FY3/15 2Q Consolidated Financial Statements[J-GAAP]
November 14, 2014
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:
November 14, 2014
Date to start dividends distribution:
December 5, 2014
Supplementary quarterly materials prepared:
Yes
Quarterly results information meeting held:
Yes (for institutional investors and analysts)(Figures are rounded down to the nearest million yen)

1. FY3/15 2Q consolidated results (April 1, 2014 – September 30, 2014)(Percentages are year-on-year changes)(1) Consolidated results
Net sales
Operating income
Ordinary income
Net income(millions of yen)

FY3/15 2Q

87,623

FY3/14 2Q

83,872(Note) Comprehensive income:(%) (millions of yen)(%) (millions of yen)

4.5

2,010

-16.6

3.3

2,408

33.2

FY3/15 2Q: ¥1,422 million (-42.3%)

Net income per share(%) (millions of yen)

(%)

2,316

-13.1

1,560

-10.1

2,664

32.8

1,736

30.3

FY3/14 2Q: ¥2,463 million (95.5%)

Diluted net income per share
(yen)

(yen)

FY3/15 2Q

58.61

－

FY3/14 2Q

64.32

－

(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

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

End-FY3/15 2Q

68,576

48,38370.6

End-FY3/14

66,39847,44971.5(Reference) Shareholders’ equity:

End-FY3/15 2Q: ¥48,382 million

End-FY3/14: ¥47,447 million

2. Dividends
1Q

Annual Dividends
3Q

2Q
(yen)

(yen)

FY3/14－12.00

FY3/15－12.00

FY3/15 (Projections)

4Q

(yen)

Annual
(yen)

(yen)

－

12.00

24.00

－

12.00

24.00

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

3. Consolidated earnings projections for FY3/15 (April 1, 2014 – March 31, 2015)(Percentages are year-on-year changes)

Net sales(millions of yen)

FY3/15170,000

Operating income

Ordinary income

Net income
per share

Net income(%) (millions of yen)(%) (millions of yen)(%) (millions of yen)

(%)

(yen)

2.8

4.4

2.2

2.4

122.81

4,700

5,000

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

3,270

* 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: Yes
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 stock)2) Number of treasury shares
3) Average number of shares
during the period

End-FY3/15 2Q

28,908,581 shares End-FY3/14

28,908,581 shares

End-FY3/15 2Q

2,308,629 shares End-FY3/14

2,228,187 shares

FY3/15 2Q

26,625,910 shares FY3/14 2Q

27,001,371 shares

Presentation of implementation status for quarterly review procedures
The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to this report. At the time of
disclosure of this report, however, review procedures for quarterly financial statements pursuant to the Financial Instruments andExchange Act had been completed.

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. Matters concerning summary information (notes) .............................................................................. 3(1) Changes in accounting policies, changes in accounting estimates and restatement of revisions ............ 3

3. Quarterly consolidated financial statements ....................................................................................... 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 six months of the current fiscal year, the Japanese economy continued to recover at a moderate pace,with the job market and corporate earnings showing signs of improvement on the back of the government’s
economic stimulus measures and the Bank of Japan’s monetary policies. However, the outlook remained uncertain
due to concerns such as a prolonged pullback in demand after the hike to consumption tax.
Under these circumstances, performance in the Matsuda Sangyo Group’s business segments was as follows.
Precious metals business segment
In the precious metals division, sales volume for precious metal products expanded year on year amid a continued
recovery in production at key customers in the semiconductor and electronic parts sectors. However, sales volume
for electronic materials and other products fell year on year, and the price of some precious metals also declined.
As a result, sales as a whole in the division were lower compared with the same period a year earlier.
In the environmental division, production activity in target sectors recovered moderately, lifting the volume ofmaterials handled by the Group. However, sales in the division declined year on year, partly due to a drop in theprice of silver recovered from photosensitive materials.
As a result, net sales for the precious metals business segment totaled ¥61,223 million (down 1.2% year onyear), and operating income was ¥1,428 million (down 31.7% year on year).
Food business segment
Despite signs of a moderate recovery in the domestic economy, the food business segment faced a challenging
operating environment due to the pullback in demand after the consumption tax hike and higher costs caused by
the weak yen and other factors. Against this backdrop, sales in the segment increased year on year, supported by
growth in sales volume for seafood products, livestock products and agricultural products, and by higher prices.
As a result, net sales for the food business segment were ¥26,434 million (up 20.6% year on year), andoperating income was ¥581 million (up 82.7% year on year).
As a result of the above, for the first six months of the fiscal year ending March 31, 2015, consolidated net sales
were ¥87,623 million (up 4.5% year on year), operating income was ¥2,010 million (down 16.6% year on year),ordinary income was ¥2,316 million (down 13.1% year on year), and net income was ¥1,560 million (down 10.1%
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 six months were ¥68,576 million, an increase of ¥2,177 million from theprevious fiscal year end. This mainly reflected increases in notes and accounts receivable – trade, and inventories,
outweighing a decline in cash and deposits.
Liabilities
Total liabilities as of the end of the first six months were ¥20,192 million, an increase of ¥1,243 million from theprevious fiscal year end. This mainly reflected increases in loans payable and accrued income taxes, which was
greater than the decrease in other accounts payable.
Net assets
Net assets as of the end of the first six months were ¥48,383 million, an increase of ¥934 million from the previous
fiscal year end. This mainly reflected an increase from profit growth in the first six months of the fiscal year,
outweighing a decrease from the payment of year-end dividends.

2(2) Cash flows status
As of the end of the first six months under review, the balance of cash and cash equivalents (hereafter, “cash”)
stood at ¥5,617 million, a decrease of ¥1,180 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities used net cash of ¥1,564 million. This mainly reflected the difference between cash provided
from income before income taxes, depreciation and a decrease in accounts receivable – other on the one hand,and cash used due to increases in income taxes paid, notes and accounts receivable – trade, and inventories on
the other. Compared with the same period in the previous fiscal year, when operating activities generated net cashof ¥1,752 million, cash used by operating activities increased ¥3,316 million.
Cash flows from investing activities
Investing activities used net cash of ¥1,421 million. This was mainly due to the purchase of property, plant andequipment related to the installation and upgrade of equipment at the Group’s plants. Compared with the same
period in the previous fiscal year, when investing activities used net cash of ¥460 million, net cash used in investing
activities increased by ¥960 million.
Cash flows from financing activities
Financing activities generated net cash of ¥1,865 million. This primarily reflected a decrease in cash due todividends paid, outweighed by an increase from loans. Compared with the same period in the previous fiscal year,
when financing activities used net cash of ¥419 million, net cash generated in financing activities increased by¥2,284 million.

(3) Qualitative information on consolidated earnings projections
We have made no change to our consolidated earnings projections announced on May 12, 2014.

2. Matters concerning summary information (notes)(1) Changes in accounting policies, changes in accounting estimates and restatement of revisions(Application of “Accounting Standard for Retirement Benefits,” etc.)
Effective from the first quarter of fiscal year ending March 31, 2015, the Company has applied the provisions inparagraph 35 of “Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan (“ASBJ”)
Statement No.26, May 17, 2012) and the provisions in paragraph 67 of “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No.25, May 17, 2012). Accordingly, the Company has changed the way it
calculates retirement benefit liabilities and prior service costs. The method for determining the discount rate has
been changed from a bond period based on the number of years approximate to the average remaining working
lives of employees to a single weighted-average discount rate that reflects the periods until the expected paymentof retirement benefits and the amount of projected benefits for each such period.
The application of the accounting standard for retirement benefits, etc. conforms with the transitional treatment
stipulated in Item 37 of the Accounting Standard for Retirement Benefits, and the effect of the change in calculation
method of retirement benefit obligations and service costs is adjusted in retained earnings at the start of thesecond quarter of the current fiscal year.
As a result, at the start of the second quarter of the current fiscal year, net defined benefit liability increased by¥113 million and retained earnings decreased by ¥72 million. The application of the accounting standard for
retirement benefits, etc. had an immaterial impact on operating income, ordinary income and net income in the firstsix months of the current fiscal year.

33. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/14(As of March 31, 2014)

End-FY3/15 2Q(As of September 30, 2014)

AssetsCurrent assets
Cash and deposits

6,798

5,617

Notes and accounts receivable – trade

16,482

19,908Merchandise and finished goods

12,82814,022

313

233

6,235

6,279

420

475

Accounts receivable – other

1,547

894

Others

2,597

2,068

-43

-44

47,18149,455Work in process
Raw materials and supplies
Deferred tax assets

Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

7,664

7,715

Accumulated depreciation-3,760-3,922

Buildings and structures, net

3,903

3,793

Machinery, equipment and vehicles

6,776

6,932

Accumulated depreciation-4,385-4,742

Machinery, equipment and vehicles, net

2,390

2,189

7,773

7,759

264

254

Accumulated depreciation

-163

-164

Land
Leased assets

Leased assets, net

101

89

Construction in progress

126

35

Others997

1,011

Accumulated depreciation

-682

-716

Others, net

314

294

14,61014,162Others215

193

Total intangible assets

215

193

Investment securities

3,040

3,348

Deferred tax assets

Total property, plant and equipment
Intangible assets

Investments and other assets

119

77

Others

1,436

1,530

Allowance for doubtful accounts

-205

-191

Total investments and other assets

4,390

4,765

Total fixed assets

19,216

19,121

Total assets

66,39868,576

4

(millions of yen)
End-FY3/14(As of March 31, 2014)

End-FY3/15 2Q(As of September 30, 2014)

Liabilities
Current liabilities
Notes and accounts payable – trade

8,095

7,952

Short-term loans payable

1,347

3,987

Current portion of long-term loans payable

623

890

Lease obligations

47

37

Income taxes payable

579

792

Provision for bonuses

623

717

Accounts payable – other

2,258

953

Others

2,278

2,334

Total current liabilities

15,854

17,666

Non-current liabilities
Long-term loans payable

2,244

1,649

Lease obligations

53

51

Provision for directors’ retirement benefits

596

565

Net defined benefit liability

156

211

Others

44

48

3,095

2,526

18,94920,192

3,559

3,559

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus

4,008

4,008

Retained earnings

41,31142,479Treasury shares-2,526-2,621

Total shareholders’ equity

46,35347,425

Valuation difference on available-for-salesecurities

252

339

Deferred gains or losses on hedges

86

46

Foreign currency translation adjustments

770

581

Remeasurements of defined benefit plans

-14

-11

1,094

956

Accumulated other comprehensive income

Total accumulated other comprehensive income
Minority interests

1

1

Total net assets

47,44948,383

66,39868,576

Total liabilities and net assets5(2) Quarterly consolidated statements of income and comprehensive income[Quarterly consolidated statements of income](millions of yen)
FY3/14 2Q(April 1, 2013 –September 30, 2013)

FY3/15 2Q(April 1, 2014 –September 30, 2014)

Net sales

83,872

87,623

Cost of sales

75,751

79,897Gross profit

8,121

7,725

Selling, general, and administrative expenses

5,712

5,715

Operating income

2,408

2,010

Interest income

33

Dividend income

10

11

Share of profit of entities accounted for using
equity method

120

249

Purchase discounts

108House rent income

30

26

Insurance income

174

18

Non-operating income

Foreign exchange gains-

15

Others18

28

Total non-operating income

368

361

Interest expenses

20

21

Foreign exchange losses

46-

Cost of lease revenue

32

19

Others13

13

Total non-operating expenses

112

54

Ordinary income

2,664

2,316

Income before income taxes

Non-operating expenses

2,664

2,316

Income taxes – current

882

786

Income taxes – deferred

48

-30

Total income taxes

930

755

1,733

1,561

Income before income taxes and minority interests
Minority interests in loss
Net income

6

-2

0

1,736

1,560

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/14 2Q(April 1, 2013 –September 30, 2013)
Income before minority interests

FY3/15 2Q(April 1, 2014 –September 30, 2014)

1,733

1,561

Valuation difference on available-for-salesecurities

38

87

Deferred gains or losses on hedges

160

-40

Foreign currency translation adjustments

417

-142

Remeasurements of defined benefit plans-

3

Share of other comprehensive income ofaffiliates accounted for using equity method

113

-46

Other comprehensive income

Total other comprehensive income

729

-138

2,463

1,422

Comprehensive income attributable to ownersof the parent

2,465

1,422

Comprehensive income attributable to minority
interests-20Comprehensive income
Comprehensive income attributable to7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/14 2Q(April 1, 2013 –September 30,
2013)

FY3/15 2Q(April 1, 2014 –September 30,
2014)

Cash flows from operating activities
Income before income taxes and minority interests

2,664

2,316

Depreciation

484

657

Increase (decrease) in allowance for doubtful accounts (‘-’ means
decrease)

-77

-12

Increase (decrease) in provision for bonuses (‘-’ means decrease)

92

93

-46

-

-

-54

22

-31

Interest and dividend income

-13

-15

Interest expenses

20

21

-120

-249

1,110

-3,456

264

470

-600

-1,212

39

-101

-392

-222

Others-459

734

Subtotal

Increase (decrease) in provision for retirement benefits (‘-’ means
decrease)
Increase (decrease) in net defined benefit liability (‘-’ means
decrease)
Increase (decrease) in provision for directors’ retirement bonuses(‘-’ means decrease)

Share of (profit) loss of entities accounted for using equity method
Decrease (increase) in notes and accounts receivable – trade(‘-’ means increase)
Decrease (increase) in accounts receivable – other (‘-’ meansincrease)
Decrease (increase) in inventories (‘-’ means increase)
Increase (decrease) in accounts payable – trade (‘-’ means
decrease)
Increase (decrease) in accounts payable – other (‘-’ means
decrease)

2,989-1,059Interest and dividend income received

81

47

Interest paid

-20

-21

Income taxes paid

-1,297-530

Cash flows from operating activities

1,752-1,564Purchase of property, plant and equipment-393-1,292

Purchase of intangible assets

-39

-9

Purchase of investment securities-4-4

Others-22-115

Cash flows from investing activities-460-1,421

Cash flows from investing activities8

(millions of yen)
FY3/14 2Q(April 1, 2013 –September 30,
2013)

FY3/15 2Q(April 1, 2014 –September 30,
2014)

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

523

2,640

Repayments of long-term loans payable

-387

-328

Purchase of treasury shares

-198

-94

Cash dividends paid

-324

-320

Others-32-31

Cash flows from financing activities

-419

1,865

Effect of exchange rate change on cash and cash equivalents

247

-60

Change in cash and cash equivalents (‘-’ means decrease)

1,119-1,180Cash and cash equivalents at beginning of period

8,582

6,798

Cash and cash equivalents at end of period

9,701

5,617

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)
FY3/15 2Q (April 1, 2014 – September 30, 2014)
There is nothing to report.

(Segment Information, etc.)
I. FY3/14 2Q (April 1, 2013 – September 30, 2013)
1. Sales and profits or losses by reportable segments

Reportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

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

Net sales
Net sales to external
partiesIntersegment sales
and transfers

61,98821,884

83,872―

83,872

2

26

29

-29

―

Total

61,99021,91083,901-29

83,872

Segment income

2,090

318

2,408

―

2,408

(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.
2. Matters concerning changes in reportable segments, etc.
There is nothing to report.
II. FY3/15 2Q (April 1, 2014 – September 30, 2014)
1. Sales and profits or losses by reportable segments

Reportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

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

Net sales
Net sales to external
partiesIntersegment sales
and transfers

61,221

26,401

87,623―87,623

2

32

35

-35

―

Total

61,223

26,43487,658-35

87,623

Segment income

1,428

581

2,010

―

2,010

(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

2. Matters concerning changes in reportable segments, etc.
Effective from the first quarter of fiscal year ending March 31, 2015, the Company has applied the provisions inparagraph 35 of “Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan (“ASBJ”)
Statement No.26, May 17, 2012) and the provisions in paragraph 67 of “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No.25, May 17, 2012). Accordingly, the Company has changed the way it
calculates retirement benefit liabilities and prior service costs. The method for determining the discount rate has
been changed from a bond period based on the number of years approximate to the average remaining working
lives of employees to a single weighted-average discount rate that reflects the periods until the expected paymentof retirement benefits and the amount of projected benefits for each such period.
The application of the accounting standard for retirement benefits, etc. had an immaterial impact on segment
income in the first six months of the current fiscal year.

11