Consolidated Basis Results of the Third Quarter for Fiscal 2019
(April 1, 2019 – December 31, 2019)
February 4, 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: February 12, 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 Third Quarter for Fiscal 2019 (April 1, 2019 - December 31, 2019)(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

Third Quarter of Fiscal 2019
Third Quarter of Fiscal 2018
(Note) Comprehensive income:202,628
212,531%

Million yen%

Million yen

(4.7)
3,881
(27.1)
3,941
25.6
5,326
(17.9)
5,581
Third Quarter of Fiscal 2019
¥3,409 million
Third Quarter of Fiscal 2018
¥1,882 million%

Million yen(29.4)(19.2)
81.2%-76.7%

2,519
3,829

%

(34.2)(18.6)

Profit per shareafter full dilution

Profit per share
Yen

Yen

Third Quarter of Fiscal 2019107.22–
Third Quarter of Fiscal 2018
163.01–(Note) The figures indicated above reflect material adjustments made to the initial allocations of historical costs based on theprovisional accounting treatment used for business combinations.
(2) Consolidated Financial Results
Total assets
Million yen

Third Quarter of Fiscal 2019
Fiscal 2018
(For reference) Shareholders’ equity:

Ratio of shareholders’equity to total assets

Net assets
Million yen

Net assets per share%

273,249
113,143
284,198
112,362
Third Quarter of Fiscal 2019 ¥112,092 million

Yen

41.0
4,771.03
39.2
4,737.26
Fiscal 2018 ¥111,304 million

2. Dividends
Dividends per share
Base date

End of second
quarter

End of first quarter

Fiscal 2018
Fiscal 2019

End of third quarterEnd of fiscal year

Full fiscal year

Yen

Yen

Yen

Yen

Yen

–
–

20.00
40.00

–
–

70.00

90.00

20.00

60.00

Fiscal 2019 (Forecasts)(Note) Whether changes to the latest dividend forecasts have been made: No

3. Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2019 - March 31, 2020)(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
share%Million yen%

Fiscal 2019
270,000(5.7)
6,500 (13.4)
7,000 (25.2)(Note) Whether changes to the latest forecasts for consolidated figures have been made: No

Million yen%

Million yen%

Million yen

4,500(36.7)

Yen

191.53

* 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” on page 8 of
the attached documents.

(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 shares)
Third Quarter of Fiscal 201924,077,510 sharesFiscal 2018(b) Number of treasury shares at the end of the period
Third Quarter of Fiscal 2019
583,166 sharesFiscal 2018(c) Average number of shares issued during the period (cumulative)
Third Quarter of Fiscal 201923,495,011 shares
Third Quarter of Fiscal 201824,077,510 shares
582,007 shares
23,489,048 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 Informationsuch as Consolidated Financial Performance Estimates” on page 3 of the attached documents.

Index of Attached Documents
1. Qualitative Information Regarding Results of the Third Quarter for Fiscal 2019 ....................................................................

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

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

3(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
Third Quarter Consolidated Cumulative Accounting Term ......................................................................................

6

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

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

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

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 February 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.

–1–

1. Qualitative Information Regarding Results of the Third Quarter for Fiscal 2019(1) Explanation Regarding Consolidated Operating Results
During the first nine months of the fiscal year under review, the U.S. continued its economic recovery, while a sense ofstagnation in the global economy increased amid an increasingly apparent slowdown in the Chinese economy, chiefly due to theimpact of the U.S.-China trade tensions. The Japanese economy continued to see improvements in employment and personal
income; exports remained weak, however, causing industrial production to decline further and resulting in a slowdown,
particularly in the manufacturing industry.
Under these circumstances, the Group launched a medium-term management plan titled Growth & Change 2021 at the beginningof the fiscal year under review. The Group is diligently implementing measures such as the reduction of fixed costs by improving
production systems while placing priority on increasing its earning power and achieving Group synergy.
The financial results for the first nine months of the fiscal year under review include consolidated net sales of ¥202,628 million(down 4.7% year on year), operating profit of ¥3,881 million (down 27.1% year on year), ordinary profit of ¥3,941 million(down 29.4% year on year), and profit attributable to owners of parent of ¥2,519 million (down 34.2% year on year) as a resultof the significant impact of a fall in profit caused by a substantially lower sales volume of parts including for the undercarriagesof construction machinery, which more than offset an increase in profit thanks to improvement in metal trading spreads in thesteel business.
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials of both construction and manufacturing companies remained low. The
price of steel scrap, a key raw material, declined considerably from the beginning of the fiscal year.
Given these circumstances, the Group’s net sales declined to ¥56,104 million (down 5.7% year on year) due to a decrease in
selling prices, despite maintaining the sales volume at the same level. Operating profit increased to ¥3,560 million (up 558.2%
year on year) thanks to an increase in the difference between selling prices and the steel scrap price and continuous cost
reductions.
(Automotive & Industrial Machinery Components Business)
In the automotive industry, the domestic automobile production volume remained mostly unchanged from a year earlier, while
the production volumes in North America and China decreased. In the construction machinery industry, Japanese manufacturers’
production of hydraulic shovels dropped significantly year on year due to lower sales in China, Southeast Asia, and othercountries, inventory adjustment, and the impact of damage to supply chains caused by typhoons in Japan. Demand for mining
machinery declined primarily in Southeast Asia, reflecting lower resource prices.
Given these conditions, the sales volume of parts for the undercarriages of construction machinery and mining machinery wheels
decreased substantially, and those of other products also fell, despite an increase in the sales volume of aluminum wheels. As aresult, net sales totaled ¥134,647 million (down 4.0% year on year) and operating profit stood at ¥2,672 million (down 61.7%
year on year).
(Power Business)
The Group endeavored to maintain a stable supply of electricity in line with its business plan. Net sales came to ¥6,849 million(down 8.8% year on year) and operating profit amounted to ¥478 million (down 30.3% year on year), given the challenging
business environment amid lower demand and intensifying price competition.
(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¥5,026 million (down 4.6% year on year), due in part to the sluggish civil engineering and construction business, and operating
profit was limited to ¥953 million (down 17.8% year on year), primarily reflecting a rise in upfront expenses to increase
synthetic mica production. As part of the activities for new businesses, the Group worked to prepare for the commercial
production of synthetic mica used in cosmetics and other products at enhanced facilities, while focusing on the expansion ofoverseas and domestic sales. In the crawler robot segment, this year the Group will launch the sale of Sekisyu Crawler, a newtransportation support AGV created with the cooperation of NEC Corporation and Nippon Express.

–2–(2) Explanation Regarding Financial Status
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at ¥273,249 million, a decrease of¥10,949 million from the end of the previous consolidated fiscal year. This was mainly due to decreases of ¥6,016 million and¥4,559 million in notes and accounts receivable - trade and cash and deposits, respectively.
Total liabilities were ¥160,105 million, a decrease of ¥11,730 million compared with the end of the previous consolidated fiscal
year. This was primarily a result of a decrease in notes and accounts payable - trade of ¥8,078 million, a fall in electronicallyrecorded obligations - operating of ¥1,943 million, and a decline in short-term loans payable of ¥1,896 million.
Total net assets came to ¥113,143 million, an increase of ¥781 million from the end of the previous consolidated fiscal year.
Major factors included an increase in valuation difference on available-for-sale securities of ¥1,638 million and a decrease inforeign currency translation adjustment of ¥806 million.
(3) Explanation Regarding Future Estimate Information such as Consolidated Financial Performance Estimates
The concerns over a slowdown in the global economy are likely to be aggravated by the U.S.-China trade friction, which may be
prolonged, China’s economic slowdown, the worsening of the Middle East situation, and the spread of infection with the novel
coronavirus. In the Japanese economy, the Group’s business environment is also expected to continue to be exposed to the risk ofsetbacks amid concerns over a slowdown in the domestic economy, which is affected by the global economy.
Taking this situation into account, the Group will focus on increasing its earning power by maximizing Group synergy, chiefly
through the optimization of production systems, and by reducing costs in all areas. The Group will also continue to develop new
businesses and products to meet social needs and aim to achieve sustainable growth.
The full-year consolidated financial forecast has not been changed from the forecast announced on November 1, 2019. Thisdecision has been made based on information available to the Group as of the date of issuance of this release. The actual results
may vary from the forecast due to various factors that will arise in the future.

–3–

2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of March 31, 2019
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 December 31, 201929,671
59,81822,327
7,413
15,1697,417△66
141,751

25,11253,802
21,6696,064
14,265
7,103△61
127,955

93,166△62,636
30,530204,197△157,286
46,911
15,287
5,089△3,2901,799
3,696
42,392△40,630
1,761
99,986

94,566△64,177
30,388208,539△161,363
47,176
15,411
5,148△3,525
1,623
4,452
43,390△41,346
2,044
101,096

5,160
5,160

4,670
4,670

27,093
478
2,340
345
7,100
△58
37,300142,447
284,198

30,034
483
1,675
345
7,044
△55
39,527145,294273,249

(Millions of yen)
As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of bonds
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 December 31, 2019

31,88020,26819,414
5,000
878
2,170
18,29397,90723,801
18,325
17,517
5,000
574
422
17,08582,72722,80032,461888
1,093

27,80030,852
589
1,130

162

172

21

39

41

43

371
12,617373
3,096
73,929171,836262
13,153368
2,966
77,378160,105

20,98318,606
68,532△1,708106,413

20,98318,606
68,460△1,711
106,339

6,284

7,922

△5
△1,023
△365
4,890
1,057
112,362
284,198△4△1,830
△335
5,752
1,051
113,143
273,249

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Third Quarter Consolidated Cumulative Accounting Term)(Millions of yen)
Nine months ended
December 31, 2018
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
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
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 before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent–6–

Nine months ended
December 31, 2019

212,531
181,336
31,19425,868
5,326

202,628
173,564
29,06325,182
3,881

77
710

54
692

326

973

272
1,387

202
1,923

501
171
458
1,132
5,581

462
419
980
1,862
3,941

3
0
3

15
17
32

6
206
1
213
5,370
1,433
3,937
108
3,829

2
183
1
186
3,787
1,228
2,559
40
2,519

(Quarterly Consolidated Statements of Comprehensive Income)(Third Quarter Consolidated Cumulative Accounting Term)(Millions of yen)
Nine months ended
December 31, 2018
ProfitOther 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–

Nine months ended
December 31, 2019

3,937

2,559

△1,682
△0
△233
50

1,630
0
△546
29

△188

△264

△2,054
1,882

850
3,409

1,807

3,381

74

28

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

–8–