Financial Results for the Third Quarter Ended July 31, 2020
[Japan GAAP] (Consolidated)
Date:

September 11, 2020

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:5-15, Kitashinagawa 5-chome, Shinagawa-ku, Tokyo, Japan

President:

Hitoshi Yamamoto

Investor Relations Contacts:

Toshiaki Yakura, Director, General Manager of Accounting Division, Tel: (03) 3442-5127

Date to report Quarterly Consolidated Financial Statement: September 18, 2020
Date for Dividend Payment:

Not applicable to this financial quarter

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Not preparedBriefing Session for Quarterly Operating Results: Not planned* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Data for the Third Quarter Ended July 31, 2020
(1) Results of Operation (Consolidated)

Quarter Ended July 31, 2020
Quarter Ended July 31, 2019

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions ofYen
Percent
Yen
Percent
Yen
Percent
28,424-8.8
1,627-12.0
1,649-12.2
31,158
2.4
1,850
18.0
1,878
18.9

Quarter Ended July 31, 2020
Quarter Ended July 31, 2019

Net Income Attributable toOwners of the Parent
Millions ofYen
Percent
1,075-15.2
1,268
21.5

Net Income per Share

Fully Diluted Quarterly
Net Income per ShareYen
107.74127.09Yen－－(Note) Comprehensive income
Third Quarter ended July 31, 2020: 861 million yen (-20.9%)

Third Quarter ended July 31, 2019: 1,089 million yen (3.0%)(2) Financial Condition (Consolidated)

Quarter Ended July 31, 2020
Year Ended October 31, 2019

Total Assets (A)(Millions of Yen)
38,19039,070Net Assets (B)(Millions of Yen)
29,254
28,861Net Assets Ratio(B) / (A) (Percent)
76.6
73.9

(Reference) Net assets
Third Quarter ended July 31, 2020: 29,254 million yen

Year Ended October 31, 2019: 28,861 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2019Year Ending October 31, 2020
Year Ending October 31, 2020(Prospect)FirstQuarter－－Interim
Term
23.50
23.50

Annual Dividend (Yen)
ThirdEnd ofQuarter
Fiscal Year
23.50
－－
23.50

(Note) Revisions since the most recently released dividend projection: None

Annual
47.00
47.00

3. Forecast for Earnings for the Year Ending October 31, 2020 (Consolidated)(Percent change from the previous Full Business Year)Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year40,900-1.1
1,980
-16.7
1,980
-17.0
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
Full Business Year
1,280-18.4128.28(Note) Revisions since the most recently released dividend projection: None
Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
Number of new subsidiaries: __(Company names):
Number of eliminated subsidiaries: __(Company names):(2) Adoption of the specific accounting method to create quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and retrospective restatements.
1) Change in accounting policies due to revision of accounting standard: None
2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At July 31, 2020: 10,533,200 shares

At October 31, 2019: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At July 31, 2020: 554,861 shares

At October 31, 2019: 554,861 shares

3) Number of average shares (accumulated quarterly total)
At July 31, 2020: 9,978,339 shares

At July 31, 2019: 9,978,339 shares*The quarterly earnings report is exempt from the quarterly review by certified public accountant or audit firm.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could
differ materially due to various factors.
Please refer to the Financial Results for the Quarter (Attachments) on page 3, (3) [Analysis of Future Forecast onConsolidated Earnings Forecast] of 1. [Qualitative Information on Quarterly Consolidated Operating Results] for theoperating results forecast.

Table of Contents (Supporting Data)
1. Qualitative Information on Quarterly Consolidated Operating Results...................................................................2(1) Analysis of Operating Results................................................................................................................................2(2) Analysis of Financial Condition..............................................................................................................................3(3) Analysis of Future Forecast on Consolidated Earnings Forecast.......................................................3
2. Quarterly Consolidated Financial Statements and Notes.................................................................................................4(1) Quarterly Consolidated Balance Sheet................................................................................................4(2) Quarterly Consolidated Statement of Income & Quarterly Consolidated Statement of Comprehensive
Income......................................................................................................................................6Quarterly Consolidated Statement of Income.....................................................................................................6Quarterly Consolidated Statement of Comprehensive Income.........................................................................7(3) Notes on Quarterly Consolidated Financial Statements………………………………………………………8(Note for premise of going concern)…………………………………………………………………..……8(Notes for significant changes in shareholder’s equity)………………………………………….…………… 8(Additional information) ………………………………………………………………………………………... 8(Segment information) ………………………………………………………………………………………... 81

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
Because of the severe impact of the coronavirus pandemic, for the third quarter year-to-date period Japan’s
economy continued to register negative growth, including sharp declines in personal consumption, capital
investment, and exports because of widespread coronavirus infections. Furthermore, despite signs of a recovery
seen in China’s economy, overseas the economies in the United States and Europe have deteriorated significantly.
Given these circumstances, net sales for the Tomoe Engineering Group for the consolidated third quarterdecreased 8.8% from the same period last year to 28,424 million yen because of decreasing sales in both theMachinery & Equipment Business and Chemical Products Business. From the earnings aspect, operating
income was 1,627 million yen, 12.0% down from the same period last year because of lower profit in both theMachinery & Equipment Businesses and Chemical Products Business, while ordinary income came to 1,649
million yen, 12.2% down from the same period last year. Net income attributable to owners of the parent was
1,075 million yen, 15.2% down from the same period last year.
Operating results by segment were as follows.
(Machinery & Equipment Business)
In the Machinery & Equipment Business, consolidated net sales for the year-to-date period were 7,440 million yen,
9.7% down from the same period last year. Net sales of equipment and construction works increased, mainly fromorders for large-scale projects to meet domestic public sector demand. Net sales of machinery, on the other hand,were lower despite expanded sales for domestic public sector demand, which were driven by orders for large-scaleprojects, as overseas net sales declined. This drop reflected the partial deferral of large-scale projects in China
because of widespread coronavirus infections, weaker demand in Southeast Asia, and a reactionary decline inlarge-scale projects in Europe, which had increased in the prior year. Furthermore, net sales of components andrepair services were off because of lackluster growth overseas, mainly in Asia, and because of slack domestic public
sector demand.
(Millions of Yen)
Productclassification

Machinery

Equipment andconstruction
works

Components
and repair
services

TOTAL

July, 2020

465

1,018

2,005

3,489

July, 2019

261

353

2,194

2,810

Difference

203664-189

678

July, 2020

450

120

1,347

1,918

July, 2019

425

108

1,444

1,978

Difference2512-97-59

July, 2020

554

0

1,476

2,031

Overseas

July, 2019

1,544

58

1,851

3,454

marketsDifference

-990

-58

-374

-1,422

July, 2020

1,470

1,139

4,829

7,440

July, 2019

2,231

521

5,490

8,243

Difference

-760

618

-661

-803

Public sector

Private sector

TOTAL

With respect to earnings during the period, operating income was 582 million yen, 22.2% down from the same period
one year earlier, reflecting lower profit.

2

(Chemical Products Business)
In the Chemical Products Business, net sales of materials for semiconductor manufacturing applications in theelectronics materials sector, and materials for semiconductor manufacturing devices in the advanced materialssector increased, but on the other hand net sales of materials for motor vehicles, housing and construction
applications in the industrial materials sector, and resin and products for domestic and overseas markets in thesynthetic resin sector decreased reflecting widespread coronavirus infections.

As a result, net sales forconsolidated third quarter year-to-date period were 20,984 million yen, 8.4% down from the same period last year.
(Millions of Yen)
July, 2019

July, 2020

Difference

Synthetic resin sector

5,637

4,858-779

Industrial materials sector

7,249

6,075-1,173

Chemical products sector

4,733

4,500-232

Advanced materials sector

2,440

2,517

76

Electronic materials sector

2,625

2,829

204

228

201

-26

22,914

20,984-1,929Other products (foreign liquor)
Total

With respect to earnings during the period, operating income was 1,045 million yen, 5.2% down from the same
period one year earlier, reflecting lower profit.
(2) Analysis of Financial Condition
Total assets as of the end of the consolidated third quarter under review were 38,190 million yen, decreased by 880
million yen from the end of the previous consolidated fiscal year. This mainly reflected an increase in work inprocess, and raw materials and supplies, and a decrease in notes and accounts receivable–trade, and cash anddeposits.
Liabilities were 8,936 million yen, decreased by 1,272 million yen from the end of the previous consolidated fiscal
year, mainly because of an increase in electronically recorded monetary debt, and advances received, and adecrease in notes and accounts payable-trade, and provision for bonuses.
Net assets stood at 29,254 million yen, increased by 392 million from the end of the previous consolidated fiscalyear. This mainly reflected an increase in retained earnings recorded under quarterly net income attributable toowners of the parent.
As a result of the above changes, the equity ratio at the end of the consolidated third quarter under review
increased by 2.7 points compared with the end of the previous consolidated fiscal year to 76.6%.
(3) Analysis of Future Forecast on Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending October 31, 2020 thatwere announced in the “Notice on changes in earnings forecast” released on June 12, 2020.

32. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet (Third Quarter)(Thousands of Yen)
End of Previous YearEnd of Third Quarter(October. 31, 2019)(July 31, 2020)

AssetsCurrent Assets
Cash and Deposits

12,147,981

11,011,339

Notes and Accounts Receivable-Trade

10,432,830

8,760,916

Electronically Recorded Monetary Claims

1,904,539

2,376,028

Merchandise and Finished Goods

3,242,217

3,483,766

Work in Process

1,200,360

1,936,073Raw Materials and Supplies

1,014,166

1,639,581

Others381,860

498,556

Allowance for Doubtful Accounts
Total Current Assets-63,652-61,731

30,260,304

29,644,529

4,608,252

4,721,313

Accumulated Depreciation-1,954,347-1,989,825

Buildings and Structures, Net

2,653,904

2,731,488

Machinery, Equipment and Vehicles

3,771,107

3,791,348-3,284,685-3,332,705

486,422458,642

1,930,720

1,930,706

123,271

1,550

1,036,746

1,050,044-955,308-947,052

81,437

102,992

5,275,756

5,225,379

129,094

123,018

Investment Securities

1,393,589

1,120,095

Guarantee Deposits

349,795

398,417

1,588,079

1,620,690

Deferred Tax Assets

16,446

3,354

Others80,562

78,178

Allowance for Doubtful Accounts-22,681-23,051

Total Investments and Other Assets

3,405,791

3,197,685

Total Noncurrent Assets

8,810,642

8,546,084

Total Assets

39,070,946

38,190,613

Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, NetLand
Construction in progress
Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets4

(Thousands of Yen)
End of Previous YearEnd of Third Quarter(October. 31, 2019)(July 31, 2020)

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade

4,165,190

3,026,054

Electronically Recorded Monetary Debt

1,822,509

2,219,366

Accounts Payable-Others

821,503604,350

Income Taxes Payable

430,816

22,488Advances Received

577,512

937,609

Provision for Bonuses

1,160,657

699,015

Provision for Directors' Bonuses

72,62742,437

Allowance for Product Warranty

313,350

265,176

Others

199,898

295,284

9,564,068

8,111,784

5,460

5,460

Total Current Liabilities
Noncurrent Liabilities
Provision for Directors' Retirement Benefits
Net Defined Benefit Liabilities

63,20867,318Deferred Tax Liabilities

576,715

751,896

Total Noncurrent Liabilities

645,384824,674

Total Liabilities

10,209,452

8,936,459

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

26,043,930

26,650,057-363,977-363,977

Total Shareholders’ Equity

28,224,573

28,830,699

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-SaleSecurities
Deferred Gains or Losses on Hedges

439,359

235,004

1,954

594

Foreign Currency Translation Adjustment

83,28289,284

Total Adjustment on Net Defined Benefit

112,324

98,572

Total Accumulated Other Comprehensive Income

636,920

423,454

Total Net Assets

28,861,494

29,254,154

Total Liabilities and Net Assets

39,070,946

38,190,613

Net Assets
Shareholders’ Equity

Treasury Stock5

(2) Quarterly Consolidated Statement of Income & Quarterly Consolidated Statement of Comprehensive Income
Quarterly Consolidated Statement of Income (Third Quarter)(Thousands of Yen)
Third Quarter Ended

Third Quarter Ended

July 31, 2019

July 31, 2020

Net Sales

31,158,296

28,424,603

Cost of Sales

24,088,149

21,783,810

7,070,147

6,640,792

5,219,756

5,013,301

1,850,390

1,627,491

Interest Income

1,887

2,278

Dividends Income

29,89931,540Rent Income

5,378

5,378

Foreign Exchange Gain

2,426

－Others

37,65425,60577,24664,802

Interest Expenses

29,623

6,005

Commission Paid

8,243

8,252

Sales Discount

5,924

4,701－

18,887

5,204

5,364

Total Non-Operating Expenses

48,996

43,211

Ordinary Income

1,878,640

1,649,082

Gain on Sales of Investment Securities

5,827

1,861

Total Extraordinary Income

5,827

1,861

1,872,813

1,647,221

Income Taxes-Current

542,389

292,903

Income Taxes-Deferred

62,287279,209

Total Income Taxes

604,676

572,113Net Income
Net Income
Attributable to Owners of the Parent

1,268,136

1,075,108

1,268,136

1,075,108

Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating ExpensesForeign Exchange Losses
OthersExtraordinary Income

Income before Income Taxes

6Quarterly Consolidated Statement of Comprehensive Income (Third Quarter)(Thousands of Yen)
Third Quarter Ended

Third Quarter Ended

July 31, 2019

July 31, 2020

1,268,136

1,075,108-100,024-204,354

Deferred Gains or Losses (-) on Hedges

634-1,360Foreign Currency Translation Adjustment-63,494

6,001

Adjustment on Net Defined Benefit-15,755-13,752

Total Other Comprehensive Income-178,639-213,465

1,089,496

861,642

1,089,496

861,642Net Income
Other Comprehensive Income
Valuation Difference on Available-for-sale Securities

Comprehensive Income(Breakdown)Comprehensive Income Attributableto Owners of the Parent7

(3) Notes on Quarterly Consolidated Financial Statements(Note for premise of going concern)
There are no pertinent matters to report.
(Notes for significant changes in shareholder’s equity)
There are no pertinent matters to report.
(Additional information)(Accounting estimates)
The widespread coronavirus pandemic has had a broad impact on the economy and corporate business activities,
and has affected the Tomoe Engineering Group’s business activities as well.
Based on the assumption this situation will continue throughout the current consolidated fiscal year, and thatcircumstances will return to normal gradually beginning from the next consolidated fiscal year, we have preparedaccounting estimates of fixed asset impairment and the potential for recovery of deferred tax assets.
Because the impact of the coronavirus pandemic on economic activity is highly uncertain, changes in the above
assumptions might affect the Tomoe Engineering Group’s future financial position and business results.
(Segment Information, etc.)[Segment Information]
I Third Quarter Ended July 31, 2019
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

8,243,944

Total

Grand Total

22,914,351

31,158,296

31,158,296－－－－

8,243,944

22,914,351

31,158,296

31,158,296

748,233

1,102,156

1,850,390

1,850,390(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

II Third Quarter Ended July 31, 2020
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

7,440,245

Total

Grand Total

20,984,358

28,424,603

28,424,603－－－－

7,440,245

20,984,358

28,424,603

28,424,603

582,3811,045,110

1,627,491

1,627,491(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

8