Three-month Consolidated Financial Report for the Fiscal Yearending October 31, 2014 [Japan GAAP]
March 7, 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
March 14, 2014
Scheduled date for commencement of dividend payments–
Preparation of Quarterly Settlement Supplementary
No
Explanatory Materials:
Quarterly Earnings Briefings:
No
1. Operating Results for the Three-Month Period of the Fiscal Year Ending October 31, 2014
(November 1, 2013 - January 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: First quarter
Fiscal Year ended October 31,
2013: First quarter

Operating Income

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

33,148

15.5

5,651

45.6

5,684

47.5

3,346

55.6

28,687

37.2

3,881

67.5

3,852

77.0

2,151

84.5

(Note) Comprehensive income
Fiscal Year Ending October 31, 2014 First Quarter
Fiscal Year Ended October 31, 2013 First Quarter¥3,715 million (34.5%)¥2,762 million (120.8%)

Net Income per
Share
Fiscal Year ending October 31,
2014: First quarter
Fiscal Year ended October 31,
2013: First quarter

Net Income

Diluted Net
Income per Share

Yen

Yen

92.86

－

65.52

－

(2) Consolidated financial position
Total Assets
Fiscal Year ending October 31,
2014: First quarter
Fiscal Year ended October 31,
2013:

Net Assets

Shareholders’ Equity
Ratio

Millions of yen

Millions of yen

176,484

59,53832.7

169,250

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

¥57,671 million¥54,549 million

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1

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%

2. Dividends
Full Year Dividend per Share
End of 1Q
Fiscal year ended October 31, 2013
Fiscal year ending October 31, 2014

End of 2Q

End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－
－

10.00

－

10.00

20.00

15.00

－

15.00

30.00

Fiscal Year ending October 31, 2014
(Projected)(Notes) 1. Has the Company revised its most recently released dividend projection?
No
2. Breakdown of second quarter dividend for the fiscal year ending October 2014 (projected)
Ordinary dividend ¥10.00
Commemorative dividend ¥5.00
Breakdown of year-end dividend for the fiscal year ending October 2014 (projected)
Ordinary dividend ¥10.00
Commemorative dividend ¥5.00
3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2014
(November 1, 2013 - October 31, 2014)(Percentages indicate percent change from prior fiscal year and prior fiscal year quarter)

Net SalesInterim (Year-to-date)
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

59,600117,500

8.9
6.0

7,390
12,530

9.5
10.0

7,030
12,090

4.7
9.2

3,820
6,050

2.8
4.1

105.99167.87(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter?
No

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2

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Note: Other(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 restatements(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 First 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 First Quarter
52,633 sharesFiscal year ended October 31, 2013
50,041 shares(c) Average number of shares outstanding during the period (consolidated year-to-date)Fiscal year ending October 31, 2014 First Quarter
36,040,454 sharesFiscal year ended October 31, 2013 First Quarter
32,831,786 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 andExchange Act. At the time of disclosure of this quarterly earnings report, the Company has not completed the quarterly
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 the
Qualitative Information Concerning Consolidated Projected Operating Results on Page 3 of the Attachments for theconditions used as assumptions for the projected operating results and matters to note before using the projected
operating results.

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3

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○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 Three-month Period ended January 31, 2014 ………………………………………………

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Three-month Period ended January 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

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4

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1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results< Management Environment > (From November 1, 2013 to January 31, 2014)
Japan’s economy during the Kanamoto Group’s first quarter maintained a modest recovery trend. The effectsof the government’s aggressive monetary and fiscal policy began to spread to the real economy, as thedepreciation of the yen and rising stock prices were coupled with the spread of other positive signs, including
improved corporate earnings and a recovery in personal consumption.
< First Quarter Operating Results > (From November 1, 2013 to January 31, 2014)
In the construction industry that is related to the Kanamoto Group’s main business, the central government’s
construction investment, including the effect of the supplementary budget in conjunction with earthquake
disaster reconstruction, remained brisk. Private sector construction investment was robust as well, supported bystrong corporate profits, and overall a modest recovery trend was seen. Nevertheless, the construction trend
remained clouded by conditions that were difficult to discern, including the conspicuous emergence of issues
such as tender mishaps because of the engineer and skilled worker shortage, and stubbornly high raw
materials prices.
Given these circumstances, the Kanamoto Group continued to focus its resources on restoration-related
works and pursue efficient asset utilization to the maximum extent of its abilities. At the same time the Company
took steps to strengthen cooperation among the Group’s firms, and enhance its business structure and improve
its financial position by analyzing and fine tuning its current operating procedures. Finally, with the start of its
new Medium to Long-term Management Plan from November of this year, Kanamoto will zealously move ahead
with the formulation of business and regional strategies based on future market trends.
Consolidated net sales for the first quarter of the Business Period ending in October 2014 climbed 15.5%
compared with the same period of the prior consolidated fiscal year to ¥33,148 million. In terms of earnings,
operating income jumped 45.6% from the same period of the prior consolidated fiscal year to ¥5,651 million,
ordinary income increased 47.5% year-on-year to ¥5,684 million and first quarter net income was up 55.6%
year-on-year to ¥3,346 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 core business, construction equipment rental demandremained at a high level. In addition to Japan’s earthquake-related reconstruction effort reaching its peak,factors driving this demand included execution of the 15-month budget, a surge in demand ahead of theincrease in the consumption tax and serious disasters caused by localized torrential rains.
In addition, operating results in every region exceeded performance in the same period of the priorconsolidated fiscal year, boosted by the continuing steady demand from countermeasure works to address
ageing infrastructure as well as disaster prevention and disaster mitigation works throughout Japan.
To maintain an appropriate rental asset portfolio, Kanamoto continued to systematically sell assets overseas,
where sales of the Company’s used construction equipment rose 44.2% compared with the same period of theprior consolidated fiscal year.
As a result of the above factors, first quarter net sales for Kanamoto’s construction-related businesses
improved 15.7% from the same period of the prior consolidated fiscal year to ¥31,330 million, and operating
income increased 45.9% year-on-year to ¥5,539 million.
[ Other businesses ]In the steel products sales the Company is developing in Hokkaido, sales for earthquake disasterreconstruction sites and harbor seawall-related works were strong, pushing revenues up 12.0% compared withthe prior consolidated fiscal year. The Company’s information and telecommunications-related businesses
achieved good results as well, with sales up 14.2% year-on-year, reflecting extended computer rental contract－

5－

periods and stable new demand for operating system replacements, and steady growth in the specified worker
dispatching business.
As a result of these factors, first quarter net sales for Kanamoto’s other businesses rose 12.3% from thesame period of the prior consolidated fiscal year to ¥1,817 million, and operating income jumped 104.1%
year-on-year to ¥35 million.
[ Business development issues deserving special mention and status of branch office changes ]The Company did not open or close any branches during the first quarter consolidated accounting period.
(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 ¥7,234 million compared with the end of
the prior consolidated fiscal year to ¥176,484 million. This change mainly reflected an increase in rental
equipment of ¥6,499 million.
Total liabilities were ¥116,946 million, an increase of ¥3,888 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥1,547 million inaccounts payable-other and an increase of ¥4,893 million in long-term accounts payable-other that accompanied
the increase in rental equipment, and a total decrease of ¥2,845 million in current portion of long-term loans
payable and long-term loans payable.
Total net assets were ¥59,538 million, ¥3,345 million higher than at the end of the prior consolidated fiscal year.
This was mainly because of the net income reported for the first quarter of ¥3,346 million.
(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, 2013 (Japan GAAP) released on December 11, 2013.

2. Matters Concerning Summary Information (Notes)
The Company had no material items to report.

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6

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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 First Quarter(As of January 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

30,864,309
29,259,076
350,000
725,417
43,410206,565
4,351,781
24,34235,946680,806
1,044,447－321,603

66,968,236

67,264,500

131,975,682－75,075,764

141,379,461－77,980,222

Rental equipment, net

56,899,918

63,399,238

Buildings and structures
Accumulated depreciation

22,843,038－15,140,640

22,935,075－15,291,850

Buildings and structures, net

7,702,397

7,643,224

Machinery, equipment and vehicles
Accumulated depreciation

5,480,758－4,861,608

5,486,430－4,861,339

Total current assets
Noncurrent assets
Property, plant and equipment
Rental equipment
Accumulated depreciation

Machinery, equipment and vehicles, net

619,149

625,091

29,798,341
1,315,544－1,012,516

29,862,468
1,479,860－1,026,384

303,028

453,475

95,322,835

101,983,498

Goodwill
Other

19,894
250,882

11,008284,433

Total intangible assets

270,777

295,4425,256,183
147,708
1,894,365－541,221－67,985

5,566,044
152,064
1,825,275－533,875－67,985

Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
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

－

6,689,049

6,941,524

102,282,662

109,220,465

169,250,899

176,484,966

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

Current Consolidated
Fiscal Year First Quarter(As of January 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

23,138,363
638,116
11,597,693
1,040,756
1,935,949
394,823

200,001

200,001

12,728,761
1,983,706

14,276,270
2,154,135

54,419,541

55,376,110

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

24,025,896
2,882,019
10,04034,223,081
222,333
206,945

58,638,518

61,570,316

113,058,060

116,946,426

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

13,652,938
14,916,981
27,448,169－55,364

52,983,438

55,962,724

1,567,744

1,735,795－1,706－27,195

1,566,038

1,708,600

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests

1,643,362

1,867,214

Total Net Assets

56,192,839

59,538,539

169,250,899

176,484,966

Total Liabilities and Net Assets

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8

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(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, 2014)(Unit: Thousands of yen)
Current Consolidated Fiscal
Prior Consolidated Fiscal
Year First Quarter
Year First Quarter(From November 1, 2013
(From November 1, 2012
to January 31, 2014)
to January 31, 2013)
28,687,949
33,148,257

Net sales
Cost of sales

19,304,549

21,772,259

Gross profit

9,383,399

11,375,997

Selling, general and administrative expenses

5,502,048

5,724,480

Operating income

3,881,350

5,651,517

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

1,968
16,33623,85910,704
1,022
14,880102,011
7,901
49,179866
22,67525,463
13,687
19,107－111,998
29,99047,319Total non-operating income

227,864

271,109

Interest expenses
Loss on sales of notes payable
Other

213,222
11,88531,297

172,179
10,96755,167

Total non-operating expenses

256,405

238,3143,852,809

5,684,312

1,809
22,262
59

19,543274
5924,131

19,876

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Subsidy income
Other
Total extraordinary income
Extraordinary loss
Loss on sales and retirement of noncurrent assets

8,916

6,042

8,916

6,042

Income before income taxes and minority interests

3,868,024

5,698,146

Income taxes-current
Income taxes-deferred

1,385,866
160,298

1,850,394
274,241

Total income taxes

1,546,164

2,124,635

Income before minority interests

2,321,860

3,573,511

Total extraordinary losses

Minority interests in income
Net income

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9

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170,851

226,935

2,151,008

3,346,575

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Three-month Period ended January 31, 2014)(Unit: Thousands of yen)
Current Consolidated Fiscal
Prior Consolidated Fiscal
Year First Quarter
Year First Quarter(From November 1, 2013
(From November 1, 2012
to January 31, 2014)
to January 31, 2013)
2,321,860
3,573,511

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

353,238
87,701

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

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10

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167,973－25,488

440,939

142,484

2,762,799

3,715,995

2,573,939

3,489,136

188,860

226,858

(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 First quarter of the previous consolidated fiscal year (from November 1, 2012 to January 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

27,069,618

1,618,330

28,687,949

－

－

－

Total

27,069,618

1,618,330

28,687,949

Segment income

3,796,855

17,1683,814,023(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)
IncomeII

AmountReporting segment total
Income for “Other businesses” classification
Other adjustments

3,796,855
17,16867,327

Operating income reported on the Consolidated
Quarterly Statements of Income

3,881,350

First quarter of the current consolidated fiscal year (from November 1, 2013 to January 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

31,330,718

1,817,538

33,148,257

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Total

31,330,718

1,817,538

33,148,257

Segment income

5,539,121

35,042

5,574,164

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11

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(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

5,539,121
35,04277,353Operating income reported on the Consolidated
Quarterly Statements of Income

5,651,517－

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