Nine-month Consolidated Financial Report for the Fiscal Yearending October 31, 2013 [Japan GAAP]
September 6, 2013
Listed Company Name
Kanamoto Co., Ltd.
Company Code Number
9678
Listing Exchanges
Tokyo Stock Exchange, Sapporo Stock Exchange(URL http://www.kanamoto.co.jp)
Representative
Kanchu Kanamoto President and CEO
Inquiries
Nobuhito Utatsu
Executive Corporate Officer, Division Manager, Accounting Division
TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp
Scheduled date for submission of Quarterly Report
September 12, 2013
Scheduled date for commencement of dividend payments–
Preparation of Quarterly Settlement Supplementary
No
Explanatory Materials
Quarterly Earnings Briefings
No
1. Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2013
(November 1, 2012 - July 31, 2013)(1) Consolidated operating results (Cumulative)(Numbers less than one million yen have been rounded down)(Percentages shown are the percent increase or decrease compared to the prior consolidated fiscal year)

Revenues
Millions of yen%

Operating Income

Ordinary Income

Millions of yen

Millions of yen%

Millions of yen

%

8,322

116.1

4,706

72.7

3,850

152.4

2,725

－

%

Fiscal Year ending October 31,
80,288
36.7
8,410
98.2
2013: Third quarter
Fiscal Year ended October 31,
58,71713.4
4,244 113.8
2012: Third quarter(Note) Comprehensive income
Fiscal Year Ending October 31, 2013, Third Quarter ¥6,178 million (123.6%)
Fiscal Year Ended October 31, 2012, Third Quarter¥2,763 million (887.1%)
Net Income per
Share
Fiscal Year ending October 31,
2013: Third quarter
Fiscal Year ended October 31,
2012: Third quarter

Net Income

Diluted Net
Income per Share

Yen

Yen

143.36

－

83.02

－

(2) Consolidated financial position
Total Assets
Fiscal Year ending October 31,
2013: Third quarter
Fiscal Year ended October 31,
2012:

Net Assets

Shareholders’Equity Ratio

Millions of yen

Millions of yen

153,31447,012

29.6

137,343

41,39929.2(Reference) Shareholders’ Equity
Fiscal Year Ending October 31, 2013 Third Quarter:
Fiscal Year Ended October 31, 2012:¥45,367 million¥40,106 million

－

1 －

%

2. Dividends
Full Year Dividend per Share
End of 1Q
Fiscal year ended October 31, 2012
Fiscal year ending October 31, 2013
Fiscal Year ending October 31, 2013
(Projected)

End of 2Q

End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－
－

10.00
10.00

－
－

10.00

20.00

10.00

20.00

(Note) Has the Company revised its most recently released dividend projection?

No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2013
(November 1, 2012 - October 31, 2013)(Percentages indicate percent change from prior consolidated fiscal year)

Revenues

Full year

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

103,410

20.1

9,570

48.8

9,230

55.6

4,530

26.7

137.99(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter?
No

－

2 －

4. Other(1) Were there changes to material subsidiaries during the period under review (transfer of specified subsidiaries in
conjunction with revisions to the scope of consolidation)? No
Company newly included (Company name:)Company newly excluded (Company name:)(2) Application of special accounting method in the preparation of quarterly consolidated financial statements:

No(3) Changes in accounting principles, changes in accounting estimates and retrospective restatements(a) Changes in accounting principles in conjunction with revision of accounting standards: No(b) Changes other than the above:No(c) Changes in accounting estimates:(d) Retrospective restatements:

NoNo(4) Number of shares issued (common stock)(a) Number of shares outstanding at the end of the period (including treasury stock)
Fiscal year ending October 31, 2013 Third Quarter:
32,872,241 sharesFiscal year ended October 31, 2012:
32,872,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2013 Third Quarter:
45,753 sharesFiscal year ended October 31, 2012:
39,955 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2013 Third Quarter:
32,828,853 sharesFiscal year ended October 31, 2012Third Quarter:

32,834,140 shares

Note: Disclosure concerning status of implementation of quarterly review procedure
This quarterly earnings report is exempt from the quarterly review procedure based on the Financial Instruments andExchange Act. At the time of disclosure of this quarterly earnings report, the Company has not completed the quarterly review
procedure for quarterly financial statements.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The above projections were prepared based upon information available to the Company at the time the projections wereannounced as well as various assumptions concerning the future economic and business environment. Actual operating
results may differ from the projected figures depending upon various factors in the future. Please refer to the Qualitative
Information Concerning Consolidated Projected Operating Results on Page 7 of the Attachments for the conditions used asassumptions for the projected operating results and matters to note before using the projected operating results.

－

3 －○Attachments Table of Contents
1. Qualitative Information Concerning Quarterly Consolidated Operating Results …………………………………….

5(1) Qualitative information concerning consolidated operating results ……………………………………………….

5(2) Qualitative information concerning consolidated financial position ……………………………………………….

7(3) Qualitative information concerning projected consolidated operating results ……………………………………

7

2. Matters Concerning Summary Information (Notes) …………………………………………………………………….

7

Changes in reporting method …………………………………………………………………………………….

7

3. Quarterly Consolidated Financial Statements …………………………………………………………………………..

8(1) Quarterly Consolidated Balance Sheets …………………………………………………………………………….
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income …………………………………………………………………………………………………………………..
Quarterly Consolidated Statements of Income

810Consolidated Nine-month Period ended July 31, 2013 ……………………………………………………..

10

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Nine-month period ended July 31, 2013………………………………………………………

11(3) Notes Relating to the Going Concern Assumption …………………………………………………………………

12(4) Business Segment Information ……………………………………………………………………………………….

12(5) Note on Significant Changes to Shareholders’ Equity ……………………………………………………………..

13

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative information concerning consolidated operating results< Management Environment > (From November 1, 2012 to July 31, 2013)
During the first nine months of Kanamoto’s current consolidated fiscal year, Japan’s economy appeared to be gearing
up for a recovery. Expectations toward the new administration’s economic measures pushed the yen lower, and helped
drive stock prices upward. Consumers loosened their purse strings somewhat, and corporate business sentiment
improved as well. Globally, however, the future direction of the economy remained opaque. Although the US economy
exhibited a gradual recovery trend, troubling embers such as Europe’s debt problems and worries about China’s slowing
economy continued to smolder.
< Third Quarter Operating Results > (From November 1, 2012 to July 31, 2013) >In the construction industry related to the Kanamoto Group, demand was stimulated by full-scale earthquake
reconstruction efforts and the upward trend in construction demand, particularly public works projects that broke groundfollowing the execution of last year’s large-scale supplemental budget. Brighter indications were seen in private sector
investment as well, which was buoyed by improved corporate earnings. Nevertheless, the industry struggled with lingering
concerns that included uncompleted project tenders and delays in construction starts because of a worker shortage and a
sharp rise in prices for materials and equipment.
Given these circumstances, the Kanamoto Group aggressively carried out capital investments that will enable theCompany to respond accurately to the diversified needs created by the progress of the reconstruction effort. This included
strengthened support for the full-scale reconstruction program, enhancement of the rental equipment portfolio, andestablishment of new offices in the earthquake-devastated areas. In addition, by moving to strengthen cooperation among
Group firms and increase transactions with alliance firms, in order to respond to disaster prevention and disaster mitigation
works and infrastructure maintenance works in regions throughout Japan as well, Kanamoto advanced the creation of anorganization that will enable it demonstrate synergistic effects across the entire group.
As a result of these actions, consolidated revenues for the first nine months of the Business Period ending in October
2013 were ¥80,288 million, up 36.7% compared with the same period of the prior consolidated fiscal year. In terms ofearnings, operating income surged 98.2% from the same period of the prior consolidated fiscal year to ¥8,410 million,
ordinary income jumped 116.1% year-on-year to ¥8,322 million and third quarter year-to-date net income rose 72.7%
year-on-year to ¥4,706 million.
Results by business segment were as follows.
[ Business related to the Construction Equipment Rental Division ]In businesses related to Kanamoto’s core business of construction equipment rental, revenues by region climbed
substantially in all regions compared with the same period of the prior fiscal year, increasing by 16.7% in the Hokkaido
Region, 38.2% in the Tohoku Region, 70.3% in the Kanto Region, 56.4% in the Kinki & Chubu Region and 20.2% in the
Kyushu & Okinawa Region. This performance reflected the entire group’s ability to remain actively involved in earthquake
disaster reconstruction-related works and decontamination-related efforts in disaster-stricken areas, and in disasterprevention measures and maintenance and repair works for antiquated infrastructure in areas throughout Japan. The
Company also strove aggressively to support increased private construction demand centered on energy-related projects.
The division’s operating results also were influenced by expansion of the scope of consolidation to include Unite Co.,
Ltd., which conducts its business mainly in the Kanto Region and Kinki & Chubu Region, two areas that experienced
significant growth compared with the same period of the prior year.
Furthermore, although the Company continued to restrict sales of used construction equipment destined for overseas
markets, prices for such assets recovered thanks to the effect of the yen’s depreciation and an improved supply anddemand situation in the secondhand market, and revenue from sales increased 14.6% year-on-year.
As a result of these factors, for the consolidated nine-month year-to-date period under review, revenues for Kanamoto’s
construction-related businesses increased 38.2% from the same period of the prior consolidated fiscal year to ¥74,624
million, and operating income climbed 101.5% year-on-year to ¥8,087 million.
[ Other Businesses ]In the steel products sales the Company is developing in Hokkaido, sales of products for solar energy-related works andcoastal surge barrier-related works remained steady. The market for steel materials improved as well. As a result,－5 －revenues were 23.3% higher than in the same period of the prior consolidated fiscal year. In Kanamoto’s information andtelecommunications-related division as well, both personal computer rentals and specified worker dispatching grew in linewith the Company’s plan, and revenues edged up 4.0% compared with the same period one year ago.
As a result of these factors, for the consolidated nine-month year-to-date period under review revenues for Kanamoto’s
other businesses increased 20.4% from the same period of the prior consolidated fiscal year to ¥5,663 million, andoperating income was up 20.3% year-on-year to ¥123 million.
[ Business development issues deserving special mention and status of branch office changes ]During the consolidated third quarter under review, Kanamoto opened a new Minamisanriku Branch (Motoyoshi-gun,
Miyagi Prefecture). The Company did not close any branches during the quarter.

－

6 －(2) Qualitative information concerning consolidated financial position
Assets, liabilities and net assets
Total assets at the end of the third quarter under review increased by ¥15,971 million compared with the end of the priorconsolidated fiscal year, to ¥153,314 million. This change mainly reflected an increase of ¥5,363 million in cash anddeposits, an increase of ¥7,444 million in rental equipment and an increase of ¥1,866 million in investment securities thatwas the result of higher market prices on stock holdings.
Total liabilities were ¥106,301 million, an increase of ¥10,358 million compared with the end of the prior consolidated
fiscal year. The principal items contributing to this change were an increase of ¥2,396 million in long-term bank loans andan increase of ¥7,585 million for the combined total of accounts payable, other, including installment payment contracts,
and long-term accrued expenses.
Total net assets were ¥47,012 million, ¥5,612 million higher than at the end of the prior consolidated fiscal year. Thiswas mainly because of the net income reported for the third quarter, and an increase of ¥987 million in the valuationdifference on other investment securities.
(3) Qualitative information concerning projected consolidated operating results
There are no revisions at this time to the Notification Concerning Revision of Projected Operating Results for the Business
Period Ending October 2013 released on May 31, 2013, because any changes to the Company’s projected consolidated
operating results would require that management ascertain the future business environment and other uncertainty factors.
The Company will disclose all revisions promptly when it has judged a change to be necessary.

2. Matters Concerning Summary Information (Notes)(Changes in reporting method)
Quarterly Consolidated Statements of Income
In the third quarter of the prior consolidated fiscal year, “foreign exchange gains” were reported in “Other” under nonoperating income. For the third quarter consolidated period under review, the Company has classified this item separately
because the amount exceeded 20/100 of total non-operating income. To reflect this change in reporting method, the Company
has revised the quarterly consolidated financial statements for the third quarter of the prior consolidated fiscal year.
As a result, ¥151,232 thousand that was reported in “Other” under non-operating income in the Quarterly Consolidated
Statements of Income for the third quarter of the prior consolidated fiscal year has been restated as “foreign exchange gains”
of ¥33,964 thousand and “Other” of ¥117,267 thousand.

－7 －3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Unit: Thousands of yen )Prior Consolidated
Fiscal Year(As of October 31, 2012)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2013)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Merchandise and finished goods
Costs on uncompleted construction contracts
Raw materials and supplies
Construction machine parts
Income taxes receivable
Consumption taxes receivable
Deferred tax assets
Other
Allowance for doubtful accounts

19,387,264
23,560,769
350,000
521,615
53,187
213,177
2,578,013
10,676
57,839616,057
719,242‐384,382

24,750,459
24,469,954
350,000
670,956
24,846
209,875
3,227,601
35,895－779,091
719,431‐311,505

Total current assets

47,683,461

54,926,607

111,689,105‐65,644,512

126,034,730‐72,545,630

Rental equipment,net

46,044,593

53,489,099

Buildings and structures

22,253,505‐14,565,048

22,354,974‐14,973,194

Buildings and structures, net

7,688,457

7,381,779

Machinery, equipment and vehicles

5,367,137‐4,771,202

5,409,022‐4,826,011

595,935

583,01129,548,049
1,579,813‐1,301,459

29,520,758
1,794,470‐1,329,533

Noncurrent assets
Property,plant and equipment
Rental equipment
Accumulated depreciation

Accumulated depreciation

Accumulated depreciation
Machinery, equipment and vehicles,
net
Land
Other
Accumulated depreciation

278,353464,936

84,155,389

91,439,585

Goodwill
Other

192,389
203,849

224,366
209,950

Total intangible assets

396,239434,316

Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss

3,196,840
622,077
1,947,320‐590,261‐67,985

5,063,208
239,850
1,848,770‐570,171‐67,985

Total Investments and Other Assets

5,107,991

6,513,672

Other, net
Total property,plant and equipment
Intangible assets

Investments and other assets

Total noncurrent assets
Total Assets－

8 －89,659,620

98,387,573

137,343,082

153,314,181

(Unit: Thousands of yen )Prior Consolidated
Fiscal Year(As of October 31, 2012)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2013)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for loss on disasterAccounts payable-other
Other

18,011,309
834,688
12,671,669
1,106,553
2,344,595
774,430
10,014
9,386,566
1,641,311

18,930,719
661,163
12,743,470
1,137,886
2,013,641
567,899
3,455
11,059,137
1,615,797

Total Current Liabilities

46,781,139

48,733,170

Long-term loans payable
Lease obligations
Provision for retirement benefits
Long-term accounts payable-other
Asset retirement obligations
Other

25,945,267
3,041,801
959
19,707,957
207,696258,310

28,341,527
3,047,798
5,776
25,620,487
196,561
356,199

Total noncurrent liabilities

49,161,991

57,568,351

95,943,130

106,301,521

Capital stock
Capital surplus
Retained earnings
Treasury stock

9,696,717
10,960,761
19,199,668‐27,523

9,696,717
10,960,761
23,359,196‐37,822

Total Shareholders’ Equity

39,829,623

43,978,853

331,641

1,319,409‐54,766

69,501

276,874

1,388,911

1,293,453

1,644,894

Noncurrent liabilities

Total Liabilities
Net Assets
Shareholders’ Equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeMinority interests
Total Net Assets
Total liabilities and net assets－

9 －41,399,951

47,012,659

137,343,082

153,314,181

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Nine-month Period ended July 31, 2013)(Unit: Thousands of yen )Prior Consolidated Fiscal
Year Third Quarter(From November 1, 2011
to July 31, 2012)
Net sales

Current Consolidated Fiscal
Year Third Quarter(From November 1, 2012
to July 31, 2013)

58,717,469

80,288,203

Cost of sales

41,036,747

55,328,515

Gross profit

17,680,722

24,959,687

Selling, general and administrative expenses

13,436,453

16,549,140

Operating income
Non-operating income
Interest income

4,244,269

8,410,546

6,266

6,077

Dividends income

85,232

57,789Insurance income

25,617

72,572Rent income

40,63344,198A receipt bonus

22,51935,143

Amortization of negative goodwill

52,374

39,345

Foreign exchange gains

33,964

222,160

Reversal of allowance for doubtful accounts

5,520

31,373

Other

117,267

170,332

Total non-operating income

389,396

678,992

633,819

630,066

Non-operating expenses
Interest expenses
Loss on sales of notes payable

35,385

31,112

Other

113,957

105,874

Total non-operating expenses

783,163

767,052

3,850,503

8,322,486

20,233
1,092
115,666
19,615
671,889
252

34,3781,039
22,393－－
59

828,751

57,87056,62059,555

183,896
1,849
184

65
－
－

242,549

59,620

Income before income taxes and minority interests

4,436,705

8,320,736

Income taxes-current
Income taxes-deferred

1,876,536‐140,957

3,388,415‐105,770

Total income taxes

1,735,579

3,282,644

Income before minority interests

2,701,125

5,038,091

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
SubsidyGain on liquidation of subsidiaries
Gain on negative goodwill
Other
Total extraordinary income
Extraordinary loss
Loss on sales and retirement of noncurrent
assetsImpairment loss
Loss on valuation of investment securities
Other
Total extraordinary losses

Minority interests in income (loss)‐24,742

331,619

Net income

2,725,867

4,706,472－

10 －(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Nine-month Period ended January 1, 2013)(Unit: Thousands of yen)
Prior Consolidated Fiscal
Year Third Quarter(From November 1, 2011
to July 31, 2012)
Income before minority interests

Current Consolidated Fiscal
Year Third Quarter(From November 1, 2012
to July 31, 2013)

2,701,125

5,038,091

Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment

52,753

988,027

9,175

152,482

Total other comprehensive income

61,9291,140,509

2,763,054

6,178,601

2,781,320

5,818,508‐18,265

360,092

Quarter comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests－

11 －(3) Notes Relating to the Going Concern Assumption
The Company had no material items to report.
(4) Business Segment Information
I Third quarter of the prior consolidated fiscal year (from November 1, 2011 to July 31, 2012)
1. Information concerning revenues and profit or loss of each reporting segment(Unit: Thousands of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Revenues
Revenues from customers
Sales or transfers between
segments
Total
Segment operating income

Other businesses(See Note)

Total

54,015,273

4,702,196

58,717,469

－

－

－

54,015,273

4,702,196

58,717,469

4,014,083

102,817

4,116,900(Note) The “Other businesses” classification encompasses business segments not included in the reporting segment,
and includes business related to the Steel Sales Division and business related to the Information Products
Division and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly Consolidated
Statements of Income, and the main reasons for the difference (Matters Pertaining to Reconciliation of Difference)(Unit: Thousands of yen)Interest

AmountReporting segment total
Earnings from “Other businesses” classification
Other adjustments

4,014,083
102,817
127,369

Operating income reported on the Quarterly
Consolidated Statements of Income

4,244,269

3. Information concerning fixed asset impairment loss and goodwill by reporting segment(Material impairment loss pertaining to fixed assets)
An impairment loss has been recorded for assets used in the “business related to the Construction Equipment
Rental Division” reporting segment whose recoverable value is less than book value. The impairment loss amountreported for the consolidated third quarter under review is ¥183,896,000.
(Material gain on negative goodwill)In the “business related to the Construction Equipment Rental Division” reporting segment, a gain on negative
goodwill of ¥671,889,000 has been reported in extraordinary income because Unite Co., Ltd., a company whose
stock Kanamoto newly acquired, will be included within the scope of consolidation beginning from the consolidated
third quarter under review.

－

12 －

II Third quarter of the current consolidated fiscal year (from November 1, 2012 to July 31, 2013)
1. Information concerning revenues and profit or loss of each reporting segment(Unit: Thousands of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Revenues
Revenues from customers
Sales or transfers between
segments
Total
Segment operating income

Other businesses(See Note)

Total

74,624,964

5,663,238

80,288,203

－

－

－

74,624,964

5,663,238

80,288,203

8,087,454

123,674

8,211,128(Note) The “Other businesses” classification encompasses business segments not included in the reporting segment,
and includes business related to the Steel Sales Division and business related to the Information Products
Division and other businesses.
2.
Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining to Reconciliation ofDifference)(Unit: Thousands of yen)Interest

AmountReporting segment total
Earnings from “Other businesses” classification
Other adjustments

8,087,454
123,674
199,418

Operating income reported on the Quarterly
Consolidated Statements of Income

8,410,546

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.
(5) Note on Significant Changes to Shareholders’ Equity
The Company had no material items to report.

－

13 －