Consolidated Basis Results of the Second Quarter for Fiscal 2020
(April 1, 2020 - September 30, 2020)
November 5, 2020
TOPY INDUSTRIES, LIMITED
Stock listing: Tokyo, Nagoya stock exchanges
7231
URL: http://www.topy.co.jp/en/index.html
Nobuhiko Takamatsu, President and CEO
Shuichi Tachibana, Operating Officer, General Manager, General Affairs Department
Telephone: 03-3493-0777 / (Overseas) 81-3-3493-0777
Scheduled date for submission of securities report: November 12, 2020
Scheduled date for dividend payment:
Preparation of supplementary explanatory materials: Yes
Holding of quarterly financial results meeting:Yes (for institutional investors and analysts)
Registered Company name:
Code number:
Representative:
Contact:(Figures of less than ¥1 million have been omitted)
1. Consolidated Financial and Operating Results of the Second Quarter for Fiscal 2020 (April 1, 2020 - September 30, 2020)(1) Consolidated Operating Results (Cumulative)(Percentage figures are changes from the same period of the previous fiscal year)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen

Second Quarter of Fiscal 2020
Second Quarter of Fiscal 2019
(Note) Comprehensive income:

97,419137,196%

Million yen%(29.0)(4,231)(3,927)1.5
2,325(30.6)
1,552(54.1)
Second Quarter of Fiscal 2020 -¥3,884 million-%
Second Quarter of Fiscal 2019
¥999 million -58.5%%(4,226)858(61.8)

Basic earnings per share

Million yen%

Diluted earnings
per share

Yen

Second Quarter of Fiscal 2020
Second Quarter of Fiscal 2019

Million yen

Yen(179.89)36.52-(2) Consolidated Financial Results
Total assets

Net assets

Million yen

Second Quarter of Fiscal 2020
Fiscal 2019(For reference) Shareholders’ equity:

Capital adequacy ratio

Million yen

Net assets per share%

248,720
99,891
254,659
103,800
Second Quarter of Fiscal 2020 ¥98,912 million

Yen

39.8
4,209.44
40.3
4,372.66
Fiscal 2019 ¥102,732 million

2. Dividends
Dividends per share
Base date

End of second
quarter

End of first quarter

Fiscal 2019
Fiscal 2020

End of third quarterEnd of fiscal year

Full fiscal year

Yen

Yen

Yen

Yen

Yen

-

40.00
0.00

-

0.00

40.00

-

20.00

20.00

Fiscal 2020 (Forecasts)(Note) Whether changes to the latest dividend forecasts have been made: Yes

3. Consolidated Financial Forecasts for Fiscal 2020 (April 1, 2020 - March 31, 2021)(Percentage figures are changes from the same period of the previous fiscal year)
Profit attributable toProfit per
Net sales
Operating profit
Ordinary profit
owners of parent
shareMillion yen%

Million yen%

Million yen

Fiscal 2020
217,000(17.6)(2,500)(1,500)(Note) Whether changes to the latest forecasts for consolidated figures have been made: Yes%

Million yen(2,500)%-Yen(106.39)

* NOTE(1) Changes in the State of Material Subsidiaries during the Period: No
Newly included: - (Name) Excluded: -(Name) -(2) Adoption of Special Accounting Methods for the Preparation of Quarterly Consolidated Financial Statements: Yes
Note: For details, please refer to “Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements.”(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements(a) Changes in accounting principles accompanying the amendment of accounting standards: None(b) Changes other than those in (a) above: None(c) Changes in accounting estimates: None(d) Retrospective restatements: None
(4) Number of Shares Issued (Common shares)(a) Number of shares issued at the end of the period (including treasury stock)
Second Quarter of Fiscal 2020
24,077,510 sharesFiscal 2019(b) Number of treasury stock at the end of the period
Second Quarter of Fiscal 2020
579,674 sharesFiscal 2019(c) Average number of shares issued during the period
Second Quarter of Fiscal 2020
23,495,147 shares
Second Quarter of Fiscal 201924,077,510 shares
583,315 shares
23,495,180 shares* These consolidated financial results are not included in the scope of quarterly audits by certified public accountants or audit
corporations.
* Explanation of the Appropriate Use of Performance Forecasts and Other Related Items(Caution concerning future descriptions etc.)
The above estimate has been compiled based on information available at the time this disclosure was made. The actual earnings
are subject to change from the estimated values due to various factors. For assumed conditions underlying the earnings forecast
and cautionary statements in using the earnings forecast, please refer to “Explanation Regarding Future Estimate Information
Such as Consolidated Financial Performance Estimates.”(Method for acquiring supplementary briefing material on quarterly financial results)
The Company plans to hold a briefing session for institutional investors and securities analysts. A video of this briefing session
and briefing material will be posted on the Company’s website promptly after the briefing session.

Index of Attached Documents
1. Qualitative Information Regarding Results of the Second Quarter for Fiscal 2020..................................................................

2(1) Explanation Regarding Consolidated Operating Results ....................................................................................................

2(2) Explanation Regarding Financial Status .............................................................................................................................

2(3) Explanation Regarding Future Estimate Information such as Consolidated Financial Performance Estimates ..................

3

2. Quarterly Consolidated Financial Statements and Important Notes .........................................................................................

4(1) Quarterly Consolidated Balance Sheets ..............................................................................................................................

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ..........

6

Quarterly Consolidated Statements of Income
Second Quarter Consolidated Cumulative Accounting Term....................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income
Second Quarter Consolidated Cumulative Accounting Term....................................................................................

7(3) Notes Regarding Quarterly Consolidated Financial Results ...............................................................................................

8(Note Related to Going Concern) .....................................................................................................................................

8(Note on Significant Changes in the Amount of Shareholders’ Equity)............................................................................

8(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements) ..................

8

Note: This document has been translated from the original Japanese version for reference purposes only. In the event of any
discrepancy between this translated document and the original Japanese version, the original shall prevail.
The original disclosure in Japanese was released on November 5, 2020 at 13:30 (GMT+9).
The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from thetranslation.

-1-

1. Qualitative Information Regarding Results of the Second Quarter for Fiscal 2020
(1) Explanation Regarding Consolidated Operating Results
During the first half of the consolidated fiscal year under review, the global economy suffered a severe downturn caused by
restrictions on economic activity imposed in countries around the world in response to the COVID-19 pandemic at the
beginning of the fiscal year. Although some economic activities are now restarting, the economy faced extremely difficult
conditions due to the prolonged impact of COVID-19. The Japanese economy likewise declined sharply due in part to a
slowdown in consumer spending and exports and a significant fall in industrial production.
Under these circumstances, the Group has focused on continuous production and stable supply to customers while ensuringthat COVID-19 preventive measures are taken. The Group has established a company-wide management reform committee andhas been taking steps to modify its production systems to promptly respond to a sharp decrease in demand and reduce all
expenses as part of its emergency measures to raise its earning power. In addition, the Group has worked to optimize its
production system in the Automotive & Industrial Machinery Components Business and implemented the development, sale,etc. of its original products in the Steel Business according to the medium-term business plan, Growth & Change 2021.
The financial results for the first half of the fiscal year under review include consolidated net sales of ¥97,419 million (down
29.0% year on year), largely due to a substantial decline in demand in the Automotive & Industrial Machinery Components
Business, which faced a severe business environment. The Group regrettably posted an operating loss of ¥4,231 million(compared to operating profit of ¥2,325 million in the same period of the previous year), and an ordinary loss of ¥3,927 million(compared to ordinary profit of ¥1,552 million in the same period of the previous year). The loss attributable to owners ofparent was ¥4,226 million (compared to profit attributable to owners of parent of ¥858 million in the same period of theprevious year).
Performance by Segment(Steel Business)
Demand for steel materials of manufacturing companies in the steel industry fell substantially and the production of crude
steel fell sharply from the volume in the same period of the previous year. In the electric furnace industry, the price of steel
scrap, a key raw material, began to rise and aggravated the situation.
Given these circumstances, the Group implemented cost reductions through emergency measures to raise earnings. It also
focused on efforts such as export and sale of steel materials to construction companies to maintain an adequate sales volume
amid the declining supply to the Automotive & Industrial Machinery Components. Selling prices remained low amid the
upward trend in steel scrap prices, however, and net sales declined to ¥32,825 million (down 11.2% year on year) while
operating profit fell to ¥671 million (down 68.6% year on year).
(Automotive & Industrial Machinery Components Business)
In the automotive industry, domestic production decreased significantly primarily due to a decline in consumer confidence,lower domestic sales of new cars caused in part by voluntary restraint of sales activities, and suspension of factory operation.
While signs of recovery appeared in China, production severely declined in the US and other countries owing largely to thesuspension of factory operations and reduced consumption. In the construction machinery industry also, production in the US,
Southeast Asia, and other regions remained low. Global production of mining machinery also decreased substantially.
Given these challenging conditions, the sales volume dropped significantly despite proceeding with consideration forstructural reforms of the Group’s businesses and cost cutting through emergency measures. As a result, net sales totaled¥57,996 million (down 37.1% year on year) and the operating loss stood at ¥3,176 million (compared to operating profit of¥1,993 million in the same period of the previous year).
(Power Business)
A challenging business environment continued in the power business due to suppression of coal fueled power generation
backed by global warming issues and intensifying price competition. Given these circumstances, the Group worked on thestable supply of electricity in line with its business plan. As a consequence, net sales came to ¥3,647 million (down 20.9% year
on year) and operating profit increased to ¥146 million (up 13.2% year on year) thanks to efforts such as controlling of repair
expenses.
(Others)
The Group operated civil engineering and construction business, real estate leasing including Topy-rec Plaza (Minami-suna,
Koto-ku, Tokyo) and a sports club, OSSO, and manufactured and sold synthetic mica and crawler robots. Net sales came to¥2,950 million (down 11.8% year on year) and operating profit was ¥273 million (down 54.7% year on year) due to a fall insales from sports club operation and other businesses, which was caused by COVID-19.
(2) Explanation Regarding Financial Status
Total assets at the end of the second quarter of the consolidated fiscal year under review stood at ¥248,720 million, a decreaseof ¥5,938 million from the end of the previous consolidated fiscal year. This was mainly due to decreases of ¥5,271 million innotes and accounts receivables.
Total liabilities were ¥148,829 million, or a decrease of ¥2,029 million compared with the end of the previous consolidated
fiscal year, primarily reflecting a decrease in notes and accounts payable of ¥2,998 million.
Total net assets came to ¥99,891 million, or a decrease of ¥3,909 million from the end of the previous consolidated fiscal year,
primarily reflecting a decrease in retained earnings of ¥4,226 million.

-2-(3) Explanation Regarding Future Estimate Information Such as Consolidated Financial Performance Estimates
While the global economy is expected to begin recovering through the resumption of economic activities, a full recovery fromthe severe impact of COVID-19 is like to take considerable time. Under these conditions, it is difficult to predict the future due
to uncertainties such as when COVID-19 will be under control course of the US-China conflict. The Group’s operating
environment, therefore, is like to remain highly uncertain.
As for the consolidated financial results for the fiscal year ending March 31, 2021 (April 1, 2020, through March 31, 2021),
the Group expects that net sales will be ¥217,000 million, operating loss will be ¥2,500 million, ordinary loss will be¥1,500 million, and loss attributable to the owners of parent will be ¥2,500 million, partially due to cost cuts, which is
expected to show some effect, while sales volumes of automobile wheels, parts for the undercarriages of construction
machinery, and steel materials remain at expected levels. For details, please refer to “Announcement Regarding the Adjustmentof the Consolidated Financial Forecast and Dividends Forecasts for Fiscal 2020” released today.

-3-2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of March 31, 2020
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-

As of September 30, 2020

23,811
44,76420,7085,529
14,0186,271△28115,074

23,17439,49317,805
5,818
14,335
7,121△54
107,693

92,392△62,551
29,841
209,235△162,259
46,976
15,256
5,141△3,625
1,515
4,778
43,460△41,383
2,076
100,445

92,580△63,343
29,236211,259△164,672
46,58615,1882,557△1,3271,230
6,043
43,636△41,623
2,013
100,298

4,637
4,637

4,278
4,278

24,774
479
1,360
295
7,642
△50

26,849
481
1,355
295
7,523
△54

34,500139,584
254,659

36,450141,027
248,720

(Millions of yen)
As of March 31, 2020
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of bonds payable
Lease obligations
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for corporate officers' retirement
benefits
Provision for share-based remuneration for
directors (and other officers)
Provision for retirement benefits for directors(and other officers)
Reserve for repairs
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-5-

As of September 30, 2020

24,562
12,687
15,495
5,500
433
502
14,872
74,053

21,563
11,406
22,649
5,500
266
570
14,841
76,79727,30028,486572
4,649

22,30028,541
451
5,168

175

212

39

36

46

27

290
12,285355
2,602
76,805150,858364
12,152356
2,419
72,032
148,829

20,98318,60661,444△1,711
99,323

20,98318,60657,218△1,703
95,104

5,440

6,852

△5
△1,401
△625
3,409
1,068
103,800
254,659△7△2,432
△603
3,808
978
99,891
248,720

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Second Quarter Consolidated Cumulative Accounting Term)(Millions of yen)Six months ended
September 30, 2019
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodSubsidies for employment adjustment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent-6-

Six months ended
September 30, 2020

137,196
117,927
19,268
16,943
2,325

97,41987,374
10,044
14,276△4,231

39
385

47
352

270

200

－
210
905

444
189
1,234

313
490
875
1,678
1,552

259
416
254
930
△3,927

15
－
15

14
17
32

0
108
1
109
1,457
578
879
21
858

1
87
－
88
△3,983250△4,234△7△4,226

(Quarterly Consolidated Statements of Comprehensive Income)(Second Quarter Consolidated Cumulative Accounting Term)(Millions of yen)Six months ended
September 30, 2019
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests-7-

Six months ended
September 30, 2020
879

△4,234

647
1
△345
△43

1,412
△2
△933
21

△140

△148

119
999

349
△3,884979△3,82719△57

(3) Notes Regarding Quarterly Consolidated Financial Results(Note Related to Going-Concern Assumption)
None(Note on Significant Changes in the Amount of Shareholders’ Equity)
None(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)
Tax expenses were calculated by multiplying the rationally estimated effective tax rate after applying tax effect accounting to
profit before income taxes for the consolidated fiscal year, which includes the current second quarter under review, by profit
before income taxes for the second quarter.

-8-