Consolidated Basis Results of the Third Quarter for Fiscal 2018
(April 1, 2018 – December 31, 2018)
February 1, 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: February 8, 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 Third Quarter for Fiscal 2018 (April 1, 2018 - December 31, 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

Third Quarter of Fiscal 2018
Third Quarter of Fiscal 2017
(Note) Comprehensive income:

212,531
169,170%

Million yen%

Million yen

25.6
5,302
(18.2)
5,557
12.7
6,486
21.3
6,909
Third Quarter of Fiscal 2018
¥1,824 million
Third Quarter of Fiscal 2017¥8,068 million

Million yen

3,793
4,704

%

(19.4)
47.1

Profit per shareafter full dilution

Profit per share
Yen

Third Quarter of Fiscal 2018
Third Quarter of Fiscal 2017%(19.6)
53.2-77.4%
346.2%

Yen

161.52200.36––(2) Consolidated Financial Results
Total assets
Million yen

Third 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%

279,897
110,013248,102109,859
Third Quarter of Fiscal 2018 ¥108,852 million

Yen

38.9
4,632.84
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
288,000
25.0
8,000
0.0
9,500
18.2
6,800
23.6
289.58
Note: Whether changes to the latest forecasts for consolidated figures have been made: Yes
For details, please refer to “Explanation Regarding Future Estimate Information such as Consolidated Financial Performance
Estimates” on page 3 of the attached materials.

* 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” 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 201824,077,510 sharesFiscal 2017(b) Number of treasury shares at the end of the period
Third Quarter of Fiscal 2018581,613 sharesFiscal 2017(c) Average number of shares issued during the period (cumulative)
Third Quarter of Fiscal 2018
23,489,048 shares
Third Quarter of Fiscal 2017

24,077,510 shares
595,417 shares
23,482,707 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 2018 ....................................................................

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 1st, 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.

–1–

1. Qualitative Information Regarding Results of the Third Quarter for Fiscal 2018
(1) Explanation Regarding Consolidated Operating Results
During the first nine months of the fiscal year under review, the global economy has shown a gradual recovery as a whole due tothe continuous economic expansion in the U.S. and a recovery trend in emerging countries remained. The outlooks of the global
economy are, however, uncertain under the concern over the impact of the US-China trade dispute, and increasing signs of an
economic slowdown in China
The Japanese economy has continued a moderate recovery, reflecting capital spending that maintained its upward trend, as
well as improved employment conditions.
Under these circumstances, the Group made steady progress toward the final targets set out in the Growth & Change 2018
initiative of the mid-term management plan, based on the concept of achieving sustainable growth and offering great workplaces.
In the Industrial Machinery Components business, the Group built new steel belt assembly lines at PT. Topy Undercarriage
Indonesia in response to growing demand for construction machinery in Southeast Asia. The facility commenced operation in
November 2018.
With regard to the Group’s financial results for the first nine months of the fiscal year under review, net sales came to ¥212,531
million (up 25.6% year on year), mainly reflecting the sale of a greater number of components including parts for theundercarriages of construction machinery and the effects of the acquisition of Ring Techs Co., Ltd. and Asahi Tec Corporation as
consolidated subsidiaries. However, operating profit, ordinary profit and profit attributable to owners of parent decreased to¥5,302 million (down 18.2% year on year), ¥5,557 million (down 19.6% year on year) and ¥3,793 million (down 19.4% year onyear), due to temporary effect of the accident that caused damage to a facility in the steel-making shop of Toyohashi Works on
October 25th, 2018.
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials remained firm, primarily among construction companies. Meanwhile,harsh conditions persisted in terms of costs due to the continued surge of prices for sub-materials including electrode and alloyiron, although prices for steel scrap, a key raw material, began to decline in the third quarter of fiscal year 2018.
Given these circumstances, the Group achieved net sales of ¥59,488 million (up 16.5% year on year) by the rationalization ofsales prices. Operating profit, however, decreased to ¥540 million (down 71.2% year on year) due to the accident that caused
damage to a facility at the steel-making shop
(Automotive & Industrial Machinery Components Business)
In the construction machinery industry, the global demand of hydraulic shovels continued to grow, mainly in China and North
America. Global demand for mining machinery also remained solid. In the automotive industry, the number of automobiles
produced in Japan remained almost unchanged from the same period of the previous year.
Given these conditions, the Group achieved net sales of ¥140,269 million (up 32.1% year on year), with operating profit of¥6,956 million (up 8.5% year on year) largely due to its steady efforts to meet demand for parts for the undercarriages of
construction machinery and very large wheels for mining and the effect resulting from the inclusion of newly consolidated
subsidiaries, despite the factors of the decline in profits due to increased material costs and the temporary expense from
corporate acquisition.
(Power Business)
The Group endeavored in the stable supply of electricity in line with its business plan. The Group achieved net sales of ¥7,506
million (up 7.1% year on year). Operating profit, however, was ¥687 million (down 3.0% year on year).
(Others)
The Group worked to expand overseas and domestic sales of synthetic mica used in cosmetics and other products. It also sought
to improve sales organizations for crawler robots, while at the same time accelerating the development of a crawler mechanism
for back/forth and left/right movement to cater to the needs of a range of businesses such as those in the agriculture anddistribution industries. The Group also saw strong performance overall in other businesses, which included indoor and outdoor
sign systems, civil engineering and construction, the leasing of real estate such as Topy-Rec Plaza (Minami-Suna, Koto-ku,
Tokyo), and the operation of the sports club OSSO. As a result, net sales came to ¥5,266 million (up 8.5% year on year), with
operating profit of ¥1,160 million (up 10.1% year on year).

–2–(2) Explanation Regarding Financial Status
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at ¥279,897 million, an increase of¥31,795 million from the end of the previous consolidated fiscal year. Primary factors for the increase include a ¥10,852 million
increase in property, plant and equipment, a ¥7,541 million increase in inventories, a ¥4,238 million in investments, a ¥3,564
million increase in notes and accounts receivable-trade, a ¥2,906 million increase in cash and deposits, and a ¥2,407 million
increase in intangible assets.
Liabilities were ¥169,884 million, or an increase of ¥31,641 million compared with the end of the previous consolidated fiscal
year. This was caused mainly by an increase of ¥11,048 million in long-term loans payable, an increase of ¥10,369 million in
short-term loans payable, and an increase of ¥9,470 million in accounts payable.
Net assets came to ¥110,013 million, or an increase of ¥153 million from the end of the previous consolidated fiscal year. This
was attributable primarily to an increase of ¥1,909 million in retained earnings and a decrease of ¥1,770 million in valuationdifference on available-for-sale securities.
(3) Explanation Regarding Future Estimate Information such as Consolidated Financial Performance Estimates
The Japanese economy is expected to remain on a moderate recovery path going forward, chiefly due to improvements in
employment/income conditions and the implementation of economic measures by the government. However, in light of
uncertain factors such as the growing seriousness of trade issues mainly in the United States and China and economic trends in
China, the business conditions surrounding the Group are expected to remain uncertain and unpredictable.
In consideration of the impact of the accident in the steel-making shop and trends in recent financial results, the Group has
reviewed the consolidated financial forecast for the fiscal year ending March 31, 2019 (April 1, 2018 – March 31, 2019) that wasannounced on May 10, 2018, and assumes net sales, operating profit, ordinary profit and profit attributable to owners of parent to¥288,000 million, ¥8,000 million, ¥9,500 million and ¥6,800 million, respectively.
In addition, the operations at the steel making shop resumed on November 19th on 2018, and the production is in the normal
condition at the present.

–3–

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

Third Quarter Consolidated
Accounting Term
(December 31, 2018)23,17953,253
17,572
5,503
12,4526,600(65)

26,08656,81822,296
6,041
14,731
8,902(66)

118,495

134,80985,948(57,633)

92,415(62,557)

Buildings and structures, net

28,31529,858

Machinery, equipment and vehicles
Accumulated depreciation

186,638(145,132)

202,655(156,224)

41,50646,431

15,897
3,493(2,172)

17,502
4,862(2,965)

1,320

1,896

3,871
38,586(37,290)

5,572
42,748(40,949)

1,295

1,799

92,206103,059

–
3,078

2,273
3,212

3,078

5,486

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

26,933
490
1,914
314
6,947
(58)

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
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–4–34,32136,542

129,606

145,088248,102279,897(Million yen)Previous Consolidated
Accounting Term
(March 31, 2018)

Third Quarter Consolidated
Accounting Term
(December 31, 2018)

26,324
17,694
17,356
5,000
582
1,715
14,21831,962
21,526
27,725
5,000
839
783
19,08982,891

106,926

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

15,80028,989
941
838
144
21
38
333
12,320323
3,205

55,351

62,957

Total liabilities

138,242

169,884

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

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

20,98318,652
65,212(1,708)101,203103,140

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

7,970
(9)
31
(235)

6,199
(10)
(291)
(185)

Total accumulated other comprehensive income

7,756

5,712

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

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

–5–

899

1,160

109,859

110,013248,102279,897

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Third Quarter Consolidated Cumulative Accounting Term)(Million yen)Previous Third Quarter Consolidated
Third Quarter Consolidated
Cumulative Accounting Term
Cumulative Accounting Term(April 1, 2017 - December 31, 2017) (April 1, 2018 - December 31, 2018)
Net sales
Cost of sales

169,170
141,053

212,531
181,336

Gross profit
Selling, general and administrative expenses

28,116
21,63031,19425,892

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

6,486

5,302

53
682
359

77
710
–

169

326

195

272

1,460

1,387

481
555

501
630

1,037

1,132

6,909

5,557

15
51

3
0

67

3

127
193
8

6
206
1

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

328

213

Profit before income taxes

Total extraordinary losses

6,647

5,346

Income taxes

1,867

1,444

Profit

4,779

3,901

Profit attributable to non-controlling interests
Profit attributable to owners of parent

–6–

74

108

4,704

3,793

(Quarterly Consolidated Statements of Comprehensive Income)(Third 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 Third Quarter Consolidated
Third Quarter Consolidated
Cumulative Accounting Term
Cumulative Accounting Term(April 1, 2017 - December 31, 2017) (April 1, 2018 - December 31, 2018)
4,779
3,901

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

–7–

3,236
5
(199)
220

(1,682)
(0)
(255)
50

26

(188)

3,289

(2,076)

8,068

1,824

7,992

1,750

76

74

(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–