Translation

Member of the Financial Accounting Standards Foundation

January 13, 2010

Consolidated Financial Results
for the Six Months ended November 30, 2009
Listed company name:
Stock exchange listing:Stock code:
Location of headquarters:
Website:Representative:
Contact:

Toyo Tanso Co., Ltd.
Tokyo Stock Exchange, 1st Section
5310
Osaka, Japan
http://www.toyotanso.co.jp
Naotaka Kondo, President & Chief Operating Officer
Toshimi Boki, Executive Officer, General Manager,
Finance and Accounting Department
81-6-6451-2114 (from overseas)

TEL:
Scheduled date for submissionof quarterly report:
Scheduled date for dividend payment

January 14, 2010-

1. Consolidated financial results for the six months ended November 30, 2009
(From June 1, 2009 to November 30, 2009)(1) Operating results (cumulative total)(Millions of yen, rounded down)
Percentages indicate changes from the same period in the previous fiscal year.

Net sales

Operating profit

Recurring profit%
Six months ended
November 30, 2009
Six months ended
November 30, 2008

Net income

%

%

%

12,646(29.7)

817(80.3)

661(82.4)

369(84.5)

17,979

-

4,154

-

3,754

-

2,379

-

Net income per share

Six months ended
November 30, 2009
Six months ended
November 30, 2008

Diluted net income
per share

yen

yen

17.84

-

114.76(Millions of yen, rounded down)(2) Financial position
Total assets

EquityEquity ratio

Equity per share%yen

As of November 30, 2009

59,62447,72678.2

2,249.70

As of May 31, 2009

58,821

48,60680.6

2,286.27

Reference: Shareholders’ equity
November 30, 2009
May 31, 2009

46,646 million yen
47,404 million yen

12. Dividends
Dividends per share (yen)First quarter end-

Year ended May 31, 2009

Second quarter
Third quarter end
end
0.00
-

Year ending May 31, 2010

0.00
(Actual)Year ending May 31, 2010
(Forecast)
Note: Revision of projected dividends in the quarter under review: None

Year-end

Total(Full year)

20.00

-

20.00
-

-

20.00

20.00

3. Consolidated results forecast for the fiscal year ending May 31, 2010
(From June 1, 2009 to May 31, 2010)

Net sales

Full year

28,000Operating profit
%

%

(9.6)

2,500 (47.3)(Millions of yen)
Percentages indicate changes on a year-on-year basis.
Net income
Recurring profit
Net income
per share%
2,500(44.2)

1,500

%

yen

(41.6)

72.34

Note: Revision of consolidated results forecast in the quarter under review: None

4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation): None
(2) Adoption of simple accounting methods and accounting methods specific to the preparation ofquarterly consolidated financial statements: Yes
Note: For details, please refer to ‘4. Others’ in Qualitative Information and Financial Statements on page4.
(3) Changes in accounting policies, procedures, and methods of presentation for preparing theconsolidated quarterly financial statements(those to be described in the section Changes in Significant Items That Form the Basis of Preparations for
Consolidated Quarterly Financial Statements)
i. Changes due to amendment of accounting standards: None
ii. Changes due to other reasons: None
(4) Number of shares outstanding (common stock)i. Number of shares outstanding and issued at the end of period (including treasury stock)
As of November 30, 2009
20,750,688 shares
As of May 31, 2009
20,750,688 shares
ii. Number of treasury stock at the end of period
As of November 30, 2009
16,215 shares
As of May 31, 2009
16,115 sharesiii. Average number of shares during the period (quarter; cumulative period)
Second quarter ended November 30, 2009
20,734,523 shares
Second quarter ended November 30, 2008
20,734,980 shares* Disclaimer regarding appropriate use of forecasts and related points of note
The results forecast has been prepared based on information that was available on the date of release of thisdocument. Actual results may differ from the forecast depending on various factors. For further information on
the results forecast, please refer to ‘3. Qualitative Information Regarding Consolidated Results Forecast’ in
Qualitative Information and Financial Statements on page 4.
2

[Qualitative Information and Financial Statements]
1. Qualitative Information Regarding Consolidated Operating Results
During the six months ended November 30, 2009, despite signs of a recovery in global economic
conditions in some areas, particularly in Asian countries such as China, brought about partly thanks
to economic stimulus measures in each country, the effects of the global recession have continued todrag on, with a poor performance continuing overall. In the Japanese economy, despite a gradual
recovery from the worst conditions thanks to an end to falling exports and production and progressin stock inventory adjustments, difficult conditions have continued.
Under these difficult circumstances, the Toyo Tanso Group has focused its efforts on stimulating
demand, particularly in the environment and energy fields where growth is expected, at the sametime as promoting self-supporting efforts such as reductions in costs and expenses and investment
restrictions.
As a result of the above performance, despite reductions in costs and expenses, the impact offalling demand in mainstay fields led to consolidated sales in the second quarter under review fell
29.7% year on year to 12,646 million yen. Operating profit fell 80.3% to 817 million yen, recurring
profit fell 82.4% to 661 million yen, and net income dropped 84.5% to 369 million yen
The table below shows sales and overall conditions by product category in the six months
under review.
Products
Special graphite products
Carbon products for generalindustries(for mechanical applications)
Carbon products for generalindustries(for electrical applications)Compound materials andother products
Related goods
Total

Six months ended
November 30, 2008
(thousand yen)
9,451,205

Six months ended
November 30, 2009
(thousand yen)
6,472,381

1,502,467

1,041,615(30.7)

2,377,008

1,915,010(19.4)

4,198,950

2,761,013(34.2)

450,211456,045

1.3

17,979,844

12,646,065(29.7)

Year on year (%)(31.5)

Special graphite products
In the electronics sector, a poor performance was inevitable as a result of a continued slump in
products used in the processing of single crystal silicon, brought about by customers’ inventory
adjustments, in addition to falling demand in mainstay Chinese and European markets for products
used in the production of solar cells. However, a gradual recovery phase can be seen overall, withdemand beginning to rise in all product areas during the latter half of the period and a rapid
expansion in demand for products used in compound semiconductors, mainly LED products.
In the general industries sector, despite weak conditions in products used for electrical dischargemachining (EDM) electrodes (a mainstay field) and metallurgical products, economic conditions
bottomed out and demand began to increase, particularly during the latter half of the period, mostly
in the newly emerging economies.
Carbon products for general industries
In carbon products for mechanical applications, despite a positive performance in products used as
sliders for pantographs, which are generally less affected by economic conditions, a poor
performance continued overall as a result of restricted capital expenditure, particularly in products
used as bearings and sealing materials.
In carbon products for electrical applications, underlying strength was seen overall despite poor
conditions caused by the global recession, with a rapid recovery in mainstay products for use insmall motors during the latter half of the period, particularly in the China market, in addition to an
improvement in the performance of products used in automobiles.
Compound materials and other products
In SiC (silicon carbide)-coated graphite products, despite a sluggish performance in3

semi-conductor-related products, LED-related products saw major growth, particularly in South
Korea and Taiwan, led by products used in backlight LCD, leading to underlying strength overall.
In C/C composite products, mainstay products used in the production of single crystals continued toperform poorly as a result of customers’ inventory adjustments, and products for use in solar cells
and industrial furnaces also failed to pick up, leading to a poor performance overall. However,signs could be seen of a recovery towards the second half of the year. In graphite sheet products,
demand became positive, mainly thanks to a rapid recovery in products for use in automobiles.

2. Qualitative Information Regarding Consolidated Financial Position
Total assets as of November 30, 2009 increased by 803 million yen from the end of the previous
fiscal year. This was caused by an increase in inventory assets of 769 million yen resulting fromsystematic transshipments of intermediate stock, an increase in tangible fixed assets of 2,599 million
yen due to manufacturing investments in expanded manufacturing facilities at the Takuma Division,and an increase in intangible fixed assets of 481 million yen resulting from new land acquisition in
Shanghai, China (land lease rights), despite a decrease in cash on hand and in banks of 2,739 million
yen due to expenditures, such as the acquisition of tangible and intangible fixed assets.
Total liabilities rose 1,684 million yen from the end of the previous fiscal year. This camelargely as a result of an increase in notes and account payable-equipment of 243 million yen, an
increase in the accrued amount payable through the purchase of tangible fixed assets of 503 million
yen resulting from investments in expanded manufacturing facilities, and an increase ininterest-bearing liabilities of 517 million yen.
Equity fell 880 million yen from the end of the previous fiscal year. This was caused largely bya decrease in foreign currency translation adjustments of 713 million yen.
3. Qualitative Information Regarding Consolidated Results Forecast
Regarding the future economic environment, despite signs of a recovery in underlying conditions
in both Japan and overseas, we have not seen a real recovery backed up by capital expenditure andpersonal consumption, and uncertain factors still persist, such as employment conditions, crude oil
prices and exchange rates, as well as fears that the effects of economic stimulus measures are
beginning to run out of steam.
Regarding the environment surrounding the Toyo Tanso Group, despite uncertain future
conditions, including exchange rates, there has been a gradual improvement in underlying demand as
expected in the forecast, particularly in the environment and energy sector and the electronics sector,
and accordingly we have made no change to the consolidated full year results forecast announced on
July 15, 2009. The assumed exchange rates used from the third quarter are as follows: 90
yen/US$ (initially 93 yen/US$), 130 yen/EUR → (no change).
4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation)
None(2) Adoption of simple accounting methods and accounting methods specific to the
preparation of quarterly consolidated financial statements
Tax expense calculation
Tax expenses are calculated by multiplying profit before income taxes by the effective tax
rate, which is reasonably estimated by applying tax-effect accounting to the estimated profit
before income taxes for the fiscal year, including the second quarter under review.
The income taxes-deferred is included in income taxes.
(3) Changes in accounting policies, procedures, and methods of presentation for
preparing the consolidated quarterly financial statements
None4

5. Consolidated Quarterly Financial Statements(1) Consolidated quarterly balance sheets(Thousands of yen, rounded down)
As of November 30, 2009
AmountAssetsCurrent assets
Cash on hand and in banks
Trade notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and stores
Other
Allowance for doubtful accounts
Total current assets
Fixed assets. Tangible fixed assets
Buildings and structures (Net)
Machinery, equipment, and vehicles (Net)Land
Construction in progress
Other (Net)
Total tangible fixed assets
Intangible fixed assets
Investments and other assets
Total fixed assets
Total assets

5

As of May 31, 2009
Amount11,296,831
8,519,001
4,706,032
4,326,723
1,257,114
1,386,612(140,248)
31,352,067

14,035,952
8,257,709
4,747,244
3,476,873
1,296,308
1,980,337(185,780)
33,608,646

6,358,201
9,012,396
5,317,175
4,702,043
417,724
25,807,541
860,755
1,604,424
28,272,721
59,624,788

6,126,730
8,589,139
5,353,520
2,699,487
439,463
23,208,341
379,167
1,624,906
25,212,415
58,821,061

(Thousands of yen, rounded down)
As of November 30, 2009

As of May 31, 2009

AmountAmountLiabilities
Current liabilities
Trade notes and accounts payable
Short-term borrowings
Accrued amount payable
Income taxes payable
Reserve for employees’ bonuses
Reserve for directors’ and corporate auditors’ bonuses
Other
Total current liabilities
Long-term liabilities
Long-term borrowings
Reserve for employees’ retirement benefits
Other
Total long-term liabilities
Total liabilities

1,988,959
1,350,128
3,923,562
204,999
720,443
1,772,046
9,960,140

1,725,878
1,323,950
3,420,334
290,192
756,470
35,8401,595,887
9,148,554

561,795
479,141
897,258
1,938,195
11,898,336

70,740329,736
665,184
1,065,661
10,214,216

EquitySareholders’ Equity
Common stock
Capital surplus
Retained earnings
Treasury stock - at cost

7,692,575
9,534,686
30,812,011(57,408)

7,692,575
9,534,686
30,856,790(56,997)

1,091

984

(1,336,561)
46,646,395(623,226)
47,404,814

1,080,056
47,726,452
59,624,788

1,202,030
48,606,845
58,821,061

Unrealized gains (losses) on available-for-sale securities
Foreign currency translation adjustments
Total Sareholders’ Equity
Minority interests
Total equity
Total liabilities and equity6(2) Consolidated quarterly statements of income
Six months ended November 30, 2009
(Thousands of yen, rounded down)

Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Dividend income
Dividends earned
Gain on foreign currency option
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange loss
Valuation loss on investment securities
Other
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on sale of fixed assets
Reversal of allowance for doubtful accounts
Gain on sale of investment securities
Subsidies received
Returned special severance payments for early retired employees during
the past fiscal year
Total extraordinary profit
Extraordinary losses
Loss on sale of fixed assets
Loss on disposal of fixed assets
Valuation loss on investment securities
Total extraordinary losses

Six months ended
November 30, 2008
Amount17,979,844
10,683,472
7,296,372
3,142,243
4,154,128

Six months ended
November 30, 2009
Amount12,646,065
9,079,843
3,566,222
2,749,186
817,035

37,6106,081
103,662
25,603
172,957

28,22015,052
63,63747,504
154,415

20,524437,350
106,6368,281
572,7933,754,292

16,724
257,753
13,47922,179310,137
661,313

770
7,240
100
-

33,72745,526
26,735-21,0538,110

127,043

1,210
11,903
1,703

275
5,973
-

14,818

6,248

Profit before income taxes

3,747,585

782,107

Income taxes
Minority interests
Net income

1,097,866
270,169
2,379,549

368,431
43,763369,9127

(3) Consolidated quarterly statements of cash flows(Thousands of yen, rounded down)
Six months ended
November 30, 2008
AmountCash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill

Six months ended
November 30, 2009
Amount3,747,585
1,561,562
5,453
94,306782,107
1,615,551
5,453
148,577

Increase (decrease) in reserve for employees’ retirement benefits
Returned special severance payments for early retired employees during
the past fiscal year
Increase (decrease) in reserve for employees’ bonuses
Increase (decrease) in reserve for directors’ bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Valuation loss (gain) on investment securities
Gain on sale of tangible fixed assets
Loss on disposal and sale of tangible fixed assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (Increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other

-

(21,053)(15,433)
25,920(15,694)(43,691)
20,524437,350
108,339(770)
13,114225,489(1,388,831)
556,163
191,419(34,904)(35,840)(72,704)(43,272)
16,724
257,753
13,479(33,727)6,248(525,992)(1,022,594)
432,875(110,334)

Sub-total

5,522,809

1,378,347

Interest and dividend received
Interest paid
Income taxes paid or refunded (Paid)

43,556(17,774)(1,163,863)

45,816(13,574)
292,554

4,384,727

1,703,142(4,665,505)
830,419(2,834,153)
974(32,441)
12,969(4,379,156)
5,361,700(3,955,719)
134,721(521,831)
10,773(6,687,737)(3,349,511)

322,646(354,710)(1,177)(2,577)(311,028)(22,196)(369,043)

97,915553,350(104,214)(1,517)(410)(412,996)(83,468)
48,657(49,706)(2,721,759)
10,491,890
7,770,130(136,511)(1,734,222)
6,412,364
4,678,142

Net cash provided by operating activities
Cash flows from investing activities
Payments for time deposits
Proceeds from time deposits
Payments for acquisition of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payments for acquisition of intangible fixed assets
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of finance lease payables
Payments for acquisition of treasury stock
Payments for dividends
Payments for dividends to minority interests
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period8(4) Notes regarding the premise of a going concern
Not applicable.
(5) Segment information
a. Business Segment Information
Six months ended November 30, 2008 (from June 1, 2008 to November 30, 2008) and six months ended
November 30, 2009 (from June 1, 2009 to November 30, 2009)
Business segment information has been omitted because the entire business of the Company and its
subsidiaries falls under the single business category of carbon product related business.
b. Geographic Segment Information
Six months ended November 30, 2008 (From June 1, 2008 to November 30, 2008)(Thousands of yen, rounded down)
Japan

North
America

Europe

Asia

Total

9,641,142

1,846,671

1,696,019

4,796,010

17,979,844

Corporateand Elim.

Consolidated-

17,979,844

Sales(1) Sales to unaffiliated customers(2) Intersegment sales or transfers

3,107,911

63,372

4,548

67,532

3,243,364(3,243,364)

-

Total

12,749,053

1,910,043

1,700,568

4,863,542

21,223,208(3,243,364)

17,979,844

1,806,331

353,064

240,360

1,585,405

3,985,161

168,967

4,154,128

Operating Profit(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. Change in the method of converting the revenues and expenditure of foreign subsidiaries:
The revenue and expenditure of foreign subsidiaries were previously converted into yen based on the spot exchange
rate on the closing date. However, commencing the first quarter under review, they are converted into yen based on the
average exchange rate for the period. In accordance with this change, sales in “North America,” “Europe,” and “Asia,”
for the six months ended November 30, 2008 increased by 164,240 thousand yen, 256,562 thousand yen, and 66,743
thousand yen, respectively, compared to those under the traditional method. Operating profit also increased by 30,215
thousand yen, 42,545 thousand yen, and 23,552 thousand yen, respectively.
4. Change in the durable years of tangible fixed assets:
As stated in Additional Information, the Company and its domestic consolidated subsidiaries reviewed and shortened
the durable years of tangible fixed assets for the first quarter under review, in the wake of the revision of the legal
durable years of machinery and equipment in the tax system revision for fiscal 2008. Accordingly, the operating profit
of “Japan” for the six months ended November 30, 2008 decreased by 177,779 thousand yen.

Six months ended November 30, 2009 (From June 1, 2009 to November 30, 2009)(Thousands of yen, rounded down)
Corporateand Elim.

Consolidated

12,646,065-

12,646,065

2,322,407(2,322,407)-

3,514,745

14,968,473(2,322,407)

12,646,065

647,634

583,562

233,473

817,035

Japan

North
America

Europe

Asia

Total

(1) Sales to unaffiliated customers

6,764,678

1,211,377

1,197,430

3,472,579(2) Intersegment sales or transfers

2,269,151

10,581

508

42,166

Total

9,033,829

1,221,958

1,197,938(102,636)

3,017

35,546

Sales

Operating Profit or Loss ( )(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan

9c. Overseas Sales
Six months ended November 30, 2008 (From June 1, 2008 to November 30, 2008)(Thousands of yen, rounded down)

I

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

North
America

EuropeAsia

Rest of
World

Total

1,675,316

2,021,439

6,253,531

255,130

10,205,418

-

-

-

-

17,979,844

9.3

11.3

34.8

1.4

56.8

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

Six months ended November 30, 2009 (From June 1, 2009 to November 30, 2009)(Thousands of yen, rounded down)

I

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

North
America

EuropeAsia

Rest ofWorld

1,170,312

1,401,391

4,544,550

Total

81,507

7,197,760

-

-

-

-

12,646,065

9.3

11.1

35.9

0.6

56.9

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

(6) Notes if the amount of shareholders’ equity has changed significantly
Not applicable.

10