Translation

Member of the Financial Accounting Standards Foundation

April 13, 2010

Consolidated Financial Results
for the Nine Months ended February 28, 2010
Listed company name:
Stock exchange listing:Stock code:
Location of headquarters:
Website:Representative:
Contact:

Toyo Tanso Co., Ltd.
Tokyo Stock Exchange, 1st Section
5310
Osaka, Japan
http://www.toyotanso.co.jp
Naotaka Kondo, President & Chief Operating Officer
Toshimi Boki, Executive Officer, General Manager,
Finance and Accounting Department
81-6-6451-2114 (from overseas)

TEL:
Scheduled date for submissionof quarterly report:
Scheduled date for dividend payment

April 14, 2010-

1. Consolidated financial results for the nine months ended February 28, 2010
(From June 1, 2009 to February 28, 2010)(1) Operating results (cumulative total)(Millions of yen, rounded down)
Percentages indicate changes from the same period in the previous fiscal year.

Net sales

Operating profit

Recurring profit%
Nine months ended
February 28, 2010
Nine months ended
February 28, 2009%%
991 (75.8)

19,370(21.1)

1,154(74.2)

24,554

-

4,478

-

Net income per share

Nine months ended
February 28, 2010
Nine months ended
February 28, 2009

Net income

4,106

-

%
589

(75.6)

2,416-

Diluted net income
per share

yen

yen

28.41

28.41

116.55-(2) Financial position(Millions of yen, rounded down).
Total assets

EquityEquity ratio

Equity per share%yen

As of February 28, 2010

62,23948,04775.4

2,264.65

As of May 31, 2009

58,821

48,60680.6

2,286.27

Reference: Shareholders’ equity
February 28, 2010
May 31, 2009

46,956 million yen
47,404 million yen

12. Dividends
Dividends per share (yen)(Record date)

First quarter end-

Year ended May 31, 2009

Second quarter
Third quarter end
end
0.00
-

Year ending May 31, 2010

0.00
(Actual)Year ending May 31, 2010
(Forecast)
Note: Revision of projected dividends in the quarter under review: None

Year-end

Total (Full year)

20.00

-

20.00
-

-

20.00

20.00

3. Consolidated results forecast for the fiscal year ending May 31, 2010
(From June 1, 2009 to May 31, 2010)

Net sales

Full year

28,000Operating profit
%

%

(9.6)

2,500 (47.3)(Millions of yen)
Percentages indicate changes on a year-on-year basis.
Net income
Recurring profit
Net income
per share%
2,500(44.2)

1,500

%

yen

(41.6)

72.34

Note: Revision of consolidated results forecast in the quarter under review: None

4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation): None
(2) Adoption of simple accounting methods and accounting methods specific to the preparation ofquarterly consolidated financial statements: Yes
Note: For details, please refer to ‘4. Others’ in Qualitative Information and Financial Statements on page5.
(3) Changes in accounting policies, procedures, and methods of presentation for preparing theconsolidated quarterly financial statements(those to be described in the section Changes in Significant Items That Form the Basis of Preparations for
Consolidated Quarterly Financial Statements)
i. Changes due to amendment of accounting standards: None
ii. Changes due to other reasons: None
(4) Number of shares outstanding (common stock)i. Number of shares outstanding and issued at the end of period (including treasury stock)
As of February 28, 2010
20,750,688 shares
As of May 31, 2009
20,750,688 shares
ii. Number of treasury stock at the end of period
As of February 28, 2010
16,215 shares
As of May 31, 2009
16,115 sharesiii. Average number of shares during the period (quarter; cumulative period)
Third quarter ended February 28, 2010
20,734,507 shares
Third quarter ended February 28, 2009
20,734,894 shares

2

* Disclaimer regarding appropriate use of forecasts and related points of note
The results forecast has been prepared based on information that was available on the date of release ofthis document. Actual results may differ from the forecast depending on various factors. For further
information on the results forecast, please refer to ‘3. Qualitative Information Regarding Consolidated
Results Forecast’ in Qualitative Information and Financial Statements on page 5.

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[Qualitative Information and Financial Statements]
1. Qualitative Information Regarding Consolidated Operating Results
During the nine months ended February 28, 2010, the effects of the global recession havecontinued to drag on, limiting the global economy overall to mild recovery. This was despite arecovery in economic conditions centered on Asian countries such as China, brought about
partly thanks to economic stimulus measures in each country. Economic conditions continued
to recover in Japan, due to the bottoming out of exports and production, and progress in stock
inventory adjustments. However, the economy continues to hover at low levels withoutachieving sustainable recovery entailing facility investment and employment.
Under these difficult circumstances, the Toyo Tanso Group has focused its efforts on
stimulating demand, particularly in the environment and energy fields where growth is expected.
At the same time, Toyo Tanso Group is promoting self-supporting efforts such as cost andexpense reductions and limiting investments.
As a result of the above performance, despite reductions in costs and expenses, the impact ofstock inventory adjustments in mainstay fields led to consolidated sales in the third quarter
under review falling 21.1% year on year to 19,370 million yen. Operating profit fell 74.2% to1,154 million yen, recurring profit fell 75.8% to 991 million yen, and net income dropped
75.6% to 589 million yen.
The table below shows sales and overall conditions by product category in the nine months
under review.
Products
Special graphite products
Carbon products for generalindustries(for mechanical applications)
Carbon products for generalindustries(for electrical applications)Compound materials andother products
Related goods
Total

Nine months ended
February 28, 2009
(thousand yen)
12,941,025

Nine months ended
February 28, 2010
(thousand yen)
9,998,045

2,136,619

1,606,774(24.8)

3,186,421

2,885,106(9.5)

5,666,274

4,217,041(25.6)

624,077

663,033

6.2

24,554,417

19,370,002(21.1)

Year on year (%)(22.7)

Special graphite products
In the electronics sector, the company performed weakly overall due to the effect on products
used in the processing of single crystal silicon of customers’ inventory adjustments, and fallingdemand in mainstay Chinese and European markets for products used in the production of solar
cells. However, orders in both areas quickened from the New Year on and demand iscontinuing to rise. Furthermore, demand for products used in compound semiconductors,
mainly LED products, continues to strengthen and a recovery phase can be seen overall.
In the general industries sector, despite weak conditions in products used for electricaldischarge machining (EDM) electrodes (a mainstay field) and metallurgical products, economic
conditions bottomed out and demand began to increase, mostly in the newly emerging
economies.
Carbon products for general industries
In carbon products for mechanical applications, despite a positive performance in products
used as sliders for pantographs, which are generally less affected by economic conditions, poor
domestic performance continued overall as a result of restricted capital expenditure, particularly4

in products used as bearings and sealing materials.
In carbon products for electrical applications, there was an early recovery in mainstay
products for use in small motors, particularly in the China market, and with the improving trend
also continuing after that, results were steady overall.
Compound materials and other products
In SiC (silicon carbide)-coated graphite products, signs of recovery began to appear insemi-conductor-related products, which had been sluggish, and LED-related products continued
to grow, particularly in South Korea and Taiwan, led by products used in backlight LCD, andincreases in demand continued to stand out. In C/C composite products, mainstay products
used in the production of single crystal silicon continued to perform poorly as a result ofcustomers’ inventory adjustments, and products for use in solar cells and industrial furnaces also
failed to pick up, leading to a poor performance overall. However, orders turned towards
expansion and demand is now on a trend towards recovery. Graphite sheet products also didwell, mainly thanks to the recovery in products for use in automobiles and glass.
2. Qualitative Information Regarding Consolidated Financial Position
Total assets as of February 28, 2010 were increased by 3,418 million yen from the end of theprevious fiscal year. This was caused by an increase in inventory assets of 1,170 million yen
resulting from the planned accumulation of semi-finished goods stock. There was also an
increase in tangible fixed assets of 5,318 million yen. This was mainly due to manufacturing
investments in expanded manufacturing facilities at the Takuma Division. The acquisition newland in Shanghai, China (land lease rights) increased intangible fixed assets by 558 million yen.
All of these acquisitions contributed to a decrease of cash on hand and in the banks of 4,125
million yen.
Total liabilities rose 3,977 million yen from the end of the previous fiscal year. This camelargely as a result of an increase in notes and account payable-equipment of 1,519 million yen.
There was also an increase in the accrued amount payable through the purchase of tangible
fixed assets of 1,980 million yen resulting from investments in expanded manufacturing
facilities.
Equity fell 559 million yen from the end of the previous fiscal year. This was caused largely
by a decrease in foreign currency translation adjustments of 622 million yen.
3. Qualitative Information Regarding Consolidated Results Forecast
We have made no changes to the consolidated results forecast for the full year ending May 31,
2010 announced on July 15, 2009.
4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation)
None(2) Adoption of simple accounting methods and accounting methods specific to the
preparation of quarterly consolidated financial statements(i) Evaluation methods for inventory assets
Inventory assets for the end of the third quarter under review are calculated by omitting aphysical inspection and using a rational method based upon the physical inspection amountcalculated at the end of the second quarter.
(ii) Tax expense calculation
Tax expenses are calculated by multiplying profit before income taxes by the effective tax

5rate, which is reasonably estimated by applying tax-effect accounting to the estimated profit
before income taxes for the fiscal year, including the third quarter under review.
The income taxes-deferred is included in income taxes.
(3) Changes in accounting policies, procedures, and methods of presentation for preparing
the consolidated quarterly financial statements
None65. Consolidated Quarterly Financial Statements(1) Consolidated balance sheets(Thousands of yen, rounded down)
As of February 28, 2010
AmountAssetsCurrent assets
Cash on hand and in banks
Trade notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and stores
Other
Allowance for doubtful accounts
Total current assets
Fixed assets. Tangible fixed assets
Buildings and structures (Net)
Machinery, equipment, and vehicles (Net)Land
Construction in progress
Other (Net)
Total tangible fixed assets
Intangible fixed assets
Investments and other assets
Total fixed assets
Total assets

7

As of May 31, 2009
Amount

9,910,466
9,224,984
4,515,174
4,921,931
1,253,672
1,447,837(107,942)
31,166,124

14,035,952
8,257,709
4,747,244
3,476,873
1,296,308
1,980,337(185,780)
33,608,646

6,249,433
8,797,845
5,313,524
7,772,007
393,669
28,526,481
938,094
1,608,599
31,073,175
62,239,300

6,126,730
8,589,139
5,353,520
2,699,487
439,463
23,208,341
379,167
1,624,906
25,212,415
58,821,061

(Thousands of yen, rounded down)

Liabilities
Current liabilities
Trade notes and accounts payable
Short-term borrowings
Accrued amount payable
Income taxes payable
Reserve for employees’ bonuses
Reserve for directors’ and corporate auditors’ bonuses
Other
Total current liabilities
Long-term liabilities
Long-term borrowings
Reserve for employees’ retirement benefits
Other
Total long-term liabilities
Total liabilities
EquityShareholders’ Equity
Common Stock
Capital surplus
Retained earnings
Treasury stock - at cost
Unrealized gains (losses) on available-for-sale securities
Foreign currency translation adjustments
Total Shareholders’ Equity
Share warrants
Minority interests
Total equity
Total liabilities and equity

8

As of February 28, 2010

As of May 31, 2009

AmountAmount2,177,908
842,061
5,400,613
137,739447,978
3,085,668
12,091,970

1,725,878
1,323,950
3,420,334
290,192
756,470
35,8401,595,887
9,148,554

606,351566,770926,598
2,099,720
14,191,691

70,740329,736
665,184
1,065,661
10,214,216

7,692,575
9,534,686
31,031,232(57,408)

7,692,575
9,534,686
30,856,790(56,997)

1,485

984

(1,246,200)
46,956,370(623,226)
47,404,814

3,348
1,087,890
48,047,609
62,239,300

1,202,030
48,606,845
58,821,061

(2) Consolidated quarterly statements of income
Nine months ended February 28, 2010
(Thousands of yen, rounded down)

Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Dividend income
Dividends earned
Gain on foreign currency option
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange loss
Valuation loss on investment securities
Other
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on sale of fixed assets
Gain on sale of investment securities
Reversal of allowance for doubtful accounts
Insurance benefits received
Subsidies received
Returned special severance payments for early retired
employees during the past fiscal year
Total extraordinary profit
Extraordinary losses
Loss on sale of fixed assets
Loss on disposal of fixed assets
Valuation loss on investment securities

Nine months ended
February 28, 2009
Amount24,554,417
15,435,547
9,118,869
4,640,124
4,478,745

Nine months ended
February 28, 2010
Amount19,370,002
14,056,401
5,313,600
4,158,951
1,154,649

74,0297,847
108,479
30,508220,864

37,41653,73755,964
59,412
206,530

26,801
412,402141,872
12,489593,565
4,106,044

27,352286,201
31,60024,332369,487
991,692

1,033
100
134,001
5,626

33,916
63,916
27,404-21,028140,760

146,265

1,118
27,051
1,798

273
10,418-

Total extraordinary losses

29,967

10,691

Profit before income taxes
Income taxes
Income taxes for prior fiscal years
Minority interests
Net income

4,216,836
1,455,840
344,418
2,416,577

1,127,266
539,386(28,543)
27,290589,1329

(3) Consolidated quarterly statements of cash flows(Thousands of yen, rounded down)Nine months ended
February 28, 2009
AmountCash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in reserve for employees’ retirement benefits
Returned special severance payments for early retired
employees during the past fiscal year
Insurance benefits received
Decrease in long-term accrued amount payable (directors’
retirement benefits)
Increase (decrease) in reserve for employees’ bonuses
Increase (decrease) in reserve for directors’ bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Valuation loss (gain) on investment securities
Gain on sale of tangible fixed assets
Loss on disposal and sale of tangible fixed assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (Increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other
Sub-totalInterest and dividend received
Interest paid
Insurance benefits received
Income taxes paid
Net cash provided by operating activities

Nine months ended
February 28, 2010
Amount4,216,836
2,402,109
8,179
148,155

1,127,266
2,503,757
8,179
236,214-(21,028)(134,001)-(699,000)(2,700)(315,118)(12,962)(3,342)(81,877)
26,801
412,402
143,670(1,033)28,1691,634,895(2,593,968)
769,471(140,988)
5,808,399
81,741(22,728)
603,869(2,300,593)
4,170,688(307,185)(35,840)(103,003)(91,154)
27,352286,201
31,600(33,916)
10,691(1,171,070)(1,406,199)
623,043
277,825
1,960,036
101,135(25,079)(22,539)
2,013,551

Cash flows from investing activities
Payments for time deposits
Proceeds from time deposits
Payments for acquisition of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payments for acquisition of intangible fixed assets
Proceeds on redemption of investment securities
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of finance lease payables
Payments for acquisition of treasury stock
Payments for dividends
Payments for dividends to minority interests
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(5,362,645)
2,353,719(3,313,762)
2,470(36,682)
500,000
11,599(5,845,300)(4,454,774)
9,602,234(5,192,799)
133,728(517,302)
8,613(420,298)(70,945)(444,718)(1,883)(3,221)(311,028)(22,196)(853,994)(371,838)(2,900,444)
10,491,890(328,363)
559,714(150,670)(3,930)(410)(413,759)(83,468)(420,889)(135,029)
1,037,334
6,412,364

Cash and cash equivalents at end of period

7,591,445

7,449,69810

(4) Notes regarding the premise of a going concern
Not applicable.
(5) Segment information
a. Business Segment Information
Nine months ended February 28, 2009 (from June 1, 2008 to February 28, 2009) and nine months ended
February 28, 2010 (from June 1, 2009 to February 28, 2010)
Business segment information has been omitted because the entire business of the Company and its
subsidiaries falls under the single business category of carbon product related business.
b. Geographic Segment Information
Nine months ended February 28, 2009 (From June 1, 2008 to February 28, 2009)(Thousands of yen, rounded down)
Japan

North
America

Europe

Asia

Total

13,173,867

2,645,825

2,226,109

6,508,615

24,554,417

Corporateand Elim.

Consolidated

Sales(1) Sales to unaffiliated customers-

24,554,417(2) Intersegment sales or transfers

4,414,035

89,241

4,268

79,5694,587,114(4,587,114)

-

Total

17,587,902

2,735,066

2,230,377

6,588,185

29,141,532(4,587,114)

24,554,417

1,773,156

479,223

285,480

1,871,103

4,408,963

69,781

4,478,745

Operating Profit(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:United States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan
3. Change in the method of converting the revenues and expenditure of foreign subsidiaries
The revenue and expenditure of foreign subsidiaries were previously converted into yen based on the spot exchange rateon the closing date. However, commencing the first quarter under review, they are converted into yen based on the
average exchange rate for the period. In accordance with this change, sales in “North America,” “Europe,” and “Asia,”
for the nine months ended February 28, 2009 increased by 65,250 thousand yen, 291,966 thousand yen, and 731,063
thousand yen, respectively, compared to those under the traditional method. Operating profit also increased by 11,121
thousand yen, 36,064 thousand yen, and 216,915 thousand yen, respectively.
4. Change in the durable years of tangible fixed assets
The Company and its domestic consolidated subsidiaries reviewed and shortened the durable years of tangible fixed
assets from the first quarter under review, in the wake of the revision of the legal durable years of machinery andequipment in the tax system revision for fiscal 2008. Accordingly, the operating profit of “Japan” for the nine months
ended February 28, 2009 decreased by 274,601 thousand yen.

Nine months ended February 28, 2010 (From June 1, 2009 to February 28, 2010)(Thousands of yen, rounded down)
Japan

North
America

Europe

Asia

Total

(1) Sales to unaffiliated customers

10,495,497

1,725,456

1,863,860

5,285,188

19,370,002-(2) Intersegment sales or transfers

3,701,055

17,851

1,301

72,614

3,792,823(3,792,823)

-

Total

14,196,552

1,743,307

1,865,161

5,357,803

23,162,826(3,792,823)

19,370,002

Operating Profit (Loss)(64,813)(34,834)

77,788855,914834,055

320,593

1,154,649

Corporateand Elim.

Consolidated

Sales(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:United States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan

11

19,370,002

c. Overseas Sales
Nine months ended February 28, 2009 (From June 1, 2008 to February 28, 2009)(Thousands of yen, rounded down)

I

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

North
America

EuropeAsia

Rest of
World

Total

2,461,251

2,680,934

8,375,867

272,603

13,790,656

10.0

11.0

34.1

1.1

24,554,417
56.2(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

Nine months ended February 28, 2010 (From June 1, 2009 to February 28, 2010)(Thousands of yen, rounded down)

I

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

North
America

EuropeAsia

Rest of
World

Total

1,651,169

2,151,906

7,025,574

135,572

10,964,223
19,370,002

8.5

11.1

36.3

0.7

56.6

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

(6) Notes if the amount of shareholders’ equity has changed significantly
Not applicable.

12