FY3/18 1Q Consolidated Financial Statements[J-GAAP]

August 10, 2017
Company name: Matsuda Sangyo Co., Ltd.
Exchanges listed on:
Tokyo Stock Exchange (First Section)
Company code:
7456
URL:
http://www.matsuda-sangyo.co.jp
Representative:
Yoshiaki Matsuda, President and Representative Director
Inquiries:
Atsushi Kinoshita, Director in Charge of IR
TEL: +81-3-5381-0728
Filing date of quarterly report:
August 10, 2017
Date to start dividends distribution:–
Supplementary quarterly materials prepared:No
Quarterly results information meeting held:
No(Figures are rounded down to the nearest million yen)

1. FY3/18 1Q consolidated results (April 1, 2017 – June 30, 2017)(1) Consolidated results
Net sales(millions of yen)

FY3/18 1Q

45,721

FY3/17 1Q

38,800(Note) Comprehensive income:(Percentages are year-on-year changes)

Operating income(%) (millions of yen)(%) (millions of yen)

17.8

1,055

99.5

(13.8)

529(45.4)

FY3/18 1Q: ¥722 million (+2,011.9%)

Earnings per share

Profit attributable toowners of parent

Ordinary income(%) (millions of yen)

(%)

1,156

113.6

761

130.8

541

(55.7)

330(58.2)

FY3/17 1Q: ¥34 million (-95.4%)

Diluted earnings per share
(yen)

(yen)

FY3/18 1Q

28.93

－

FY3/17 1Q

12.53

－

(2) Consolidated financial position
Total assets

Net assets(millions of yen)(millions of yen)(%)

74,12753,772

72.5

53,41973.4

End-FY3/18 1Q
End-FY3/17

72,715(Reference) Shareholders’ equity:

Shareholders’ equity ratio

End-FY3/18 1Q: ¥53,737 million

End-FY3/17: ¥53,390 million

2. Dividends
1Q
FY3/17－

FY3/18

－

(yen)

2Q

FY3/18 (Projections)(yen)

Annual dividends
3Q

4Q

(yen)

Annual

(yen)

(yen)

14.00

－

14.00

28.00

14.00

－

14.00

28.00

(Note) Revisions to the most recently announced projections of dividends: No

3. Consolidated earnings projections for FY3/18 (April 1, 2017 – March 31, 2018)(Percentages are year-on-year changes)

Net sales
1H FY3/18
FY3/18(millions of yen)

84,000175,000

Operating income(%) (millions of yen)

6.3
7.3

1,400
3,200

Ordinary income(%) (millions of yen)

12.4
8.1

1,600
3,500

Profit attributable to Earnings perowners of parentshare(%) (millions of yen)

12.1
1.2

(Note) Revisions to the most recently announced projections of consolidated earnings: No

1,140
2,490

(%)

17.6
1.4

(yen)

43.29
94.55

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries in accordance withchanges in the scope of consolidation): No(2) Application of special accounting treatment in preparing the quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: No
2) Changes in accounting policies other than the above:No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of issued shares (common shares)
1) Number of issued shares(including treasury shares)
2) Number of treasury shares
3) Average number of shares
during the period

End-FY3/18 1Q

28,908,581 shares End-FY3/17

28,908,581 shares

End-FY3/18 1Q

2,575,155 shares End-FY3/17

2,575,021 shares

FY3/18 1Q

26,333,475 shares FY3/17 1Q

26,333,779 shares*These quarterly financial statements are outside the scope of quarterly review procedures.
*Notes on appropriate use of earnings projections and other special remarks
Earnings projections and other forward-looking statements in this document are based on reasonable assumptions andinformation available to the Company at the time of release. Actual results may differ materially from forward-looking statements
due to a number of factors. For more information about earnings projections assumptions and notes regarding the use of
earnings projections, please refer to “1. Qualitative information on consolidated results during the period, (3) Qualitative
information on consolidated earnings projections” on page 3 of the attached documents.

Contents of Attached Document
1. Qualitative information on consolidated results during the period .................................................. 2(1) Qualitative information on consolidated results ............................................................................................. 2(2) Qualitative information on consolidated financial position............................................................................ 2(3) Qualitative information on consolidated earnings projections ...................................................................... 3

2. Quarterly consolidated financial statements and related notes ........................................................ 4(1) Quarterly consolidated balance sheets ............................................................................................................ 4(2) Quarterly consolidated statements of income and comprehensive income................................................. 6(3) Quarterly consolidated statements of cash flows ........................................................................................... 8(4) Notes on quarterly consolidated financial statements ................................................................................. 10(Notes on premise of a going concern) ................................................................................................................ 10(Notes on significant changes in the amount of shareholders’ equity) ................................................................. 10(Segment Information, etc.) .................................................................................................................................. 10

1

1. Qualitative information on consolidated results during the period(1) Qualitative information on consolidated results
In the first three months of the fiscal year ending March 31, 2018, the Japanese economy continued to recover at amoderate pace, supported by improving corporate earnings and employment conditions, despite some signs of
weakness in consumer spending. However, the outlook remained unclear due to concerns about labor shortages in
the Japanese economy and rising uncertainties in overseas economies.
Against this backdrop, the Matsuda Sangyo Group’s precious metals business segment increased the use of
production sites in Japan and overseas and stepped up marketing activities, while also working to secure precious
metals materials, boost sales of products such as precious metal chemical products and expand its industrial waste
treatment outsourcing business. The food business segment worked hard to develop and provide products that
address customer needs and actively implemented marketing activities, which included expanding the use ofoverseas business, as well as domestic business sites, in order to increase sales volume.
As a result of the above, for the first three months of the fiscal year ending March 31, 2018, consolidated net
sales were ¥45,721 million (up 17.8% year on year), operating income was ¥1,055 million (up 99.5% year on year),ordinary income was ¥1,156 million (up 113.6% year on year), and profit attributable to owners of parent was ¥761
million (up 130.8% year on year).
Performance in the Matsuda Sangyo Group’s business segments was as follows.
Precious metals business segment
In the precious metals division, production at key customers in the electronics sector was strong overall, centeredon electronic parts and devices. Against this backdrop, the volume of precious metal recycling and industrial waste
treatment handled by the Group’s precious metals division increased year on year. Despite a drop in sales volume
for silver products due to factors such as a contracting market in the photosensitive materials sector, sales volume
for precious metals products and electronic materials increased and the price of precious metals rose. As a result,sales overall were higher than in the same period of the previous fiscal year.
As a result, net sales for the precious metals business segment totaled ¥28,688 million (up 17.6% year on year),and operating income was ¥613 million (up 64.2% year on year).
Food business segment
In the food business segment, production activity in the food processing sector was solid overall supported partly
by rising exports, despite sluggish growth in consumer spending in Japan. In this environment, prices for surimi fish
paste dropped and sales volume for agricultural products declined. However, sales volume increased for seafood
products and livestock products, leading to higher sales compared with the same period of the previous fiscal year.
As a result, net sales for the food business segment were ¥17,047 million (up 18.1% year on year), andoperating income was ¥442 million (up 184.6% year on year).

(2) Qualitative information on consolidated financial position(1) Assets, liabilities and net assets
Total assets
Total assets as of the end of the first three months were ¥74,127 million, an increase of ¥1,412 million from theprevious fiscal year end. This mainly reflected increases in notes and accounts receivable – trade and inventories.
Liabilities
Total liabilities as of the end of the first three months were ¥20,355 million, an increase of ¥1,058 million from theprevious fiscal year end. This mainly reflected an increase in loans.
Net assets
Net assets as of the end of the first three months were ¥53,772 million, an increase of ¥353 million from theprevious fiscal year end. This mainly reflected a decrease due to year-end cash dividends paid, outweighed by anincrease in retained earnings.

2

(2) Cash flows status
As of the end of the first three months under review, the balance of cash and cash equivalents (hereafter, “cash”)
stood at ¥7,029 million, an increase of ¥245 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities used net cash of ¥1,975 million. This primarily reflected the difference between cash provided
from profit before income taxes on the one hand, and cash used due to increase in notes and accounts receivable– trade, increase in inventories, decrease in accounts payable – trade and income taxes paid on the other.
Compared with the same period in the previous fiscal year, when operating activities provided net cash of ¥947
million, cash from operating activities decreased by ¥2,922 million.
Cash flows from investing activities
Investing activities used net cash of ¥264 million. This was mainly due to the purchase of property, plant andequipment, such as factory equipment. Compared with the same period in the previous fiscal year, when investing
activities used net cash of ¥260 million, cash used by investing activities increased by ¥3 million.
Cash flows from financing activities
Financing activities provided net cash of ¥2,513 million. This mainly reflected cash used due to year-end cash
dividends paid, outweighed by cash provided by proceeds from loans. Compared with the same period in theprevious fiscal year, when financing activities used net cash of ¥791 million, cash from financing activities
increased by ¥3,305 million.

(3) Qualitative information on consolidated earnings projections
We have made no change to our consolidated earnings projections announced on May 12, 2017.

3

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/17(As of March 31, 2017)

End-FY3/18 1Q(As of June 30, 2017)

AssetsCurrent assets
Cash and deposits

6,784

7,029

Notes and accounts receivable – trade

19,954

20,484Merchandise and finished goods

14,226

15,209

404

423

6,311

6,309

449

263

2,698

2,783

(9)

(7)

50,82052,497Work in process
Raw materials and supplies
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

8,835

8,820

Accumulated depreciation(4,597)(4,673)

Buildings and structures, net

4,237

4,146

Machinery, equipment and vehicles

8,254

8,261

Accumulated depreciation(6,092)(6,252)

Machinery, equipment and vehicles, net

2,161

2,008

7,791

7,779

644

673

Accumulated depreciation

(197)

(217)

Leased assets, net

446

456

Construction in progress

42

96

Land
Leased assets

Others

1,083

1,063

Accumulated depreciation

(903)

(892)

Others, net

180

171

14,85914,658Others895

859

Total intangible assets

895

859

4,470

4,541

3

3

Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
Deferred tax assets
Others

1,733

1,631

Allowance for doubtful accounts

(68)

(65)

Total investments and other assets

6,139

6,111

Total non-current assets

21,894

21,630Total assets

72,715

74,127

4

(millions of yen)
End-FY3/17(As of March 31, 2017)

End-FY3/18 1Q(As of June 30, 2017)

Liabilities
Current liabilities
Notes and accounts payable – trade

8,223

7,266

Short-term loans payable

1,993

5,180

Current portion of long-term loans payable

994

905

Lease obligations

127

165

Income taxes payable

572

295

Deferred tax liabilities-

9

Provision for bonuses

744

448

Others

3,184

2,706

Total current liabilities

15,84016,976

Non-current liabilities
Long-term loans payable

1,598

1,399

Lease obligations

318

412

Deferred tax liabilities

636

649

Provision for directors’ retirement benefits
Provision for executive officers’ retirement
benefits
Net defined benefit liability

565

575

16

18

228

231

Others

92

92

3,456

3,378

19,296

20,355

Common stock

3,559

3,559

Capital surplus

4,008

4,008

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Retained earnings

47,51547,909Treasury shares(3,009)(3,009)Total shareholders’ equity

52,07452,467

Valuation difference on available-for-salesecurities

627

631

Deferred gains or losses on hedges

(30)

39

Foreign currency translation adjustment

810

686

Remeasurements of defined benefit plans

(91)

(87)

1,315

1,269

Accumulated other comprehensive income

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

29

34

53,41953,772

72,715

74,127

(2) Quarterly consolidated statements of income and comprehensive income[Quarterly consolidated statements of income](millions of yen)
FY3/17 1Q(April 1, 2016 –June 30, 2016)

FY3/18 1Q(April 1, 2017 –June 30, 2017)

Net sales

38,80045,721

Cost of sales

34,942

41,315Gross profit

3,858

4,405

Selling, general, and administrative expenses

3,329

3,349

529

1,055

Interest income

1

2

Dividend income

1010Gain on sales of securities

3

-

119

111

Purchase discounts

3

4

Others10

11

Total non-operating income

147

140

Interest expenses

710

Foreign exchange losses

27

13

Loss on valuation of investment securities

96

11

Others

4

5

135

41

Ordinary income

541

1,156

Profit before income taxes

541

1,156

Operating income
Non-operating income

Share of profit of entities accounted for using
equity method

Non-operating expenses

Total non-operating expenses

Income taxes – current

82

220

Income taxes – deferred

123

168

Total income taxes

205

389

Profit

335

766

5

4

330

761

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

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/17 1Q(April 1, 2016 –June 30, 2016)
ProfitFY3/18 1Q(April 1, 2017 –June 30, 2017)
335

766

Valuation difference on available-for-salesecurities

19

4

Deferred gains or losses on hedges

Other comprehensive income

(0)

70

Foreign currency translation adjustments

(257)

(86)

Remeasurements of defined benefit plans

8

4

Share of other comprehensive income (loss) ofentities accounted for using equity method

(71)

(37)

Total other comprehensive income (loss)

(301)

(44)

34

722

Comprehensive income attributable to ownersof parent

28

716

Comprehensive income attributable to noncontrolling interests

55Comprehensive income
Comprehensive income attributable to7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/17 1Q(April 1, 2016 –June 30, 2016)

FY3/18 1Q(April 1, 2017 –June 30, 2017)

Cash flows from operating activities
Profit before income taxes

541

1,156

Depreciation

287

338

0

(5)

(219)

(295)

Increase (decrease) in net defined benefit liability

12

9Increase (decrease) in provision for directors’ retirement benefits

(37)

9

-

1

(11)

(13)

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

Increase (decrease) in provision for executive officers’ retirement
benefits
Interest and dividend income
Interest expenses

7

10

Share of (profit) loss of entities accounted for using equity method

(119)

(111)

Decrease (increase) in notes and accounts receivable – trade

(398)

(531)

Decrease (increase) in inventories(265)(1,010)

Increase (decrease) in accounts payable – trade

602

(953)

Others860(161)

Subtotal

1,258(1,555)Interest and dividend income received

11

13Interest paid

(7)

(10)

Income taxes paid

(315)

(422)

Net cash provided by (used in) operating activities

947(1,975)Purchase of property, plant and equipment

(192)

(345)

Purchase of intangible assets

(62)

(25)

Purchase of investment securities

(1)

(1)

Proceeds from sales of investment securities

5-

Others

(8)

108

(260)

(264)

Cash flows from investing activities

Net cash provided by (used in) investing activities8

(millions of yen)
FY3/17 1Q(April 1, 2016 –June 30, 2016)

FY3/18 1Q(April 1, 2017 –June 30, 2017)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

(117)

3,206

Repayments of long-term loans payable

(288)

(288)

Cash dividends paid

(368)

(368)

Others(17)(36)

Net cash provided by (used in) financing activities

(791)

2,513

Effect of exchange rate change on cash and cash equivalents

(237)

(28)

Net increase (decrease) in cash and cash equivalents

(342)

245

Cash and cash equivalents at beginning of period

9,524

6,784

Cash and cash equivalents at end of period

9,181

7,029

9

(4) Notes on quarterly consolidated financial statements(Notes on premise of a going concern)
There is nothing to report.

(Notes on significant changes in the amount of shareholders' equity)
There is nothing to report.

(Segment Information, etc.)
I. FY3/17 1Q (April 1, 2016 – June 30, 2016)
1. Sales and profits or losses by reportable segments
Reportable Segments
Precious
metalsbusinesssegment

Food businesssegment

Adjustments
Note 1

Total(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeNote 2

Net sales(1) Net sales to external
parties(2) Intersegment sales
and transfers
Total
Segment income

24,386

14,41338,800―38,800

―

15

15

(15)

―

24,386

14,42938,816(15)

38,800

373

155

529

―

529

(Notes) 1. Adjustments correspond to the elimination of transactions and transfers between segments.
2. Total segment income matches operating income recorded on the quarterly consolidated statements
of income.
II. FY3/18 1Q (April 1, 2017 – June 30, 2017)
1. Sales and profits or losses by reportable segments
Reportable Segments
Precious
metalsbusinesssegment

Food businesssegment

Adjustments
Note 1

Total(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeNote 2

Net sales(1) Net sales to external
parties(2) Intersegment sales
and transfers
Total
Segment income

28,68817,03245,721―45,721

―

14

14

(14)

―

28,68817,04745,736(14)

45,721

613

442

1,055

―

1,055

(Notes) 1. Adjustments correspond to the elimination of transactions and transfers between segments.
2. Total segment income matches operating income recorded on the quarterly consolidated statements
of income.

10