Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Six Months Ended September 30, 2014
(Based on Japanese GAAP)
November 11, 2014
Company name:Howa Machinery, Ltd.
Stock exchange listing: Tokyo, Nagoya
Stock code:
Representative:

6203
President

URL

http://www.howa.co.jp/
Kazuhide Banno

Inquiries:
Managing Director
Scheduled date to file Quarterly Securities Report:

Hiromitsu Ishihara
November 14, 2014

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:

Yes

TEL

052-408-1001(for institutional investors and analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the six months ended September 30, 2014 (from April 1, 2014 to September 30, 2014)(1) Consolidated financial results (cumulative)

Percentages indicate year-on-year changes
Net sales

Six months ended September 30, 2014
Six months ended September 30, 2013

Millions of yen
11,205
10,955

Operating income% Millions of yen
2.3
186(7.7)451

Net income per share% Millions of yen(58.6)
281(16.5)
456

Net income% Millions of yen(38.3)
299(9.3)
488%(38.5)
58.7

Diluted net income per share

Yen
23.94
38.95

Six months ended September 30, 2014
Six months ended September 30, 2013

Ordinary income

Yen––(2) Consolidated financial position
Total assets

Net assets

Millions of yen
26,793
26,234As of September 30, 2014
As of March 31, 2014

Equity ratio

Millions of yen
16,12015,366

Net assets per share
%59.8
58.2

Yen
1,278.43
1,217.62

2. Cash dividends
Annual dividends per share

Year ended March 31, 2014
Year ending March 31, 2015

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
0.00
0.00

Yen–

Yen
20.00

Yen
20.00

–

20.00

20.00

Year ending March 31, 2015 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2015 (from April 1, 2014 to March 31, 2015)Net sales
Full year

Millions of yen
23,000Percentages indicate year-on-year changes
Net income
Operating income
Ordinary income
Net income
per share% Millions of yen% Millions of yen% Millions of yen
%
Yen
(1.3)
780 (23.1)
890 (14.6)
850 (28.1)
67.84

1

4. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2014(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

Yes
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2014

12,548,134 shares As of March 31, 2014

12,548,134 shares

Number of treasury shares at the end of the period
As of September 30, 2014

18,256 shares As of March 31, 2014

17,615 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2014

12,530,198 shares Six months ended September 30, 20132

12,530,812 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2014

As of September 30, 2014

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

2,914
9,254

3,514
6,889

494–398
1,200

240
2,671

380
3,306

Raw materials and supplies
Deferred tax assets

271
180

275
181

Other
Allowance for doubtful accounts

192
(12)

207
(8)

16,20816,343

Buildings and structures, net
Other, net

2,554
1,920

2,706
1,988

Total property, plant and equipment

4,474

4,695

41

68

4,487
1,111

4,702
1,070

Electronically recorded monetary claims - operating
Securities
Merchandise and finished goods
Work in process

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
Investments and other assets
Investment securities
OtherAllowance for doubtful accounts

(88)

(88)

Total investments and other assets

5,510

5,685

10,025

10,44926,234

26,793

3,072
442

3,812
432

Current portion of bonds
Accounts payable - other247
205

200
366

Accrued expenses
Income taxes payable

909
93

772
47

Accrued consumption taxes
Provision for bonuses

201
440

29420

Provision for loss on construction contracts
Other

10112

14
146

5,734

6,243

Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

Total current liabilities

3(Millions of yen)
As of March 31, 2014

As of September 30, 2014

Non-current liabilities
Bonds payable
Long-term loans payable

330
225

230
285

Deferred tax liabilities
Provision for environmental safety measures

719
124

783
124

3,161
80

2,445
81493

479

Net defined benefit liability
Asset retirement obligations
OtherTotal non-current liabilities

5,133

4,428

10,868

10,672

Capital stock
Retained earnings

9,019
4,815

9,019
5,454

Treasury shares

(17)

(18)

13,817

14,456

1,311
0

1,429
(15)

Total liabilities
Net assets
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

128

148

1,439

1,562

Minority interests

108

101

Total net assets

15,366

16,12026,234

26,793

Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)Six months ended
September 30, 2013

Six months ended
September 30, 2014

Net sales

10,955

11,205

Cost of sales

8,907

9,527

Gross profit

2,047

1,678

Selling, general and administrative expenses

1,596

1,491

451

186

Interest income
Dividend income

053059Subsidy income
Miscellaneous income–
354664

Total non-operating income

89

170

Interest expenses

114

Maintenance cost for idle assets
Insurance expenses

24
14

1615

Miscellaneous loss

35

39

Operating income
Non-operating income

Non-operating expenses

Total non-operating expensesOrdinary income

8476

456

281

8765

Extraordinary income
Gain on sales of non-current assets
Other00

Total extraordinary income

8865

Loss on sales of non-current assets
Loss on disposal of non-current assets

12208

Compensation for damage

19–

Extraordinary losses

Total extraordinary losses
Income before income taxes and minority interests

348509338

Income taxes

2244

Income before minority interests

487

293

Minority interests in loss

(0)

(6)

Net income

488

299

5Consolidated statements of comprehensive income (cumulative)(Millions of yen)Six months ended
September 30, 2013
Income before minority interests

Six months ended
September 30, 2014
487

293

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

239
0118
(15)

Remeasurements of defined benefit plans, net of tax

–

19239

122

726

416

Comprehensive income attributable to owners of parent

727

422

Comprehensive income attributable to minority interests

(0)

(6)

Other comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to6Consolidated statements of cash flows(Millions of yen)Six months ended
September 30, 2013

Six months ended
September 30, 2014

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

509

338

Depreciation
Increase (decrease) in allowance for doubtful accounts

323
2325
(3)

Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses

(6)
(7)

(19)
–

Increase (decrease) in provision for retirement benefits
Increase (decrease) in net defined benefit liability(107)––(106)

Increase (decrease) in provision for loss on construction
contracts

04

Increase (decrease) in provision for loss on removal of fixedassets(8)–Interest and dividend income
Interest expenses(54)
11(60)
4

Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment

(0)
(75)

(3)
(64)

2

7

Loss (gain) on disposal of property, plant and equipment
Loss (gain) on sales of short-term and long-term investment
securities
Decrease (increase) in notes and accounts receivable - trade

(0)

–

2,246

2,461

Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade56(692)(776)
740

Increase (decrease) in accrued consumption taxes
Decrease (increase) in other current assets

(54)
36

(172)
(12)

Increase (decrease) in other current liabilities
Other, net

(126)
(76)

(115)
(12)

Subtotal

1,977

2,534

54

60

Interest and dividend income received
Interest expenses paid

(11)

(4)

Income taxes paid

(35)

(78)

1,985

2,511

Payments into time deposits
Proceeds from withdrawal of time deposits

(128)
125

(138)
125

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

(577)
155

(389)
69

Purchase of intangible assets
Purchase of investment securities

(1)
(10)

(33)
(31)

Proceeds from sales and redemption of investment securities
Other, net

268
13037

Net cash provided by (used in) investing activities

(155)

(361)

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

7

(Millions of yen)Six months ended
September 30, 2013

Six months ended
September 30, 2014

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(50)50Proceeds from long-term loans payable
Repayments of long-term loans payable–(379)

100(99)

Redemption of bonds
Cash dividends paid

(197)
(247)

(147)
(247)

Cash dividends paid to minority shareholders
Repayments of lease obligations

(6)
(40)

(0)
(21)

Proceeds from sales of treasury shares
Purchase of treasury shares

0(0)

–(0)

Net cash provided by (used in) financing activities

(922)

(366)

Effect of exchange rate change on cash and cash equivalents

03

Net increase (decrease) in cash and cash equivalents

909

1,786

Cash and cash equivalents at beginning of period

2,794

2,700

Cash and cash equivalents at end of period

3,703

4,486

8