OKAMURA : Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)ed) (PDF 128KB)

Financial Results for Third Quarter of Fiscal Year

Ending March 31, 2015 [Japanese GAAP] (Consolidated)

February 3, 2015
Okamura Corporation Listing: Tokyo Stock Exchange
Code Number: 7994 URL: http://www.okamura.co.jp/
Representative: Masayuki Nakamura, President and Representative Director
Contact: Kiyoshi Sato, Senior Managing Director and Senior General Manager, Administration Division TEL: 045-319-3445
Scheduled date for filing of quarterly report: February 13, 2015
Scheduled date for commencement of dividend payments: -
Preparation of supplementary materials to explain quarterly financial results: Not prepared. Scheduling of meeting to explain quarterly financial results: Not scheduled.

(Amounts less than 1 million yen have been rounded down.)

1. Financial and Operational Review for Third Quarter (Apr. 1, 2014 to December 31, 2014) of FY Ending March 2015 (Apr. 1, 2014 to Mar. 31, 2015)

(1) Operating Results (cumulative) (% Figures indicate year-over-year increase/decrease.)

Note: Comprehensive income ¥5,928 million (-12.2%) for the third quarter f of FY ending March 2015
¥6,753 million (127.3%) for the third quarter of FY ended March 2014

(2) Financial Position

Reference: Total equity ¥97,202 million for the third quarter of FY ending March 2015
¥92,853 million for FY ended March 2014

2. Dividend

Note: Revision of the most recently released dividend forecasts: None

3. Forecast of Consolidated Performance for FY Ending March 2015 (April 1, 2014 to March 31, 2015)

(% Figures indicate year-over-year increase/decrease.)

Note: Revision of the most recently released performance forecasts: None

* Notes

(1) Changes in the number of material subsidiaries during the third quarter under review (This indicates whether there have been changes in the number of specified subsidiaries involving changes in the scope of consolidation): None

New - company(ies) ( -) Excluded - company(ies) ( -)

(2) Adoption of a special accounting method applicable to the preparation of quarterly consolidated financial statements: None

(3) Changes in accounting policy or accounting estimates, or restatement

 Changes in accounting policy in accordance with revisions to accounting standards: Yes

 Changes other than those in  above in accounting policy: None

 Changes in accounting estimates: None

 Restatement: None

(4) Number of shares of stock (common stock)

 Number of shares issued (including treasury stock) at the end of the term

 Number of shares of treasury stock at the end of the term

 Average number of shares during the term (cumulative quarters)

* Indication of Implementation Status of Quarterly Review Procedures

• This quarterly Financial Results summary is not subject to the quarterly review procedures as provided for in the Financial Instruments and Exchange Act. The procedures for reviewing the Company's quarterly financial statements in accordance with the Financial Instruments and Exchange Act are yet to be completed at the time of publication of this quarterly Financial Results summary.

* Explanation of Appropriate Use of Performance Forecasts and Other Issues Requiring Particular Mention

• The performance forecasts and other forward-looking statements contained herein are based on the information available to the Company at the time, and contain certain assumptions that the Company considers to be reasonable. They are subject to diverse factors that may cause actual results of operations and other items to differ significantly from the statements and forecasts. For a description of the assumptions underlying the performance forecasts and the points to note when using the performance forecasts in this document, etc., please refer to (3) Explanation of the performance forecast in 1. Qualitative Information Concerning Quarterly Consolidated Financial Results on page 3 of the Appendix.

Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)

 Table of Contents of Appendix

1. Qualitative Information Concerning Quarterly Consolidated Financial Results ............................................................... 2 (1) Explanation of the progress in (consolidated) operating results............................................................................... 2 (2) Explanation of the changes in (consolidated) financial position .............................................................................. 3 (3) Explanation of the performance forecast ................................................................................................................. 3
2. Summary Information (Notes) .......................................................................................................................................... 4 (1) Changes in the number of material subsidiaries during the third quarter under review ........................................... 4
(2) Adoption of a special accounting method applicable to the preparation of quarterly consolidated financial statements ................................................................................................................................................................ 4
(3) Changes in accounting policy or accounting estimates, or restatement ................................................................... 4
3. Quarterly Financial Statements ......................................................................................................................................... 5 (1) Quarterly Consolidated Balance Sheet..................................................................................................................... 5
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income ..................................................................................................................................................................... 7
(3) Quarterly Consolidated Statements of Cash Flows .................................................................................................. 9 (4) Note regarding consolidated quarterly financial statements................................................................................... 10
Note regarding the assumption of going concern................................................................................................ 10
Note regarding occurrence of significant change in amount of shareholders' equity.......................................... 10
Segment information .......................................................................................................................................... 10
Material subsequent events ................................................................................................................................. 10
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
1. Qualitative Information Concerning Quarterly Consolidated Financial Results
(1) Explanation of the progress in (consolidated) operating results
During the third quarter of the consolidated fiscal year under review, the Japanese economy remained uncertain due to the prolonged effects of the increase in Japanese consumption tax, along with deceleration of growth in the emerging economies and rising imported raw-material costs caused by a drop in the yen. This uncertainty persists despite the presence of positive economic indicators such as personal income and an employment situation that continued to improve on the back of strong growth in corporate performance as well as brisk capital investment.
Under these circumstances, the Okamura Group strove to develop new market potential, increase our market share in each of our business segments, and cultivate new customer bases by creating distinctive products and offering total solutions. The Group also endeavored to improve productivity and accelerate the cost reduction.
Performance results by segment are discussed below.

Note: The total of segment income (loss) corresponds to the operating income on Consolidated Statements of Income.
Office Furniture
In the Office Furniture segment, demand for both office relocation and renewal began to recover, due to an increase in the supply of large-scale office buildings mainly in the center of Tokyo, despite the effect of a decrease in demand in reaction to the last-minute demand generated before the increase in Japanese consumption tax. Under these circumstances, the Company proactively made proposals on how to use office space in an optimal way in response to various office working styles. It also endeavored to engage in aggressive sales activities for educational, healthcare, cultural, and R&D facilities, as well as municipality offices, in the office-related furniture market. The results of the above efforts increase both net sales and income year-over-year.
As a result, net sales in this segment amounted to ¥79,175 million (an increase of 4.1% year-over-year), and the segment income amounted to ¥2,478 million (an increase of 33.2% year-over-year).
Store Displays
In the Store Displays segment, the Company concentrated its efforts on convenience stores and drug stores that are aggressive in opening new stores and store renovations, and endeavored to acquire more orders for store renovations and for our refrigerated showcases. In August 2014, we launched the operation of the new Gotemba Plant building, increasing production capacity for our refrigerated showcases. We also strengthened our product range and expanded our sales force by taking over Nissin Kogyo Co., Ltd.'s store cart business in September, as part of our efforts to respond to future demand. The results of the above efforts increased net sales year-over-year.
As a result, net sales in this segment amounted to ¥65,244 million (an increase of 2.5% year-over-year), and the segment income amounted to ¥1,920 million (a decrease of 26.6% year-over-year).
Others (including Material Handling Systems business)
In the Materials Handling Systems segment, the Company focused on growth areas such as food, healthcare, and Internet shopping and on making use of synergies with other segments in such areas as food processing centers and automated book vaults for libraries. In addition, the Company aggressively attracted more orders for total solutions by taking advantage of its solution-proposal capabilities and its products, which are distinguished by their superiority. However, despite these efforts, a reduction in large-scale projects caused net sales to decrease year-over-year.
As a result, net sales in this segment amounted to ¥9,731 million (a decrease of 6.7% year-over-year), and the segment loss amounted to ¥155 million (versus a segment income of ¥542 million in the same period of the previous fiscal year).
As a result of the above, during the third quarter of the current fiscal year, the Company posted net sales of ¥154,151 million (an increase of 2.7% year-over-year), operating income of ¥4,243 million (a decrease of 15.5% year-over-year), ordinary income of ¥5,475 million (a decrease of 3.3% year-over-year), and net income of ¥3,572 million (a decrease of 2.8% year- over-year).
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
(2) Explanation of the changes in (consolidated) financial position
The Company's consolidated financial position at the end of the third quarter of the fiscal year under review is as follows:
Total assets amounted to ¥196,376 million, up ¥5,462 million compared with the end of the previous consolidated fiscal year. Current assets decreased by ¥1,361 million, mainly because of an increase in cash and deposits and a decrease in notes and accounts receivable-trade, and noncurrent assets increased by ¥6,823 million, mainly because of increases in buildings and structures due to the construction of the new Gotemba Plant building, and investment securities.
Liabilities amounted to ¥98,814 million, up ¥1,129 million over the end of the previous fiscal year, mainly because of an increase in short-term loans payable and decreases in notes and accounts payable-trade as well as income taxes payable and provision for bonuses.
Net assets amounted to ¥97,561 million, up ¥4,332 million over the end of the previous fiscal year, mainly because of increases in retained earnings and valuation difference on available-for-sale securities. The equity ratio amounted to 49.5%, up
0.9 percentage points.
A review of cash flows for the third quarter of the current fiscal year is as follows:
Operating activities generated a net cash increase of ¥6,366 million (an increase of ¥9,327 million in the same period of the previous fiscal year), reflecting inflows including income before income taxes and minority interests for the quarter of ¥5,529 million, depreciation and amortization of ¥3,541 million, and a decrease in notes and accounts receivable-trade of ¥7,519 million. Outflows included a decrease in provision for bonuses of ¥1,445 million, an increase in inventories of ¥2,949 million, and decreases in notes and accounts payable-trade of ¥2,222 million and income taxes paid of ¥4,823 million.
Investment activities resulted in a net cash outflow of ¥5,164 million (versus a net cash outflow of ¥5,904 million in the same period of the previous fiscal year), reflecting inflows including income from sales and redemption of investment securities of
¥304 million, and outflows including disbursements of ¥3,454 million for the purchase of property, plant and equipment, ¥862 million for the purchase of intangible assets, and ¥547 million for the purchase of investment securities.
Financing activities resulted in a net cash increase of ¥2,193 million (an increase of ¥2,820 million in the same period of the previous fiscal year), reflecting increases in short-term loans payable of ¥4,766 million and decreases in dividend payments of
¥1,896 million.
Consequently, consolidated cash and cash equivalents at the end of the current fiscal year's third quarter increased by ¥3,462 million from the end of the previous fiscal year (an increase of ¥6,401 million in the same period of the previous fiscal year) to ¥28,372 million.
(3) Explanation of the performance forecast
The consolidated performance forecasts for the fiscal year ending March 2015 remain the same as those that were announced on May 9, 2014.
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
2. Summary Information (Notes)
(1) Changes in the number of material subsidiaries during the third quarter under review
Nothing in particular.
(2) Adoption of a special accounting method applicable to the preparation of quarterly consolidated financial statements
Nothing in particular.
(3) Changes in accounting policy or accounting estimates, or restatement
The Company has applied the provisions in Article 35 of in the Accounting Standards for Retirement Benefits (Accounting Standards Board of Japan ("ASBJ") Statement No. 26, May 17, 2012) and Article 67 of Guidance on Accounting Standards for Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012) since the first quarter of the fiscal year. Accordingly, the Company has revised the calculation method for retirement benefit obligation and service expenses, changed the method of attributing the expected benefit to periods from the straight-line basis to the benefit formula basis, and changed the method of determining the discount rate from a method based on an approximation of the employees' average remaining service period with regard to the period of bonds that are the basis for determining the discount rate to a method of using a single weighted average discount rate reflecting the estimated payment period and the amount for each estimated payment period of the retirement benefit.
The application of the Accounting Standards for Retirement Benefits is in accordance with the transitional treatment as provided in Article 37 of the Accounting Standards for Retirement Benefits, and the amount of the influence of the change in the calculation method for retirement benefit obligation and service expenses was reflected in the retained earnings at the beginning of the third quarter of the consolidated fiscal year under review.
As a result, net defined benefit liability at the beginning of the third quarter of the consolidated fiscal year under review decreased by ¥682 million and the retained earnings at the beginning of the third quarter of the consolidated fiscal year under review increased by ¥452 million.
The influence of these changes on profit or loss for the third quarter of the consolidated fiscal year under review is minimal.
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)

3. Quarterly Financial Statements

(1) Quarterly Consolidated Balance Sheet
Assets

Current assets
Previous fiscal year
(As of March 31, 2014)

(Millions of yen) Third quarter of the current fiscal year
(As of December 31, 2014)
Cash and deposits 26,545 29,887

Notes and accounts receivable-trade 55,281 47,762
Short-term investment securities 331 31

Merchandise and finished goods 8,851 11,076
Work in process 1,491 2,160

Raw materials and supplies 3,708 4,131
Other 3,827 3,625

Allowance for doubtful accounts (28) (26) Total current assets 100,008 98,647

Noncurrent assets
Property, plant and equipment

Buildings and structures, net 13,221 15,573
Land 23,522 23,522

Other, net 11,728 11,394
Total property, plant and equipment 48,471 50,490

Intangible assets
Goodwill 1,292 988

Other 3,595 3,898
Total intangible assets 4,887 4,887

Investments and other assets
Investment securities 26,154 30,529

Other 11,416 11,845

Allowance for doubtful accounts (26) (24) Total investments and other assets 37,545 42,350
Total noncurrent assets 90,905 97,728

Total assets 190,913 196,376
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)

(Millions of yen)
Liabilities

Current liabilities
Previous fiscal year
(As of March 31, 2014)
Third quarter of the current fiscal year
(As of December 31, 2014)
Notes and accounts payable-trade 31,361 28,688

Electronically recorded obligations-operating 11,051 12,137
Short-term loans payable 6,289 11,075

Current portion of long-term loans payable 1,085 1,827
Current portion of bonds 5,000 5,000

Income taxes payable 3,134 89
Provision for bonuses 3,244 1,798

Other 4,475 5,655
Total current liabilities 65,641 66,271

Noncurrent liabilities
Bonds payable 5,000 5,000

Long-term loans payable 7,988 6,690
Net defined benefit liability 13,427 13,165

Other 5,627 7,686
Total noncurrent liabilities 32,043 32,542

Total liabilities 97,684 98,814
Net assets

Shareholders' equity
Capital stock 18,670 18,670

Capital surplus 16,759 16,759
Retained earnings 53,532 55,515

Treasury stock (2,405) (2,412) Total shareholders' equity 86,557 88,533

Accumulated other comprehensive income
Valuation difference on available-for-sale securities 5,957 8,295

Foreign currency translation adjustment 186 300
Remeasurement of defined benefit plans 152 73

Total accumulated other comprehensive income 6,295 8,669
Minority interests 375 359

Total net assets 93,229 97,561
Total liabilities and net assets 190,913 196,376
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income
[Third Quarter of Current Fiscal Year]
Third quarter of FY ended March 2014 (From April 1, 2013 to December 31, 2013)

(Millions of yen) Third quarter of FY ending March 2015
(From April 1, 2014 to
December 31, 2014)
Net sales 150,134 154,151

Cost of sales 105,594 108,703
Gross profit 44,539 45,448

Selling, general and administrative expenses
Packing and transportation expenses 6,239 6,314

Salaries and allowances 13,420 14,141
Provision for bonuses 1,141 1,229

Rent expenses 4,628 4,958
Other 14,088 14,560

Total selling, general and administrative expenses 39,518 41,205
Operating income 5,020 4,243

Non-operating income
Interest income 32 16

Dividends income 436 507
Equity in earnings of affiliates 156 198

Foreign exchange gains 186 328
Other 461 590

Total non-operating income 1,273 1,642
Non-operating expenses

Interest expenses 260 236
Other 373 173

Total non-operating expenses 633 409
Ordinary income 5,660 5,475

Extraordinary income

Gain on sales of investment securities 24 - Gain on sales of golf club memberships - 54

Gain on bargain purchase 279 - Total extraordinary income 304 54
Extraordinary loss

Loss on valuation of golf club memberships 1 0
Total extraordinary loss 1 0

Income before income taxes and minority interests 5,963 5,529
Income taxes-current 1,888 1,464

Income taxes-deferred 428 513
Total income taxes 2,316 1,977
Income before minority interests 3,646 3,551

Minority interests in income (26) (20) Net income 3,673 3,572
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
Quarterly Consolidated Statements of Comprehensive Income
[Third Quarter of Current Fiscal Year]

Third quarter of FY ended March 2014 (From April 1, 2013 to December 31, 2013)
(Millions of yen) Third quarter of FY ending March 2015
(From April 1, 2014 to
December 31, 2014)
Income before minority interests 3,646 3,551

Other comprehensive income
Valuation difference on available-for-sale securities 2,840 2,333
Foreign currency translation adjustment 175 66

Remeasurement of defined benefit plans, net of tax - (78) Share of other comprehensive income of

associates accounted for using equity method 90 55
Total other comprehensive income 3,106 2,377

Comprehensive income 6,753 5,928 (Details)
Comprehensive income attributable to

owners of the parent 6,779 5,945
Comprehensive income attributable to
minority interests (26) (16)
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
(3) Quarterly Consolidated Statements of Cash Flows
Net cash provided by (used in) operating activities

Third quarter of FY ended March 2014 (From April 1, 2013 to December 31, 2013)

(Millions of yen) Third quarter of FY ending March 2015
(From April 1, 2014 to
December 31, 2014)

Income before income taxes and minority interests 5,963 5,529
Depreciation and amortization 3,305 3,541

Gain on bargain purchase (279) - Equity in (earnings) losses of affiliates (156) (198) Increase (decrease) in provision for bonuses (1,079) (1,445) Increase (decrease) in provision for retirement benefits 487 - Increase (decrease) in net defined benefit liability - 456

Interest and dividends income (469) (523) Interest expenses 260 236
Loss (gain) on sale of investment securities (24) - Decrease (increase) in notes and accounts

receivable-trade 8,040 7,519

Decrease (increase) in inventories (3,087) (2,949) Increase (decrease) in notes and accounts payable-trade 131 (2,222) Other, net 301 904

Subtotal 13,392 10,846
Interest and dividends income received 491 556

Interest expenses paid (290) (212) Income taxes paid (4,266) (4,823) Net cash provided by (used in) operating activities 9,327 6,366
Net cash provided by (used in) investing activities

Payments into time deposits (1,394) (1,854) Proceeds from withdrawal of time deposits 1,705 1,979

Purchase of property, plant and equipment (3,253) (3,454) Purchase of intangible assets (1,126) (862) Purchase of investment securities (884) (547) Proceeds from sales and redemption of
investment securities 92 304
Purchase of investments in subsidiaries

resulting in change in scope of consolidation (554) -

Other, net (488) (728) Net cash provided by (used in) investing activities (5,904) (5,164)
Net cash provided by (used in) financing activities

Net increase (decrease) in short-term loans payable 4,999 4,766

Proceeds from long-term loans payable 1,407 - Repayment of long-term loans payable (2,318) (560) Proceeds from issuance of bonds 5,000 - Redemption of bonds (5,000) - Purchase of treasury stock (8) (3) Cash dividends paid (1,349) (1,896) Other, net 91 (113) Net cash provided by (used in) financing activities 2,820 2,193
Effect of exchange rate change on cash and cash equivalents 158 67

Net increase (decrease) in cash and cash equivalents 6,401 3,462
Cash and cash equivalents at the beginning of the fiscal year 25,818 24,909

Cash and cash equivalents at the end of the quarter term 32,220 28,372
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Okamura Corporation (7994) Financial Results for Third Quarter of Fiscal Year Ending March 31, 2015 (Consolidated)
(4) Note regarding consolidated quarterly financial statements

Note regarding the assumption of going concern

There is no information that needs to be disclosed herein.

Note regarding occurrence of significant change in amount of shareholders' equity

There is no information that needs to be disclosed herein.

Segment information

Third quarter of FY ended March 2014 (from April 1, 2013 to December 31, 2013)
1. Information concerning net sales and income or loss amounts by reportable segment
(Millions of yen)

Notes: 1. The category "Others" aggregates those business segments that do not meet the definition of reportable segments, and includes Material Handling Systems, Industrial Machinery and Others.
2. The total of segment income corresponds to the operating income on Quarterly Consolidated Statements of Income.
Third quarter of FY ending March 2015 (from April 1, 2014 to December 31, 2014)
1. Information concerning net sales and income or loss amounts by reportable segment
(Millions of yen)

Notes: 1. The category "Others" aggregates those business segments that do not meet the definition of reportable segments, and includes Material Handling Systems, Industrial Machinery and Others.
2. The total of segment income (loss) corresponds to the operating income on Quarterly Consolidated Statements of
Income.

Material subsequent events

There is no information that needs to be disclosed herein.
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