TOLI : Financial Announcement for 3rd Quarter of the Year Ending March 2023

Financial Announcement for 3rd Quarter of the Year Ending March 2023 [Japan standard]

(Consolidated)

					February 3, 2023
Company name: TOLI Corporation		Stock Exchange: Tokyo Stock Exchange
Code Number:	7971	URL https://www.toli.co.jp
Representative	(Position)	President and Representative Director	(Name)	Motohiro Nagashima
Official responsible	(Position)	Managing Executive Officer, Senior General	(Name)	Yozo Araki	TEL [phone]
for inquiries		Manager, Administration Headquarters and
		General Manager, Accounting and Finance
		Department

Scheduled date for submission of quarterly reports	February 10, 2023
Scheduled date for start of dividend payments	-
Preparation of supplementary explanatory materials for the financial announcement	:	None
Holding of a briefing on the quarterly financial announcement	:	None

(Amounts less than one million yen are rounded off)

1. Consolidated Results for the First Nine Months of Year Ending March 2023 (April 1, 2022 to December 31, 2022)

(1) Consolidated results (year to date)			(% shows change for the quarter compared with the same quarter of the previous year)
	Net Sales		Operating Income	Ordinary Income		Profit Attributable to Owners
			of Parent
	Million yen		%	Million yen	%	Million yen		%	Million yen		%
Q3 for year ending March 2023	67,429		7.0	1,424	676.9	1,494		178.5	897		-
Q3 for year ended March 2022	63,004		3.2	183	(25.2)	536		(16.8)	(11)		-

(Note) Comprehensive income for Q3 for year ending March 2023: 1,414 million yen (-%); first nine months of year ended March 2022: (4) million yen (-%)

	Profit per Share	Profit per Share - Diluted
	Yen	Yen
Q3 for year ending March 2023	14.91	-
Q3 for year ended March 2022	(0.18)	-

(2) Consolidated assets

		Total Assets			Net Assets		Capital-to-asset Ratio
				Million yen			Million yen		%
Q3 of year ending March 2023			81,433			39,182		47.8
Year ended March 2022:			79,982			38,285		47.5
(Reference) Equity capital:	Q3 for year ending March 2023: 38,908 million yen	Year ended March 2022: 38,013 million yen
2. Dividend Payments
						Annual Dividends
		End of Q1		End of Q2	End of Q3	End of Year	Total
		Yen			Yen	Yen		Yen	Yen
Year ended March 2022:		-		0.00	-	8.00	8.00
Year Ending March 2023		-		0.00	-
Year Ending March 2023							8.00	8.00
(forecast)

(Note) Adjustment from most recently published dividend forecast: None

3. Consolidated Forecasts for the Year Ending March 2023 (April 1, 2022 to March 31, 2023)

(Percentages represent changes from the previous year)

Net Sales

Million yen

%

Operating Income

Ordinary Income

Profit Attributable to

Profit per

Owners of Parent

Share

Million yen

%

Million yen

%

Million yen

%

Yen

Full term	94,500	6.8	2,450	179.0		2,600	108.9	1,600	122.2
(Note)	Adjustment from most recently published performance projections: Yes

26.58

* Notes

1. Significant changes to subsidiaries during the consolidated first nine months under review (changes for a specified subsidiary entailing a change in the scope of consolidation): None
2. Application of specific accounting procedure for creation of quarterly consolidated financial statement: None
3. Changes in accounting policies, changes in accounting estimates, and representation of amendments

[1] Changes in accounting policies accompanying revisions to accounting standards:	None
[2] Changes in accounting policies other than [1] :	None
[3] Changes in accounting estimates:	None
[4] Representation of amendments:	None

1. Number of outstanding shares (ordinary shares)
2. 1. Number of outstanding shares at the end of year (including treasury shares)
   2. Number of treasury shares at end of year
   3. Average number of shares during the term (cumulative from the start of the fiscal year)

Q3 for year ending	66,829,249 shares	Year ended March	66,829,249 shares
March 2023	2022:
Q3 for year ending	6,642,988 shares	Year ended March	6,494,889 shares
March 2023	2022:
Q3 for year ending	60,201,179 shares	Q3 for year ended	61,186,967 shares
March 2023	March 2022

• Quarterly Financial Announcement is out of the scope of quarterly review by a certified public accountant or an audit corporation
• Explanation of the appropriate use of performance projections and other special instructions

The financial forecasts and other descriptions related to future events presented in this document are based on information currently available and certain assumptions judged as reasonable. As such, the financial forecasts and future descriptions are not considered to guarantee the fulfillment thereof. Actual financial performance may vary significantly due to various factors. For details, such as assumptions for financial forecasts and cautions when using financial forecasts, please refer to "1. Qualitative information regarding quarterly results (3) Explanation concerning future predictive information, such as consolidated forecasts" on page 3 of the attachment.

TOLI Corporation (7971) Summary of Financial Results for the Third Quarter of Year Ending March 2023

• Contents of the supplementary materials

1.	Qualitative information regarding quarterly results ···············································································	2
	(1)	Explanation of the management performance ·················································································	2
	(2)	Explanation of the financial position ···························································································	3
	(3)	Explanation concerning future predictive information, such as consolidated forecasts ··································	3
2.	Quarterly consolidated financial statements and major notes ····································································	4
	(1)	Quarterly consolidated balance sheet ···························································································	4
	(2)	Quarterly consolidated statements of income and comprehensive income ················································	6
		Quarterly consolidated statement of income
		First nine months ·············································································································	6
		Quarterly consolidated statement of comprehensive income
		First nine months ···············································································································	7
	(3)	Notes on consolidated financial statements ····················································································	8
		(Notes on the assumption of the company as a going concern) ·······························································	8
		(Notes when there are significant changes in amounts of shareholders' equity) ··········································	8
		(Segment information, etc.) ······································································································	8

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TOLI Corporation (7971) Summary of Financial Results for the Third Quarter of Year Ending March 2023

1. Qualitative information regarding quarterly results

1. Explanation of the management performance

During the first nine months of the current fiscal year, the Japanese economy continued to face an uncertain management environment due to supply chain disruptions caused by heightened geopolitical risks and inflationary concerns from rising prices, despite a pickup in personal consumption as a result of active moves toward normalization of economic activities.

In the construction industry, which is closely related to our Group business, although a recovery trend continues in non-housing investment, private housing demand continues to decline due to increased construction costs caused by high material prices.

In the Medium-term Business Plan "SHINKA Plus ONE" to realize our long-term vision "TOLI VISION 2030," despite such circumstances, our Group promotes five key strategies: A. Reinforcement of core businesses, B. Expanding the growth of promising business, C. Creation of a fifth business, D. Enhancement of capabilities across the Group, and E. Building a business base that supports growth. In the fiscal year under review, to cope with the several rounds of rising raw material costs since last year, we focused on reducing manufacturing costs by having in-house production of raw nylon yarn for carpet tiles and improving the ratio of recycled raw materials used. We also worked to improve earnings by having the second and third sales price revisions take place in May and September.

As a result, for the consolidated first nine months under review, the Company posted net sales of 67,429 million yen (up 7.0% year on year), operating profit of 1,424 million yen (up 676.9% year on year), ordinary profit of 1,494 million yen (up 178.5% year on year), and profit attributable to owners of parent of 897 million yen (loss of 11 million yen for the same quarter year on year).

Performance by segment is as follows. This information includes business between segments.

In the product business, net sales grew as a result of sales promotion activities focusing on new merchandise launched this fiscal year and efforts to revise selling prices. In terms of profit, in addition to our efforts to reduce various manufacturing costs, the sales price revisions since May have contributed to the positive effect, but with raw material prices remaining high, the improvement in profits due to the subsequent price pass-on was limited to a certain extent.

In the area of vinyl flooring materials, the Tile Collection series of vinyl floor tiles, launched in July, performed well, and sales of the mainstay Royal Series, and the Luxury Calcium Carbonate Tile (LCT) and Vinyl Composition Tile (VCT) series, single- layer vinyl floor tiles utilizing the Company's proprietary technologies, were strong. Furthermore, sales of vinyl flooring materials were strong, with "ToughtecTile," a new third flooring material launched in April, winning the FY2022 Good Design Award for its evolution of multi-layered vinyl floor tiles.

In carpets, sales promotion activities focused on the office market with increasing needs for green products, centering on GA- 3600 Sustive Back, an environmentally friendly carpet tile based on TOLI Complete Recycling launched in June. Although the overall sales volume of carpet tiles remained weak including new and renewal use, net sales increased year on year with sales price revisions.

In wallcovering materials, in addition to the strong sales of "VS," a general-purpose vinyl wallpaper launched in July, the Company focused on sales promotion activities for "Real Deco," a non-combustible decorative wallcovering that aims to express material textures, launched in October, resulting in strong sales of wall coverings. In addition, net sales were well above the previous year's level due to the increased penetration of sales price revisions. In curtains, sales of contract curtains for various facilities, which were launched in October, got off to a good start thanks to focused sales promotion activities mainly in the recovering medical and welfare markets, but net sales for curtains, on the whole, fell below the previous year's level.

As a result, the Product Business reported net sales of 40,991 million yen (up 9.5% year on year) and segment income of 880 million yen (up 275.9% year on year).

In the Interior Wholesaling and Installation Businesses, while procurement costs for interior-related materials continued to rise, in addition to passing these costs on to selling prices, efforts to improve attentive, community-based services resulted in steady growth for the overall business. Although net sales growth at TOLI (Shanghai) Corporation was slow due to activity restrictions imposed by the zero-COVID policy in China, the company's performance in the first nine months (January to September 2022) remained solid.

As a result, the Interior Wholesaling and Installation Business reported net sales of 44,375 million yen (up 5.8% year on year) and segment income of 814 million yen (up 69.0% year on year).

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TOLI Corporation (7971) Summary of Financial Results for the Third Quarter of Year Ending March 2023

1. Explanation of the financial position

Current assets at the end of the third quarter of the current fiscal year were up by 552 million yen compared with the end of the previous fiscal year to 47,392 million yen. This was mainly due to an increase in merchandise and finished goods. Non-current assets were up 897 million yen compared with the end of the previous fiscal year, to 34,040 million yen. This increase was mainly due to an increase in construction in progress resulting from the capital investment of a manufacturing subsidiary.

As a result, total assets were up by 1,450 million yen compared with the end of the previous fiscal year to 81,433 million yen.

Current liabilities at the end of the third quarter of the current fiscal year were up by 515 million yen compared with the end of the previous fiscal year to 29,869 million yen. This was mainly due to an increase in trade payables. Non-current liabilities were up 37 million yen compared with the end of the previous fiscal year to 12,381 million yen.

As a result, total liabilities were up by 553 million yen compared with the end of the previous fiscal year, to 42,251 million yen.

Total net assets at the end of the third quarter of the current fiscal year were up by 896 million yen compared with the end of the previous fiscal year to 39,182 million yen. This was mainly due to an increase in retained earnings resulting from the profit attributable to owners of parent.

1. Explanation concerning future predictive information, such as consolidated forecasts

We shall revise our full-year consolidated earnings forecast for the fiscal year ending March 2023, which was published on October 24, 2022, considering our performance and other factors in light of the most recent management environment.

For details, please refer to the "Notice of Revision of Earnings Forecasts" announced today (February 3, 2023).

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