Consolidated Basis Results of the First Quarter for Fiscal 2020
(April 1, 2020 – June 30, 2020)
August 4, 2020
TOPY INDUSTRIES, LIMITED
Stock listing: Tokyo, Nagoya stock exchanges
7231
URL: http://www.topy.co.jp/en/index.html
Nobuhiko Takamatsu, Representative Director , 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: August 7, 2020
Scheduled date for dividend payment:‒
Preparation of supplementary explanatory materials: No
Holding of quarterly financial results meeting:No
Registered Company name:
Code number:
Representative:
Contact:(Figures of less than ¥1 million have been omitted)
1. Consolidated Financial and Operating Results of the First Quarter for Fiscal 2020 (April 1, 2020 – June 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

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

45,974
69,631%Million yen%(34.0)(2,290)–(2,282)–7.7
1,140(56.1)
1,164(58.3)First Quarter of Fiscal 2020-¥2,656 million–%
First Quarter of Fiscal 2019
¥1,674 million 30.0%%

Million yen%(2,238)762–(59.2)

Profit per shareafter full dilution

Profit per share
YenFirst Quarter of Fiscal 2020
First Quarter of Fiscal 2019

Million yen

Yen

–
–

(95.30)32.45(2) Consolidated Financial Position
Total assets

Net assets

Million yen

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

Ratio of shareholders’equity to total assets

Million yen

Net assets per share%

247,232
101,143
254,659
103,800
First Quarter of Fiscal 2020
¥100,172 million

Yen

40.5
4,263.74
40.3
4,372.66
Fiscal 2019 ¥102,732 million

2. Dividends
Dividends per share
End of first quarter
Fiscal 2019
Fiscal 2020

End of second
quarter

End of third quarterEnd of fiscal year

Full fiscal year

Yen

Yen

Yen

Yen

Yen

–
–

40.00

–

0.00

40.00

–

–

–

Fiscal 2020 (Forecasts)
0.00
Note: Whether changes to the latest dividend forecasts have been made: Yes
End of fiscal year dividend forecast for fiscal 2020 is currently pending.

For details, refer to “Announcement Regarding the Adjustment of Financial Forecast and Dividends Forecast for Fiscal YearEnding March 31, 2021”–1–

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

Second Quarter of Fiscal
105,000 (23.5)(5,000)–(5,000)2020 (Cumulative)
Fiscal 2020
225,000 (14.5)(4,000)–(2,500)Note: Whether changes to the latest forecasts for consolidated figures have been made: Yes%

Million yen

%

Yen

–

(5,000)–(212.82)–(4,000)–(170.26)

For details, refer to “Announcement Regarding the Adjustment of Financial Forecast and Dividends Forecast for Fiscal Year Ending
March 31, 2021”–2–

* NOTE(1) Changes in the State of Material Subsidiaries during the Period: None
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)
First Quarter of Fiscal 2020
24,077,510 sharesFiscal 2019(b) Number of treasury stock at the end of the period
First Quarter of Fiscal 2020
583,434 sharesFiscal 2019(c) Average number of shares issued during the period
First Quarter of Fiscal 2020
23,494,156 sharesFirst Quarter of Fiscal 201924,077,510 shares
583,315 shares
23,495,374 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” on page 6.

–3–

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

5(1) Explanation Regarding Consolidated Operating Results ....................................................................................................

5(2) Explanation Regarding Financial Position ..........................................................................................................................

6(3) Explanation Regarding Future Estimate Information Such as Consolidated Financial Performance Estimates..................

6

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

7(1) Quarterly Consolidated Balance Sheets ..............................................................................................................................

7(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ..........

9

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

9

Quarterly Consolidated Statements of Comprehensive Income
First Quarter Consolidated Cumulative Accounting Term ....................................................................................... 10(3) Notes Regarding Quarterly Consolidated Financial Results ............................................................................................... 11(Note Related to Going Concern Assumption) ................................................................................................................. 11(Note on Significant Changes in the Amount of Shareholders’ Equity) ........................................................................... 11(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements) .................. 11

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 August 4th, 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.

–4–

1. Qualitative Information Regarding Results of the First Quarter for Fiscal 2020
(1) Explanation Regarding Consolidated Operating Results
During the first quarter 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. Although some
economic activities have since restarted, the outlook of the world economy is uncertain amid concerns such as prolonged
effects of COVID-19 and the aggravation of the U.S.-China trade friction etc. As in the global economy, the Japanese economy
continued to face extremely difficult conditions.
Under these circumstances, the Group has established a company-wide management reform committee and has been
continuously striving to modify its production systems to promptly respond to a sharp decrease in demand and reduce costs
through emergency measures to improve earnings such as cutting head office expenses. In addition, the Group has worked tosecure funds in preparation for sudden changes in its business environment by controlling capital spending and setting
commitment lines etc. The Group prioritized raising its earning power and achieving Group synergy, which are key themes in
the medium-term management plan, Growth & Change 2021, and accelerated structural reforms through optimization of theGroup’s production systems in the Automotive & Industrial Machinery Components Business.
The financial results for the first quarter of the fiscal year under review include consolidated net sales of ¥45,974 million (down
34.0% year on year) due to substantially low sales volume in the Automotive & Industrial Machinery Components Business etc.,
which was severely affected by an economic slowdown both in Japan and overseas. Operating result was a loss of ¥2,290
million (compared to operating profit of ¥1,140 million in the same period of the previous year), and ordinary result was a lossof ¥2,282 million (compared to ordinary profit of ¥1,164 million in the same period of the previous year). Loss attributable toowners of parent was ¥2,238 million (compared to profit attributable to owners of parent of ¥762 million in the same period of
the previous year).
Performance by Segment(Steel Business)
In the electric furnace industry, domestic demand for steel materials declined among both construction and manufacturing
companies due to stagnant economic activity caused by the COVID-19 pandemic. Meanwhile, the price of steel scrap, a key raw
material, declined year on year.
Given these circumstances, the Group implemented cost reduction through emergency measures to raise earnings and worked tooffset the fall in domestic demand by export. The selling prices of steel materials decreased, however, and the difference fromthe purchasing price of steel scrap decreased. As a result, net sales declined to ¥15,212 million (down 20.2% year on year) andoperating profit fell to ¥671 million (down 34.2% year on year).
(Automotive & Industrial Machinery Components Business)
In the automotive industry, production was reduced considerably in many countries due to the COVID-19 pandemic. While
signs of recovery appeared in China, production severely declined in Japan and North America. Likewise, in the construction
machinery industry, production of hydraulic shovels severely declined except in China, and the production of mining machinery
globally remained at a low level.
Given these challenging conditions, the sales volume of all productions, including automobile wheels and parts for theundercarriages of construction machinery, dropped significantly despite progress made in structure reform and cost reduction
through emergency measures to improve earnings. As a result, net sales totaled ¥27,927 million (down 40.7% year on year) andoperating loss stood at ¥1,826 million (compared to operating profit of ¥1,332 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 the stable supplyof electricity, however, net sales came to ¥1,353 million (down 26.5% year on year) owing to a decrease in selling prices. In
addition, suspension of operation for regular repair contributed to operating loss, which totaled ¥184 million (compared tooperating loss of ¥206 million in the same period of the previous year).
(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¥1,481 million (down 8.7% year on year) and operating profit was ¥187 million (down 36.4% year on year) due to a fall in sales
from sports club operation and other businesses, which was caused by COVID-19.

–5–

(2) Explanation Regarding Financial Position
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at ¥247,232 million, a decrease of¥7,427 million from the end of the previous consolidated fiscal year. Primary factors for the decrease included a ¥6,947 million
decrease in notes and accounts receivable - trade.
Total liabilities were ¥146,088 million, or a decrease of ¥4,770 million compared with the end of the previous consolidated
fiscal year. This was caused mainly by a decrease of ¥4,622 million in notes and accounts payable - trade.
Total net assets came to ¥101,143 million, or a decrease of ¥2,656 million from the end of the previous consolidated fiscal year.
This was mainly due to a decrease of ¥2,238 million in retained earnings.
(3) Explanation Regarding Future Estimate Information Such as Consolidated Financial Performance Estimates
Currently, economic activity is gradually resuming in China, the U.S., Europe, and other regions, while the outlook for the
global economy is uncertain amid concerns such as the prolongation of COVID-19 and escalating tension between the U.S. andChina. In Japan, economic activity has partially resumed; however, the Group expects that a considerable amount of time will be
required for the economy to be fully normalized.
The Group has yet to establish consolidated financial forecasts for the fiscal year ending March 2021 due to the difficulty inreasonably calculating the forecasts as a result of COVID-19. It has decided, however, to announce forecasts by calculating thembased on information currently available to the Group. For details, refer to the “Announcement Regarding the Adjustment of
Financial Forecast and Dividends Forecast for Fiscal Year Ending March 31, 2021” released on August 4, 2020.

–6–

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–7–

As of June 30, 2020

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

22,16437,817
20,531
5,835
14,2756,873△28
107,469

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

92,332△63,000
29,331
209,478△163,412
46,065
15,2085,094△3,761
1,333
5,531
43,603△41,526
2,076
99,547

4,637
4,637

4,416
4,416

24,774
479
1,360
295
7,642
△50
34,500139,584
254,659

26,083
479
1,463
295
7,531
△54
35,798
139,762
247,232(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–8–

As of June 30, 2020

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

19,94011,50723,734
5,500
335
317
14,50475,83927,30028,486572
4,649

22,30026,630
513
4,942

175

194

39

45

46

25

290
12,285355
2,602
76,805150,858327
12,453357
2,458
70,248146,088

20,98318,60661,444△1,711
99,323

20,98318,60659,205△1,711
97,083

5,440

6,346

△5
△1,401
△625
3,409
1,068
103,800
254,659△4△2,640
△612
3,088
971
101,143
247,232(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(First Quarter Consolidated Cumulative Accounting Term)(Millions of yen)Three months ended
June 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
methodOther
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
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent–9–

Three months ended
June 30, 2020

69,63160,018
9,613
8,473
1,140

45,974
41,2574,716
7,006△2,290

22
374

25
345

120

104

144
661

167
642

154
341
140
636
1,164

128
321
185
635
△2,282

11
－
11

0
1
1

0
17
17
1,158
371
787
25
762

0
45
45
△2,326△98△2,22810△2,238(Quarterly Consolidated Statements of Comprehensive Income)(First Quarter Consolidated Cumulative Accounting Term)(Millions of yen)Three months ended
June 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– 10 –

Three months ended
June 30, 2020
787

△2,228

142
△3
639
36

907
1
△1,222
12

71

△127

887
1,674

△428
△2,656

1,625△2,55949△97

(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 first quarter under review, by profit before
income taxes for the first quarter.

– 11 –