October 12, 2016

Summary of Consolidated Business Results for the First Quarter of Fiscal 2016
For the fiscal year ending May 31, 2017
Toyo Denki Seizo K.K.
Stock Code: 6505
Representative:
Inquiries:

Stock Exchange: 1st Section of the Tokyo Stock Exchange
URL https://www.toyodenki.co.jp
Kenzo Terashima, President
Takatoshi Ohtsuka, General Manager, Management Planning Division
TEL +81-3-5202-8122
Scheduled date of submission of quarterly financial report:
October 13, 2016
Scheduled date of commencement of dividend payments:－
Preparation of quarterly financial report supplemental explanatory materials: Yes
Holding of quarterly financial results briefing:
Yes (for institutional investors andanalysts)
Note: Amounts less than one million yen in financial statements and the supplementary data are rounded down.

1. Consolidated Business Results for the First Quarter of Fiscal 2016
(June 1, 2016 to August 31, 2016)(1) Consolidated Operating Results(In millions of yen, except where noted; percentage figures show year-on-year increase or decrease.)

Net Sales
1Q Fiscal 2016
1Q Fiscal 2015

7,767
8,837

(12.1)%
22.8%

Operating Income
(533)
166

－
－

Net Income
Attributable to
Owners of the Parent
－
(452)
－
－
(40)
－

Ordinary Income
(659)
121

(Note) Comprehensive income: 1Q Fiscal 2016: (1,641) million yen [－%]
1Q Fiscal 2015: (1,244) million yen [－%]Net Income
per Share (Yen)

Diluted Net Income
per Share (Yen)(9.45)(0.85)－－

1Q Fiscal 2016
1Q Fiscal 2015

(2) Consolidated Financial Position(In millions of yen, except where noted)

Total Assets
As of August 31, 2016
As of May 31, 2016

46,95650,233

Net Assets
21,446
23,676

Shareholders’ Equity
Ratio (%)
45.7
47.1

(Reference) Shareholders’ equity: As of August 31, 2016: 21,446 million yen
As of May 31, 2016: 23,676 million yen

2. Dividend Information
1Q

Annual Dividend (Yen)Interim
3Q
Fiscal Year-End
0.00
－
6.00

Fiscal 2015－
Fiscal 2016－
Fiscal 2016
0.00－
(Forecast)(Note) Revisions to the most recently announced dividend forecasts: Yes

30.00

Total
6.00
30.00

* The Company plans to conduct a share consolidation of its common shares at the ratio of 5 shares to 1 sharewith an effective date of December 1, 2016. Therefore, the figure of the year-end dividend forecast for fiscal

2016 reflects the planned share consolidation. If the planned share consolidation were not taken into account,the year-end dividend forecast for fiscal 2016 would be 6 yen. For further details, please refer to “Disclaimer
concerning the Proper Use of Business Results Forecasts and Other Relevant Specific Items 2.”

3. Consolidated Performance Forecast for Fiscal 2016 (June 1, 2016 to May 31, 2017)(In millions of yen, except where noted; percentage figures show year-on-year increase or decrease.)

Net Sales

Operating Income

Ordinary Income

First half
20,0006.7%
500 (18.3)%
400 (43.6)%
Full year
43,000
8.2%
1,900
15.9%
1,800
20.6%
(Note) Revisions to the most recently announced performance forecast: No

Net Income
Attributable to
Owners of the
Parent270 (42.9)%
1,200
34.9%

Net Income
per Share
(Yen)
28.00
124.50* The Company plans to conduct a share consolidation of its common shares at the ratio of 5 shares to 1 sharewith an effective date of December 1, 2016. Therefore, the figures of net income per share for the first half andfull year reflect the planned share consolidation. For further details, please refer to “Disclaimer concerning theProper Use of Business Results Forecasts and Other Relevant Specific Items 2.”

Notes:(1) Transfers of major subsidiaries during the period (transfers of specified subsidiaries accompanied by changes
in the scope of consolidation): No(2) Application of Special Accounting Practices for the Preparation of Quarterly Consolidated Financial
Statement: No(3) Changes in accounting policies, changes in accounting estimates, and restatement(a) Changes in accounting policies in accordance with revisions to accounting standards and related practices: Yes(b) Any changes other than (a) above: No(c) Changes in accounting estimates: No(d) Restatement: No(4) Shares outstanding (common stock)(a) Number of shares outstanding as of the end of the period (including treasury stock):
August 31, 2016: 48,675,000 shares
May 31, 2016: 48,675,000 shares(b) Number of shares of treasury stock as of the end of the period:
August 31, 2016: 1,445,778 shares
May 31, 2016: 493,478 shares(c) Average number of shares for the period (fiscal year-to-date):
1Q Fiscal 2016: 47,901,644 shares
1Q Fiscal 2015: 48,189,394 shares
Statements Regarding the Implementation Status of Quarterly Review ProceduresThis quarterly financial report is not subject to quarterly review procedures as prescribed under the Financial
Instruments and Exchange Act. As of the date of quarterly financial report disclosure, quarterly review proceduresfor the quarterly financial statements pursuant to the aforementioned Act were not yet completed.
Disclaimer concerning the Proper Use of Business Results Forecasts and Other Relevant Specific Items
1. The forecasts of business results presented in this document are based on management’s assumptions andbeliefs in light of currently available information. Toyo Denki Seizo K.K. (hereinafter Toyo Denki) cautions
readers that due to a variety of factors actual results may differ materially from forecasts. Please refer to“Explanation of Consolidated Performance Forecast and Other Forward-looking Information” inAccompanying Materials on page 3 for details relating to operating results forecasts.

2. Following the approval of a share consolidation at the 155th annual general meeting of shareholders held on
August 26, 2016, the Company plans to conduct a one-for-five share consolidation of its common shares with
an effective date of December 1, 2016. If the planned share consolidation were not taken into account, thedividend forecast and consolidated performance forecast for fiscal 2016 would be as follows:(1) Dividend forecast for fiscal 2016
Year-end:
6 yen(2) Consolidated performance forecast for fiscal 2016
Net income per shareFirst half:
5.60 yen
Full year:
24.90 yen

Accompanying Materials Contents
1.

Qualitative Information regarding Quarterly Financial Results ...................................................................... 2(1) Explanation of Business Results ..................................................................................................................... 2(2) Explanation of Financial Position ................................................................................................................... 3(3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information ...................... 3
2.
Items regarding Summary Information (Notes) .............................................................................................. 4(1) Transfer of Major Subsidiaries during the Period ........................................................................................... 4(2) Application of Special Accounting Practices for the Preparation of
Quarterly Consolidated Financial Statements ................................................................................................. 4(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements...... 4(4) Additional Information ................................................................................................................................... 4
3.
Consolidated Financial Statements ................................................................................................................. 5(1) Consolidated Balance Sheets .......................................................................................................................... 5(2) Consolidated Statements of Income and Comprehensive Income .................................................................. 7(3) Notes to Quarterly Consolidated Financial Statements................................................................................... 9(Notes on Going Concern Assumptions) ................................................................................................... 9(Notes on Significant Fluctuations in Shareholders’ Equity) .................................................................... 9(Segment Information) .............................................................................................................................. 94.
Supporting Materials for the Financial Results ............................................................................................. 11(1) The Status of Production, Orders, and Sales ................................................................................................. 11-1-

1. Qualitative Information regarding Quarterly Financial Results(1) Explanation of Business Results
During the first quarter (June 1, 2016 to August 31, 2016) of fiscal 2016, the fiscal year ending May 31, 2017, withregard to the economic environment surrounding the Toyo Denki Group overseas, uncertainty about the economic
outlook has intensified due to factors such as the slowdown in economic growth in China and ASEAN countries
and Brexit, although the economy in the United States continued to recover. In Japan, corporations became morecautious with capital expenditures mainly due to uncertainty over the overseas economic outlook and the advancein the appreciation of the yen. Even under such circumstances, investments in railway infrastructure continued to bestrong in China, ASEAN countries and Japan.
Under these circumstances, the Toyo Denki Group has been working in unison to thoroughly strengthen its
management foundation and drastically improve its corporate value according to “Next 100: Beyond 100 years,
Ver. 2,” the medium-term management plan ending in fiscal 2017.
The Toyo Denki Group’s performance in the first quarter of fiscal 2016 was as follows.
Orders received increased 6.7% compared with the corresponding period of the previous fiscal year to 10,848
million yen. This overall result reflected increases in orders received in the Industrial Systems segment and theInformation Equipment Systems segment, despite a decrease in orders in the Transportation Systems segment.
Net sales decreased 12.1% year on year to 7,767 million yen mainly due to a decrease in the Industrial Systems
segment.
From a profit perspective, operating income decreased 700 million yen compared with the corresponding periodof the previous fiscal year, and recorded a 533 million yen loss, due to decreased profit in the Transportation
Systems segment and the Industrial Systems segment. Primarily due to the posting of loss on foreign currency
exchange of 214 million yen from a progressively stronger yen, ordinary income decreased 781 million yen,recording a 659 million yen loss, and net income attributable to owners of the parent decreased 411 million yen torecord a 452 million yen loss.
Information by business segment is presented as follows.
Transportation Systems
Orders received decreased 8.9% compared with the corresponding period of the previous fiscal year to 6,975
million yen, reflecting a temporary delay in part of orders from outside Japan, despite an upturn in Japan mainly
due to demand ahead of the Olympic Games to be held in 2020.
Net sales in this segment totaled 5,711 million yen, a 5.1% decrease from the corresponding period of theprevious year, due to a decrease outside Japan, despite an increase in Japan.
Segment profit decreased 49.0% compared with the corresponding period of the previous fiscal year to 308
million yen.
Industrial Systems
Orders received increased 17.6% compared with the corresponding period of the previous fiscal year to 2,802
million yen, due to increased orders outside Japan, despite decreased orders for testing equipment for automotive
development.
Net sales decreased 28.1% year on year to 1,897 million yen, due to decreases in sales of testing equipment for
automotive development, processing equipment and printing equipment.
Segment profit was a 148 million yen loss, a decrease of 285 million yen compared with the corresponding
period of the previous fiscal year.
Information Equipment Systems
Orders received in this segment increased 758.2% to 1,067 million yen, due to an increase in railway station
operating equipment.
Net sales in this segment decreased 12.1% year on year to 157 million yen due to a decrease in sales of railway
station operating equipment.
Segment profit totaled 2 million yen, an increase of 3 million yen compared with the corresponding period of
the previous fiscal year.

-2-Note: Net sales data by business segment represents sales to third parties and is exclusive of inter-segment sales andtransfers.
(2) Explanation of Financial Position
Total assets as of August 31, 2016 stood at 46,956 million yen, a decrease of 3,277 million yen compared with theend of the previous fiscal year. Despite an increase in inventories of 482 million yen, the decrease in total assets
was largely attributable to factors such as decreases in investment securities of 1,644 million yen resulting from adecrease in the market price of held listed securities, cash and cash equivalents of 957 million yen and trade notes
and accounts receivable of 1,557 million yen.
Total liabilities as of August 31, 2016 amounted to 25,510 million yen, a decrease of 1,046 million yen
compared with the previous fiscal year end. Despite an 837 million yen increase in borrowings and a 225 million
yen increase in reserve for order losses, the decrease in total liabilities was largely attributable to decreases in tradenotes and accounts payable of 1,207 million yen and deferred tax liabilities of 488 million yen.
Net assets as of August 31, 2016 stood at 21,446 million yen, a decrease of 2,230 million yen compared withthe end of the previous fiscal year. This decrease was largely attributable to a 1,143 million yen decrease inunrealized holding gain on available-for-sale securities and a 741 million yen decrease in retained earnings.
(3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information
We have made no revision to the “Consolidated Performance Forecast for Fiscal 2016” announced on July 12,
2016.

-3-

2. Items regarding Summary Information (Notes)(1) Transfer of Major Subsidiaries during the Period
Not applicable(2) Application of Special Accounting Practices for the Preparation of Quarterly Consolidated Financial Statements
Not applicable(3) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements
Changes in Accounting Policies
In accordance with revisions of the Corporation Tax Law, in the first quarter of fiscal 2016, the Company has
applied the “Practical Solution on a change in depreciation method due to Tax Reform 2016” (AccountingStandards Board of Japan (ASBJ) Practical Issues Task Force (PITF) No. 32, June 17, 2016), and changed thedepreciation method of facilities attached to buildings and structures acquired on and after June 1, 2016 from thedeclining-balance method to the straight-line method. The effect of this change on operating loss, ordinary loss andloss before income taxes for the three months ended August 31, 2016 is immaterial.
(4) Additional Information
Effective from the first quarter of fiscal 2016, the Company has applied the “Revised Implementation Guidance on
Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).

-4-3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
As of May 31, 2016

End of the First Quarter of Fiscal
2016 (August 31, 2016)

AssetsCurrent assets
Cash and cash equivalents

2,401

1,444

Trade notes and accounts receivable

13,79012,232965

871

Products and finished goods

1,490

1,827

Work in process

3,172

3,362

Raw materials and stored goods

2,657

2,613

Electronically recorded monetary claims - operating

Advances

26

39

Deferred tax assets

517

778

Other accounts receivable

273

277

Other

229

365

Allowance for doubtful accounts

(2)

(2)

25,52023,809

7,171

7,300

Accumulated depreciation(4,536)(4,592)

Buildings and structures, net

2,634

2,707

Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

6,728

6,749

(6,013)(6,064)

715

684

Land

289

289

Construction in progress

269

290

Machinery and equipment
Accumulated depreciation
Machinery and equipment, net

Other
Accumulated depreciation

3,281

3,311

(2,828)(2,868)

452

442

4,361

4,415

Software199

196

Software in progress

333

397

Other, net
Total property, plant and equipment
Intangible assets

Other

11

11

Total intangible assets

544

605

17,39615,751

Investments and other assets
Investment securities
Deferred tax assets
Other

55

62

2,368

2,323

Allowance for doubtful accounts

(12)

(12)

Total investments and other assets

19,807

18,126

24,712

23,14750,233

46,956

Total fixed assets
Total assets-5-

(Millions of yen)
As of May 31, 2016

End of the First Quarter of Fiscal
2016 (August 31, 2016)

Trade notes and accounts payable

3,742

2,534

Electronically recorded obligations - operating

5,277

5,386

Short-term debt

1,017

1,901

Income taxes payable

253

66

Consumption and other taxes payable87

62

Accrued expenses

1,250

1,080

Advances received

82

112

Deposits received

221

338

Reserve for directors’ bonuses

37

11

Reserve for employees’ bonuses

928

512

Reserve for order losses

294

520

Liabilities
Current liabilities

Other
Total current liabilities

389

523

13,583

13,050

7,288

7,242

Long-term liabilities
Long-term debt

157

157

Net defined benefit liability

3,852

3,873

Deferred tax liabilities

1,636

1,148

37

37

12,972

12,45926,55625,510Capital stock

4,998

4,998

Capital surplus

3,177

3,177

Retained earnings

9,298

8,557

Long-term payables

Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity

Treasury stock

(175)

(475)

Total shareholders’ equity

17,29916,257

6,469

5,325

260

201

Accumulated other comprehensive income
Unrealized holding gain on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans

(351)

(338)

Total accumulated other comprehensive income

6,377

5,188

23,676

21,44650,233

46,956

Total net assets
Total liabilities and net assets-6-

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income for the First Quarter of Fiscal 2016)(Millions of yen)
1Q FY2015
1Q FY2016(June 1, 2015 to August 31, 2015) (June 1, 2016 to August 31, 2016)
Net sales

8,837

7,767

Cost of sales

6,852

6,368

Gross profit

1,985

1,398

Selling, general and administrative expenses

1,818

1,932

166

(533)

Operating income (loss)
Non-operating income

00Dividend income
Equity in profit of unconsolidated subsidiaries andaffiliates
Miscellaneous income

110

105

-

5

10

7

Total non-operating income

120

118

Interest expense
Equity in loss of unconsolidated subsidiaries andaffiliates
Loss on disposal of fixed assets

29

27

7

-

0

0

Loss on foreign currency exchange

124

214

Interest income

Non-operating expenses

Miscellaneous loss
Total non-operating expenses
Ordinary income (loss)

3

1

164

244

121

(659)

-

23

Extraordinary loss
Loss on sales of fixed assets
Total extraordinary losses-

23

Income (loss) before income taxes

121

(683)

Income taxes:
Current

44

27

Deferred

118

(257)

Total income taxes

162

(230)

Net loss

(40)

(452)

Net loss attributable to owners of the parent

(40)

(452)

-7-

(Consolidated Statements of Comprehensive Income)(Millions of yen)
1Q FY2015
1Q FY2016(June 1, 2015 to August 31, 2015) (June 1, 2016 to August 31, 2016)
Net loss

(40)

(452)

(1,243)(1,143)

Other comprehensive income
Unrealized holding loss on available-for-sale securities
Foreign currency translation adjustments

26

4

Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates towhich the equity method is applied
Total other comprehensive income

11

12

1

(63)

(1,203)(1,189)(1,244)(1,641)(1,244)(1,641)--

Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests-8-(3) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Notes on Significant Fluctuations in Shareholders’ Equity)
Not applicable.
(Segment Information)
First Quarter of Fiscal 2015 (June 1, 2015 to August 31, 2015)
Information regarding Net Sales and Income (Loss) by Reporting Segment
Reporting Segment
Transportation Industrial Information
Systems
Systems Equipment
Systems

Other1

Total(Millions of yen)AmountRecorded on
Adjustment Quarterly
Amount2
Consolidated
Statementsof Income3

Net sales
Sales to third parties

6,020

2,637

178

1

8,837

－

8,837

Inter-segment sales
and transfers

0

0

－

137

138

(138)

－

6,020

2,637

178

139

8,976

(138)

8,837

Total

604
137
(1)
5
745
(579)
166
Segment profit (loss)
Notes:
1. The “Other” segment includes operations not included in reporting segments such as the dispatch of
temporary staff.
2. The segment profit (loss) adjustment amount is a loss of 579 million yen. This is comprised of anelimination of inter-segment sales and transfer amount of 1 million yen and corporate expenditure (a loss of
577 million yen) that is not allocated to each reporting segment. Corporate expenditure is primarily
comprised of selling, general and administrative expenses as well as research and development costs that are
not allocated to each reporting segment.
3. Segment profit (loss) has been adjusted with operating income recorded under the quarterly consolidated
statements of income.

-9-

First Quarter of Fiscal 2016 (June 1, 2016 to August 31, 2016)
Information regarding Net Sales and Income (Loss) by Reporting Segment
Reporting Segment
Transportation Industrial Information
Systems
Systems Equipment
Systems

Other1

Total(Millions of yen)AmountRecorded on
Adjustment Quarterly
Amount2
Consolidated
Statementsof Income3

Net sales
Sales to third parties

5,711

1,897

157

1

7,767

－

7,767

Inter-segment sales
and transfers

1

0

－

161

163

(163)

－

5,713

1,897

157

163

7,930

(163)

7,767

Total

308
(148)
2
11
173
(707)
(533)
Segment profit (loss)
Notes:
1. The “Other” segment includes operations not included in reporting segments such as the dispatch of
temporary staff.
2. The segment profit (loss) adjustment amount is a loss of 707 million yen. This is comprised of anelimination of inter-segment sales and transfer amount of 0 million yen and corporate expenditure (a loss of
706 million yen) that is not allocated to each reporting segment. Corporate expenditure is primarily
comprised of selling, general and administrative expenses as well as research and development costs that are
not allocated to each reporting segment.
3. Segment profit (loss) has been adjusted with operating loss recorded under the quarterly consolidated
statements of income.

- 10 -

4. Supporting Materials for the Financial Results(1) The Status of Production, Orders, and Sales(a) Production Status
1Q FY2015(June 1, 2015 to August 31, 2015)
Business segment
Millions of yen
Share (%)
Transportation Systems
6,298
72.9
Industrial Systems
2,191
25.4
Information Equipment
149
1.7
Systems
Other
－
－
Total
8,640
100.0
Notes:
1. Amounts are based on sales prices.
2. Amounts are exclusive of consumption and other taxes.

1Q FY2016(June 1, 2016 to August 31, 2016)
Millions of yen
Share (%)
5,932
73.7
2,009
25.0
102

1.3

－
8,044

－
100.0

(b) Status of Orders Received
Business segment

1Q FY2015(June 1, 2015 to August 31, 2015)
Orders Received
Balance(Millions of yen)
(Millions of yen)
7,657
26,2152,383
6,380Transportation Systems
Industrial Systems
Information Equipment
124
43
Systems
Other
1
－
Total
10,16632,639Notes:
1. Amounts are based on sales prices.
2. Amounts are exclusive of consumption and other taxes.

1Q FY2016(June 1, 2016 to August 31, 2016)
Orders Received
Balance(Millions of yen)
(Millions of yen)
6,975
25,442
2,802
6,934
1,067

1,423

1
10,848－33,800(c) Sales Status
Business segment

1Q FY2015(June 1, 2015 to August 31, 2015)
Millions of yen
Share (%)
6,020
68.1
2,637
29.8

Transportation Systems
Industrial Systems
Information Equipment
178
Systems
Other
1
Total
8,837
Notes:
1. Amounts are based on sales prices.
2. Amounts are exclusive of consumption and other taxes.

- 11 -

1Q FY2016(June 1, 2016 to August 31, 2016)
Millions of yen
Share (%)
5,711
73.5
1,897
24.4

2.0

157

2.0

0.0
100.0

1
7,767

0.0
100.0