,178 million (123.6%)
Diluted Net
Income per Share

Yen

Yen

199.63－143.36－(2) Consolidated financial position
Total Assets
Fiscal Year ending October 31,
2014: Third quarter
Fiscal Year ended October 31,
2013:

Net Assets

Shareholders’Equity Ratio

Millions of yen

Millions of yen%

180,054

63,34234.0

169,250

56,19232.2(Reference) Shareholders’ Equity
Fiscal Year Ending October 31, 2014 Third Quarter
Fiscal Year Ended October 31, 2013

¥61,276 million¥54,549 million

－

1

－

2. Dividends
Full Year Dividend per Share
End of 2Q
End of 3Q
Year-end

End of 1Q
Fiscal Year ended October 31, 2013
Fiscal Year ending October 31, 2014
Fiscal Year ending October 31, 2014
(Projected)

Total

Yen

Yen

Yen

Yen

Yen

－
－

10.00
15.00

－
－

10.00

20.00

15.00

30.00

(Notes) 1. Has the Company revised its most recently released dividend projection?

No

2. Breakdown of interim dividend for the Fiscal Year ending October 31, 2014
Ordinary dividend ¥10.00
Commemorative dividend ¥5.00
Breakdown of (planned) year-end dividend for the fiscal year ending October 31, 2014
Ordinary dividend ¥10.00
Commemorative dividend ¥5.00
3. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2014
(November 1, 2013- October 31, 2014)(Percentages indicate percent change from prior consolidated fiscal year)

Net Sales

Full year

Operating Income

Ordinary Income

Net Income per
Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

122,600

10.6

16,01040.5

15,540

40.3

7,770

33.8

215.59(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter?
No

－

2

－

Notes(1) Were there changes to material subsidiaries during the period under review (transfer of specified subsidiaries in
conjunction with revisions to 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: No(3) Changes in accounting principles, changes in accounting estimates and retrospective restatement(a) Changes in accounting policy in conjunction with revision of accounting standards? No(b) Changes other than the above: No(c) Changes in accounting estimates: No(d) Retrospective restatements: No(4) Number of shares issued (common stock)(a) Number of shares outstanding at the end of the period (including treasury stock)
Fiscal year ending October 31, 2014 Third Quarter
36,092,241 sharesFiscal year ended October 31, 201336,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2014 Third Quarter
52,752 sharesFiscal year ended October 31, 2013
50,041 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2014 Third Quarter
36,039,856 sharesFiscal year ended October 31, 2013 Third Quarter
32,828,853 shares

Note: Disclosure concerning status of implementation of quarterly review procedure
This quarterly earnings report is exempt from the quarterly review procedure based on the Financial Instruments
and Exchange Act. At the time of disclosure of this quarterly earnings report, the Company has not completed thequarterly review procedure for quarterly financial statements.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The above projections were prepared based upon information available to the Company at the time the projections
were announced as well as various assumptions concerning the future economic and business environment. Actual
operating results may differ from the projected figures depending upon various factors in the future. Please refer to “1.
Qualitative Information Concerning Quarterly Consolidated Operating Results (3) Qualitative Information Concerning
Projected Consolidated Operating Results” on Page 6 of the Attachments for the conditions used as assumptions forthe projected operating results and matters to note before using the projected operating results.

－

3

－

○ 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 ……………………………………………

6(3) Qualitative Information Concerning Projected Consolidated Operating Results ………………………………..

6

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

6

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

7(1) Quarterly Consolidated Balance Sheets …………………………………………………………………………….

7(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income …………………………………………………………………………………………………………………..

9

Quarterly Consolidated Statements of Income
Consolidated Nine-month Period ended July 31, 2014 ……………………………………………………..

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Nine-month Period ended July 31, 2014 ……………………………………………………..

10(3) Notes Concerning Quarterly Consolidated Financial Statements ………………………………………………..

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

11(Note on Significant Changes to Shareholders’ Equity) ………………………………………………………….

11(Business Segment Information) ……………………………………………………………………………………

11

－

4

－

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results[ Management Environment ] (From November 1, 2013 to July 31, 2014)
Despite a slump in consumption because of a consumption tax rate increase and lingering worries about aweakening of the economy overseas, during Kanamoto’s consolidated nine-month period ended July 31, 2014
Japan’s economy generally maintained its recovery momentum. This included a positive trend in corporate
earnings noted against the background of aggressive public spending and the continuation of a flexible monetary
policy.
[ Third Quarter Operating Results ] (From November 1, 2013 to July 31, 2014)
In the construction industry related to the Kanamoto Group, spending on public works projects rose steadily asa result of economic policy measures, and a recovery in private sector capital investment was seen as well. On
the other hand, however, these activities engendered several causes for concern that have yet to be eliminated,
including a sharp rise in raw material prices and delayed construction starts as the result of a shortage of skilledconstruction workers.
Based on such circumstances, the Kanamoto Group continued to concentrate its management resources in
the Tohoku Region, and focused its sales and marketing activity on that area as well, in order to support rapid
restoration of the disaster-stricken area. In addition, as part of its future growth strategy, the Company
established a new Market Development Office to accelerate the pace at which Kanamoto can open or closebranch offices in the major metropolitan areas of the Kanto and Kansai regions. To achieve competitive
advantages such as enhanced operating processes and lower personnel expenses, the Company also newly
established a Business Process Reengineering Department, an organization reporting directly to Kanamoto’s
president, and took steps to create an organization that will increase the sophistication and efficiency of all of theCompany’s business processes.
Net sales for the consolidated nine-month period ended July 31, 2014 rose by 15.4% from the same period of
the previous consolidated fiscal year to ¥92,657 million. From an earnings perspective, operating income
expanded 52.4% from the same period of the previous consolidated fiscal year to ¥12,813 million, ordinary
income increased 49.4% year-on-year to ¥12,430 million and third quarter year-to-date net income was up
52.9% year-on-year to ¥7,194 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 the main business of Kanamoto, construction equipment rental
demand remained strong throughout Japan. In addition to increases in government countermeasure works suchas aseismic retrofits to strengthen ageing infrastructure, and public works centered mainly on restoration works,
the number of civil engineering and infrastructure-related works in sectors such as railways, telecommunications,natural gas and harbors increased as well.
To respond to this demand to the maximum extent possible, the Kanamoto Group executed an aggressive
capital spending program, and sought an appropriate regional distribution of assets and worked to strengthen
sales and marketing, and as a result, net sales exceeded the prior year’s results in all regions nationwide.
Used construction equipment sales increased 89.7% from the corresponding period of the previous
consolidated fiscal year, as Kanamoto implemented planned asset clearance on a timely basis in order to
optimize the composition of its equipment portfolio.
As a result of these factors, net sales for Kanamoto’s construction-related businesses for the first nine monthsof the fiscal year increased 16.4% from the same period of the previous consolidated fiscal year to ¥86,883
million, and operating income rose 53.8% year-on-year to ¥12,435 million.
－5－< Other businesses >In the Company’s other businesses, both steel products sales and sales in the information andtelecommunications-related division improved steadily in line with the Company’s plan, and as a result, for thethird quarter year-to-date consolidated period under review net sales from other businesses rose by 2.0% fromthe same period of the previous consolidated fiscal year to ¥5,775 million, while operating income expanded
11.0% year-on-year to ¥137 million.
[ Business development issues deserving special mention and status of branch office changes ]The Company did not open any branches during its third quarter consolidated business period. The Company
closed its Sendai Nishi Branch (Aoba-ku, Sendai City), the only office closed during the period.
(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the third quarter under review increased by ¥10,803 million compared with the endof the previous consolidated fiscal year to ¥180,054 million. This mainly reflected increases of ¥6,885 million inrental equipment and ¥1,925 million in construction machine parts supplied for rental operations, an increaseof ¥1,642 million in land for purposes such as branch expansion, and an increase of ¥1,084 million in
investment securities that reflected higher prices on the Company’s stock holdings.
Total liabilities were ¥116,711 million, an increase of ¥3,653 million compared with the end of the previous
consolidated fiscal year. The principal items contributing to this change were an increase of ¥2,983 million inaccounts payable-other and an increase of ¥6,767 million in long-term accounts payable-other that
accompanied the increase in rental equipment, and a total decrease of ¥4,458 million in current portion of
long-term loans payable and long-term loans payable.
Total Net Assets were ¥63,342 million, ¥7,150 million higher than at the end of the previous consolidated
fiscal year. This was mainly because of the net income reported for the consolidated nine-month period of¥7,194 million.
(3) Qualitative Information Concerning Projected Consolidated Operating Results
For more details, please refer to the press release “Notification Concerning Revision of Projected Operating
Results for the Business Period Ending October 2014” issued on May 29, 2014, to which no changes have been
made at this time. Kanamoto will promptly disclose any changes when it has judged revisions are necessary.

2. Matters Concerning Summary Information (Notes)(Supplemental information)
Effect of the change in the corporation tax rate etc.
As a result of the Law for the Partial Amendment of the Income Tax Law, Etc. (Act No. 10 of 2014)
promulgated on March 31, 2014 and partial amendment of the Act on Special Measures for Securing Financial
Resources Necessary to Implement Measures for Reconstruction Following the Great East Japan Earthquake(Act No. 117 of 2011), the Special Reconstruction Corporation Tax will be discontinued beginning from theconsolidated fiscal year commencing on or after April 1, 2014.
In conjunction with this change, the statutory effective tax rate applied in the calculation of deferred tax
assets and deferred tax liabilities arising from temporary differences expected to be recovered or settled in the
consolidated fiscal year commencing on November 1, 2014 will change from the current 37.7% to 35.3%.
The effect of this change is not material.

－

6

－

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Unit: Thousands of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2013)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2014)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Costs on uncompleted construction contracts
Raw materials and supplies
Construction machine parts
Income taxes receivable
Consumption taxes receivable
Deferred tax assets
Other
Allowance for doubtful accounts

32,627,458
27,731,488
350,000
642,805
20,081
201,740
3,954,840
29,255
8,313
983,057
754,987－335,792

30,649,459
28,425,905
350,000
862,058
62,546
223,432
5,880,743－
32,974754,930
734,815－305,356

66,968,236

67,671,509

131,975,682－75,075,764

145,623,403－81,838,188

Rental equipment, net

56,899,918

63,785,215

Buildings and structures
Accumulated depreciation

22,843,038－15,140,640

23,164,997－15,578,280

Buildings and structures, net

7,702,397

7,586,717

Machinery, equipment and vehicles
Accumulated depreciation

5,480,758－4,861,608

5,487,432－4,882,227

Total current assets
Noncurrent assets
Property, plant and equipment
Rental equipment
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 noncurrent assets
Total Assets

－

7

－

619,149

605,205

29,798,341
1,315,544－1,012,516

31,441,103
1,909,035－995,042

303,028

913,992

95,322,835

104,332,233

19,894
250,882

56,999211,396

270,777

268,395

5,256,183
147,708
1,894,365－541,221－67,985

6,340,826
223,708
1,874,565－547,038－110,054

6,689,049

7,782,006

102,282,662

112,382,635

169,250,899

180,054,145

(Unit: Thousands of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2013)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2014)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Allowance for losses on employee pension fundwithdrawal
Accounts payable-other
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Long-term accounts payable-other
Asset retirement obligations
Other
Total noncurrent liabilities
Total Liabilities
Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

21,293,370
591,774
12,179,620
1,085,477
3,533,247
823,580

21,114,093
597,657
12,434,037
967,5482,534,271
590,624200,001－

12,728,761
1,983,706

15,712,477
2,296,683

54,419,541

56,247,393

26,288,975
2,662,783
7,896
29,329,772
210,132
138,957

21,576,362
2,192,227
14,37636,097,748
228,899354,259

58,638,518

60,463,873

113,058,060

116,711,266

13,652,938
14,916,981
24,462,016－48,497

13,652,938
14,916,981
30,755,795－55,783

52,983,438

59,269,932

1,567,744

2,014,086－1,706－7,687

1,566,038

2,006,399

1,643,362

2,066,547

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeMinority interests
Total Net Assets
Total Liabilities and Net Assets

－

8

－

56,192,839

63,342,878

169,250,899

180,054,145

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Nine-month Period ended July 31, 2014)(Unit: Thousands of yen)
Current Consolidated Fiscal
Prior Consolidated Fiscal
Year Third Quarter
Year Third Quarter(From November 1, 2013
(From November 1, 2012
to July 31, 2014)
to July 31, 2013)
80,288,203
92,657,579

Net sales
Cost of sales

55,328,515

62,601,473

Gross profit

24,959,687

30,056,105

Selling, general and administrative expenses

16,549,140

17,242,199

Operating income

8,410,546

12,813,906

Interest income
Dividends income
Insurance income
Rent income
A receipt bonus
Amortization of negative goodwill
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other

6,077
57,78972,572
44,19835,14339,345
222,160
31,373
170,332

5,672
89,682
25,76445,163
41,589－50,41734,558133,368

Total non-operating income

678,992426,215Interest expenses
Loss on sales of notes payable
Other

630,066
31,112
105,874

475,906
28,744
304,814

Total non-operating expenses

767,052

809,465

8,322,486

12,430,657

34,3781,039
22,39359

32,122－463
59

57,87032,64559,55565－

51,254－43,652Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Subsidy income
Other
Total extraordinary income
Extraordinary loss
Loss on sales and retirement of noncurrent assets
Impairment loss
Loss on revision of retirement benefit plan

59,62094,907

Income before income taxes and minority interests

Total extraordinary losses

8,320,736

12,368,396

Income taxes-current
Income taxes-deferred

3,388,415－105,770

4,691,011
123,939

Total income taxes

3,282,644

4,814,950

Income before minority interests

5,038,091

7,553,445

Minority interests in income
Net income

－

9

－

331,619358,650

4,706,472

7,194,795

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Nine-month Period ended July 31, 2014)(Unit: Thousands of yen)
Current Consolidated Fiscal
Prior Consolidated Fiscal
Year Third Quarter
Year Third Quarter(From November 1, 2013
(From November 1, 2012
to July 31, 2014)
to July 31, 2013)
5,038,091
7,553,445

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

988,027
152,482

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests

－

10

－

446,315－6,8941,140,509

439,421

6,178,601

7,992,866

5,818,508

7,635,156

360,092

357,710

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Note on Significant Changes to Shareholders’ Equity)
The Company had no material items to report.
(Business Segment Information)
I Third quarter of the previous consolidated fiscal year (From November 1, 2012 to July 31, 2013)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Thousands of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Net sales
Net sales to outside
customers
Net sales or transfers
between related segments

Other Businesses(See Note)

Total

74,624,964

5,663,238

80,288,203

－

－

－

Total

74,624,964

5,663,238

80,288,203

Segment income

8,087,454

123,674

8,211,128(Note) The “Other businesses” classification encompasses business segments not included in thereporting 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)(Unit: Thousands of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

8,087,454
123,674
199,418

Operating income reported on the Consolidated
Quarterly Statements of Income

8,410,546

II Third quarter of the current consolidated fiscal year (From November 1, 2013 to July 31, 2014)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Thousands of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Net sales
Net sales to outside
customers
Net sales or transfers
between related segments

Other Businesses(See Note)

Total

86,883,403

5,774,175

92,657,579

－

1,000

1,000

Total

86,883,403

5,775,175

92,658,579

Segment income

12,435,353

137,239

12,572,592(Note) The “Other businesses” classification encompasses business segments not included in thereporting segment, and includes business related to the Steel Sales Division and business related
to the Information Products Division and other businesses.
－

11

－

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)(Unit: Thousands of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

12,435,353
137,239
241,313

Operating income reported on the Consolidated
Quarterly Statements of Income

12,813,906－

12－