FY3/20 1Q Consolidated Financial Statements[J-GAAP]
August 8, 2019
Company name: Matsuda Sangyo Co., Ltd.
Exchanges listed on:
Tokyo Stock Exchange (First Section)
7456
URL:
http://www.matsuda-sangyo.co.jp
Company code:
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 9, 2019
Date to start dividends distribution:－
Supplementary quarterly materials prepared:
None
Quarterly results information meeting held:
None(Figures are rounded down to the nearest million yen)

1. FY3/20 1Q consolidated results (April 1, 2019 – June 30, 2019)(1) Consolidated results
Net sales(millions of yen)

FY3/20 1Q

49,774

FY3/19 1Q

52,941(Note) Comprehensive income:(Percentages are year-on-year changes)(%) (millions of yen)(%) (millions of yen)

(6.0)

1,590

25.7

15.8

1,265

19.8

FY3/20 1Q: ¥867 million (+18.6%)

Earnings per share

Profit attributable toowners of parent

Ordinary income

Operating income(%) (millions of yen)

(%)

1,620

18.2

1,098

22.2

1,371

18.6

898

18.0

FY3/19 1Q: ¥731 million (+1.3%)

Diluted earnings per share
(yen)

(yen)

FY3/20 1Q

41.73

－

FY3/19 1Q

34.13

－

(2) Consolidated financial position
Total assets

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

83,99959,44070.7

58,96872.8

End-FY3/20 1Q
End-FY3/19

80,915(Reference) Shareholders’ equity:

Shareholders’ equity ratio

End-FY3/20 1Q: ¥59,351 million

End-FY3/19: ¥58,889 million

2. Dividends
1Q
(yen)

FY3/19－FY3/20－

Annual dividends
3Q

2Q
(yen)

FY3/20 (Projections)

4Q

(yen)

Annual
(yen)

(yen)

15.00

－

15.00

30.00

17.00

－

17.00

34.00

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

3. Consolidated earnings projections for FY3/20 (April 1, 2019 – March 31, 2020)(Percentages are year-on-year changes)

Net sales(millions of yen)

1H FY3/20
FY3/20Operating income(%) (millions of yen)

92,000 (10.4)
200,000 (4.0)

2,300
5,000

Ordinary income(%) (millions of yen)

(8.2)
1.0

Profit attributable to Earnings pershareowners of parent(%) (millions of yen)

2,330 (14.4)
5,100
0.1

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

(%)

(yen)

1,570 (15.4)
3,450
1.7

59.62
131.01

* 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(Note) For details, please refer to “2. Quarterly consolidated financial statements and related notes, (4) Notes on quarterly
consolidated financial statements” on page 10 of the attached documents.

(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-FY3/20 1Q

28,908,581 shares End-FY3/19

28,908,581 shares

End-FY3/20 1Q

2,575,877 shares End-FY3/19

2,575,791 shares

FY3/20 1Q

26,332,729 shares FY3/19 1Q

26,332,982 shares* These quarterly financial statements are outside the scope of audit procedures conducted by certified public
accountants and the independent auditor.
*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 and provide no guarantee of future performance. 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(Changes in accounting policy)............................................................................................................................. 10(Segment information, etc.) .................................................................................................................................. 111

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, 2020, the Japanese economy continued to recover at amoderate pace, supported by improving income and employment conditions, despite some weakness in exports
and other areas. The outlook also remained unclear due to uncertainties such as the impact of trade issues on the
global economy, the outlook for the Chinese economy, and economic trends and policies in overseas economies.
Against this backdrop, the Matsuda Sangyo Group’s precious metals business segment stepped up marketing
activities and actively used production sites in Japan and overseas 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 of overseas 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, 2020, consolidated net
sales were ¥49,774 million (down 6.0% year on year), operating income was ¥1,590 million (up 25.7% year onyear), ordinary income was ¥1,620 million (up 18.2% year on year), and profit attributable to owners of parent was¥1,098 million (up 22.2% year on year).
Performance in the Matsuda Sangyo Group’s business segments was as follows.
Precious metals business segment
In the precious metals business segment, key customers in the electronics sector faced challenging conditions
amid declining production of electronic parts and devices, partly due to the impact of trade issues. Against thatbackdrop, there was a modest decline in the volume of precious metal recycling and the amount of industrial waste
treated on an outsourcing basis by the Group’s precious metals business segment. In particular, precious metal
product sales volume fell due to a drop in the amount of precious metal bullion purchased, leading to a decline insales overall compared with the same period of the previous fiscal year. However, operating income increased year
on year, supported by higher selling prices and lower costs.
As a result, net sales for the precious metals business segment totaled ¥29,022 million (down 14.8% year onyear), and operating income was ¥1,093 million (up 29.3% year on year).
Food business segment
In the food business segment, production activity at key customers in the food processing sector was firm overall
amid rising demand for processed food products, despite continued weakness in domestic consumer spending. In
this environment, the segment reported higher sales year on year, supported by an increase in sales volume for
seafood products, livestock products and agricultural products.
As a result, net sales for the food business segment were ¥20,781 million (up 10.0% year on year), andoperating income was ¥496 million (up 18.5% year on year).

(2) Qualitative information on consolidated financial position(1) Assets, liabilities and net assets
AssetsTotal assets as of the end of the first three months were ¥83,999 million, an increase of ¥3,084 million from theprevious fiscal year end. This mainly reflected an increase for notes and accounts receivable – trade due to higher
sales in the food business segment.
Liabilities
Total liabilities as of the end of the first three months were ¥24,558 million, an increase of ¥2,611 million from theprevious fiscal year end. This was mainly attributable to an increase in short-term loans payable to provide funds
for working capital.
Net assets
Net assets as of the end of the first three months were ¥59,440 million, an increase of ¥472 million from theprevious fiscal year end. This mainly reflected an increase in retained earnings, which outweighed year-end cash
dividends paid of ¥394 million.

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 ¥7,936 million, an increase of ¥120 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities used net cash of ¥2,180 million. This mainly reflected the difference between cash provided
from profit before income taxes and decrease in inventories on the one hand, and cash used for increase in notes
and accounts receivable – trade, 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 ¥1,604
million, cash from operating activities decreased by ¥3,785 million.
Cash flows from investing activities
Investing activities used net cash of ¥666 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 ¥253 million, cash used by investing
activities increased by ¥412 million.
Cash flows from financing activities
Financing activities provided net cash of ¥2,935 million. This mainly reflected cash provided by proceeds fromshort-terms loans payable, which outweighed cash used for year-end cash dividends paid. Compared with thesame period in the previous fiscal year, when financing activities provided net cash of ¥62 million, cash fromfinancing activities increased by ¥2,872 million.

(3) Qualitative information on consolidated earnings projections
The Company has not revised its interim or full-year consolidated earnings forecasts disclosed with financial
statements for the fiscal year ended March 31, 2019, released on May 13, 2019.

3

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/19(As of March 31, 2019)

End-FY3/20 1Q(As of June 30, 2019)

AssetsCurrent assets
Cash and deposits

7,816

7,936

Notes and accounts receivable – trade20,522

23,553Merchandise and finished goods

16,702

17,046Work in process

542

475

Raw materials and supplies

6,942

6,079

Others

4,440

4,458

(4)

(8)

56,96159,542

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

9,177

9,314

Accumulated depreciation(5,131)(5,205)

Buildings and structures, net

4,045

4,109

Machinery, equipment and vehicles

8,800

8,875

Accumulated depreciation(7,158)(7,303)

Machinery, equipment and vehicles, net

1,642

1,571

Land

9,036

9,049

Leased assets

1,181

1,494

Accumulated depreciation

(449)

(575)

Leased assets, net

731

918

Construction in progress

1,303

1,734

Others

1,302

1,343

Accumulated depreciation(965)(1,003)

Others, net

337

340

17,09817,724

Others642

631

Total intangible assets

642

631

Investment securities

4,512

4,376

Deferred tax assets

115

141

Total property, plant and equipment
Intangible assets

Investments and other assets

Others

1,601

1,609

Allowance for doubtful accounts

(16)

(25)

Total investments and other assets

6,212

6,101

Total non-current assets

23,95324,457

Total assets

80,91583,9994

(millions of yen)
End-FY3/19(As of March 31, 2019)

End-FY3/20 1Q(As of June 30, 2019)

Liabilities
Current liabilities
Accounts payable – trade

8,170

7,682

Short-term loans payable

3,081

6,674

Current portion of long-term loans payable

755

708

Lease obligations

271

334

Income taxes payable

914

385

Provision for bonuses

818

496

Others

3,803

4,129

Total current liabilities

17,814

20,411

2,480

2,335

Lease obligations

524

640

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

625

638

28

9

185

187

Deferred tax liabilities

220

300

Non-current liabilities
Long-term loans payable

Others

68

35

4,132

4,147

21,94624,558

Common stock

3,559

3,559

Capital surplus

4,008

4,008

Retained earnings

52,86553,569Treasury shares(3,010)(3,010)Total shareholders’ equity

57,422

58,126

Valuation difference on available-for-salesecurities

585

502

Deferred gains or losses on hedges

41

(224)

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

Accumulated other comprehensive income

Foreign currency translation adjustment

855

957

Remeasurements of defined benefit plans

(15)

(11)

1,466

1,224

79

89

58,96859,44080,91583,999Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets5(2) Quarterly consolidated statements of income and comprehensive income[Quarterly consolidated statements of income](millions of yen)
FY3/19 1Q(April 1, 2018 –June 30, 2018)

FY3/20 1Q(April 1, 2019 –June 30, 2019)

Net sales

52,941

49,774

Cost of sales

48,022

44,329Gross profit

4,919

5,444

Selling, general, and administrative expenses

3,653

3,854

Operating income

1,265

1,590

Interest income

01

Dividend income

1111Gain on sales of investment securities

12-

Share of profit of entities accounted for using
equity method

98

1

Purchase discounts

32

Insurance claim income

019Compensation income

Non-operating income-

34

Others11

10

Total non-operating income

139

82

Interest expenses

13

15

Foreign exchange losses

14

25

Others5

10Total non-operating expenses

33

51

Ordinary income

1,371

1,620

Profit before income taxes

1,371

1,620

Non-operating expenses

Income taxes – current

277

311

Income taxes – deferred

189

201

Total income taxes

466

513

Profit

904

1,107

5

8

898

1,098

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

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/19 1Q(April 1, 2018 –June 30, 2018)
ProfitFY3/20 1Q(April 1, 2019 –June 30, 2019)
904

1,107

Valuation difference on available-for-salesecurities

28

(82)

Deferred gains or losses on hedges

Other comprehensive income

44

(265)

Foreign currency translation adjustments

(230)

124

Remeasurements of defined benefit plans2

3

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

(17)

(20)

Total other comprehensive income (loss)

(173)

(240)

731

867

Comprehensive income attributable to ownersof parent

725

856

Comprehensive income attributable to noncontrolling interests

5

10

Comprehensive income
Comprehensive income attributable to7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/19 1Q(April 1, 2018 –June 30, 2018)

FY3/20 1Q(April 1, 2019 –June 30, 2019)

Cash flows from operating activities
Profit before income taxes

1,371

1,620

314

356

0

13

(315)

(322)

Increase (decrease) in net defined benefit liability

11

5

Increase (decrease) in provision for directors’ retirement benefits

916

Increase (decrease) in provision for executive officers’ retirement
benefits

1

1

Interest and dividend income

(12)

(13)

Interest expenses

13

15

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

(98)

(1)

Decrease (increase) in notes and accounts receivable – trade(623)(2,995)Decrease (increase) in inventories

800

617

Increase (decrease) in accounts payable – trade

245

(514)

Others879(198)

Subtotal

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

2,597(1,398)Interest and dividend income received

12

13Interest paid

(13)

(15)

Income taxes paid

(991)

(779)

Net cash provided by (used in) operating activities

1,604(2,180)Purchase of property, plant and equipment

(229)

(631)

Purchase of intangible assets

Cash flows from investing activities

(11)

(29)

Purchase of investment securities

(1)

(1)

Others(11)(3)

Net cash provided by (used in) investing activities

(253)

(666)

8

(millions of yen)
FY3/19 1Q(April 1, 2018 –June 30, 2018)

FY3/20 1Q(April 1, 2019 –June 30, 2019)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(2,314)

3,606

Proceeds from long-term loans payable

3,000

-

Repayments of long-term loans payable

(198)

(191)

Cash dividends paid

(368)

(394)

Others(55)(84)

Net cash provided by (used in) financing activities

62

2,935

(83)

31

Net increase (decrease) in cash and cash equivalents

1,330

120

Cash and cash equivalents at beginning of period

7,571

7,816

Cash and cash equivalents at end of period

8,902

7,936

Effect of exchange rate change on cash and cash equivalents9(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.

(Changes in accounting policy)
Group subsidiaries that have adopted International Financial Reporting Standards (IFRS) have applied IFRS
standard 16 for leases (IFRS 16), effective from the first quarter of the fiscal year under review. As a result, inprinciple, lessees now recognize all assets and liabilities arising from a lease on their balance sheets. In
accordance with transitional measures, the Company has adopted a method to recognize the cumulative impact ofapplying IFRS 16 as of the date of initial application.
As a result, as of the end of the first quarter of the current fiscal year, property, plant and equipment increased¥188 million, lease obligations under current liabilities increased ¥49 million, and lease obligations under noncurrent liabilities increased ¥139 million. The change in accounting standard had an immaterial impact on profits forthe first quarter of the current fiscal year.

10

(Segment information, etc.)
I. FY3/19 1Q (April 1, 2018 – June 30, 2018)
1. Sales and income or losses by reportable segments(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

Total

Note 2

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

34,067

18,87452,941-

52,941

-

21

21

(21)

-

34,067

18,89652,963(21)

52,941

846

419

1,265

-

1,265

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. FY3/20 1Q (April 1, 2019 – June 30, 2019)
1. Sales and income or losses by reportable segments(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

Total

Note 2

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

29,022

20,752

49,774-

49,774

-

29

29

(29)

-

29,022

20,78149,804(29)

49,774

1,093

496

1,590

-

1,590

(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.

11