Consolidated Basis Results of the Second Quarter for Fiscal 2017
(April 1, 2017 – September 30, 2017)
November 2, 2017
TOPY INDUSTRIES, LIMITED
Stock listing: Tokyo, Nagoya stock exchanges
7231
URL: http://www.topy.co.jp/english/index.html
Nobuhiko Takamatsu, President and CEO
Shuichi Tachibana, General Manager, General Affairs Department
Telephone: 03-3493-0777 / (Overseas) 81-3-3493-0777
Scheduled date for submission of securities report: November 9, 2017
Scheduled date for dividend payment:
December 5, 2017
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 2017 (April 1, 2017 - September 30, 2017)(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 2017
Second Quarter of Fiscal 2016
(Note) Comprehensive income:

107,235
97,185%

Million yen%

Million yen

10.3
3,605
86.8
4,001
(10.4)
1,930(41.0)
984
Second Quarter of Fiscal 2017
¥4,190 million
Second Quarter of Fiscal 2016 (¥2,838) million
Profit per shareafter full dilution

Profit per share
Yen

Second Quarter of Fiscal 2017
Second Quarter of Fiscal 2016%

Million yen

306.5(64.4)
‒%
‒%

2,768
1,177

%

135.2
–

Yen

117.9049.76––* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, profit per share has been
calculated under the assumption that the aforementioned consolidation of shares was carried out at the beginning of the previous consolidated fiscal
year.

(2) Consolidated Financial Results
Total assets

Net assets

Million yen

Second Quarter of Fiscal 2017
Fiscal 2016
(For reference) Shareholders’ equity:

Ratio of shareholders’equity to total assets

Million yen

Net assets per share%

234,304
107,361
223,050
104,853
Second Quarter of Fiscal 2017 ¥106,467 million

Yen

45.4
4,533.65
46.6
4,426.81
Fiscal 2016 ¥103,951 million

2. Dividends
Dividends per share
Base dateFiscal 2016
Fiscal 2017

End of first quarterEnd of second
quarter

End of third quarterEnd of fiscal year

Full fiscal year

Yen

Yen

Yen

Yen

Yen

–
–

1.00
20.00

–

70.00

–

Fiscal 2017 (Forecasts)
–
60.00
80.00
Note: Whether changes to the latest dividend forecasts have been made: Yes / No
For revision of the dividend forecast, please refer to the announcement made today, “Notice Regarding the Difference between the
Forecast for Second Quarter Financial Performance and Actual Results, and the Adjustment of Dividends Forecast”.
* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, the year-end dividends
per share for fiscal 2016 presented are the amount that takes into account the effects of the aforementioned consolidation of shares, and full-year
dividends per share for fiscal 2016 shows “-.” Based on a conversion standard applicable after the consolidation of shares, 10 yen is the dividend pershare for the end of the second quarter of fiscal 2016, which makes the full year dividend per share 80 yen.

–1–

3. Consolidated Financial Forecasts for Fiscal 2017 (April 1, 2017 - March 31, 2018)(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 2017
233,000
11.9
8,500
18.4
8,600
40.6
Note: Whether changes to the latest forecasts for consolidated figures have been made: Yes / No

Million yen%

Million yen%

Million yen

5,500(23.5)

Yen

234.20* NOTE(1) Changes in the State of Material Subsidiaries during the Period: None
Newly included: –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 2017
24,077,510 sharesFiscal 2016(b) Number of treasury stock at the end of the period
Second Quarter of Fiscal 2017593,718 sharesFiscal 2016(c) Average number of shares issued during the period
Second Quarter of Fiscal 201723,482,470 shares
Second Quarter of Fiscal 2016

24,077,510 shares
595,205 shares
23,660,018 shares* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, the average
number of shares issued during the period has been calculated under the assumption that the aforementioned consolidation of shares was
carried out at the beginning of the previous consolidated fiscal year.

* A quarterly results report does not need to undergo a quarterly review.
* 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.

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Index of Attached Documents
1. Qualitative Information Regarding Results of the Second Quarter for Fiscal 2017..................................................................

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, 2017 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 2017
(1) Explanation Regarding Consolidated Operating Results
During the second quarter of the consolidated fiscal year under review, the U.S. and European economy remained firm. In
addition, China and emerging countries showed signs of a turnaround, helping the global economy record a moderate rebound asa whole. The Japanese economy remained on a moderate recovery trend supported chiefly by a sustained increase inemployment and industrial production.
Under these circumstances, the Group made stable progress of the Growth & Change 2018 initiative of the mid-term
management plan to achieve sustainable growth and offer great workplaces. As part of these efforts, a joint venture company wasestablished in India for the steel wheel business, thereby accelerating its global development. Also, the Group decided to launch
TACoil (Topy Advanced compact Coil), a new product which enables greater efficiency of bar processing whereby deformed bar
is tightly rolled into a coil configuration in its steel business and started the construction of a dedicated production line.
Additionally, it also continued to work on reassessing production systems and improving productivity according to demand, andrationalizing costs through energy saving and other measures.
With regard to the Group’s financial results for the second quarter of the consolidated fiscal year under review, net sales andoperating profit came to ¥107,235 million (up 10.3% year on year) and ¥3,605 million (up 86.8% year on year), and ordinary
profit increased to ¥4,001 million (up 306.5% year on year). Profit attributable to owners of parent also rose to ¥2,768 million(up 135.2% year on year).
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials remained strong. Meanwhile, prices of iron and steel scrap, the main
raw materials, continued to increase after a temporary fall at the beginning of the period.
In this environment, the Group strived to rationalize sales prices backed by increasing steel demand. As a result, since there wasa wider gap between sales prices and iron and steel scrap prices, net sales increased to ¥33,164 million (up 9.6% year on year).
Operating profit came to ¥1,676 million (up 58.8% year on year).
(Automotive & Industrial Machinery Components Business)
In the automobile industry, the number of vehicles produced in Japan, and passenger cars in particular, increased year on year.
However, there were signs of weakening in favorable demand trends in the United States. In the construction machinery industry,sales soared due to a surge in demand before the enforcement of emission control as well as a rise in demand in China on theback of an increase in infrastructure investments. Demand for mining equipment expanded due to increase etc. of coal price.
Given these conditions, the Group succeeded in selling a greater number of components, including parts for the undercarriagesof construction machinery and very large-sized wheels for mining in particular. As a result, net sales stood at ¥66,244 million (up11.0% year on year). Operating profit rose to ¥3,206 million (up 66.7% year on year), reflecting efforts to suppress labor costs
and increase sales volume, along with other cost reductions(Power Business)
The Group endeavored in the stable supply of electricity in line with its business plan. Net sales came to ¥4,628 million (up10.9% year on year) due to increase in electricity sales price. Furthermore, although the coal price, fuel for power generation
increased, operating profit grew 74.6% year on year to ¥482 million.
(Others)
The Topy Industries Group also engages in the manufacture and sales of synthetic mica used in cosmetics and other products, themanufacture and sales of crawler robots, wholesale electricity utility, indoor and outdoor sign systems, civil engineering andconstruction, leasing of real estate such as Topy-Rec Plaza (Minami-Suna, Koto-ku, Tokyo), and the operation of the sports club
OSSO. Net sales were ¥3,197 million, and operating profit was ¥702 million.

–4–(2) Explanation Regarding Financial Status
Total assets at the end of the second quarter of the consolidated fiscal year under review stood at ¥234,304 million, an increaseof ¥11,254 million from the end of the previous consolidated fiscal year. This was largely due to an increase of ¥4,332 million in
cash and deposits, an increase of ¥3,981 million in investment securities, and an increase of ¥3,479 million in inventories.
Liabilities were ¥126,942 million, or an increase of ¥8,746 million compared with the end of the previous consolidated fiscal
year. This was caused mainly by an increase of ¥6,360 million in accounts payable and an increase of ¥1,962 million in shortterm loans payable.
Net assets came to ¥107,361 million, or an increase of ¥258 million from the end of the previous consolidated fiscal year. This
was attributable primarily to an increase of ¥1,674 million in valuation difference on available-for-sale securities and an increaseof ¥1,119 million in retained earnings.
(3) Explanation Regarding Future Estimate Information Such as Consolidated Financial Performance Estimates
The global economy is expected to continue a steady recovery. The Japanese economy is also expected to recover moderately
going forward thanks to improvements in employment/income conditions and the government policy, among other factors.
Despite this, the business conditions surrounding the Group are likely to remain uncertain, given protectionist movements
mainly in the United States and Europe, concern about the outlook of the economies of China and emerging countries, andproduction overcapacity in China, among other factors.
The Group has revised the full-year consolidated financial forecasts for the fiscal year ending March 31, 2018 (April 1, 2017 March 31, 2018), announced on May 12, 2017, to net sales of ¥233,000 million, operating profit of ¥8,500 million, ordinary
profit of ¥8,600 million, and profit attributable to owners of parent of ¥5,500 million. For more details, please refer to “NoticeRegarding the Difference between Second Quarter Financial Forecasts and Actual Financial Results AND Revision of Full-YearBusiness Financial Forecast AND Revision of Dividend Forecast” announced November 2, 2017.

–5–

2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly Consolidated Balance Sheets(Million yen)Previous Consolidated
Accounting Term
(March 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts

Second Quarter Consolidated
Accounting Term
(September 30, 2017)16,57943,781
12,337
4,310
9,915
1,530
5,728
(28)

20,91145,403
14,120
5,144
10,777
1,586
5,238
(29)

94,154

103,153

83,348(54,051)

83,369(54,622)

29,296
179,388(134,090)

28,746
180,390(136,039)

Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation

45,29815,4993,955(2,044)44,351
15,131
3,409(1,904)

Leased assets, net
Construction in progress
Other
Accumulated depreciation

1,910
1,849
32,809(31,001)

1,504
1,773
33,178(31,461)

1,808

1,716

Total property, plant and equipment
Intangible assets
Other

95,663

93,224

1,722

2,628

Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts

1,722

2,628

27,272
626
1,025
2,681
(94)

31,253
474
1,023
2,642
(95)

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

Other, net

Total investments and other assets
Total non-current assets
Total assets–6–

31,51035,297

128,895

131,150

223,050

234,304

(Million yen)Previous Consolidated
Accounting Term
(March 31, 2017)
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
Reserve for repairs
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities

Second Quarter Consolidated
Accounting Term
(September 30, 2017)

20,49912,34816,503
3,300
604
738
11,224

22,335
16,872
18,466
8,300
565
1,041
11,892

65,21879,47320,80015,227
1,765
789
195
–
305
11,031177
2,683

15,80014,973
1,129
1,575
201
28
171
10,988170
2,431

52,97747,469118,196

126,942

20,983
18,62559,922(1,728)20,98318,652
61,041(1,728)

Total shareholders’ equity
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

97,801

98,948

6,610
(14)
332
(778)

8,284
(2)
(131)
(632)

Total accumulated other comprehensive income
Non-controlling interests

6,149
902

7,518
894

104,853

107,361

223,050

234,304

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

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)(Second Quarter Consolidated Cumulative Accounting Term)(Million yen)Previous Second Quarter
Second Quarter Consolidated
Consolidated Cumulative
Cumulative Accounting Term
Accounting Term(April 1, 2017 - September 30, 2017)(April 1, 2016 - September 30, 2016)
Net sales
Cost of sales

97,18581,859107,235
89,345Gross profit
Selling, general and administrative expenses

15,325
13,395

17,89014,285

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

1,930

3,605

35
329
–

32
363
420

50

169

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
Gain on investments in capital of subsidiaries andassociates
Other
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on reduction 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–

73

169

488

1,156

472
615
346

329
–
430

1,434

759

984

4,001

6
20

14
51

624

–

13

–

665

66

0
135
7
3

127
170
–
0

146

297

1,502

3,770

224

951

1,278

2,818

101

50

1,177

2,768

(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, 2017 - September 30, 2017)(April 1, 2016 - September 30, 2016)
1,278
2,818

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

–9–

(390)
(4)
(3,888)
173

1,649
11
(461)
146

(7)

25

(4,116)

1,371(2,838)4,190(2,835)

4,137

(2)

53

(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 –