Consolidated Basis Results of the First Quarter for Fiscal 2019
(April 1, 2019 – June 30, 2019)
August 2, 2019
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: August 9, 2019
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 2019 (April 1, 2019 – June 30, 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

First Quarter of Fiscal 2019
First Quarter of Fiscal 2018
(Note) Comprehensive income:

69,63164,638%Million yen%

Million yen%

Million yen

7.7
1,140
(56.1)
1,164(58.3)
23.1
2,594
24.1
2,792
10.9
First Quarter of Fiscal 2019
¥1,674 million 30.0%
First Quarter of Fiscal 2018
¥1,288 million -13.9%(59.2)
6.4

Profit per shareafter full dilution

Profit per share
YenFirst Quarter of Fiscal 2019
First Quarter of Fiscal 2018

762
1,866

%

Yen

–
–

32.45
79.50

(2) Consolidated Financial Position
Total assets
Million yen

First 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%

280,187
112,387
284,198
112,362First Quarter of Fiscal 2019
¥111,280 million

Yen

39.7
4,736.29
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

–

70.00

90.00

–

50.00

90.00

Fiscal 2019 (Forecasts)
40.00
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
shareMillion yen%

Million yen%

Million yen%

Second Quarter of
Fiscal 2019
149,000
10.2
4,200
25.9
4,400
30.6
(Cumulative)
Fiscal 2019
307,000
7.3
11,00046.6
11,40021.8
Note: Whether changes to the latest forecasts for consolidated figures have been made: No–1–Million yen

%

Yen

3,100

39.2

131.94

8,000

12.5

340.49

* 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 201924,077,510 sharesFiscal 2018(b) Number of treasury stock at the end of the period
First Quarter of Fiscal 2019582,240 sharesFiscal 2018(c) Average number of shares issued during the period
First Quarter of Fiscal 201923,495,374 sharesFirst Quarter of Fiscal 201824,077,510 shares
582,007 shares
23,482,010 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.”–2–

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

4(1) Explanation Regarding Consolidated Operating Results ....................................................................................................

4(2) Explanation Regarding Financial Position ..........................................................................................................................

5(3) Explanation Regarding Future Estimate Information such as Consolidated Financial Performance Estimates ..................

5

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

6(1) Quarterly Consolidated Balance Sheets ..............................................................................................................................

6(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ..........

8

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

8

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

9(3) Notes Regarding Quarterly Consolidated Financial Results ............................................................................................... 10(Note Related to Going Concern) ..................................................................................................................................... 10(Note on Significant Changes in the Amount of Shareholders’ Equity) ........................................................................... 10(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements) .................. 10

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 2nd, 2019 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.

–3–

1. Qualitative Information Regarding Results of the First Quarter for Fiscal 2019(1) Explanation Regarding Consolidated Operating Results
During the first quarter of the consolidated fiscal year under review, the U.S. economy continued to expand. However, the global
economy remained uncertain, partly reflecting the economic slowdown in China mainly attributable to intensifying U.S. - China
trade tensions as well as the repercussions thereof. The Japanese economy became stagnant due to weakness observed mainly inexports and production, although moderate recovery continued against the backdrop of improvements in employment andincome.
Under these circumstances, the Group has instituted the Growth & Challenge 2021 initiative, or the final phase in the series of
the Growth & Challenge mid-term management initiatives that it has been implementing since 2012, with the goal of achieving
global “Growth” and “Change” to achieve a highly profitable business structure. It is already in the process of implementing a
range of initiatives with a focus on the priority initiatives, namely, the (i) increase in earnings power, (ii) manifestation of theGroup synergies, (iii) enhancement of strategic products, (iv) taking on the challenge of innovation, and (v) further strengtheningof the management foundation.
In terms of consolidated financial results for the first quarter of the fiscal year under review, net sales increased to ¥69,631
million yen (up 7.7% year on year), because of the effects of new consolidation which was generated by the fact that the Groupstarted to include ASAHI TECH corporation, an automobile aluminum wheel manufacturer that was converted into a whollyowned subsidiary in May of the previous year. However, mainly due to a decrease in the sales volume of parts for theundercarriages of construction machinery, operating profit, ordinary profit and profit attributable to owners of parent declined to¥1,140 million (down 56.1% year on year), ¥1,164 million (down 58.3% year on year) and ¥762 million (down 59.2% year onyear), respectively.
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials declined among both construction and manufacturing companies. In
addition, harsh conditions persisted in terms of costs mainly due to sustained high prices for auxiliary materials such as electrodeand alloy iron, although the price of steel scrap, a main material, fell.
Given these circumstances, the Group continued to implement a range of measures including cost reductions while
simultaneously striving to maintain proper sales prices, which resulted in the expansion of differences between steel scrap prices
and sales prices. However, mainly due to a lower sales volume, net sales and operating profit decreased to ¥19,052 million(down 9.2% year on year) and ¥1,020 million (down 4.5% year on year), respectively.
(Automotive & Industrial Machinery Components Business)
The automotive and construction machinery industries were affected by the unstable condition of the global economy. In theautomotive industry, the number of automobiles produced remained almost unchanged year on year in Japan, but it declined in
North America and China. In the construction industry, sales of hydraulic shovels decreased among Japanese manufacturers in
China and Southeast Asia, and on top of that, signs of inventory adjustments were also observed. Meanwhile, demand for mining
machinery fell in Southeast Asia, among other regions.
Given these conditions, the Group achieved net sales of ¥47,115 million (up 18.1% year on year), due to the effect of new
consolidation of including ASAHI TEC Corporation, an aluminum wheel manufacturer, in its consolidated financial results.
However, operating profit decreased to ¥1,332 million (down 39.0% year on year), primarily due to a decrease in the sales
volume of parts for the undercarriages of construction machinery and wheels for mining machinery.
(Power Business)
The Group endeavored to maintain the stable supply of electricity in line with its business plan. Net sales came to ¥1,842 million(down 8.3% year on year). Even so, the segment recorded an operating loss of ¥206 million, due to a rise in the price of coal,fuel for power generation, as well as regular maintenance, which is conducted at power stations in the first quarter every year.
(Others)
Net sales came to ¥1,621 million (down 6.3% year on year) and operating profit decreased to 294 million (down 30.5% year onyear), mainly due to the poor performance of the civil engineering/construction business.
In conjunction with initiatives for new businesses, the Group moved forward with preparations for the commencement of themass production of synthetic mica used in cosmetics and other products by leveraging expanded and reinforced facilities, while
also focusing on the expansion of overseas and domestic sales. As for the Crawler Robot, it worked on preparations for fullscale production and sales organization improvement measures with respect to the crawler mechanism for back/forth andleft/right movement.

–4–(2) Explanation Regarding Financial Position
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at ¥280,187 million, a decrease of¥4,011 million from the end of the previous consolidated fiscal year. This was mainly due to decreases of ¥4,551 million and¥1,753 million in notes and accounts receivable-trade and cash and deposits, respectively, and an increase of ¥1,362 million inproperty, plant and equipment.
Total liabilities were ¥167,799 million, or a decrease of ¥4,036 million compared with the end of the previous consolidated fiscal
year. This was mainly caused by a decrease of ¥5,000 million in bonds payable.
Total net assets came to ¥112,387 million, or an increase of ¥25 million from the end of the previous consolidated fiscal year.
Primary factors for the growth included increases of ¥707 million and ¥121 million foreign currency translation adjustment andvaluation difference on available-for-sale securities, respectively and a decrease of ¥886 million in retained earnings.
(3) Explanation Regarding Future Estimate Information Such as Consolidated Financial Performance Estimates
It is expected that the global economy will slow down, chiefly due to the intensification of the U.S.-China trade tensions andslowdown of the Chinese economy. There are also concerns over the slowdown of the Japanese economy mainly due to a
decline in overseas demand and a rise in the consumption tax rate. Accordingly, the Group will need to keep a close eye on its
operating environment.
Therefore, the full-year consolidated financial forecast remains unchanged from the forecast announced on May 10, 2019. These
forecasts are based on information available at the time this document was published, and thus the actual results may differ
materially from the forecast due to a variety of factors.

–5–

2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly Consolidated Balance Sheets(Million yen)Previous Consolidated
Accounting Term
(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

First Quarter Consolidated
Accounting Term
(June 30, 2019)29,671
59,81822,327
7,413
15,1697,417(66)

27,91755,267
23,252
8,231
14,9286,730(66)

141,751

136,261

93,166(62,636)

93,574(63,244)

Buildings and structures, net

30,53030,329Machinery, equipment and vehicles
Accumulated depreciation

204,197(157,286)

206,142(159,193)

46,911

46,94915,287
5,089(3,290)15,3705,100(3,224)

1,799

1,875

3,696
42,392(40,630)

5,001
42,786(40,964)

1,761

1,822

99,986

101,348

5,160

4,988

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
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

5,160

4,988

Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts

Total intangible assets

27,093
478
2,340
345
7,100
(58)

27,320
486
2,249
345
7,239
(53)

Total investments and other assets

37,30037,587

142,447

143,925

284,198

280,187

Total non-current assets
Total assets–6–

(Million yen)Previous Consolidated
Accounting Term
(March 31, 2019)

First Quarter Consolidated
Accounting Term
(June 30, 2019)

31,88020,26819,414
5,000
878
2,170
18,29329,916
18,83427,306
5,000
817
428
18,066

97,907

100,369

22,80032,461
888
1,093
162
21
41
371
12,617373
3,096

17,80030,985
732
1,115
178
39
49
208
12,846370
3,104

73,92967,429Total liabilities

171,836

167,799

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

20,98318,606
68,532(1,708)20,98318,606
67,646(1,709)Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans payable
Current portion of bonds
Lease obligations
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for corporate officers’ retirement benefits
Provision for officers’ stock benefits
Provision for directors’ retirement benefits
Reserve for repairs
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities

Total shareholders’ equity

106,413

105,527

Accumulated 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

6,284
(5)
(1,023)
(365)

6,406
(8)
(315)
(328)

Total accumulated other comprehensive income

4,890

5,753

1,057

1,107

112,362

112,387

284,198

280,187

Non-controlling interests
Total net assets
Total liabilities and net assets–7–

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(First Quarter Consolidated Cumulative Accounting Term)(Million yen)Previous First Quarter Consolidated
Cumulative Accounting Term(April 1, 2018 – June 30, 2018)

First Quarter Consolidated
Cumulative Accounting Term(April 1, 2019 – June 30, 2019)

Net sales
Cost of sales

64,63855,021

69,63160,018Gross profit
Selling, general and administrative expenses

9,616
7,022

9,613
8,473

Operating profit
Non-operating income
Interest income
Dividends income
Foreign exchange gains
Share of profit of entities accounted for using equity
method
Other

2,594

1,140

16
372
54

22
374
–

32

120

63

144

540

661

147
–
84
110

154
341
–
140

Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Valuation losses on forward exchange contracts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

–8–

342

636

2,792

1,164

1

11

1

11

1
36

0
17

37

17

2,755

1,158

853

371

1,901

787

34

25

1,866

762

(Quarterly Consolidated Statements of Comprehensive Income)(First Quarter Consolidated Cumulative Accounting Term)(Million yen)

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 associates
accounted for using equity method

Previous First Quarter Consolidated
Cumulative Accounting Term(April 1, 2018 – June 30, 2018)
1,901

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests–9–

First Quarter Consolidated
Cumulative Accounting Term(April 1, 2019 – June 30, 2019)
787

454
5
(1,078)
10

142
(3)
639
36

(6)

71

(612)

887

1,288

1,674

1,289

1,625

(1)

49

(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.

– 10 –