Financial Results for the First Quarter Ended January 31, 2016
[Japan GAAP] (Consolidated)
Date:

February 29, 2016

Company Name and Code:

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

1 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: March 14, 2016
Date for Dividend Payment:

Not applicable to this financial quarter

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Not prepared
Briefing 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 First Quarter Ended January 31, 2016
(1) Results of Operation (Consolidated)

Quarter Ended January 31, 2016
Quarter Ended January 31, 2015

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions of
Yen
Percent
Yen
Percent
Yen
Percent
8,912
-6.9
109
-62.0
111
-76.8
9,572
5.1
287
140.6
481
69.2

Quarter Ended January 31, 2016
Quarter Ended January 31, 2015

Net Income Attributable to
Owners of the Parent
Millions of
Yen
Percent
29
-92.4
383
45.5

Net Income per Share

Fully Diluted Quarterly
Net Income per Share

Yen
93
2.
43
38.

Yen
-

(Note) Comprehensive income
First Quarter ended January 31, 2016: -51 million yen (---%)First Quarter ended January 31, 2015: 615 million yen (39.5%)(2) Financial Condition (Consolidated)

Quarter Ended January 31, 2016
Year Ended October 31, 2015

Total Assets (A)(Millions of Yen)
34,14734,341Net Assets (B)(Millions of Yen)
24,92425,200Net Assets Ratio(B) / (A) (Percent)
73.0
73.4

(Reference) Net assets
First Quarter ended January 31, 2016: 24,924 million yen

Year Ended October 31, 2015: 25,200 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2015
Year Ending October 31, 2016
Year Ending October 31, 2016 (Prospect)First
Quarter-Interim
Term
50
22.

Annual Dividend (Yen)Third
End ofQuarter
Fiscal Year
50
22.

50

22.

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

-

50

22.

Annual
00

45.

00

45.

3. Forecast for Earnings for the Year Ending October 31, 2016 (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)nd
2 Quarter YTD
20,600
2.6
710
-24.0
710
-38.9
Full Business Year41,800
6.2
1,320
-4.9
1,300
-21.9
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
nd
08
2 Quarter YTD
350
-62.1
35.
14
Full Business Year
660
-35.8
66.
(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 simplified accounting method and the specific accounting method: None
(3) Changes of the principles, procedures, and representation of the accounting policies
1) Change due to revision of accounting standard: Existing2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
For more information, please refer to (3) [Changes in accounting principles, changes in accounting estimatesand retrospective restatements] of 2. [Matters Concerning Summary Information (Notes)] on page 4.
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At January 31, 2016: 10,533,200 shares

At October 31, 2015: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At January 31, 2016: 554,667 shares

At October 31, 2015: 554,667 shares

3) Number of average shares (accumulated quarterly total)
At January 31, 2016: 9,978,533 shares

At January 31, 2015: 9,978,533 shares*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 aquarterly review procedure based on the Financial Instruments and Exchange Act.
*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 on
Quarterly Consolidated Earnings Forecast] of 1. [Qualitative Information on Quarterly Consolidated Operating
Results] for the operating 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 Quarterly Consolidated Earnings Forecast.......................................................3
2. Matters Concerning Summary Information (Notes)...........................................................................................4(1) Changes to material subsidiaries during the consolidated cumulative first quarter..................4(2) Application of special accounting method in the preparation of quarterly consolidated financial
statements......................................................................................................................................4(3) Changes in accounting principles, changes in accounting estimates and retrospective restatements...4
3. Quarterly Consolidated Financial Statement...........................................................................................................5(1) Quarterly Consolidated Balance Sheet. ................................................................................................5(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
Income...................................................................................................................................... 7
Quarterly Consolidated Statements of Income.....................................................................................................7
Quarterly Consolidated Statements of Comprehensive Income.........................................................................8(3) Notes for Quarterly Consolidated Financial Statements………………………………………………..9(Note for premise of going concern)……………………………………………………………...9(Notes for significant changes in shareholder’s equity)…………………………………………...9(Segment information) ………………………………………………………………………………...9
4. Overseas Net Sales (Supplemental Information)...................................................................................................10

1

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
Although Japan’s economy was supported to a certain extent during the first quarter by an increase in capital
investment against the backdrop of improved corporate earnings, this was undercut by a sharp drop in stock prices
and the appreciation of the yen, two factors that weakened corporate business sentiment and dampened consumer
confidence, and the recovery generally lacked strength. Overseas, in addition to the sluggishness evident in the U.S,
economy, which earlier had acted as an engine for growth, and the continuing economic slowdown in newly
developing countries including China, the economies of resource-producing countries deteriorated under the impactof the slide in crude oil prices, and the outlook for the global economy remained opaque.
Given these circumstances, net sales for the Tomoe Engineering Group for the consolidated first quarterslipped 6.9% from the same period last year to 8,912 million yen mainly because of decreasing sales in the
Machinery & Equipment Business. From an earnings aspect, profits were higher in the Chemical Products
Business, but operating income was 109 million yen, 62.0% down from the previous consolidated fiscal year against
the backdrop of lower net sales in the Machinery & Equipment Business, while ordinary income came to 111 million
yen, 76.8% down from the previous consolidated fiscal year because of a decrease in foreign exchange gains. Profit
attributable to owners of the parent was 29 million yen, 92.4% down from the previous consolidated fiscal 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 1,307 million yen,
32.9% down from the same period last year. Net sales of equipment and construction for China expanded, and net
sales of machinery for domestic public sector demand and net sales of components and repair services for private
sector demand remained steady. Net sales of machinery for North America oil wells were lower, however, and in
addition net sales of components and repair services for domestic public sector demand stagnated.
With respect to earnings during the period, income was affected by the decline of net sales in all of Tomoe’s
businesses, and operating income fell from the operating income of 56 million yen reported in the same period one
year ago to a loss of 277 million yen.

(Chemical Products Business)
In the Chemical Products Business, net sales of resin raw materials and UV curing resin for inks, two products webegan handling in the fine chemicals sector, as well as net sales of electrodes for ferroalloy manufacturing applicationsin the industrial materials sector, materials for automotive and housing and construction applications, and ceramics
products for semiconductor equipment manufacturing in the advanced materials sector, all remained strong. On theother hand, net sales of resin raw materials for the domestic plastics sector, transport trays for semiconductor
manufacturing applications in the electronics materials sector, and resin raw materials and products at Tomoe
Engineering (Hong Kong) decreased. As a result, consolidated net sales for the first quarter were 7,604 million yen,
0.2% down from the same period last year.
With respect to earnings, operating income was driven by the growth in net sales for products in the industrial materials
sector and advanced materials sector, which have comparatively high margins, and amounted to 386 million yen,
67.6% up from the same period one year earlier.

2(2) Analysis of Financial Condition
Total assets as of the end of the consolidated first quarter under review were 34,147 million yen, down 0.6% or 193
million yen from the end of the previous consolidated fiscal year. This mainly reflected an increase of 980 million yen
in inventory, and a decrease of 1,095 million yen in notes and accounts receivable–trade.
Liabilities were 9,222 million yen, up 0.9% or 82 million yen from the end of the previous consolidated fiscal year,
mainly because of a decrease of 167 million yen in income tax payable, a decrease of 398 million yen in provision
for Bonuses, an increase of 375 million yen in notes and accounts payable-trade, an increase of 182 million yen inadvances received, and an increase of 66 million yen in accounts payable-others.
Net assets stood at 24,924 million yen, 275 million yen or 1.1% down from the end of the previous consolidated fiscal
year. This mainly reflected quarterly profit attributable to owners of the parent of 29 million yen, a decrease by 195
million yen in retained earnings because of a dividend payment of 224 million yen, a decrease of 58 million yen invaluation difference on available-for-sale securities, and a 31 million yen decrease in the translation adjustments
account.
As a result of the above changes, the equity ratio at the end of the consolidated first quarter under review
decreased by 0.4 point compared with the end of the previous consolidated fiscal year to 73.0%.
(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending in October 31, 2016that were announced in the “Financial Results for the Fiscal Year Ended October 31, 2015 [Japan GAAP](Consolidated)” released on December 9, 2015.

3

2. Matters Concerning Summary Information (Notes)(1) Changes to material subsidiaries during the consolidated cumulative first quarter:
There are no pertinent matters to report.
(2) Application of special accounting method in the preparation of quarterly consolidated financial statements:
There are no pertinent matters to report.
(3) Changes in accounting principles, changes in accounting estimates and retrospective restatements:
Beginning from the first quarter consolidated accounting period, the Company has applied the Accounting Standard forBusiness Combinations (Accounting Standards Board of Japan Statement No. 21), the Accounting Standard forConsolidated Financial Statements (Accounting Standards Board of Japan Statement No. 22) and the AccountingStandard for Business Divestitures (Accounting Standards Board of Japan Statement No. 7), and has changed thepresentation of “Net income” and the presentation from “Minority interests” to “Non-controlling interests”. To reflect thischange in reporting method, the Company has made reclassifications to its quarterly consolidated financial statements
and consolidated financial statements for the first quarter of the prior consolidated fiscal year and the prior consolidated
fiscal year.

43. Quarterly Consolidated Financial Statement(1) Quarterly Consolidated Balance Sheets (First Quarter)(Thousands of Yen)
End of Previous YearEnd of First Quarter(October. 31, 2015)(January 31, 2016)

AssetsCurrent Assets
Cash and Deposits

5,295,280

5,459,645

Notes and Accounts Receivable-Trade

14,575,274

13,480,053

Merchandise and Finished Goods

2,883,186

3,072,022

Work in Process

1,428,858

2,031,349

Raw Materials and Supplies

814,139

1,003,583

Deferred Tax Assets

415,636

336,526

Others170,571

174,788-5,309-8,05425,577,638

25,549,915

4,414,855

4,413,963

Accumulated Depreciation-1,554,623-1,584,497

Buildings and Structures, Net

2,860,232

2,829,465

Machinery, Equipment and Vehicles

4,105,001

4,060,040-3,469,389-3,457,401

635,612602,638Land

1,934,976

1,935,016

Others

1,094,601

1,076,530-1,004,257-992,999

90,34383,5305,521,164

5,450,651

362,505

343,847

Investment Securities

1,189,880

1,108,742

Guarantee Deposits

83,64582,687

1,506,899

1,517,028

Others122,346

118,706

Allowance for Doubtful Accounts-22,775-23,724

Total Investments and Other Assets

2,879,996

2,803,441

Total Noncurrent Assets

8,763,665

8,597,941

Total Assets

34,341,304

34,147,856

Allowance for Doubtful Accounts
Total Current Assets
Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net

Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets5

(Thousands of Yen)
End of Previous YearEnd of First Quarter(October. 31, 2015)(January 31, 2016)

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

5,836,44

6,211,979

Accounts Payable-Others

557,504

624,468

Income Taxes Payable

182,965

15,403

Advances Received

105,602

288,089

Provision for Bonuses

701,392

302,488

Provision for Directors' Bonuses

42,374

9,651

Allowance for Product Warranty

122,478

140,802

Others269,841

333,072

7,818,605

7,925,955

Noncurrent Liabilities
Provision for Directors' Retirement Benefits

5,460

5,460

Net Defined Benefit Liabilities

54,052

55,217

1,262,702

1,236,265

Total Noncurrent Liabilities

1,322,214

1,296,942

Total Liabilities

9,140,820

9,222,898

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

22,313,936-363,591

22,118,675

Total Shareholders’ Equity

24,494,965

24,299,704

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

330,518

271,518748

289

415,072-40,820

383,989

Total Accumulated Other Comprehensive Income

705,518

625,253

Total Net Assets

25,200,484

24,924,957

Total Liabilities and Net Assets

34,341,304

34,147,856

Total Current Liabilities

Deferred Tax Liabilities

Net Assets
Shareholders’ Equity

Treasury Stock

Foreign Currency Translation Adjustment
Total Adjustment on Net Defined Benefit

6-363,591-30,543

(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income (First Quarter)(Thousands of Yen)First Quarter Ended

First Quarter Ended

January 31, 2015

January 31, 2016

Net Sales

9,572,181

8,912,467

Cost of Sales

7,633,464

7,280,715

1,938,716

1,631,752

1,651,265

1,522,623

287,451

109,129

Interest Income

5,036

1,721

Dividends Income

9,540

9,295

Rent Income

1,758

1,707

Foreign Exchange Gains

168,578-

Others12,974

4,020

197,888

16,745Interest Expenses

427

51

Commission Paid

756

756

Sales Discount

1,522

1,531

-

10,358

701

1,232

3,407
481,932

13,931111,943

15,814-

15,814-

Income before Income Taxes and Minority Interests

497,746

111,943

Income Taxes-Current

36,219

7,325

Income Taxes-Deferred

78,03175,362

Total Income Taxes

114,251

82,687Net Income

383,495

29,255Net Income Attributable to Owners of the Parent

383,495

29,255Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Foreign Exchange Losses
OthersTotal Non-Operating Expenses
Ordinary Income
Extraordinary Income
Gain on Sales of Noncurrent Assets
Total Extraordinary Income

7Quarterly Consolidated Statements of Comprehensive Income (First Quarter)(Thousands of Yen)First Quarter Ended

First Quarter Ended

January 31, 2015

January 31, 2016

383,495

29,25557,752-58,999

Deferred Gains or Losses (-) on Hedges

-919

-459

Foreign Currency Translation Adjustment

173,476-31,082

2,000

10,276232,310-80,265

615,806-51,009615,806-51,009

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

Net Defined Benefit
Total Other Comprehensive Income
Comprehensive Income(Breakdown)Comprehensive Income Attributable to Owners of the
Parent8

(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.
(Segment Information, etc.)
First Quarter Ended January 31, 2015
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment
Machinery & Equipment
Business

Chemical Products
Business

1,948,883

7,623,297

9,572,181

9,572,181

-

-

-

-

1,948,883

7,623,297

9,572,181

9,572,181

56,965

230,485

287,451

287,451

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

Total

Grand Total(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

2 Information Concerning Impairment Loss on Noncurrent Assets, Goodwill, and Other Items by Reporting Segment(Material gain on negative goodwill)
The Tomoe Engineering Group had a gain on negative goodwill in the Chemical Products Business in conjunction withthe acquisition of the stock of Interstella Co., Ltd., a consolidated subsidiary of Tomoe Engineering, which was owned
by another company. The reported amount of the gain on negative goodwill in the consolidated First Quarter underreview as a result of this acquisition was 145,132,000 yen.

First Quarter Ended January 31, 2016
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment
Machinery & Equipment
Business

Chemical Products
Business

1,307,719

7,604,748

8,912,467

8,912,467

-

-

-

-

Total

1,307,719

8,912,467

8,912,467

Segment Profit or Loss (-)-277,117

7,604,748
386,246

109,129

109,129

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred

Total

Grand Total(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

9

4. Overseas Net Sales (Supplemental Information)
First Quarter Ended January 31, 2015

(Thousands of Yen)

I. Overseas Net Sales
II. Consolidated Net Sales
III. Ratio of Overseas Net Sales to Consolidated Net Sales (%)

Asia
1,183,785

Other Regions
881,320

Total
2,065,105--

9,572,181

12.4

9.2

21.6

(Notes)1. Areas including countries or regions are determined based on their degree of geographical proximity.
2. Main countries or regions included in the areas:(1) Asia: China, Korea, Taiwan and Indonesia(2) Other regions: America and Europe
3. Overseas net sales are sales of our company and subsidiaries made in countries and regions other than Japan.
First Quarter Ended January 31, 2016

(Thousands of Yen)

I. Overseas Net Sales
II. Consolidated Net Sales
III. Ratio of Overseas Net Sales to Consolidated Net Sales (%)

Asia
1,311,212

Other Regions
322,515

Total
1,633,728--

8,912,467

14.7

3.6

18.3

(Notes)1. Areas including countries or regions are determined based on their degree of geographical proximity.
2. Main countries or regions included in the areas:(1) Asia: China, Korea, Taiwan and Indonesia(2) Other regions: America and Europe
3. Overseas net sales are sales of our company and subsidiaries made in countries and regions other than Japan.

10