Metal One Corporation and Subsidiaries Consolidated Financial Results for FY2013

Income Statements(In ¥100 million)

Outline of Consolidated Results for FY2013

Performance in FY2012
Consolidated
Non-consolidated

Performance in FY2013

Variance

Variance

Consolidated

Non-consolidated

25,633

12,15623,057

2,576

11,579577

1,284(5.0%)-927-5-0303(2.5%)-252
2-1,077(4.7%)
-835
17-2

206

24-93-22
2279(2.4%)-252
15--0-13-

Operating income

351

54257

94

43

11

Interest income
Interest expense
Interest expense–net

6-39-33

6-7-15-37-32

1-2-1

7-9-2-1
2
1

Dividend income

16-16
19103
-27-

18
434-2-20-15

105-16--2-11-337

128

281

56

129

-1

Sales
Gross profit(Gross profit ratio)
Operating expenses
Provision for doubtful receivables

Amortization of goodwill

Other non-operating income and expenses
Equity in earnings of affiliated companies

Ordinary income

May 30, 2014
Metal One Corporation

Business environment
Although there were signs that the economies of leading developed nations were beginning to rebound from the lengthy slump that followed 2008’s collapse of LehmanBrothers and subsequent global financial meltdown, the growth rates of developing nations that had contributed to recovery—such as China, India and the members of
ASEAN—slowed in the face of financial and political instability. Growth in the global economy therefore remained moderate overall this fiscal year. As corporate
performance rallied in connection with corrections to the yen’s strength from the second half of 2012 and reconstruction demand picked up, Japan’s economy remainedsolid overall, and the Nikkei average exceeded ¥16,000 at the end of 2013. The September 2013 decision to hold the 2020 Olympics and Paralympics in Tokyo also
contributed to some economic stimulus and improved sentiment regarding the economy.

Business performance
In this business environment the Metal One Group has selected several priority issues for our corporate group: shifting to a cost structure matched with our consolidated
profits, promoting allocation of corporate resources suited to environmental changes, considering restructuring domestic business investment affiliates beyond theGroup, and strengthening our compliance systems. We are also executing strategies for restructuring to strengthen our domestic operations and our strategic approach tooverseas business, which are themes of our Fourth Mid-term Consolidated Management Plan.
The efforts noted above resulted in a consolidated Metal One Group performance this fiscal year that exceeded the preceding year’s results, with ¥2.5633 trillion insales (up by 11.2 percent compared to the fiscal year before), ordinary income of ¥33.7 billion (up 20.1 percent), and ¥23.7 billion in consolidated net income (up 8.6percent).

Extraordinary gain and loss

5851

46

11-3484

Income before income taxes395179327

68

96

83-136-21-45--93-15-44-6-6--39-

Situation with main items
1. Sales and gross profit

237

134

219

1990

44

Rising steel prices resulted in ¥2.5633 trillion in sales, a ¥257.6 billion increase compared to fiscal 2012, and ¥128.4 billion in gross profit, up ¥20.6 billion.

260

98

Income taxes
Minority interests

Net income358

Basic earnings capabilities

2. Operating expenses
Despite continuing efforts to cut costs, our overall operating expenses rose ¥9.3 billion, to ¥92.7 billion, due to an increase in consolidated subsidiaries and corrections
to the yen’s strength.

Basic earnings capabilities = Operating income (less provision for doubtful receivables) + Interest expense–net+ Dividend income + Equity in earnings of affiliated companies

3. Extraordinary gain and loss

Consolidated Balance Sheets

4. Business results by transaction type
March 31, 2014

Current assets
Cash and deposits
Accounts receivable
Inventories
Other current assets

8,615
299
5,883
2,132
302

304 Current liabilities
payable6 Accounts
取引債務
debt305 Short-term
短期借入金
current liabilities
37 Other
その他の流動負債-43 Non-current liabilities
OtherTangible and intangible non-current
assetsInvestments and other assets

2,523
1,314
1,209

Total liabilities-17
Common stock and additional paid-in
27 capital-44 Retained earnings, etc.
Assets and liabilities valuation andtranslation adjustments
Total net assets excluding minority
interests

Minority interests

Total net assets

Total assets

11138

287

5. Total assets and shareholders’ equity

Variance from March
31, 2013

Long-term debt

Non-current assets

Viewed by type of transaction, sales in Japan’s domestic market accounted for ¥1.6187 trillion (64 percent) of the whole, overseas ventures for ¥492.7 billion (19percent), and exports for ¥443 billion (17 percent).

March 31, 2014

Variance from March31, 2013(In ¥100 million)

The company’s extraordinary gains exceeded extraordinary losses by ¥5.8 billion due to profits from sales of securities.

Total liabilities andnet assets

6,475
3,667
2,453
355
1,104
892
212
7,579
1,500
1,496
146
3,142
417
3,560

-8128-109-27
34
19
15
26
0129
109
238
22260

11,138287

An increase in accounts receivable was the primary factor in total assets increasing ¥28.7 billion compared to the end of the year before, to ¥1.1138 trillion. Current
assets accounted for 77 percent of these, and the company has continued to maintain a highly liquid financial structure.
Furthermore, net assets excluding minority interests rose ¥23.8 billion compared to the end of the previous fiscal year to ¥314.2 billion, thanks to rebounding stock
prices, an increase in valuation and translation adjustments as a result of corrections to the yen’s strength. This meant that the shareholders’ equity ratio rose 1.4 percent
compared to the end of the previous fiscal year to 28.2 percent, which bolstered the company’s sound financial condition.

6. Interest-bearing debt
Although our steel business in the United States remained strong, that related to the Thai automotive sector declined. We promoted more efficient use of funds due toexpanded domestic group financing and sales of shareholdings. The company’s consolidated debt balance declined by ¥9.1 billion compared to the end of the previous
fiscal year, to ¥334.4 billion.

Status of affiliatesMetal One recently established Nifast do Brasil Ltda. to warehouse and sell small automotive parts, typically automotive fasteners such as bolts and nuts that areclassified as tertiary wire products. This is in line with specific moves to respond to car manufacturers’ global strategies in Brazil, where medium- to long-term growthis anticipated, in connection with our strategic approach to overseas business in the second year of the fourth Mid-term Consolidated Management Plan. Brazil will holdnumerous international events—including the 2014 FIFA World Cup and the 2016 Olympics—over the coming decade, and large-scale infrastructure investments areanticipated there. The company also established a new company in Brazil to melt-cut steel plate, Metal One Shibaura Brasil Ltda., in a bid to capture domestic demandin the steel plate processing business.
As part of efforts to restructure to strengthen our domestic operations and the foundations of our domestic construction steel business, we upgraded our level ofcoordination and efficiency with M.O. Tec Corporation, a company we took over and turned into a wholly-owned subsidiary last year. Similarly, Metal One Structural
Steel & Resource Corporation carried out domestic structural and ferrous raw materials operations consolidation. Both of these initiatives are designed to seek out
operational and cost synergies.

Consolidated Financial Indicators
Number of Group Companies
March 31, 2014 March 31, 2013
Shareholders’equity ratio

28.2%

26.8%

Net D/E ratio

1.1

1.3

Shareholders’ equity ratio =Note: Figures in parentheses ( ) show changes from the previous year.
Excluding the indirectly owned subsidiaries, there are 79 consolidated subsidiaries. Total net assets excluding minority interests ÷ Total assets
Net D/E ratio =(Short-term and long-term debt + Securitized receivables −Cash and deposit) ÷ Total net assets (excluding minorityinterests)