Nine-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2015 [Japan GAAP]
September 4, 2015
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 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
September 11, 2015
Scheduled date for commencement of dividend payments–
Preparation of Quarterly Settlement Supplementary
No
Explanatory Materials
Quarterly Earnings Briefings
No
1. Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2015
(November 1, 2014 – July 31, 2015)(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,
2015: Third quarter
Fiscal Year ended October 31,
2014: Third quarter

Operating Income

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

6.8

12,498 －2.5

12,546

0.9

7,499

4.2

15.4

12,813

12,430

49.4

7,194

52.9

Millions of yen%

98,95692,657(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2015, Third Quarter
Fiscal Year Ended October 31, 2014, Third Quarter

8,162 (2.1%)
7,992 (29.4%)

Net Income per
Share

Fiscal Year ending October 31,
2015: Third quarter
Fiscal Year ended October 31,
2014: Third quarter

52.4

Net Income per
Share on a Fully
Diluted Basis

Yen

Yen

208.08－199.63－(2) Consolidated financial position
Total Assets
Fiscal Year ending October 31,
2015: Third quarter
Fiscal Year ended October 31,
2014

Net Assets

Equity Ratio

Millions of yen

Millions of yen%

197,905

72,40035.4

188,491

65,513

33.6(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2015 Third Quarter:
Fiscal Year Ended October 31, 2014

70,05663,365－

1－

Net Income

2. Dividends
Annual Dividends per Share
End of 1Q

End of 2Q

End of 3Q

Yen

Yen

Yen

Yen

Yen

－
－

15.00
15.00

－
－

20.00

35.00

－

15.00

30.00

Fiscal year ended October 31, 2014
Fiscal year ending October 31, 2015
Fiscal Year ending October 31, 2015(Projected)

Year-end

Total(Notes) 1. Has the Company revised its most recently released dividend projection:
No
2. Breakdown of interim dividend for the Fiscal Year ended October 31, 2014
Ordinary dividend 10.00yen
Commemorative dividend 5.00yen
Breakdown of planned year-end dividend for the Fiscal Year ended October 31, 2014
Ordinary dividend 10.00yen
Commemorative dividend 10.00yen
3. Projected Consolidated Operating Results for the Fiscal Year ending October 2015
(November 1, 2014 – October 31, 2015)(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

131,030

4.4

15,950－3.1

15,660

－2.6

9,340

0.4

259.16(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter:
Yes

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2

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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 newly excluded －(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:(d) Retrospective restatements:

NoNo(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, 2015 Third Quarter
36,092,241 sharesFiscal year ended October 31, 2014
36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2015 Third Quarter
52,941 sharesFiscal year ended October 31, 2014
52,930 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2015 Third Quarter
36,039,308 sharesFiscal year ended October 31, 2014 Third Quarter
36,039,856 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 5 of the Attachments for the conditions used asassumptions for the projected operating results and matters to note before using the projected operating results.
(Revision of unit for presentation of amounts)
In past years the Company reported amounts in its quarterly consolidated financial statements in thousands of yen.
Beginning from the end of the prior consolidated fiscal year, the Company has revised its reporting convention tomillions of yen. To facilitate comparison, the amounts for the third quarter consolidated financial statements of theprior consolidated fiscal year also have been restated in units of millions of yen.

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

7

Consolidated Nine-month Period ended July 31, 2015 ……………………………………………………..

9

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Nine-month Period ended July 31, 2015 ……………………………………………………..

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, 2014 to July 31, 2015) ]During the consolidated nine-month period ended July 31, 2015, Japan’s economy maintained its modest
recovery trend as corporate earnings improved and the employment situation brightened, supported by thecontinuation of proactive economic and monetary policy measures. Moves toward a recovery in personal
consumption were evident as well. This was insufficient to eliminate lingering uncertainty clouding the future
outlook, however, which is being sustained by circumstances such as concerns about the future direction of theoverseas economy including China, and the upward creep of prices resulting from the weakness of the yen.
[ Third Quarter Operating Results > (From November 1, 2014 to July 31, 2015) ]In the construction industry related to the Kanamoto Group, construction demand related to earthquake
restoration works in the Tohoku Region and development works in the Tokyo metropolitan area remained brisk. A
positive trend in private sector capital investment could be noted as well, reflecting the improvement in corporate
earnings. Nevertheless, for the country as a whole, activity was somewhat weaker and below the level seen one
year ago, as regional differences were exposed in sharper relief as a result of cutbacks in spending on public
works projects compared with the prior year.
In light of these circumstances, the Kanamoto Group continued to focus on critical items and worked to further
increase its corporate value, based on the various measures in its Medium-term Management Plan (fiscal 2014 fiscal 2016). We also actively pursued our regional strategy, to secure efficient earnings opportunities for theentire group that are tailored closely to changes in Japan’s construction market, as well as our strategy ofoverseas development.
As a result, net sales for the consolidated nine-month period ended July 31, 2015 rose by 6.8% from the same
period of the prior consolidated fiscal year to ¥98,956 million. From an earnings perspective, operating income
edged down 2.5% from the same period of the prior consolidated fiscal year to ¥12,498 million, reflectingchanges such as softer operating results at certain consolidated subsidiaries that were affected by the economic
slowdown in China and lower volume of road pavement work throughout Japan. Ordinary income rose 0.9%
year-on-year to ¥12,546 million, and third quarter year-to-date net income was up 4.2% year-on-year to ¥7,499
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 Tohoku Region, reflecting full-scale earthquake reconstruction works anddecontamination-related efforts. In other regions, several areas were negatively affected by lower public works
budgets and experienced a large drop in demand from the prior year, but generally there was little year-to-yearchange, and overall rental revenues remained solid.
Used construction equipment sales increased 15.2% from the corresponding period of the prior consolidated
fiscal year, as Kanamoto sold equipment based on its initial plan in order to maintain an appropriate asset
portfolio.
As a result of these factors, net sales for Kanamoto’s construction-related businesses for the first nine monthsof the fiscal year increased 5.7% from the same period of the prior consolidated fiscal year to ¥91,813 million,
and operating income decreased 3.6% year-on-year to ¥11,992 million.
< Other businesses >In Kanamoto’s other businesses, steel products-related sales also rose substantially higher than the
Company’s initial assumption, thanks to the recovery in private demand. Net sales gained 23.7% over the same
period of the prior consolidated fiscal year to ¥7,143 million, and operating income jumped 65.7% year-on-year to¥227 million.
－5－

< Change in number of branches >The Company opened six new branches during its third quarter consolidated business period. The Company
did not close any branches during the quarter.
New branches:

Tohoku Equipment Repair Center (Miyagino Ward, Sendai), Hokkaido Region Wide Area
Branch (Chuo Ward, Sapporo City), Biratori Equipment Center (Saru-gun, Hokkaido Prefecture),
Tsuruga Branch (Tsuruga City, Fukui Prefecture), Misato Branch and Tokyo Small Equipment
Center (Misato City, Saitama Prefecture)(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 ¥9,414 million compared with the end of
the prior consolidated fiscal year to ¥197,905 million. This change mainly reflected increases of ¥1,387 millionand ¥4,522 million in construction machine parts and rental equipment, respectively, and an increase of ¥1,221
million in buildings and structures.
Total liabilities were ¥125,505 million, an increase of ¥2,527 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥2,032 million inaccounts payable-other and an increase of ¥3,617 million in long-term accounts payable-other, and decreases of¥1,847 million and ¥1,952 million in income taxes payable and long-term loans payable, respectively.
Total net assets were ¥72,400 million, ¥6,887 million higher than at the end of the prior consolidated fiscal year.
This mainly reflected nine month year-to-date net income of ¥7,499 million, and a decrease in surplus of ¥1,261
million as a result of dividend payments.

(3) Qualitative Information Concerning Projected Consolidated Operating Results
The Company has revised its full-year consolidated operating results forecast of projected consolidated operating
results. Based on operating results for the consolidated nine-month period ended July 31, 2015 and the outlook forthe future, operating income, ordinary income, and net income are forecast to be lower than the Company’s
earnings projection announced on December 10, 2014 in the Financial Statements Bulletin (Japan GAAP) for the
Fiscal Year Ended October 31, 2014 (Consolidated).
Actual operating results may differ from the forecast figures as a result of various future factors.

2. Matters Concerning Summary Information (Notes)(Supplemental information)
Effect of the change in the corporate tax rate etc.
With the promulgation of the Act for Partial Revision of the Income Tax Act Etc. (Act No. 9 of 2015) and the Act
for Partial Revision of the Local Tax Act (Act No. 2 of 2015) on March 31, 2015, Japan’s corporate tax rate andbusiness tax rate will be reduced in the consolidated fiscal year beginning on or after April 1, 2015. In conjunction
with this change, the statutory effective tax rate used to calculate deferred tax assets and deferred tax liabilities will
be revised from 35.3% applied in the past to 32.8% for temporary differences expected to be eliminated in the
consolidated fiscal year that begins on November 1, 2015, and to 32.0% for temporary differences expected to beeliminated in the consolidated fiscal years that begin from November 1, 2016.
As a result of applying this statutory effective tax rate, the amount for deferred tax assets, (amount after
deducting deferred tax liabilities) will decrease by ¥36 million, and the amounts for income taxes-deferred and thevaluation of available-for-sale securities will increase by ¥79 million and ¥15 million, respectively.

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6

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3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2014)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2015)

31,65033,651
350
595
50
227
6,566
43
656
515
－227
74,08031,70034,299
350
707
36
250
7,953
59
398
477
－483
75,749150,727－85,083
65,644
23,691－15,663
8,027
5,541－4,882659
31,4591,563－1,013549
106,341

162,343－92,175
70,16725,342－16,092
9,249
5,634－4,899734
31,8152,334－1,088
1,245
113,212

57
208
266

－
302
302

6,286
265
1,854
－491
－110
7,804
114,411
188,491

7,044
302
1,965
－561
－110
8,640
122,156
197,905

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
Consumption taxes receivable
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

－

7

－

(Unit: Millions of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2014)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2015)

23,134612
11,883
995
3,729
850
16,4602,988
60,655

22,774734
12,608
1,723
1,882
608
18,493
2,448
61,273

21,6982,082
37,85316
231
440
62,322
122,978

19,746
2,093
41,47122
314
583
64,232
125,505

13,652
14,91632,860－56
61,373

13,652
14,91639,097－56
67,611

1,977
14
1,992
2,147
65,513
188,491

2,414
30
2,445
2,343
72,400
197,905

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
Accounts payable-other
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Long-term accounts payable-other
Net defined benefit liability
Asset retirement obligations
Other
Total non-current 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
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total Net Assets
Total Liabilities and Net Assets

－

8

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(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, 2015)(Unit: Millions of yen)
Prior Consolidated Fiscal
Current Consolidated
Year Third Quarter
Fiscal Year Third Quarter(From November 1, 2013 (From November 1, 2014
to July 31, 2014)
to July 31, 2015)
92,657
98,95662,601
68,11630,05630,84017,242
18,341
12,813
12,498Net 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 payable
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Compensation income for damage
Other
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Loss on valuation of investment securities
Loss on revision of retirement benefit plan
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

－

9

－

5
89
25
45
41
50
34
133
426

5
109
29
50
24
190
3
145
558

475
28
304
809
12,430

383
14
113
510
12,546

32
0
－
0
32

8
12
118
－
138

51
－
－
43
94
12,368
4,691
123
4,814
7,553
358
7,194

123
42
27
－
193
12,491
4,473
305
4,779
7,712
213
7,499

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Nine-month Period ended July 31, 2015)(Unit: Millions of yen)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests－

10

Prior Consolidated Fiscal
Current Consolidated
Year Third Quarter
Fiscal Year Third Quarter(From November 1, 2013 (From November 1, 2014
to July 31, 2014)
to July 31, 2015)
7,553
7,712

－

446
－6
439
7,992

436
12
449
8,162

7,635
357

7,952
210

(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)【 Segment information 】
I Third quarter of the previous 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: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses(See note)

86,883

5,774

92,657－1

186,883

5,775

92,658Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total

Total

Segment income
12,435
137
12,572(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)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments
Operating income reported on the Consolidated
Quarterly Statements of Income

12,435137
241
12,813

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.
II Third quarter of the current consolidated fiscal year (from November 1, 2014 to July 31, 2015)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses(See note)

91,813

7,143

98,956－－－

91,813

7,143

98,956

Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total

Total

Segment income
11,992
227
12,220(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.
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11

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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: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments
Operating income reported on the Consolidated
Quarterly Statements of Income

11,992
227
278
12,498

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
In the “Business related to the Construction Equipment Rental Division” segment, the Company
recorded an impairment loss on goodwill of ¥42 million.

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12－