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 Year Ended March 31, 2019
(Based on Japanese GAAP)May 9, 2019
Company name:Howa Machinery, Ltd.

Stock exchange listing: Tokyo, Nagoya
Stock code:
6203
URL
Representative:
Inquiries:

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

President,Managing Director
Managing Director

Takahiro Tsukamoto
Hiromitsu Ishihara

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to file Securities Report:

June 27, 2019
June 27, 2019

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

June 28, 2019
Yes

Holding of 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 year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)(1) Consolidated operating results
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Year ended March 31, 2019
22,32314.7
1,038–
1,108–
1,132 570.5
Year ended March 31, 201819,4645.2(13)
–
62–
168
–

Earnings per share

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%
–
7.5
4.6
4.6
–
1.1
0.3
(0.1)

Diluted earnings pershare

Yen
91.10
13.49

Year ended March 31, 2019Year ended March 31, 2018
(2) Consolidated financial position

Total assets
As of March 31, 2019
As of March 31, 2018

Net assets

Equity ratio

Millions of yen
24,35424,205

Millions of yen
15,27914,895

Cash flows fromoperating activities
Millions of yen
690(1,359)Cash flows frominvesting activities
Millions of yen
312
193

Net assets per share%
62.7
61.5

Yen
1,232.96
1,189.13(3) Consolidated cash flows

Year ended March 31, 2019Year ended March 31, 2018

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(310)
3,275
(35)
2,595

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2018Year ended March 31, 2019Year ending March 31, 2020
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen

%%

–
–

0.00
0.00

–
–

20.00
20.00

20.00
20.00

250
247

148.3
22.0

1.7
1.7

–

0.00

–

20.00

20.00

133.1

3. Forecast of consolidated financial results for the year ending March 31, 2020 (from April 1, 2019 to March 31, 2020)
Net sales
Millions of yen
Six months ending
September 30, 2019
Full year

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen

10,5003.9

280(8.9)300(10.7)250(13.4)

20.12

21,700(2.8)

800(22.9)860(22.4)

750(33.8)

60.35

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2019(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) 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:No
Changes in accounting policies due to other reasons:
Changes in accounting estimates:

No
No

Restatement of prior period financial statements:

No(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 201912,548,134 shares As of March 31, 2018

12,548,134 shares

Number of treasury shares at the end of the period
As of March 31, 2019

163,445 shares As of March 31, 2018

31,854 shares

Average number of shares during the period
Year ended March 31, 201912,428,605 shares Year ended March 31, 20182

12,516,558 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of March 31, 2019

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

2,685
6,304

3,338
7,425

Electronically recorded monetary claims - operating
Securities

1,653
20

1,057
–

Merchandise and finished goods
Work in process

90
3,623

149
4,191

Raw materials and supplies
Other

334
1,090

353
224

Allowance for doubtful accounts

(5)

(15)

15,79816,724

11,65011,645

Accumulated depreciation(9,330)(9,333)

Buildings and structures, net

2,320

2,311

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

Machinery, equipment and vehicles

12,583

12,599

Accumulated depreciation(11,654)(11,829)

Machinery, equipment and vehicles, net

928

770

1,584

1,633(1,445)(1,509)

138

124

Land

502

558

Leased assets
Accumulated depreciation

164
(113)

144
(122)

50

22

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

Leased assets, net
Construction in progress

65

0

4,006

3,787

Other

80

100

Total intangible assets

80

100

3,727
642

3,264
524

Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
OtherAllowance for doubtful accounts

(50)

(46)

Total investments and other assets

4,319

3,742

Total non-current assets
Total assets

38,407

7,630

24,20524,354

(Millions of yen)
As of March 31, 2018

As of March 31, 2019

Liabilities
Current liabilities
Accounts payable - trade

2,738

3,131

Short-term loans payable
Lease obligations

821
31

813
20

Accounts payable - otherAccrued expenses

11076627776

Income taxes payable
Accrued consumption taxes

114
20

171
22

Provision for bonuses
Provision for loss on construction contracts

285
46342
26

demolition expenses for non-current assetsProvision for environmental safety measures

–
390

17–

Other

305

234

5,630

5,584

Long-term loans payable
Lease obligations

773
23879
3

Deferred tax liabilities
Provision for environmental safety measures

545
80

396
87

1,850
86

1,727
88

318

309

3,678

3,490

9,309

9,075

Capital stock
Capital surplus

9,019
–

9,019
0

Retained earnings
Treasury shares

4,325
(28)

5,207
(151)

Total shareholders' equity

13,316

14,075

1,281

911

Deferred gains or losses on hedges
Foreign currency translation adjustment(0)
109(0)
103

Remeasurements of defined benefit plans

175

179

1,566

1,194

129

14,895

15,27924,20524,354

Total current liabilities
Non-current liabilities

Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

4Consolidated statements of income and consolidated statements of comprehensive incomeConsolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

Net sales

19,464

22,323

Cost of sales

16,471

18,173Gross profit

2,993

4,150

Selling, general and administrative expenses

3,007

3,112

Operating profit (loss)

(13)

1,038

Non-operating income
Interest income

32

Dividend income
Insurance income

120
22

121
63

Miscellaneous income

3731

Total non-operating income

183

220

Interest expenses
Insurance expenses

424

422

Maintenance cost for idle assets
Foreign exchange losses

24828
29

Miscellaneous loss

4565

Total non-operating expenses

Non-operating expenses

108

149

Ordinary profit

62

1,108

Extraordinary income
Gain on sales of non-current assets

65

4668
––
241

Gain on sales of investment securities
Reversal for environmental safety measures
Other

00734

246

Loss on product safety measures
Impairment loss

17–

1911

provision for demolition expenses for non-current assets
Environmental expenses

–
56

17–

Provision for environmental safety measures
Other441
1–0Total extraordinary losses

517

49

Profit before income taxes

279

1,306

Income taxes - current
Income taxes - deferred1080194(17)

Total income taxes

109176

Profit170

1,130

Total extraordinary income
Extraordinary losses

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

5

1

(1)

168

1,132

Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
170

1,130

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

(288)
(2)

(370)
0

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

344

(6)
4(244)

(372)

(73)

757

(75)

759

1(1)

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6

Consolidated statements of changes in equity
Fiscal year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Retained earnings
9,019

Treasury shares

4,407

Total shareholders' equity(27)

13,398Changes of items during
periodDividends of surplus

(250)

(250)

Profit attributable toowners of parent

168

168

Purchase of treasury
shares(0)(0)

Net changes of items
other than shareholders'equity–Total changes of items
during period
Balance at end of current
period

–

(81)

(0)

(82)

9,019

4,325

(28)

13,316

Accumulated other comprehensive income

Balance at beginning ofcurrent period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges

1,570

2

Total
accumulatedof defined benefit
othercomprehensiveplansincome

Foreigncurrencytranslation
adjustment

Remeasurements

106

131

1,810

Non-controllinginterests

Total net assets

1015,220

Changes of items duringperiod
Dividends of surplus

–

(250)

Profit attributable toowners of parent–

168

Purchase of treasury
shares–(0)

Net changes of items
other than shareholders'equity(288)(2)

344(244)1(242)

Total changes of items
during period(288)(2)

344(244)1(324)

Balance at end of current
period

1,281(0)

109

175

1,566

1214,895

7Fiscal year ended March 31, 2019(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Capital surplus

9,019

Retained earnings–

Total shareholders'equity

Treasury shares

4,325

(28)

13,316

Changes of items during
periodDividends of surplus

(250)

(250)

Profit attributable toowners of parent

1,132

1,132

Purchase of treasury
shares
Disposal of treasury
shares0(123)(123)00

Net changes of items
other than shareholders'equity–

Total changes of items
during period
Balance at end of current
period

–

0881

(123)

758

9,019

05,207(151)14,075

Accumulated other comprehensive income

Balance at beginning ofcurrent period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges

1,281

(0)

Total
accumulated
otherof defined benefit
comprehensive
plansincomeForeigncurrencytranslation
adjustment

Remeasurements

109

175

1,566

Non-controllinginterests

Total net assets

12

14,895

Changes of items during
periodDividends of surplus

–

(250)

Profit attributable toowners of parent–

1,132

Purchase of treasury
shares–(123)

Disposal of treasury
shares–0

Net changes of items
other than shareholders'equity

(370)

0(6)

4(372)(2)(374)

Total changes of items
during period

(370)

0(6)

4(372)(2)

383

Balance at end of current
period

911

(0)

103

179

1,194

915,2798

Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
279

1,306

Depreciation
Impairment loss

650
–599
11

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

(15)
(6)

655

Increase (decrease) in retirement benefit liability
Increase (decrease) in demolition expenses for non-current

(59)

(119)

–

17(4)

(19)

assetsIncrease (decrease) in provision for loss on construction
contracts
Increase (decrease) in provision for environmental safetymeasuresInterest and dividend income428(241)

(123)

(124)

Interest expenses
Foreign exchange losses (gains)

4(0)

4
9

Loss (gain) on sales of property, plant and equipment
Loss (gain) on disposal of property, plant and equipment

(65)
1(4)
0Environmental expenses
Loss (gain) on sales of short-term and long-term investment

56–

securities
Decrease (increase) in notes and accounts receivable - trade(665)–(1,831)(529)

Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade

52
211

(635)
396

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

(234)
(94)

(1)
164

Increase (decrease) in other current liabilities
Other, net

116
(43)

(52)
4

Subtotal(1,342)

848

Interest and dividend income received
Interest expenses paid

123
(4)

125
(4)

Income taxes paid
Environmental expenses paid

(80)
(56)

(138)
(140)

(1,359)690

Net cash provided by (used in) operating activities

9

(Millions of yen)

Cash flows from investing activities
Payments into time deposits

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
(93)

(65)

Proceeds from withdrawal of time deposits
Purchase of securities

86
(20)

92
–

Proceeds from sales and redemption of securities
Purchase of property, plant and equipment20(247)20(368)Proceeds from sales of property, plant and equipment
Purchase of intangible assets

67
(17)

4(24)

Purchase of investment securities
Proceeds from sales and redemption of investment securities

(14)
473

(8)
736

Purchase of shares of subsidiaries
Purchase of shares of subsidiaries resulting in change in scope

(41)

(58)

–(111)of consolidation
Collection of loans receivable

58

61

Payments of loans receivable
Other, net

(83)
5(29)
63

Net cash provided by (used in) investing activities

193

312

Cash flows from financing activities
Net increase (decrease) in short-term loans payable300(213)

Proceeds from long-term loans payable
Repayments of long-term loans payable

350
(336)

750
(441)

Redemption of bonds
Net decrease (increase) in treasury shares

(60)
(0)

–
(123)

Cash dividends paid
Dividends paid to non-controlling interests(250)–(249)(0)

Repayments of lease obligations

(37)

(31)

Net cash provided by (used in) financing activities

(35)

(310)

Effect of exchange rate change on cash and cash equivalents

13(12)Net increase (decrease) in cash and cash equivalents(1,189)680

Cash and cash equivalents at beginning of period

3,784

2,595

Cash and cash equivalents at end of period

2,595

3,275

10