Three-month Consolidated Financial Report for the Fiscal Yearending October 31, 2013 [Japan GAAP]
March 8, 2013
Listed Company Name
Kanamoto Co., Ltd.
Company Code Number
9678
Listing Exchanges
Tokyo Stock Exchange, Sapporo Stock Exchange(URL http://www.kanamoto.co.jp)
Representative
Kanchu Kanamoto President and CEO
Inquiries
Nobuhito Utatsu
Director & Executive Corporate Officer, Division Manager, Accounting Division
TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp
Scheduled date for submission of Quarterly Report
March 13, 2013
Scheduled date for commencement of dividend payments–
Preparation of Quarterly Settlement Supplementary
No
Explanatory Materials
Quarterly Earnings Briefings
No
1. Operating Results for the Three-Month Period of the Fiscal Year Ending October 31, 2013
(November 1, 2012 - January 31, 2013)(1) Consolidated operating results (Cumulative)(Numbers less than one million yen have been rounded down)(Percentages shown are the percent increase or decrease compared to the prior consolidated fiscal year)

Revenues
Millions of yen

Operating Income

Ordinary Income

Millions of yen

Millions of yen%

Millions of yen

%

3,852

77.0

2,151

84.5

2,176

122.1

1,165

228.7

%

%

Fiscal Year ending October 31,
28,687
37.2
3,881
67.5
2013: First quarter
Fiscal Year ended October 31,
20,91514.4
2,316 107.9
2012: First quarter(Note) Comprehensive income
Fiscal Year Ending October 31, 2013, First Quarter ¥2,762 million (120.8%)
Fiscal Year Ended October 31, 2012, First Quarter¥1,251 million (118.2%)
Diluted Net
Income per
Share

Net Income per
Share
Fiscal Year ending October 31,
2013: First quarter
Fiscal Year ended October 31,
2012: First quarter

Net Income

Yen

Yen

65.52

－

35.51

－

(2) Consolidated Financial Position
Total Assets
Fiscal Year ending October 31,
2013: First quarter
Fiscal Year ended October 31,
2012:

Net Assets

Shareholders’Equity Ratio

Millions of yen

Millions of yen

146,571

43,93429.0

137,343

41,39929.2(Reference) Shareholders’ Equity
Fiscal Year Ending October 31, 2013 First Quarter:
Fiscal Year Ended October 31, 2012:¥42,460 million¥40,106 million

－

1 －

%

2. Dividends
Full Year Dividend per Share
End of 1Q
Fiscal year ended October 31, 2012
Fiscal year ending October 31, 2013

End of 2Q

End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－
－

10.00

－

10.00

20.00

10.00

－

10.00

20.00

Fiscal Year ending October 31, 2013
(Projected)(Note) Has the Company revised its most recently released dividend projection?

No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2013
(November 1, 2012 - October 31, 2013)(Percentages indicate percent change from prior fiscal year)

Revenues
Interim(Year-to-date)
Full year

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

51,240

28.1

4,580

28.9

4,110

24.6

1,970

10.9

60.00

99,150

15.1

7,120

10.7

6,510

9.7

3,190

–10.8

97.16

(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter?
No
4. Other(1) Were there changes to material subsidiaries during the period under review (transfer of specified subsidiaries in
conjunction with revisions to the scope of consolidation)? No
Company newly included (Company name:)Company newly excluded (Company name:)(2) Application of special accounting method in the preparation of quarterly consolidated financial statements:

No(3) Changes in accounting principles, changes in accounting estimates and retrospective restatements(a) Changes in accounting principles in conjunction with revision of accounting standards: No(b) Changes other than the above:No(c) Changes in accounting estimates:(d) Retrospective restatements:

NoNo(4) Number of shares issued (common stock)(a) Number of shares outstanding at the end of the period (including treasury stock)
Fiscal year ending October 31, 2013 First Quarter:
32,872,241 sharesFiscal year ended October 31, 2012:
32,872,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2013 First Quarter:
40,784 sharesFiscal year ended October 31, 2012:
39,955 shares(c) Number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2013 First Quarter:
32,831,786 sharesFiscal year ended October 31, 2012: First Quarter
32,834,534 shares
Note: Disclosure concerning status of implementation of quarterly review procedure
This quarterly earnings report is exempt from the quarterly review procedure based on the Financial Instruments
and Exchange Act. At the time of disclosure of this quarterly earnings report, the Company has not completed thequarterly review procedure for quarterly financial statements.

－

2 －Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The above projections were prepared based upon information available to the Company at the time the projections
were announced as well as various assumptions concerning the future economic and business environment. Actual
operating results may differ from the projected figures depending upon various factors in the future. Please refer tothe Qualitative Information Concerning Consolidated Projected Operating Results on Page 3 of the Attachments forthe conditions used as assumptions for the projected operating results and matters to note before using the
projected operating results.

－

3 －○ Attachments Table of Contents
1. Qualitative Information Concerning Quarterly Consolidated Operating Results ………..…………………………

5(1) Qualitative Information Concerning Consolidated Operating Results……………………………………………

5(2) Qualitative Information Concerning Consolidated Financial Position ……………………………………………

7(3) Qualitative Information Concerning Projected Consolidated Operating Results ……………………………….

7

2. Matters Concerning Summary Information (Notes) ……………………………………………………………………

7

Changes to Material Subsidiaries during the Consolidated Period under Review …………………………

7

3. Quarterly Consolidated Financial Statements …………………………………………………………………………

8(1) Quarterly Consolidated Balance Sheets ……………………………………………………………………………
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income ………………………………………………………………………………………………………………….
Quarterly Consolidated Statements of Income

810Consolidated Three-month Period ended January 31, 2013 ………………………………………………

10

Quarterly Consolidated Statements of Comprehensive Income
Consolidated three-month period ended January 31, 2013…………………………………………………

11(3) Notes Relating to the Going Concern Assumption …………………………………………………………………

12(4) Business Segment Information ………………………………………………………………………………………

12(5) Note on Significant Changes to Shareholders’ Equity ……………………………………………………………

13

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results< Management Environment > (From November 1, 2012 to January 31, 2013)
As indications of an improvement in business sentiment emerged against the backdrop of restoration andrecovery demand, Japan’s economy during the Kanamoto Group’s first quarter was affected by a shift toward aweaker yen and higher stock prices. Both changes were driven by a sense of anticipation toward the newadministration’s economic measures and monetary expansion. On the other hand, there also were heightened
concerns regarding a slowdown of the global economy centered on Europe and China, diplomatic spats withneighboring countries, and the risk that a recession might be triggered by factors such as the future increase in
the consumption tax. Overall, conditions that made it difficult to adopt an optimistic view regarding the economic
outlook lingered.
< First Quarter Operating Results > (From November 1, 2012 to January 31, 2013)
In the construction industry related to the Kanamoto Group, investment in public works continued to increaseagainst the backdrop of earthquake restoration-related demand, while in the private sector, personal
consumption exhibited a recovery trend that was propelled by housing investment, and capital investment
followed a gentle upward course, supported by the recovery of corporate earnings. Nevertheless, conditions also
contained the seeds of concerns regarding the future construction trend. These included signs of job tender
glitches, and the first delays in some construction starts because of factors such as a shortage of engineers andskilled workers brought about by restoration-related demand and a sharp rise in labor costs and materials
expenses.
Given these circumstances, the Kanamoto Group declared restoration and recovery of the devastated region
to be its most important policy, and in addition to centralizing the allocation of equipment matched to construction
site needs in order to respond accurately to restoration and reconstruction demand, the Company moved ahead
aggressively with adopting and providing new technologies and new labor-saving products, including informationaided construction, to compensate for the shortage of engineers. The Company also pursued organizationalchanges aimed at boosting earnings. These included measures to utilize management resources more
effectively and improve the efficiency of activities processes, and thorough steps to achieve comprehensive cost
reductions.
As a result of these efforts, consolidated revenues for the first quarter of the Business Period ending in
October 2013 climbed 37.2% compared with the same period of the previous consolidated fiscal year to ¥28,687
million. In terms of earnings, operating income jumped 67.5% from the same period of the previous consolidated
fiscal year to ¥3,881 million, ordinary income soared 77.0% year-on-year to ¥3,852 million and first quarter net
income rocketed 84.5% year-on-year to ¥2,151 million.
Results by business segment were as follows.
[ Business related to the Construction Equipment Rental Division ]In the construction-related business of the entire Kanamoto Group by region, revenues for the corresponding
business were up year-over-year in each area as a result of Unite Co., Ltd. being included for the first time. This
trend emerged especially forcefully in the Kanto Region and Kinki & Chubu Region.
In the Hokkaido Region, rental revenues for the first quarter rose 15.8% compared with the prior consolidated
fiscal year. This reflected the receipt of firm orders for ground improvement works, a specialized area in which
the Company excels, and for large-scale projects centered on tunnel works. The Tohoku Region saw significant
growth, with revenues up 43.3% over the same period of the prior year. In addition to the gradual increase in port
restoration-related works in earthquake stricken areas, and higher demand accompanying restoration andrecovery in the devastated regions, revenues were boosted by decontamination-related efforts in Iwaki and
Fukushima prefectures. In the Kanto Region, orders for large-scale projects including port foundation-related
works, as well as infrastructure inspection works and disaster prevention-related works, all contributed
significantly to a 75.5% year-on-year increase. In the Kinki & Chubu Region revenues were up 38.5% year-onyear, again reflecting infrastructure-related works as well as large-scale projects in metropolitan areas, while in
the Kyushu & Okinawa Region, revenues grew by 58.3% compared with the same period one year ago as theCompany expanded its area of operations and was able to accurately secure orders for new demand.

－

5 －Overseas, the external environment surrounding Shanghai Jinheyuan Engineering Construction Co., Ltd.,
which is developing a construction equipment rental business in China from its base in Shanghai, showed no
improvement. In another development, the Company liquidated SJ Rental, Inc. (Territory of Guam, UnitedStates) in the prior consolidated fiscal year and excluded that firm from consolidation. Both situations had
minimal impact on the Company’s consolidated revenues.
With regard to disposal of used equipment, the Company postponed asset sales because its top priority is to
respond to earthquake-related demand, and overseas sales of used construction equipment were down 19.8%
year-on-year, in line with the Company’s initial plan.
As a result of these factors, first quarter revenues for Kanamoto’s construction-related businesses rose 40.3%
from the same period of the previous consolidated fiscal year to ¥27,069 million, and operating income increased
69.7% year-on-year to ¥3,796 million.
[ Other Businesses ]In the steel products sales business the Company is developing in Hokkaido, revenues slipped 1.6% from thelevel in the same period of the previous consolidated fiscal year. Although sales for earthquake reconstruction
sites and sales in the Doo Block in Hokkaido were robust, demand was down during the winter period. In
Kanamoto’s information and telecommunications-related operations and other businesses, on the other hand,both personal computer rental demand and engineering-related employee dispatch were higher, resulting in a
6.6% year-on-year increase in revenues.
As a result of these factors, first quarter revenues for Kanamoto’s other businesses eased down 0.5% from thesame period of the previous consolidated fiscal year to ¥1,618 million, and operating income fell 57.2% year-onyear to ¥17 million.

－

6 －[ Business development issues deserving special mention and status of branch office changes ]The Company did not open or close any branches during the first quarter consolidated accounting period.
(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the first quarter under review increased by ¥9,228 million compared with the end of theprior consolidated accounting fiscal year to ¥146,571 million. This mainly reflected an increase in cash anddeposits of ¥1,258 million as a result of the collection of accounts receivable, trade, an increase in notes andaccounts receivable, trade of ¥1,818 million that resulted from the growth in sales and an increase in rental
equipment of ¥5,742 million.
Total liabilities were ¥102,636 million, an increase of ¥6,693 million compared with the end of the priorconsolidated accounting fiscal year. The main items contributing to this change were an increase of ¥1,479 million
in notes and accounts payable, trade, an increase of ¥1,917 million in long-term bank loans, and an increase of¥4,499 million in long-term accrued expenses including installment payment contracts that are the principal meansof procurement, in conjunction with increases in rental equipment and other assets.
Net assets at the end of the first quarter under review increased by ¥2,534 million compared with the end of theprior consolidated fiscal year to ¥43,934 million. This mainly reflected net income for the first quarter of ¥2,151
million, and an increase of ¥353 million in the valuation difference on other investment securities because of higher
market prices for negotiable securities held.
(3) Qualitative Information Concerning Projected Consolidated Operating Results
There are no revisions to the full-year projected operating results that the Company announced in the Financial
Statements Bulletin for the Fiscal Year Ended October 31, 2012 (Japan GAAP) released on December 7, 2012.

2. Matters Concerning Summary Information (Notes)
Changes to Material Subsidiaries during the Consolidated Period under Review
The Company currently is liquidating SJ Rental, Inc., a consolidated subsidiary, and has excluded that entity fromthe scope of consolidation for the first quarter under review because the entity is no longer material.

－

7 －3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Unit: Thousands of yen )Prior Consolidated
Fiscal Year(As of October 31, 2012)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable, trade
Negotiable securities
Merchandise inventories and products
Work in progress
Raw materials and supplies
Construction equipment
Income taxes receivable
Consumption tax receivable
Deferred tax assets
Other
Allowance for doubtful accounts

Current Consolidated
Fiscal Year First Quarter(As of January 31, 2013)

19,387,264
23,560,769
350,000
521,615
53,187
213,177
2,578,013
10,676
57,839616,057
719,242－384,382

20,645,331
25,379,543
350,000
493,183
35,998226,665
2,845,613
1,840
10,240383,427
603,265－322,054

47,683,461

50,653,056

111,689,105－65,644,512

119,720,891－67,933,573

46,044,593

51,787,318

22,253,505－14,565,048

22,239,865－14,701,345

7,688,457

7,538,519

5,367,137

5,372,480－4,771,202－4,793,883

595,935

578,596

29,548,049
1,579,813－1,301,459

29,573,611
1,647,028－1,318,299

278,353

328,729

84,155,389

89,806,774

192,389
203,849

211,909
189,594

Total Intangible Fixed Assets

396,239

401,503

Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Reserve for investment losses

3,196,840
622,077
1,947,320－590,261－67,985

3,740,736
618,774
1,992,972－574,242－67,985

5,107,991

5,710,256

Total Current Assets
Fixed assets
Tangible fixed assets
Rental equipment assets
Accumulated depreciation
Net rental equipment assets
Buildings and structures
Accumulated depreciation
Net buildings and structures
Machinery, equipment, vehicles anddelivery equipment
Accumulated depreciation
Net machinery, equipment, vehicles
and delivery equipment
Land
Other
Accumulated depreciation
Net other
Total Tangible Fixed Assets
Intangible fixed assets
Goodwill
Other

Total Investments and Other Assets
Total Fixed Assets
Total Assets－

8 －89,659,620

95,918,533

137,343,082

146,571,590

(Unit: Thousands of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2012)
Liabilities
Current liabilities
Notes and accounts payable, trade
Short-term bank loans
Long-term bank loans due within one year
Lease obligations
Corporate taxes payable
Accrued bonuses to employees
Allowance for disaster losses
Accounts payable, other
Other
Total Current Liabilities
Long-term liabilities
Long-term bank loans
Lease obligations
Accrued employees retirement benefits
Long-term accrued expenses
Asset retirement obligations
Other
Total Long-term Liabilities
Total Liabilities
Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total Shareholders’ Equity
Accumulated other comprehensive income
Valuation difference on other investment
securities
Translation adjustments accountTotal accumulated other comprehensive
incomeMinority interests
Total Net Assets
Total Liabilities and Net Assets－

9 －Current Consolidated
Fiscal Year First Quarter(As of January 31, 2013)18,011,309
834,688
12,671,669
1,106,553
2,344,595
774,430
10,014
9,386,566
1,641,311

19,491,057
1,004,783
12,225,896
1,048,198
1,389,781
370,525
6,486
9,962,005
1,543,531

46,781,139

47,042,266

25,945,267
3,041,801
959
19,707,957
207,696258,310

27,862,361
3,051,887
2,498
24,207,172
208,534
262,271

49,161,991

55,594,725

95,943,130

102,636,991

9,696,717
10,960,761
19,199,668－27,523

9,696,717
10,960,761
21,132,003－28,350

39,829,623

41,761,130

331,641

684,756－54,766

15,049276,874

699,805

1,293,453

1,473,662

41,399,951

43,934,598

137,343,082

146,571,590

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Three-month Period ended January 31, 2013)(Unit: Thousands of yen )Revenues
Cost of revenues
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance benefits
Rents received
Cash bonus received
Amortization of negative goodwill
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expense
Loss on sale of notes receivable
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of fixed assets
Subsidies
Gain on liquidation of subsidiary
Other
Total extraordinary income
Extraordinary losses
Loss on sale or retirement of fixed assets
Other
Total extraordinary losses
Income before taxes and adjustments
Corporate, local and business taxes
Adjustment for corporate and other taxes
Total corporate and other taxes
Income before minority interest
Minority interest in income or loss
Net income－

Prior Consolidated Fiscal
Year First Quarter(From November 1, 2011
to January 31, 2012)
20,915,098
14,099,491
6,815,607
4,498,869
2,316,737

Current Consolidated Fiscal
Year First Quarter(From November 1, 2012
to January 31, 2013)
28,687,949
19,304,549
9,383,399
5,502,048
3,881,350

1,482
16,28812,654
12,85013,33817,458－17,432
29,873
121,377

1,968
16,33623,85910,704
1,022
14,880102,011
7,901
49,179227,864

210,974
12,87838,131
261,984
2,176,130

213,222
11,88531,297
256,405
3,852,809

1,347－
19,615
138
21,102

1,809
22,262－
59
24,13126,806
126
26,933
2,170,299
873,355
111,704
985,060
1,185,239
19,2981,165,940

8,916
－
8,916
3,868,024
1,385,866
160,298
1,546,164
2,321,860
170,851
2,151,008

10 －(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Three-month Period ended January 1, 2013)(Unit: Thousands of yen)

Income before minority interest
Other comprehensive income
Valuation difference on other investment
securities
Translation adjustments accountTotal other comprehensive income
Quarter comprehensive income(Breakdown)Comprehensive quarterly income attributable toowners of the parent
Comprehensive quarterly income attributable tominority interests－

Prior Consolidated Fiscal
Year First Quarter(From November 1, 2011
to January 31, 2012)
1,185,239

Current Consolidated Fiscal
Year First Quarter(From November 1, 2012
to January 31, 2013)
2,321,860

60,594353,2385,209
65,8031,251,042

87,701
440,9392,762,799

1,228,313

2,573,939

22,729188,860

11 －(3) Notes Relating to the Going Concern Assumption
The Company had no material items to report.
(4) Business Segment Information
I First quarter of the previous consolidated fiscal year (from November 1, 2011 to January 31, 2012)
1. Information concerning revenues and profit or loss of each reporting segment(Unit: Thousands of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Revenues
Revenues from customers
Sales or transfers between
segments
Total
Segment operating income

Other businesses(See Note)

Total

19,288,740

1,626,357

20,915,098

－

－

－

19,288,740

1,626,357

20,915,098

2,237,413

40,156

2,277,569(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and business related to the
Information Products Division and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Thousands of yen)
Earnings

II

AmountReporting segment total
Earnings from “Other businesses” classification
Other adjustments

2,237,413
40,156
39,167

Operating income reported on the Quarterly
Consolidated Statements of Income

2,316,737

First quarter of the current consolidated fiscal year (from November 1, 2012 to January 31, 2013)
1. Information concerning revenues and profit or loss of each reporting segment(Unit: Thousands of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Revenues
Revenues from customers
Sales or transfers between
segments
Total
Segment operating income

Other businesses(See Note)

Total

27,069,618

1,618,330

28,687,949

－

－

－

27,069,618

1,618,330

28,687,949

3,796,855

17,1683,814,023(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and business related to the
Information Products Division and other businesses.

－

12 －

2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Thousands of yen)
Earnings

AmountReporting segment total
Income from “Other businesses” classification
Other adjustments

3,796,855
17,16867,327

Operating income reported on the Consolidated
Quarterly Statements of Income

3,881,350(5) Note on Significant Changes to Shareholders’ Equity
The Company had no material items to report.

－

13 －