Consolidated Basis Results of the Second Quarter for Fiscal 2018
(April 1, 2018 – September 30, 2018)
November 2, 2018
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 9, 2018
Scheduled date for dividend payment:
December 4, 2018
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 2018 (April 1, 2018 - September 30, 2018)(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 2018
Second Quarter of Fiscal 2017
(Note) Comprehensive income:

135,173
107,235%

Million yen%

Million yen%

Million yen

26.1
3,336
(7.4)
3,369
(15.8)
10.3
3,605
86.8
4,001
306.5
Second Quarter of Fiscal 2018
¥2,342 million -44.1%
Second Quarter of Fiscal 2017
¥4,190 million‒%%(19.5)
135.2

Profit per shareafter full dilution

Profit per share
Yen

Second Quarter of Fiscal 2018
Second Quarter of Fiscal 2017

2,227
2,768

Yen

94.85
117.90––(2) Consolidated Financial Results
Total assets
Million yen

Second Quarter of Fiscal 2018
Fiscal 2017(For reference) Shareholders’ equity:

Ratio of shareholders’equity to total assets

Net assets
Million yen

Net assets per share%

280,708
111,002248,102109,859
Second Quarter of Fiscal 2018 ¥109,895 million

Yen

39.1
4,677.13
43.9
4,640.13
Fiscal 2017 ¥108,959 million

2. Dividends
Dividends per share
Base date

End of second
quarter

End of first quarter

Fiscal 2017
Fiscal 2018

End of third quarterEnd of fiscal year

Full fiscal year

Yen

Yen

Yen

Yen

Yen

–
–

20.00
20.00

–

60.00

80.00

–

70.00

90.00

Fiscal 2018 (Forecasts)
Note: Whether changes to the latest dividend forecasts have been made: No

3. Consolidated Financial Forecasts for Fiscal 2018 (April 1, 2018 - March 31, 2019)(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%

Million yen%

Yen

Fiscal 2018
283,000
22.8
10,00025.0
10,100
25.7
6,800
23.6
289.58
Note: Whether changes to the latest forecasts for consolidated figures have been made: No*The impact on consolidated business result of Fiscal 2018 by the accident occurred in steel making shop of Toyohashi Works on
October 25, 2018, which damaged some facilities in the electric furnace, will be announced promptly after the amount is able to bereasonably estimated.
–1–

* NOTE(1) Changes in the State of Material Subsidiaries during the Period: Yes
Newly included: One (Name) Asahi Tec Aluminium (Thailand) Co., Ltd.
Excluded:–(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 201824,077,510 sharesFiscal 2017(b) Number of treasury stock at the end of the period
Second Quarter of Fiscal 2018581,256 sharesFiscal 2017(c) Average number of shares issued during the period
Second Quarter of Fiscal 2018
23,486,041 shares
Second Quarter of Fiscal 2017

24,077,510 shares
595,417 shares
23,482,470 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.

–2–

Index of Attached Documents
1. Qualitative Information Regarding Results of the Second Quarter for Fiscal 2018..................................................................

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

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

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
Second Quarter Consolidated Cumulative Accounting Term....................................................................................

8

Quarterly Consolidated Statements of Comprehensive Income
Second 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 November 2nd, 2018 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 Second Quarter for Fiscal 2018
(1) Explanation Regarding Consolidated Operating Results
During the first half of the fiscal year under review, the U.S. economy grew moderately while China and emerging countries
continued their recovery trend, which helped the global economy record a moderate rebound as a whole, despite concerns overintensifying trade disputes such as additional duties determined by the U.S. and China. The Japanese economy remained on amoderate recovery trend, supported by improvements in employment conditions with robust industrial production and corporate
capital spending.
Under these circumstances, the Group proceeded steadily toward the final target with the Growth & Change 2018 initiative of
the mid-term management plan, aiming to achieve sustainable growth and offer great workplaces. In the steel business segment,
the Group launched the sale of TACoil on schedule, a new product with higher processing efficiency for bar coils, in October aspart of its efforts to develop demand. The Group also began activities to create synergies with Ring Techs Co., Ltd., a steel wheel
manufacturer, and Asahi Tec Corporation, an aluminum wheel manufacturer, which had been made wholly owned subsidiaries.
The financial results for the first half of the fiscal year under review include consolidated net sales of ¥135,173 million, an
increase of 26.1% year on year, thanks to growth in sales of parts for the undercarriages of construction machinery and otherproducts, the new consolidation of Ring Techs and Asahi Tec and so on. A significant rise in costs due to higher prices of submaterials and temporary expenses for the acquisition of Asahi Tec, however, caused operating profit to decrease 7.4% year on
year to ¥3,336 million, ordinary profit to fall 15.8% year on year to ¥3,369 million, and profit attributable to owners of parent to
decline 19.5% year on year to ¥2,227 million.
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials remained firm, primarily among construction companies. Meanwhile,
prices of steel scrap, a key raw material, and the prices of auxiliary materials such as alloy iron and electricity costs also
escalated, leading to the continued adverse condition.
Given these circumstances, the Group achieved net sales of ¥40,996 million (up 23.6% year on year) by taking steps to recoversales prices while aiming for growth in sales volume. Operating profit, however, decreased to ¥1,297 million (down 22.6% year
on year) due to the significant impact of higher cost caused by the rising prices of auxiliary and other materials.
(Automotive & Industrial Machinery Components Business)
In the construction machinery industry, domestic sales of hydraulic shovels experienced a reactionary fall from last year’s lastminute surge in demand before the emission control regulations. Meanwhile, overseas demand continued to grow, particularly in
China and North America. Global demand for mining machinery also remained favorable. In the automotive industry, thevolume of domestic automobile production remained broadly at the same level as that in the same period of the previous year.
Given these conditions, the Group achieved net sales of ¥85,845 million (up 29.6% year on year) by steadily meeting demandfor products such as parts for the undercarriages of construction machinery, very large wheels for mining and by taking
advantage of the new consolidation of Ring Techs and Asahi Tec and so on. Also, the Group achieved operating profit of ¥3,652
million (up 13.9% year on year) although there were a significant rise in costs due to higher prices of sub-materials andtemporary expenses for the acquisition of Asahi Tec.
(Power Business)
The group endeavored to maintain the stable supply of electricity in line with its business plan. The Group achieved net sales of¥4,908 million (up 6.0% year on year) thanks to higher electricity prices. Operating profit, however, was ¥367 million (down
23.8% year on year) due to an increase in repair cost.
(Others)
The Group worked to expand overseas and domestic sales of synthetic mica used in cosmetics and other products and, for
Crawler Robot, accelerated the development of a crawler mechanism for back/forth and left/right movement to cater toagriculture and distribution industries. Moreover, the other business including indoor and outdoor sign systems, civil engineeringand construction, leasing of real estate such as Topy-Rec Plaza (Minami-Suna, Koto-ku, Tokyo) and the operation of the sports
club OSSO remained steady on the whole. As a result, net sales for the quarter came to ¥3,422 million (up 7.0% year on year),with operating profit of ¥812 million (up 15.6% year on year).

–4–(2) Explanation Regarding Financial Status
Total assets at the end of the second quarter of the consolidated fiscal year under review stood at ¥280,708 million, an increaseof ¥32,605 million from the end of the previous consolidated fiscal year. Primary factors for the increase include a ¥9,355
million increase in property, plant and equipment, a ¥9,079 million increase in inventories, a ¥4,050 million increase in cash anddeposits, a ¥4,158 million in investments, and a ¥2,482 million increase in intangible assets.
Total liabilities were ¥169,705 million, or an increase of ¥31,462 million compared with the end of the previous consolidated
fiscal year. This was caused mainly by an increase of ¥11,986 million in short-term loans payable, an increase of ¥9,573 million
in accounts payable, and an increase of ¥8,272 million in long-term loans payable.
Total net assets came to ¥111,002 million, or an increase of ¥1,142 million from the end of the previous consolidated fiscal year.
This was attributable primarily to an increase of ¥815 million in valuation difference on available-for-sale securities and anincrease of ¥814 million in retained earnings.
(3) Explanation Regarding Future Estimate Information Such as Consolidated Financial Performance Estimates
It is expected that the global economy will continue to make a steady recovery in spite of various problems. The Japanese
economy is also expected to continue recovering moderately going forward thanks to improvements in employment/income
conditions and the government economic policy, among other factors. It seems, however, that the business conditions
surrounding the Group are expected to remain uncertain and unforeseeable particularly in view of the ongoing trade disputes
mainly in the U.S. and China, and the outlook for the Chinese economy.
Therefore, the full-year consolidated financial forecast remains unchanged from the forecast announced on May 10, 2018. 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.
The impact on consolidated business result of Fiscal 2018 by the accident occurred in steel making shop of Toyohashi Works on
October 25, 2018, which damaged some facilities in the electric furnace, will be announced promptly after the amount is able tobe reasonably estimated.

–5–2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly Consolidated Balance Sheets(Million yen)Previous Consolidated
Accounting Term
(March 31, 2018)
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

Second Quarter Consolidated
Accounting Term
(September 30, 2018)23,17953,253
17,572
5,503
12,4526,600(65)

27,22954,85524,357
6,067
14,183
7,296(91)

118,495

133,898

85,948(57,633)

91,454(62,099)

Buildings and structures, net

28,31529,355

Machinery, equipment and vehicles
Accumulated depreciation

186,638(145,132)

199,774(154,802)

41,50644,971

15,897
3,493(2,172)

17,504
4,828(2,881)

1,320

1,947

3,871
38,586(37,290)

6,239
42,186(40,643)

1,295

1,543

92,206

101,562

–
3,078

2,333
3,227

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
Goodwill
Other

3,078

5,561

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

29,351
469
1,342
365
2,852
(60)

30,546
481
1,430
391
6,892
(56)

Total investments and other assets

34,321

39,686

129,606

146,809248,102280,708

Total non-current assets
Total assets–6–

(Million yen)Previous Consolidated
Accounting Term
(March 31, 2018)
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

Second Quarter Consolidated
Accounting Term
(September 30, 2018)

26,324
17,694
17,356
5,000
582
1,715
14,21833,12820,46329,343
5,000
774
1,080
19,24482,891109,035

20,80017,940
875
494
158
28
42
248
11,249276
3,238

15,80026,212
1,145
1,409
129
52
36
298
11,978323
3,283

55,35160,670Total liabilities

138,242

169,705

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

20,98318,652
63,302(1,734)

20,98318,65264,117(1,707)

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

101,203

102,046

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

Total shareholders’ equity

7,970
(9)
31
(235)

8,785
3
(745)
(194)

Total accumulated other comprehensive income

7,756

7,848

899

1,107

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

109,859

111,002248,102280,708

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Second Quarter Consolidated Cumulative Accounting Term)(Million yen)Previous Second Quarter
Second Quarter Consolidated
Consolidated Cumulative
Cumulative Accounting Term
Accounting Term(April 1, 2018 - September 30, 2018)(April 1, 2017 - September 30, 2017)
Net sales
Cost of sales

107,235
89,345

135,173
114,809

Gross profit
Selling, general and administrative expenses

17,89014,28520,36317,027

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

3,605

3,336

32
363
420

48
382
23

169

153

Total non-operating income
Non-operating expenses
Interest expenses
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

–8–

169

189

1,156

796

329
430

324
439

759

763

4,001

3,369

14
51

3
0

66

3

127
170
0

3
138
0

297

142

3,770

3,230

951

932

2,818

2,298

50

70

2,768

2,227

(Quarterly Consolidated Statements of Comprehensive Income)(Second 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 Second Quarter
Second Quarter Consolidated
Consolidated Cumulative
Cumulative Accounting Term
Accounting Term(April 1, 2018 - September 30, 2018)(April 1, 2017 - September 30, 2017)
2,818
2,298

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

–9–

1,649
11
(461)
146

795
13
(765)
40

25

(40)

1,371

43

4,190

2,342

4,137

2,320

53

21

(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.

– 10 –