Consolidated Basis Results of the Third Quarter for Fiscal 2017
(April 1, 2017 – December 31, 2017)
February 2, 2018
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: February 9, 2018
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 2017 (April 1, 2017 - December 31, 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

Third Quarter of Fiscal 2017
Third Quarter of Fiscal 2016
(Note) Comprehensive income:

169,170
150,152%

Million yen%

Million yen

12.7
6,486
21.3
6,909
(8.2)
5,349
(22.2)
4,509
Third Quarter of Fiscal 2017¥8,068 million
Third Quarter of Fiscal 2016
¥1,808 million

Million yen

4,704
3,197

%

47.1
–

Profit per shareafter full dilution

Profit per share
Yen

Third Quarter of Fiscal 2017
Third Quarter of Fiscal 2016%

53.2
(23.9)
346.2%‒%

Yen

200.36134.99––* 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

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

Ratio of shareholders’equity to total assets

Million yen

Net assets per share%

242,846
110,765
223,050
104,853
Third Quarter of Fiscal 2017 ¥109,847 million

Yen

45.2
4,677.81
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

–

60.00

80.00

Fiscal 2017 (Forecasts)
Note: Whether changes to the latest dividend forecasts have been made: No* 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
shareMillion yen%

Million yen%

Million yen%

Million yen

%

5,500

(23.5)

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: No

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” on page 10 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 2017
24,077,510 sharesFiscal 2016(b) Number of treasury shares at the end of the period
Third Quarter of Fiscal 2017594,842 sharesFiscal 2016(c) Average number of shares issued during the period (cumulative)
Third Quarter of Fiscal 201723,482,707 shares
Third Quarter of Fiscal 2016

24,077,510 shares
595,205 shares
23,690,592 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 Informationsuch as Consolidated Financial Performance Estimates” on page 5 of the attached documents.

–2–

Index of Attached Documents
1. Qualitative Information Regarding Results of the Third 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
Third Quarter Consolidated Cumulative Accounting Term ......................................................................................

8

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

9(3) Notes Regarding Quarterly Consolidated Financial Results ............................................................................................... 10(Note Related to Going Concern Assumption) ................................................................................................................. 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 February 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 Third Quarter for Fiscal 2017
(1) Explanation Regarding Consolidated Operating Results
During this consolidated cumulative third quarter under review, the global economy staged a moderate recovery overall,reflecting solid economic conditions in the United States and Europe as well as signs of continued recovery in China andemerging countries. The Japanese economy made a gradual recovery as consumer spending picked up and industrial production
and capital spending made an upward trend.
Under these circumstances, the Group steadily implemented the Growth & Change 2018 initiative of the mid-term management
plan to achieve sustainable growth and offer great workplaces. As part of these efforts, in the steel wheel business, renewal of
the Topy America, Inc. Kentucky factory have been decided in the United States, where production bases are established by theworld’s largest automobile manufacturers. In addition, along with continuing to consider the acquisition of 100% shares of Ring
Techs Co., Ltd, it also continued to work on reassessing production systems and improving productivity according to demand,and rationalizing costs through energy saving and other measures.
With regard to the Group’s financial results for the consolidated cumulative third quarter under review, net sales and operating
profit came to ¥169,170 million (up 12.7% year on year) and ¥6,486 million (up 21.3% year on year), respectively, and ordinary
profit increased to ¥6,909 million (up 53.2% year on year). Profit attributable to owners of parent also rose to ¥4,704 million (up47.1% year on year).
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials remained firm and therefore crude steel production was greater thanthe previous year. Meanwhile, prices of iron and steel scrap, the main materials, remained on an upward trend and auxiliarymaterials also soared.
In this environment, the Group sought to rationalize sales prices, however, due to delayed response to increases in costs , net
sales increased to ¥51,083 million (up 10.4% year on year), and operating profit came to ¥1,877 million (down 23.4% year onyear).
(Automotive & Industrial Machinery Components Business)
In the automobile industry, production remained solid in Japan, while there were signs of weakening in passenger car demand in
the United States. In the construction machinery industry, sales climbed in Japan due to a surge in demand prior to theenforcement of emission control. Demand also rose in China on the back of an increase in infrastructure investment. Demand formining equipment also expanded due to increased coal prices, among other factors.
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 ¥106,224 million(up 14.1% year on year). Operating profit rose to ¥6,410 million (up 42.0% year on year) due to the impacts of foreign exchange
rate fluctuation as well as efforts to minimize an increase in labor costs and improve cost management through reassessment of
production systems.
(Power Business)
The Group endeavored in the stable supply of electricity in line with its business plan. Net sales came to ¥7,010 million (up13.1% year on year) due to increase in electricity sales price caused by fluctuation of crude oil and LNG prices etc. Furthermore,
although the coal price, fuel for power generation increased, operating profit grew 79.0% year on year to ¥708 million due tocuts in repair costs.
(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 ¥4,851 million, and operating profit was ¥1,053 million.

–4–(2) Explanation Regarding Financial Status
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at ¥242,846 million, an increase of¥19,796 million from the end of the previous consolidated fiscal year. This was mainly due to an increase of ¥6,104 million in
investment securities, a rise of ¥5,765 million in inventories, and an increase of ¥4,960 million in notes and accounts receivabletrade.
Liabilities were ¥132,081 million, or an increase of ¥13,885 million compared with the end of the previous consolidated fiscal
year. This mainly reflected an increase of ¥8,349 million in accounts payable and a rise of ¥4,020 million in interest-bearing debt.
Net assets came to ¥110,765 million, or an increase of ¥5,911 million from the end of the previous consolidated fiscal year. This
was attributable primarily to an increase of ¥3,263 million in valuation difference on available-for-sale securities and an increaseof ¥2,584 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.
However, the Group will need to keep a close eye on the business environment surrounding the Group due to uncertain factors,
such as protectionist movements mainly in the United States and the outlook of economic conditions in China and emerging
countries.
The full-year consolidated financial forecast remains unchanged from the forecast announced on November 2, 2017. The
forecast is based on information available when this document was published, and thus the actual results may differ materiallyfrom 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, 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

Third Quarter Consolidated
Accounting Term
(December 31, 2017)16,57943,781
12,337
4,310
9,915
1,530
5,728
(28)

21,35348,741
15,404
5,792
11,132
1,554
5,899
(29)

94,154

109,848

83,348(54,051)

83,675(55,147)

29,296
179,388(134,090)

28,527
180,989(137,703)

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

45,29815,4993,955(2,044)43,285
15,1273,401(1,994)

Leased assets, net
Construction in progress
Other
Accumulated depreciation

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

1,407
2,738
33,483(31,846)

1,808

1,637

Total property, plant and equipment
Intangible assets
Other

95,66392,723

1,722

2,725

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

1,722

2,725

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

33,376
472
1,017
2,740
(58)

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–

31,51037,549128,895

132,997

223,050

242,846(Million yen)

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

Previous Consolidated
Accounting Term
(March 31, 2017)

Third Quarter Consolidated
Accounting Term
(December 31, 2017)

20,49912,34816,503
3,300
604
738
11,22422,471
18,725
20,147
5,300
565
1,070
11,80965,21880,08920,80015,227
1,765
789
195
–
305
11,031177
2,683

20,80013,604
988
2,309
215
28
209
11,244171
2,419

52,97751,991

118,196

132,081

20,983
18,62559,922(1,728)20,98318,65262,506(1,732)

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

100,409

6,610
(14)
332
(778)

9,873
(9)
132
(558)

Total accumulated other comprehensive income
Non-controlling interests

6,149
902

9,437
917

104,853

110,765

223,050

242,846

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)(Third Quarter Consolidated Cumulative Accounting Term)(Million yen)Previous Third Quarter Consolidated
Third Quarter Consolidated
Cumulative Accounting Term
Cumulative Accounting Term(April 1, 2016 - December 31, 2016) (April 1, 2017 - December 31, 2017)
Net sales
Cost of sales

150,152
124,555

169,170
141,053

Gross profit
Selling, general and administrative expenses

25,596
20,246

28,116
21,630Operating profit
Non-operating income
Interest income
Dividends income
Foreign exchange gains
Share of profit of entities accounted for using equity
method
Other

5,349

6,486

56
609
–

53
682
359

75

169

113

195

855

1,460

662
367
665

481
–
555

1,695

1,037

4,509

6,909

38
20

15
51

624

–

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
Restructuring loss
Other
Total extraordinary losses

13

–

697

67

6
271
7
300
4

127
193
–
–
8

591

328

Profit before income taxes

4,615

6,647

Income taxes

1,263

1,867

Profit

3,351

4,779

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

–8–

154

74

3,197

4,704

(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, 2016 - December 31, 2016) (April 1, 2017 - December 31, 2017)
3,351
4,779

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

–9–

2,574
11
(4,456)
260

3,236
5
(199)
220

67

26

(1,543)

3,289

1,808

8,068

1,754

7,992

53

76

(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.

– 10 –