Matsuda Sangyo : FY3/18 1Q Consolidated Financial Statements

FY3/18 1Q Consolidated Financial Statements [J-GAAP]

August 10, 2017

Company name: Matsuda Sangyo Co., Ltd. Exchanges listed on: Tokyo Stock Exchange (First Section) Company code: 7456 URL: http://www.matsuda-sangyo.co.jp Representative: Yoshiaki Matsuda, President and Representative Director

Inquiries: Atsushi Kinoshita, Director in Charge of IR TEL: [phone] Filing date of quarterly report: August 10, 2017

Date to start dividends distribution: - Supplementary quarterly materials prepared: No Quarterly results information meeting held: No

1. FY3/18 1Q consolidated results (April 1, 2017 - June 30, 2017)

   (Figures are rounded down to the nearest million yen)

2. Consolidated results (Percentages are year-on-year changes)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent
   FY3/18 1Q	(millions of yen)	(%)	(millions of yen)	(%)	(millions of yen)	(%)	(millions of yen)	(%)
   	45,721	17.8	1,055	99.5	1,156	113.6	761	130.8
   FY3/17 1Q	38,800	(13.8)	529	(45.4)	541	(55.7)	330	(58.2)

   (Note) Comprehensive income: FY3/18 1Q: ¥722 million (+2,011.9%) FY3/17 1Q: ¥34 million (-95.4%)

   Earnings per share	Diluted earnings per share
   FY3/18 1Q FY3/17 1Q	(yen) 28.93 12.53	(yen) － －

3. Consolidated financial position

   Total assets	Net assets	Shareholders' equity ratio
   End-FY3/18 1Q	(millions of yen)	(millions of yen)	(%)
   	74,127	53,772	72.5
   End-FY3/17	72,715	53,419	73.4

   (Reference) Shareholders' equity: End-FY3/18 1Q: ¥53,737 million End-FY3/17: ¥53,390 million

4. Dividends

   Annual dividends
   1Q	2Q	3Q	4Q	Annual
   FY3/17 FY3/18	(yen) － －	(yen) 14.00	(yen) －	(yen) 14.00	(yen) 28.00
   FY3/18 (Projections)	14.00	－	14.00	28.00

   (Note) Revisions to the most recently announced projections of dividends: No

5. Consolidated earnings projections for FY3/18 (April 1, 2017 - March 31, 2018)

   (Percentages are year-on-year changes)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent		Earnings per share
   1H FY3/18	(millions of yen)	(%)	(millions of yen)	(%)	(millions of yen)	(%)	(millions of yen)	(%)	(yen)
   	84,000	6.3	1,400	12.4	1,600	12.1	1,140	17.6	43.29
   FY3/18	175,000	7.3	3,200	8.1	3,500	1.2	2,490	1.4	94.55

   (Note) Revisions to the most recently announced projections of consolidated earnings: No

   * Notes

6. Changes in significant subsidiaries during the period (changes in specified subsidiaries in accordance with changes in the scope of consolidation): No

7. Application of special accounting treatment in preparing the quarterly consolidated financial statements: No

8. Changes in accounting policies, changes in accounting estimates and restatement of revisions

9. Changes in accounting policies with revision of accounting standards: No

10. Changes in accounting policies other than the above: No

11. Changes in accounting estimates: No

12. Restatement of revisions: No

13. Number of issued shares (common shares)

    End-FY3/18 1Q	28,908,581 shares	End-FY3/17	28,908,581 shares
    End-FY3/18 1Q	2,575,155 shares	End-FY3/17	2,575,021 shares
    FY3/18 1Q	26,333,475 shares	FY3/17 1Q	26,333,779 shares

14. Number of issued shares (including treasury shares)

15. Number of treasury shares

16. Average number of shares during the period

17. *These quarterly financial statements are outside the scope of quarterly review procedures.

    *Notes on appropriate use of earnings projections and other special remarks

    Earnings projections and other forward-looking statements in this document are based on reasonable assumptions and information available to the Company at the time of release. Actual results may differ materially from forward-looking statements due to a number of factors. For more information about earnings projections assumptions and notes regarding the use of earnings projections, please refer to "1. Qualitative information on consolidated results during the period, (3) Qualitative information on consolidated earnings projections" on page 3 of the attached documents.

    Contents of Attached Document
18. Qualitative information on consolidated results during the period 2
19. Qualitative information on consolidated results 2
20. Qualitative information on consolidated financial position 2
21. Qualitative information on consolidated earnings projections 3
22. Quarterly consolidated financial statements and related notes 4
23. Quarterly consolidated balance sheets 4
24. Quarterly consolidated statements of income and comprehensive income 6
25. Quarterly consolidated statements of cash flows 8
26. Notes on quarterly consolidated financial statements 10

27. (Notes on premise of a going concern) 10

    (Notes on significant changes in the amount of shareholders' equity) 10

    (Segment Information, etc.) 10

    1. Qualitative information on consolidated results during the period
28. Qualitative information on consolidated results

    In the first three months of the fiscal year ending March 31, 2018, the Japanese economy continued to recover at a moderate pace, supported by improving corporate earnings and employment conditions, despite some signs of weakness in consumer spending. However, the outlook remained unclear due to concerns about labor shortages in the Japanese economy and rising uncertainties in overseas economies.

    Against this backdrop, the Matsuda Sangyo Group's precious metals business segment increased the use of production sites in Japan and overseas and stepped up marketing activities, while also working to secure precious metals materials, boost sales of products such as precious metal chemical products and expand its industrial waste treatment outsourcing business. The food business segment worked hard to develop and provide products that address customer needs and actively implemented marketing activities, which included expanding the use of overseas business, as well as domestic business sites, in order to increase sales volume.

    As a result of the above, for the first three months of the fiscal year ending March 31, 2018, consolidated net sales were ¥45,721 million (up 17.8% year on year), operating income was ¥1,055 million (up 99.5% year on year), ordinary income was ¥1,156 million (up 113.6% year on year), and profit attributable to owners of parent was ¥761 million (up 130.8% year on year).

    Performance in the Matsuda Sangyo Group's business segments was as follows.

    Precious metals business segment

    In the precious metals division, production at key customers in the electronics sector was strong overall, centered on electronic parts and devices. Against this backdrop, the volume of precious metal recycling and industrial waste treatment handled by the Group's precious metals division increased year on year. Despite a drop in sales volume for silver products due to factors such as a contracting market in the photosensitive materials sector, sales volume for precious metals products and electronic materials increased and the price of precious metals rose. As a result, sales overall were higher than in the same period of the previous fiscal year.

    As a result, net sales for the precious metals business segment totaled ¥28,688 million (up 17.6% year on year), and operating income was ¥613 million (up 64.2% year on year).

    Food business segment

    In the food business segment, production activity in the food processing sector was solid overall supported partly by rising exports, despite sluggish growth in consumer spending in Japan. In this environment, prices for surimi fish paste dropped and sales volume for agricultural products declined. However, sales volume increased for seafood products and livestock products, leading to higher sales compared with the same period of the previous fiscal year.

    As a result, net sales for the food business segment were ¥17,047 million (up 18.1% year on year), and operating income was ¥442 million (up 184.6% year on year).

29. Qualitative information on consolidated financial position

30. Assets, liabilities and net assets

31. Total assets

    Total assets as of the end of the first three months were ¥74,127 million, an increase of ¥1,412 million from the previous fiscal year end. This mainly reflected increases in notes and accounts receivable - trade and inventories.

    Liabilities

    Total liabilities as of the end of the first three months were ¥20,355 million, an increase of ¥1,058 million from the previous fiscal year end. This mainly reflected an increase in loans.

    Net assets

    Net assets as of the end of the first three months were ¥53,772 million, an increase of ¥353 million from the previous fiscal year end. This mainly reflected a decrease due to year-end cash dividends paid, outweighed by an increase in retained earnings.