FY3/19 1Q Consolidated Financial Statements[J-GAAP]
August 9, 2018
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, 2018
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. FY3/19 1Q consolidated results (April 1, 2018 – June 30, 2018)(1) Consolidated results
Net sales(millions of yen)

FY3/19 1Q

52,941

FY3/18 1Q

45,721(Note) Comprehensive income:(Percentages are year-on-year changes)

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

15.8

1,265

19.8

17.8

1,055

99.5

FY3/19 1Q: ¥731 million (+1.3%)

Earnings per share

Profit attributable toowners of parent

Ordinary income(%) (millions of yen)

(%)

1,371

18.6

898

18.0

1,156

113.6

761

130.8

FY3/18 1Q: ¥722 million (+2,011.9%)

Diluted earnings per share
(yen)

(yen)

FY3/19 1Q

34.13

－

FY3/18 1Q

28.93

－

(2) Consolidated financial position
Total assets

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

81,00257,01070.3

56,64870.5

End-FY3/19 1Q
End-FY3/18

80,261(Reference) Shareholders’ equity:

Shareholders’ equity ratio

End-FY3/19 1Q: ¥56,949 million

End-FY3/18: ¥56,592 million

Note: Effective from the first quarter of the current fiscal year, the Company has applied “Partial Amendments to AccountingStandard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018). The changes have been retroactively applied
to amounts for the fiscal year ended March 31, 2018.

2. Dividends
1Q
(yen)

FY3/18－

FY3/19－FY3/19 (Projections)

Annual dividends
3Q

2Q
(yen)

(yen)

4Q

Annual
(yen)

(yen)

14.00

－

14.00

28.00

15.00

－

15.00

30.00

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

3. Consolidated earnings projections for FY3/19 (April 1, 2018 – March 31, 2019)(Percentages are year-on-year changes)

Net sales(millions of yen)

1H FY3/19
FY3/1996,000200,000

Operating income

Ordinary income

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

(%)

(yen)

1.8
5.2

8.9
2.5

3.2
1.1

2.3
1.2

63.79
132.91

2,400
5,000

2,500
5,200

1,680
3,500

(Note) Revisions to the most recently announced projections of consolidated earnings: No* 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-FY3/19 1Q

28,908,581 shares End-FY3/18

28,908,581 shares

End-FY3/19 1Q

2,575,642 shares End-FY3/18

2,575,524 shares

FY3/19 1Q

26,332,982 shares FY3/18 1Q

26,333,475 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
and information 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, pleaserefer 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 ................................................................................... 9(Notes on premise of a going concern) .................................................................................................................. 9(Notes on significant changes in the amount of shareholders’ equity) ................................................................... 9(Additional information) ........................................................................................................................................ 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, 2019, the Japanese economy continued to recover at amoderate pace, supported by improving corporate earnings and employment conditions. However, the outlook
remained unclear due to weakness in consumer spending and rising uncertainty 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, 2019, consolidated net
sales were ¥52,941 million (up 15.8% year on year), operating income was ¥1,265 million (up 19.8% year on year),ordinary income was ¥1,371 million (up 18.6% year on year), and profit attributable to owners of parent was ¥898
million (up 18.0% 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 remained firm overall,centered on electronic parts and devices. Against this backdrop, the Group’s precious metals division increased thevolume of precious metal recycling, boosted sales volume for precious metal products and increased the amount ofindustrial waste treatment. Along with higher sales prices for precious metals, that growth supported higher sales
overall compared with the same period of the previous fiscal year.
As a result, net sales for the precious metals business segment totaled ¥34,067 million (up 18.7% year on year),and operating income was ¥846 million (up 37.9% year on year).
Food business segment
In the food business segment, production activity at key customers in the food processing sector increased
gradually, despite weakness in consumer spending in Japan. Production activity was mainly supported by strong
demand for processed food products and moves into overseas markets. In this environment, the Group’s foodbusiness segment reported higher sales compared with the same period of the previous fiscal year, supported byan increase in sales volume for seafood products and livestock products and by rising sales prices for seafood
products.
As a result, net sales for the food business segment were ¥18,896 million (up 10.8% year on year), andoperating income was ¥419 million (down 5.3% 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 ¥81,002 million, an increase of ¥741 million from theprevious fiscal year end. This mainly reflected the difference between increases for cash and deposits and fornotes and accounts receivable – trade, and decrease in inventories.
Liabilities
Total liabilities as of the end of the first three months were ¥23,992 million, an increase of ¥379 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 ¥57,010 million, an increase of ¥362 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 ¥8,902 million, an increase of ¥1,330 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities provided net cash of ¥1,604 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 income taxes paidon the other. Compared with the same period in the previous fiscal year, when operating activities used net cash of¥1,975 million, cash from operating activities increased by ¥3,580 million.
Cash flows from investing activities
Investing activities used net cash of ¥253 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 ¥264 million, cash used by investing
activities decreased by ¥10 million.
Cash flows from financing activities
Financing activities provided net cash of ¥62 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 provided net cash of ¥2,513 million, cash from financing activities
decreased by ¥2,450 million.

(3) Qualitative information on consolidated earnings projections
We have made no change to our consolidated earnings projections announced on May 11, 2018.

3

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/18(As of March 31, 2018)

End-FY3/19 1Q(As of June 30, 2018)

AssetsCurrent assets
Cash and deposits

7,571

8,902

Notes and accounts receivable – trade

22,502

23,074Merchandise and finished goods

16,77816,036Work in process

393

432

Raw materials and supplies

6,531

6,384

Others

3,584

3,221

(0)

(0)

57,362

58,051

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

9,201

9,159

Accumulated depreciation(4,875)(4,933)

Buildings and structures, net

4,325

4,225

Machinery, equipment and vehicles

8,383

8,400

Accumulated depreciation(6,740)(6,801)

Machinery, equipment and vehicles, net

1,643

1,599

8,925

8,911

849

900

Accumulated depreciation

(284)

(322)

Leased assets, net

564

577

Construction in progress

199

324

Land
Leased assets

Others

1,135

1,132

Accumulated depreciation

(927)

(929)

Others, net

208

203

15,867

15,840

Others774

744

Total intangible assets

774

744

Investment securities

4,575

4,692

Deferred tax assets

72

68

Total property, plant and equipment
Intangible assets

Investments and other assets

Others

1,673

1,669

Allowance for doubtful accounts

(64)

(64)

Total investments and other assets

6,256

6,366

Total non-current assets

22,89822,950Total assets

80,26181,002

4

(millions of yen)
End-FY3/18(As of March 31, 2018)

End-FY3/19 1Q(As of June 30, 2018)

Liabilities
Current liabilities
Accounts payable – trade

7,626

7,837

Short-term loans payable

7,402

5,102

Current portion of long-term loans payable

1,063

1,356

Lease obligations

206

214

Income taxes payable

1,155

387

Provision for bonuses

763

447

Others

3,104

3,702

Total current liabilities

21,321

19,046Long-term loans payable

535

3,043

Lease obligations

456

451

Provision for directors’ retirement benefits

604

583

Provision for executive officers’ retirement
benefits

23

23

Net defined benefit liability

224

230

Deferred tax liabilities

333

552

Others11560

Non-current liabilities

Total non-current liabilities

2,291

4,945

23,61323,992

Common stock

3,559

3,559

Capital surplus

4,008

4,008

Retained earnings

50,23850,768Treasury shares(3,010)(3,010)Total shareholders’ equity

54,79555,326

Valuation difference on available-for-salesecurities

630

659

Deferred gains or losses on hedges

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

121

164

Foreign currency translation adjustment

1,101

851

Remeasurements of defined benefit plans

(56)

(51)

1,796

1,623

55

60

56,64857,01080,26181,002

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

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

Net sales

45,721

52,941

Cost of sales

41,31548,022Gross profit

4,405

4,919

Selling, general, and administrative expenses

3,349

3,653

Operating income

1,055

1,265

Interest income

20Dividend income

10

11

-

12

111

98

Purchase discounts

43

Others11

12

Total non-operating income

140

139

Interest expenses

10

13

Foreign exchange losses

13

14

Loss on valuation of investment securities

11-

Others55Total non-operating expenses

41

33

Ordinary income

1,156

1,371

Profit before income taxes

1,156

1,371

Non-operating income

Gain on sales of investment securities
Share of profit of entities accounted for using
equity method

Non-operating expenses

Income taxes – current

220

277

Income taxes – deferred

168

189

Total income taxes

389

466

Profit

766

904

4

5

761

898

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

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/18 1Q(April 1, 2017 –June 30, 2017)
ProfitFY3/19 1Q(April 1, 2018 –June 30, 2018)
766

904

Valuation difference on available-for-salesecurities

4

28

Deferred gains or losses on hedges

70

44

Foreign currency translation adjustments

(86)

(230)

Remeasurements of defined benefit plans

42

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

(37)

(17)

Total other comprehensive income (loss)

(44)

(173)

722

731

Comprehensive income attributable to ownersof parent

716

725

Comprehensive income attributable to noncontrolling interests

5

5

Other comprehensive income

Comprehensive income
Comprehensive income attributable to7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/18 1Q(April 1, 2017 –June 30, 2017)

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

Cash flows from operating activities
Profit before income taxes

1,156

1,371

Depreciation

338

314

Increase (decrease) in allowance for doubtful accounts

(5)

0

(295)

(315)

Increase (decrease) in net defined benefit liability

911

Increase (decrease) in provision for directors’ retirement benefits

99Increase (decrease) in provision for executive officers’ retirement
benefits

1

1

Interest and dividend income

(13)

(12)

Interest expenses

Increase (decrease) in provision for bonuses

10

13

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

(111)

(98)

Decrease (increase) in notes and accounts receivable – trade

(531)

(623)

(1,010)800

Increase (decrease) in accounts payable – trade

(953)

245

Others(161)879

Subtotal

Decrease (increase) in inventories(1,555)2,597Interest and dividend income received

13

12Interest paid

(10)

(13)

Income taxes paid

(422)

(991)

(1,975)

1,604

Purchase of property, plant and equipment

(345)

(229)

Purchase of intangible assets

(25)

(11)

Net cash provided by (used in) operating activities
Cash flows from investing activities

Purchase of investment securities

(1)

(1)

Others108(11)

Net cash provided by (used in) investing activities

(264)

(253)

3,206

(2,314)

Proceeds from long-term loans payable

-

3,000

Repayments of long-term loans payable

(288)

(198)

Cash dividends paid

(368)

(368)

Others

(36)

(55)

2,513

62

Effect of exchange rate change on cash and cash equivalents

(28)

(83)

Net increase (decrease) in cash and cash equivalents

245

1,330

Cash and cash equivalents at beginning of period

6,784

7,571

Cash and cash equivalents at end of period

7,029

8,902

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

Net cash provided by (used in) financing activities8(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.

(Additional information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”)
Effective from the first quarter of the current fiscal year, the Company has applied “Partial Amendments to
Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018). As a result, theCompany now classifies deferred tax assets as investments and other assets, and deferred tax liabilities as noncurrent liabilities. Figures for the previous fiscal year in the consolidated financial statements have been reclassified
to reflect these changes.

9(Segment information, etc.)
I. FY3/18 1Q (April 1, 2017 – June 30, 2017)
1. Sales and income 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(1) Net sales to external
parties(2) Intersegment sales
and transfers
Total
Segment income(Notes)

28,68817,03245,721―45,721

―

14

14

(14)

―

28,68817,04745,736(14)

45,721

613

442

1,055

―

1,055

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. FY3/19 1Q (April 1, 2018 – June 30, 2018)
1. Sales and income 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(1) Net sales to external
parties(2) Intersegment sales
and transfers
Total
Segment income

34,067

18,87452,941―

52,941

―

21

21

(21)

―

34,067

18,89652,963(21)

52,941

846

419

1,265

―

1,265

(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