FY3/18 3Q Consolidated Financial Statements[J-GAAP]

February 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:
February 13, 2018
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. FY3/18 3Q consolidated results (April 1, 2017 – December 31, 2017)(1) Consolidated results
Net sales(millions of yen)

FY3/18 3Q

146,560

FY3/17 3Q

120,671(Note) Comprehensive income:Operating income(%) (millions of yen)

(Percentages are year-on-year changes)(%) (millions of yen)

21.5

4,009

95.8

(4.3)

2,047

(25.7)

FY3/18 3Q: ¥3,166 million (+315.5%)

Earnings per share

Profit attributable toowners of parent

Ordinary income(%) (millions of yen)

(%)

4,322

77.7

2,968

81.5

2,432

(26.2)

1,635(27.0)

FY3/17 3Q: ¥762 million (-60.3%)

Diluted earnings per share
(yen)

(yen)

FY3/18 3Q

112.74－

FY3/17 3Q

62.09

－

(2) Consolidated financial position
Total assets

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

78,66855,84770.9

53,41973.4

End-FY3/18 3Q
End-FY3/17

72,715(Reference) Shareholders’ equity:

Shareholders’ equity ratio

End-FY3/18 3Q: ¥55,804 million

End-FY3/17: ¥53,390 million

2. Dividends
1Q
FY3/17－

FY3/18

－

(yen)

2Q

(yen)

14.00
14.00

Annual dividends
3Q

4Q

(yen)

－

Annual

(yen)

(yen)

14.00

28.00

14.00

28.00

－

FY3/18 (Projections)(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(millions of yen)

FY3/18

193,000

Operating income

Ordinary income

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

(%)

(yen)

18.4

62.1

50.3

45.0

135.19

4,800

5,200

(Note) Revisions to the most recently announced projections of consolidated earnings: Yes

3,560

* 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 3Q

28,908,581 shares End-FY3/17

28,908,581 shares

End-FY3/18 3Q

2,575,441 shares End-FY3/17

2,575,021 shares

FY3/18 3Q

26,333,360 shares FY3/17 3Q

26,333,758 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 nine months of the fiscal year ending March 31, 2018, the Japanese economy continued to recover,supported by a sustained improvement in corporate earnings and employment conditions. However, consumer
spending lacked momentum. Furthermore, 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 nine months of the fiscal year ending March 31, 2018, consolidated net
sales were ¥146,560 million (up 21.5% year on year), operating income was ¥4,009 million (up 95.8% year onyear), ordinary income was ¥4,322 million (up 77.7% year on year), and profit attributable to owners of parent was¥2,968 million (up 81.5% 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, production activity remained strong at key customers in the electronics
sector, particularly makers of semiconductors and electronic devices. Against this backdrop, the volume of precious
metal recycling and industrial waste treatment handled by the Group’s precious metals business segment
increased year on year. Although sales volume for silver products declined, sales volume for gold products andelectronic 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 ¥92,770 million (up 23.6% year on year),and operating income was ¥2,672 million (up 126.1% year on year).
Food business segment
In the food business segment, production activity at key customers in the food processing sector was firm overall,
supported by business expansion overseas amid sluggish consumer spending in Japan. In this environment, sales
volume for seafood products and livestock products increased and sales were higher than in the same period of
the previous fiscal year.
As a result, net sales for the food business segment were ¥53,836 million (up 17.9% year on year), andoperating income was ¥1,336 million (up 54.4% 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 nine months were ¥78,668 million, an increase of ¥5,952 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 nine months were ¥22,820 million, an increase of ¥3,523 million from theprevious fiscal year end. This mainly reflected an increase in loans.
Net assets
Net assets as of the end of the first nine months were ¥55,847 million, an increase of ¥2,428 million from theprevious fiscal year end. This mainly reflected an increase in retained earnings, which outweighed cash dividends
paid.

2

(2) Cash flows status
As of the end of the first nine months under review, the balance of cash and cash equivalents (hereafter, “cash”)
stood at ¥6,850 million, an increase of ¥66 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities used net cash of ¥388 million. This mainly reflected the difference between cash provided fromprofit before income taxes and depreciation on the one hand, and cash used due to increase in notes and accounts
receivable – trade, increase in inventories, and income taxes paid on the other. Compared with the same period in
the previous fiscal year, when operating activities used net cash of ¥1,512 million, cash used by operating activities
decreased by ¥1,124 million.
Cash flows from investing activities
Investing activities used net cash of ¥1,481 million. This was mainly due to the purchase of property, plant andequipment, such as factory land and equipment. Compared with the same period in the previous fiscal year, wheninvesting activities used net cash of ¥1,634 million, cash used by investing activities decreased by ¥153 million.
Cash flows from financing activities
Financing activities provided net cash of ¥1,913 million. This mainly reflected cash used due to cash dividends paid,
outweighed by cash provided by proceeds from loans. Compared with the same period in the previous fiscal year,
when financing activities used net cash of ¥35 million, cash from financing activities increased by ¥1,948 million.

(3) Qualitative information on consolidated earnings projections
The Company revised up its earnings projections for the full fiscal year on November 9, 2017. However, amid
growth in volumes handled and rising prices for precious metals, the Company now expects earnings to exceed
those upwardly revised projections. Consequently, the Company has revised its consolidated earnings projections
for FY3/18 announced on November 9, 2017, as shown in the table below.
Consolidated earnings projections for FY3/18 (April 1, 2017 – March 31, 2018)
Net sales
Previous
projections(A)
Revisedprojections(B)
Change(B – A)
Change (%)(Ref) FY3/17
results

Operating income

Ordinary income

Profit attributable toowners of parent

Earnings
per share(millions of yen)(millions of yen)(millions of yen)

190,000

4,000

4,400

2,980

113.16

193,000

4,800

5,200

3,560

135.19

3,000

800

800

580

－

1.6

20.0

18.2

19.5

－

163,054

2,960

3,459

2,454

93.21

3

(millions of yen)(yen)

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 3Q(As of December 31, 2017)

AssetsCurrent assets
Cash and deposits

6,784

6,850

Notes and accounts receivable – trade

19,954

24,572Merchandise and finished goods

14,226

14,929

404

431

6,311

6,490

449

342

2,698

2,554

(9)

(7)

50,82056,164Work 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

9,074

Accumulated depreciation(4,597)(4,847)

Buildings and structures, net

4,237

4,227

Machinery, equipment and vehicles

8,254

8,382

Accumulated depreciation(6,092)(6,597)

Machinery, equipment and vehicles, net

2,161

1,784

7,791

8,470

644

805

Accumulated depreciation

(197)

(241)

Leased assets, net

446

564

Construction in progress

42

138

Land
Leased assets

Others

1,083

1,168

Accumulated depreciation

(903)

(954)

Others, net

180

213

14,85915,398Others895

801

Total intangible assets

895

801

4,470

4,730

3

3

Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
Deferred tax assets
Others

1,733

1,633

Allowance for doubtful accounts

(68)

(64)

Total investments and other assets

6,139

6,303

Total non-current assets

21,89422,503

Total assets

72,71578,6684

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

End-FY3/18 3Q(As of December 31, 2017)

Liabilities
Current liabilities
Accounts payable – trade

8,223

8,559

Short-term loans payable

1,993

5,580

Current portion of long-term loans payable

994

795

Lease obligations

127

199

Income taxes payable

572

783

Provision for bonuses

744

363

Others

3,184

3,446

Total current liabilities

15,84019,728

1,598

1,001

Lease obligations

318

470

Deferred tax liabilities

636

673

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

565

594

16

22

228

236

Others

92

92

3,456

3,092

19,29622,820Common stock

3,559

3,559

Capital surplus

4,008

4,008

Retained earnings

47,51549,747

Treasury shares(3,009)(3,009)Total shareholders’ equity

52,07454,305

Valuation difference on available-for-salesecurities

627

689

Deferred gains or losses on hedges

(30)

(48)

Non-current liabilities
Long-term loans payable

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

Accumulated other comprehensive income

Foreign currency translation adjustment

810

936

Remeasurements of defined benefit plans

(91)

(78)

1,315

1,498

29

43

53,41955,84772,71578,668

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)
FY3/17 3Q(April 1, 2016 –December 31, 2016)

FY3/18 3Q(April 1, 2017 –December 31, 2017)

Net sales

120,671

146,560

Cost of sales

109,010

132,510Gross profit

11,66014,049Selling, general, and administrative expenses

9,612

10,039Operating income

2,047

4,009

Interest income

56Dividend income

2022Gain on sales of investment securities

Non-operating income

30

Share of profit of entities accounted for using
equity method

419

359

Purchase discounts

10

11

Foreign exchange gains

81-

Others32

58

Total non-operating income

572

458

24

38

-

66

Loss on valuation of investment securities

125

17

Others37

23

Total non-operating expenses

187

145

Ordinary income

2,432

4,322

Profit before income taxes

2,432

4,322

Non-operating expenses
Interest expenses
Foreign exchange losses

Income taxes – current

610

1,220

Income taxes – deferred

173

118

Total income taxes

784

1,339

1,648

2,983

12

14

1,635

2,968

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

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/17 3Q(April 1, 2016 –December 31, 2016)
ProfitFY3/18 3Q(April 1, 2017 –December 31, 2017)

1,648

2,983

Valuation difference on available-for-salesecurities

98

62

Deferred gains or losses on hedges

Other comprehensive income

198

(18)

Foreign currency translation adjustments(1,022)155

Remeasurements of defined benefit plans

25

13

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

(185)

(28)

Total other comprehensive income (loss)

(885)

183

762

3,166

Comprehensive income attributable to ownersof parent

753

3,152

Comprehensive income attributable to noncontrolling interests

914

Comprehensive income
Comprehensive income attributable to7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/17 3Q(April 1, 2016 –December 31,
2016)

FY3/18 3Q(April 1, 2017 –December 31,
2017)

Cash flows from operating activities
Profit before income taxes

2,432

4,322

947

1,017

0

(5)

(227)

(380)

Increase (decrease) in net defined benefit liability

34

27

Increase (decrease) in provision for directors’ retirement benefits

(50)

29

3

5

Interest and dividend income

(26)

(28)

Interest expenses

24

38

(419)

(359)

(4,850)(4,547)

(37)

(840)

1,043

272

Others285

834

Subtotal

(840)

385

Interest and dividend income received

164

180

Interest paid

(24)

(38)

Income taxes paid

(813)

(916)

(1,512)(388)(1,380)(1,470)Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

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

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

Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

80

Purchase of intangible assets

(200)

(28)

Purchase of investment securities

(13)

(9)

5

0

(54)

26

(1,634)(1,481)

Proceeds from sales of investment securities
OthersNet cash provided by (used in) investing activities8

(millions of yen)
FY3/17 3Q(April 1, 2016 –December 31,
2016)

FY3/18 3Q(April 1, 2017 –December 31,
2017)

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

1,660

3,586

Repayments of long-term loans payable

(864)

(795)

Purchase of treasury shares

(0)

(0)

Cash dividends paid

(737)

(737)

Others

(93)

(139)

Net cash provided by (used in) financing activities

(35)

1,913

Effect of exchange rate change on cash and cash equivalents

(408)

22

Net increase (decrease) in cash and cash equivalents(3,590)66

Cash and cash equivalents at beginning of period

9,524

6,784

Cash and cash equivalents at end of period

5,934

6,850

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 3Q (April 1, 2016 – December 31, 2016)
1. Sales and profits or losses by reportable segments(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Food businesssegment

Adjustments
Note 1

Total

Note 2

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

75,06545,605

120,671-

120,671

-

46

46

(46)

-

Total

75,06545,652

120,718(46)

120,671

Segment income

1,181

866

2,047

-

2,047

(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 3Q (April 1, 2017 – December 31, 2017)
1. Sales and profits or losses by reportable segments(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Food businesssegment

Adjustments
Note 1

Total

Note 2

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

92,77053,789146,560-

146,560

-

46

46

(46)

-

Total

92,77053,836146,606(46)

146,560

Segment income

2,672

1,336

4,009

-

4,009

(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