April 3, 2015

Summary of Consolidated Business Results for the First Three Quarters of Fiscal 2014
For the fiscal year ending May 31, 2015
Toyo Denki Seizo K.K.
Stock Code: 6505
Representative:
Inquiries:

Stock Exchange: 1st Section of the Tokyo Stock Exchange
URL http://www.toyodenki.co.jp
Kenzo Terashima, President
Yoshifumi Otsubo, Operating Officer and General Manager, Management Planning
Division
TEL +81-3-5202-8122
Scheduled date of submission of quarterly financial report:
April 7, 2015
Scheduled date of commencement of dividend payments:－
Preparation of quarterly financial report supplemental explanatory materials: Yes
Holding of quarterly financial results briefing:
Yes (for institutional investors andanalysts)
Note: Amounts less than one million yen in financial statements and the supplementary data are rounded down.

1. Consolidated Business Results for the First Three Quarters of Fiscal 2014
(June 1, 2014 to February 28, 2015)(1) Consolidated Operating Results(In millions of yen, except where noted; percentage figures show year-on-year increase or decrease.)

Net SalesFirst Three Quarters,
Fiscal 2014
First Three Quarters,
Fiscal 2013

Operating Income

Ordinary Income

Net Income

28,856

17.7%

913

164.2

1,253

259.5

727

175.4

24,511

19.3%

345

－

348

－

264

－

(Note) Comprehensive income: 3Q FY2014: 4,572 million yen [442.4%]
3Q FY2013: 842 million yen [(51.8)%]

Net Income
per Share (Yen)

Diluted Net Income
per Share (Yen)

15.08

－

5.48

－

First Three Quarters,
Fiscal 2014
First Three Quarters,
Fiscal 2013

(2) Consolidated Financial Position(In millions of yen, except where noted)

Total Assets
As of February 28, 2015
As of May 31, 2014

Net Assets

52,05344,752(Reference) Shareholders’ equity:

24,00019,350Shareholders’Equity Ratio (%)
46.1
43.2

As of February 28, 2015: 24,000 million yen
As of May 31, 2014: 19,350 million yen

2. Dividend Information
1Q

Annual Dividend (Yen)Interim
3Q
Fiscal Year-End
0.00
－
6.00
0.00
－

Fiscal 2013－
Fiscal 2014－
Fiscal 2014
(Forecast)(Note) Revisions to the most recently announced dividend forecasts: No

6.00

Total
6.00
6.00

3. Consolidated Performance Forecast for Fiscal 2014 (June 1, 2014 to May 31, 2015)(In millions of yen, except where noted; percentage figures show year-on-year increase or decrease.)

Net Sales

Operating Income

Ordinary Income

Full year
40,000
14.4%
1,800
67.3%
2,100 102.7%(Note) Revisions to the most recently announced performance forecast: No

Net Income
1,200

86.2%

Net Income
per Share
(Yen)
24.89

Notes:(1) Transfers of major subsidiaries during the period (transfers of specified subsidiaries accompanied by changes
in the scope of consolidation): No(2) Application of Special Accounting Practices for the Preparation of Quarterly Consolidated Financial
Statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatement(a) Changes in accounting policies in accordance with revisions to accounting standards and related practices: Yes(b) Any changes other than (a) above: No(c) Changes in accounting estimates: No(d) Restatement: No(4) Shares outstanding (common stock)(a) Number of shares outstanding as of the end of the period (including treasury stock):February 28, 2015: 48,675,000 shares
May 31, 2014: 48,675,000 shares(b) Number of shares of treasury stock as of the end of the period:
February 28, 2015: 481,694 shares
May 31, 2014: 474,527 shares(c) Average number of shares for the period (fiscal year-to-date):
First Three Quarters, FY2014: 48,196,049 sharesFirst Three Quarters, FY2013: 48,206,926 shares
Statements Regarding the Implementation Status of Quarterly Review Procedure
This quarterly financial report is not subject to quarterly review procedures as prescribed under the Financial
Instruments and Exchange Act. As of the date of quarterly financial report disclosure, quarterly financial report
review procedures pursuant to the aforementioned Act have not been completed.
Disclaimer concerning the Proper Use of Business Results Forecasts and Other Relevant Specific Items
The forecasts of business results presented in this document are based on management’s assumptions and beliefs inlight of currently available information. Toyo Denki Seizo K.K. (hereinafter Toyo Denki) cautions readers that due
to a variety of factors actual results may differ materially from forecasts. Please refer to “Explanation ofConsolidated Performance Forecast and Other Forward-looking Information” in Accompanying Materials on page
3 for details relating to operating results forecasts.

Accompanying Materials Contents
1.

Qualitative Information regarding Quarterly Financial Results ...................................................................... 2(1) Explanation of Business Results ..................................................................................................................... 2(2) Explanation of Financial Position ................................................................................................................... 3(3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information ...................... 3
2.
Items regarding Summary Information (Notes) .............................................................................................. 4(1) Transfer of Major Subsidiaries during the Period ........................................................................................... 4(2) Application of Special Accounting Practices for the Preparation of
Quarterly Consolidated Financial Statements ................................................................................................. 4(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements...... 4
3.
Quarterly Consolidated Financial Statements ................................................................................................. 5(1) Quarterly Consolidated Balance Sheets .......................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Comprehensive Income .................................................. 7(3) Notes to Quarterly Consolidated Financial Statements................................................................................... 9(Notes on Going Concern Assumptions) ................................................................................................... 9(Notes on Significant Fluctuations in Shareholders’ Equity) .................................................................... 9(Segment Information) .............................................................................................................................. 94.
Supporting Materials for the Financial Results ............................................................................................. 11(1) The Status of Production, Orders, and Sales ................................................................................................. 11-1-

1. Qualitative Information regarding Quarterly Financial Results(1) Explanation of Business Results
During the first three quarters (June 1, 2014 to February 28, 2015) of fiscal 2014, the fiscal year ending May 31,
2015, the economy in Japan saw the remaining effects of the increase in the consumption tax rate on personal
consumption, and subdued conditions persisted for capital expenditures. However, a recovery trend continued andsigns of a recovery in demand were seen due to improvement in the corporate and personal income environment,
backed by the economic policies and monetary easing policy of the current administration. Meanwhile, with regard
to overseas, although economic trends in Europe were weak, the recovery trend of the economy in the United States
continued, and China secured growth amid a decelerating growth rate, leading to a high level of investment ininfrastructure. These overseas conditions are expected to continue for the foreseeable future.
Under these circumstances, the Toyo Denki Group has been working in unison to thoroughly strengthen its
management foundation and drastically improve its corporate value according to “Next 100 : Beyond 100 years,”
the medium-term management plan launched during fiscal 2014.
The Toyo Denki Group’s performance in the first three quarters of fiscal 2014, the first fiscal year of the plan,
was as follows.
Orders received decreased 1.5% compared with the corresponding period of the previous fiscal year to 29,263
million yen. This overall result reflected a decrease in orders received in the Transportation Systems segment andthe Information Equipment Systems segment, despite a surge in orders in the Industrial Systems segment.
Net sales increased 17.7% year on year to 28,856 million yen. Despite a decrease in the Information Equipment
Systems segment, this result reflected a significant surge in the Transportation Systems segment outside Japan aswell as a slight increase in the Industrial Systems segment.
From a profit perspective, operating income increased 164.2% compared with the corresponding period of theprevious fiscal year to 913 million yen, mainly due to higher revenues in the Transportation Systems segment andthe effects of improved profitability in the Industrial Systems segment. Ordinary income grew by 259.5% to 1,253
million yen as a result of recording foreign exchange gains from a progressively weaker yen, and net income
increased by 175.4% to 727 million yen.
Looking at the overall nature and structure of the Group’s business activities, sales are generally concentrated in
the fourth quarter of each fiscal year. As a result, quarterly consolidated operating results are impacted by seasonal
factors.
Information by business segment is presented as follows.
Transportation Systems
Orders received were down both in Japan and outside Japan, leading to a decrease of 3.2% compared with thecorresponding period of the previous fiscal year to 19,269 million yen.
Net sales in this segment showed a significant upturn outside Japan, totaling 19,878 million yen, a 29.4%
increase from the corresponding period of the previous year.
Segment profit increased by 38.9% compared with the corresponding period of the previous fiscal year to 2,107
million yen, which was attributable to contributions from increased revenue outside Japan.
Industrial Systems
While orders received for capital expenditure such as printing equipment and processing equipment were downslightly, orders related to infrastructure increased, causing a 9.9% increase compared with the corresponding periodof the previous fiscal year to 9,162 million yen.
Net sales increased 1.1% year on year to 8,096 million yen primarily as sales of testing equipment for
automotive development increased, despite a decrease in sales related to processing equipment.
Segment profit totaled 511 million yen, an increase of 70.2% compared with the corresponding period of theprevious fiscal year due to effect of improved profitability.

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Information Equipment Systems
Orders received in this segment decreased 43.5% to 826 million yen, primarily due to declines in orders for railway
station operating equipment and remote monitoring systems.
Net sales in this segment decreased 23.2% year on year to 876 million yen, owing to the same reasons as above.
Segment profit was 79 million yen, a decrease of 23.7% compared with the corresponding period of theprevious fiscal year.
Note: Net sales data by business segment represents sales to third parties and is exclusive of inter-segment sales andtransfers.
(2) Explanation of Financial Position
Total assets as of February 28, 2015 stood at 52,053 million yen, an increase of 7,301 million yen compared withthe end of the previous fiscal year. Despite a 905 million yen decrease in cash and cash equivalents, the increase intotal assets was largely attributable to increases in trade notes and accounts receivable of 2,405 million yen, andinvestment securities of 5,656 million yen, which was the result of an increase in the market price of held listed
securities.
Total liabilities amounted to 28,053 million yen, an increase of 2,650 million yen compared with the previous
fiscal year end. Despite a 672 million yen decrease in net defined benefit liability, a 427 million yen decrease inreserve for employees’ bonuses, and a 391 million yen decrease in accrued expenses, the increase in total liabilities
was largely attributable to increases in deferred tax liabilities (included in other of long-term liabilities) of 2,258
million yen, borrowings of 1,015 million yen, and electronically recorded obligations – operating of 555 million
yen.
Net assets stood at 24,000 million yen, 4,650 million yen higher than the balance as of the previous fiscal year
end. Major movements were a 3,656 million yen increase in unrealized holding gain on available-for-sale securities
and an 808 million yen increase in retained earnings.
(3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information
We have made no revision to the “Consolidated Performance Forecast for Fiscal 2014” announced on January 14,
2015.

-3-

2. Items regarding Summary Information (Notes)(1) Transfer of Major Subsidiaries during the Period
Not applicable(2) Application of Special Accounting Practices for the Preparation of Quarterly Consolidated Financial Statements
Not applicable(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements
Changes in Accounting Policies(Application of Accounting Standard for Retirement Benefits)
Provisions stated in Section 35 of the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26 of
May 17, 2012; hereinafter referred to as the “Retirement Benefits Accounting Standard”) and Section 67 of the“Guidance on the Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25 of May 17, 2012;
hereinafter referred to as the “Guidance on Retirement Benefits”) have been applied from the first quarter of fiscal
2014. Along with this application, calculation methods for retirement benefit obligations and service cost have beenrevised. Furthermore, the method for determining the portion of projected benefit obligation attributed to periods
was changed from the straight-line method to the benefit formula basis. In addition, the method of determining thediscount rates applied in the calculation of projected benefit obligation was changed from the method using thenumber of years approximate to the average remaining service period of employees to the method using the single
weighted average discount rate that reflects the estimated period and amount of benefit payment in each period.
In accordance with the transitional treatment prescribed in Section 37 of the Retirement Benefits AccountingStandard, the Company applied the Accounting Standard for Retirement Benefits at the beginning of the first threequarters of fiscal 2014, and the effect of the accounting change in retirement benefit obligations and service cost
was reflected in retained earnings.
As a result, net defined benefit liability decreased by 576 million yen, and retained earnings increased by 370
million yen at the beginning of the first three quarters of fiscal 2014. The impact on operating income, ordinary
income and income before income taxes and minority interests recorded for the first three quarters of fiscal 2014 isimmaterial.

-4-3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of May 31, 2014

End of the First Three Quarters of
Fiscal 2014 (February 28, 2015)

Cash and cash equivalents

2,997

2,091

Trade notes and accounts receivable

12,805

15,211

Products and finished goods

1,483

1,432

Work in process

3,459

3,515

Raw materials and stored goods

2,158

2,180

Other

684

927

Allowance for doubtful accounts

(34)

(41)

23,55525,317

AssetsCurrent assets

Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

7,075

7,123

Accumulated depreciation(4,228)(4,398)

Buildings and structures, net

2,847

2,725

6,679

6,767

(5,770)(5,894)

908

873

289

289

Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment

63

125

3,171

3,244

(2,624)(2,740)

547

504

4,656

4,518

230

208

Intangible assets
Software
Other

37

73

Total intangible assets

268

281

Investment securities

14,262

19,919Other

Investments and other assets
2,022

2,029

Allowance for doubtful accounts

(12)

(12)

Total investments and other assets

16,273

21,93521,197

26,73644,752

52,053

Total fixed assets
Total assets-5-

(Millions of yen)
As of May 31, 2014

End of the First Three Quarters of
Fiscal 2014 (February 28, 2015)

5,285

5,301

Liabilities
Current liabilities
Trade notes and accounts payable

—

555

1,987

2,059

Income taxes payable

374

329

Consumption and other taxes payable

180

112

Accrued expenses

3,792

3,400

Advances received

292

457

Deposits received

228

229

Reserve for directors’ bonuses

28

21

Reserve for employees’ bonuses

915

487

Reserve for order losses

129

395

Electronically recorded obligations - operating
Short-term debt

281

310

13,496

13,660

6,934

7,878

Long-term payables

145

143

Allowance for environmental development

43

43

4,044

3,372

737

2,955

11,906

14,392

25,402

28,053

Capital stock

4,998

4,998

Capital surplus

3,177

3,177

Retained earnings

7,510

8,319

Other
Total current liabilities
Long-term liabilities
Long-term debt

Net defined benefit liability
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity

Treasury stock
Total shareholders’ equity

(167)

(170)

15,51916,324

3,989

7,645

(26)

—

Accumulated other comprehensive income
Unrealized holding gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments

165

202

Remeasurements of defined benefit plans

(298)

(172)

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

-6-

3,830

7,675

19,35024,00044,752

52,053

(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income for the First Three Quarters of Fiscal 2014)(Millions of yen)First Three Quarters, FY2013
First Three Quarters, FY2014(June 1, 2013 to February 28, 2014) (June 1, 2014 to February 28, 2015)
Net sales

24,511

28,856

Cost of sales

19,01822,243Gross profit

5,492

6,612

Selling, general and administrative expenses

5,147

5,699

345

913

Interest income

03

Dividend income

Operating income
Non-operating income

167

202

Life insurance dividend income

36Foreign exchange gains

17

258

Miscellaneous income

15

24

Total non-operating income

204

494

132

104

57

9

Non-operating expenses
Interest expense
Equity in loss of unconsolidated subsidiaries andaffiliates
Loss on disposal of fixed assets
Miscellaneous loss

5

1

4

38

201

154

348

1,253

Gain on sales of fixed assets—

12

Total extraordinary income

—

12

348

1,266

Current

233

550

Deferred

(148)

(10)

Total income taxes

84

539

Income before minority interests

264

727

Net income

264

727

Total non-operating expenses
Ordinary income
Extraordinary income

Income before income taxes and minority interests
Income taxes:-7-

(Quarterly Consolidated Statements of Comprehensive Income for the First Three Quarters of Fiscal 2014)(Millions of yen)First Three Quarters, FY2013
First Three Quarters, FY2014(June 1, 2013 to February 28, 2014) (June 1, 2014 to February 28, 2015)
Income before minority interests

264

727

Other comprehensive income
Unrealized holding gain (loss) on available-for-salesecurities
Deferred gains or losses on hedges

459

3,656

—

26

Foreign currency translation adjustments

18

16

Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates towhich the equity method is applied
Total other comprehensive income

—

126

100

19

578

3,845

842

4,572

Owners of the parent

842

4,572

Minority interests——

Comprehensive income
Comprehensive income attributable to:-8-(3) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Notes on Significant Fluctuations in Shareholders’ Equity)
Not applicable.
(Segment Information)(a) The First Three Quarters of Fiscal 2013 (June 1, 2013 to February 28, 2014)
Information regarding Net Sales and Income (Loss) by Reporting Segment
Reporting Segment(Millions of yen)AmountRecorded on
Adjustment
Quarterly
Amount2
Consolidated
Statement of
Income3

Transportation
Systems

Industrial
Systems

Information
Equipment
Systems

Other1

Total

Sales to third parties

15,355

8,010

1,141

4

24,511—

24,511

Inter-segment sales
and transfers

26

1

—

366

394

(394)

—

Net sales

Total
15,3828,011
1,141
371 24,906(394)
24,511
Segment profit
1,517
300
103
29
1,951
(1,605)345
Notes:
1. The “Other” segment includes operations not included in reporting segments such as the dispatch of temporary
staff.
2. The segment profit adjustment amount is a loss of 1,605 million yen. This is comprised of an elimination ofinter-segment sales and transfer amount of 2 million yen and corporate expenditure (a loss of 1,608 million
yen) that is not allocated to each reporting segment. Corporate expenditure is primarily comprised of selling,
general and administrative expenses as well as research and development costs that are not allocated to eachreporting segment.
3. Segment profit has been adjusted with operating income recorded under the quarterly consolidated
statement of income.

-9-(b) The First Three Quarters of Fiscal 2014 (June 1, 2014 to February 28, 2015)
Information regarding Net Sales and Income (Loss) by Reporting Segment
Reporting Segment(Millions of yen)AmountRecorded on
Adjustment
Quarterly
Amount2
Consolidated
Statement of
Income3

Transportation
Systems

Industrial
Systems

Information
Equipment
Systems

Other1

Total

Sales to third parties

19,878

8,096

876

4

28,856—28,856

Inter-segment sales
and transfers

31

0

—

435

467

(467)

—

Net sales

Total
19,9098,097
876
439 29,323(467)
28,856
Segment profit
2,107
511
79
41
2,738
(1,825)913
Notes:
1. The “Other” segment includes operations not included in reporting segments such as the dispatch of temporary
staff.
2. The segment profit adjustment amount is a loss of 1,825 million yen. This is comprised of an elimination ofinter-segment sales and transfer amount of 1 million yen and corporate expenditure (a loss of 1,824 million
yen) that is not allocated to each reporting segment. Corporate expenditure is primarily comprised of selling,
general and administrative expenses as well as research and development costs that are not allocated to eachreporting segment.
3. Segment profit has been adjusted with operating income recorded under the quarterly consolidated
statement of income.

- 10 -

4. Supporting Materials for the Financial Results(1) The Status of Production, Orders, and Sales(a) Production Status
First Three Quarters, FY2013(June 1, 2013 to February 28, 2014)
Business segment
Millions of yen
Share (%)
Transportation Systems
15,313
65.1
Industrial Systems
7,370
31.3
Information Equipment
836
3.6
Systems
Other
—
—
Total
23,520100.0
Notes:
1. Amounts are based on sales prices.
2. Amounts are exclusive of consumption and other taxes.
(b) Status of Orders Received
First Three Quarters, FY2013(June 1, 2013 to February 28, 2014)
Business segment
Orders Received
Balance(Millions of yen)
(Millions of yen)Transportation Systems
19,90422,604
Industrial Systems
8,337
5,083
Information Equipment
1,463
718
Systems
Other
4
—
Total
29,71028,405
Notes:
1. Amounts are based on sales prices.
2. Amounts are exclusive of consumption and other taxes.

First Three Quarters, FY2014(June 1, 2014 to February 28, 2015)
Millions of yen
Share (%)
19,989
70.6
7,778
27.5
526

1.9

—
28,294—100.0

First Three Quarters, FY2014(June 1, 2014 to February 28, 2015)
Orders Received
Balance(Millions of yen)
(Millions of yen)
19,26925,039
9,162
5,994
826

190

4
29,263—31,224(c) Sales Status
Business segment

First Three Quarters, FY2013(June 1, 2013 to February 28, 2014)
Millions of yen
Share (%)
15,355
62.6
8,010
32.7

First Three Quarters, FY2014(June 1, 2014 to February 28, 2015)
Millions of yen
Share (%)
19,878
68.9
8,096
28.1

Transportation Systems
Industrial Systems
Information Equipment
1,141
4.7
876
3.0
Systems
Other
4
0.0
4
0.0
Total
24,511
100.0
28,856100.0
Notes:
1. Amounts are exclusive of consumption and other taxes.
2. Looking at the overall nature and structure of the Group business activities, sales are generally concentrated in
the fourth quarter of each fiscal year. As a result, quarterly consolidated operating results are impacted byseasonal factors.

- 11 -