Toyo Denki Seizo K.k.TSE: 6505

Consolidated Financial Results for the Six Months Ended November 30, 2024

Jan 13, 2025 at 11:00 PM UTC · Issued by Toyo Denki Seizo K.K.

January 14, 2025

(Under Japanese GAAP)

Company name:	Toyo Denki Seizo K.K.
Listing:	Tokyo Stock Exchange
Securities code:	6505
URL	https://www.toyodenki.co.jp
Representative:	Akira Watanabe, President, Representative Director
Inquiries:	Akihiro Otsuka, Operating Officer, General Manager, Corporate Planning Division
Telephone:	+81-3-5202-8122

Scheduled date to file semiannual securities report:	January 14, 2025
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended November 30, 2024 (from June 1, 2024, to November 30, 2024)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes.)

			Net sales		Operating profit		Ordinary profit		Profit attributable to
						owners of parent


		Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen	%
	Six months ended		19,015		28.3	762		307.4		987	77.4	800	151.1
	November 30, 2024

	November 30, 2023		14,817		7.2	187		-		556	181.7	318	-

	Note: Comprehensive income	For the six months ended November 30, 2024	223 million	[(75.8)%]
			For the six months ended November 30, 2023	923 million	[	9.8%]

		Basic earnings per	Diluted earnings per
			share		share

					Yen			Yen
	Six months ended				86.24			-
	November 30, 2024

	November 30, 2023				33.80			-
(2) Consolidated financial position
			Total assets		Net assets			Equity-to-asset ratio

			Millions of yen	Millions of yen				%
	As of				53,796			25,859			48.1
	November 30, 2024

	May 31, 2024				51,652			26,070			50.5

	Reference: Equity	As of November 30, 2024			¥25,859 million
			As of May 31, 2024			¥26,070 million

2. Cash dividends

		Annual dividends per share

	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total

	Yen	Yen	Yen	Yen	Yen
Fiscal year ended	-	0.00	-	30.00	30.00
May 31, 2024

Fiscal year ending	-	0.00
May 31, 2025

Fiscal year ending
May 31, 2025			-	40.00	40.00
(forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated financial results forecast for the fiscal year ending May 31, 2025 (from June 1, 2024, to May 31, 2025)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings per
		owners of parent	share


	Millions		%	Millions	%	Millions	%	Millions	%	Yen
	of yen		of yen	of yen		of yen

Fiscal year ending	37,000		15.1	1,300	40.1	1,700	14.3	1,200	28.3	128.64
May 31, 2025


Note: Revisions to the financial results forecast most recently announced: None

* Notes

(1) Significant changes in scope of consolidation during the period: None

Newly included:	- companies (Company name)
Excluded:	- companies (Company name)

Adoption of accounting treatment specific to the preparation of semi-annual consolidated financial statements: None
Changes in accounting policies, changes in accounting estimates, and restatement
1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
2. Changes in accounting policies due to other reasons: None
3. Changes in accounting estimates: None
4. Restatement: None

Note: For details, please refer to "Notes on Changes in Accounting Policies" on page 9 of the quarterly financial results report (attachment).

(4) Number of issued shares (common shares)

(i) Total number of issued shares at the end of the period (including treasury shares)

	As of November 30, 2024	9,735,000	shares

	As of May 31, 2024	9,735,000	shares
(ii) Number of treasury shares at the end of the period

	As of November 30, 2024	546,306	shares

	As of May 31, 2024	406,671	shares

(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended November 30, 2024	9,281,802	shares

Six months ended November 30, 2023	9,433,021	shares

* Six-month (interim) financial results reports are exempt from review conducted by certified public accountants or an audit corporation.

* Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements)

The above forecasts are based on information available as of the date of publication of this document, and actual results may differ from the forecasts due to various factors in the future.

* This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

2. Semi-annual Consolidated Financial Statements and Significant Notes Thereto

(1) Semi-annual Consolidated Balance Sheets

			(Millions of yen)
		As of May 31, 2024	As of November 30, 2024

Assets
Current assets

Cash and deposits		6,423	4,387
Notes and accounts receivable - trade, and contract	11,756	16,698
assets

Electronically recorded monetary claims - operating		1,849	1,456
Merchandise and finished goods	466	464
Work in process		3,692	3,685
Raw materials and supplies	3,388	3,775
Advance payments to suppliers		13	15
Accounts receivable - other	116	99

Other		280	358
Allowance for doubtful accounts	(25)	(40)
Total current assets		27,960	30,899
Non-current assets
Property, plant and equipment
Buildings and structures	9,987	9,991

Accumulated depreciation		(6,614)	(6,736)
Buildings and structures, net	3,372	3,255
Machinery, equipment and vehicles		8,341	8,413
Accumulated depreciation	(8,038)	(8,103)
Machinery, equipment and vehicles, net		303	309
Land	1,269	1,269
Construction in progress		135	131
Other	5,250	5,149
Accumulated depreciation		(4,776)	(4,724)
Other, net		474	424
Total property, plant and equipment		5,555	5,391
Intangible assets
Software		84	74
Other	43	47
Total intangible assets		127	121
Investments and other assets

Investment securities		15,009	13,869
Deferred tax assets	-	265
Other		3,001	3,251
Allowance for doubtful accounts	(2)	(2)
Total investments and other assets		18,008	17,383
Total non-current assets	23,691	22,896
Total assets		51,652	53,796

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

				(Millions of yen)
			As of May 31, 2024	As of November 30, 2024

	Liabilities
	Current liabilities
	Notes and accounts payable - trade		2,292	2,791
	Electronically recorded obligations - operating	4,684	4,219

	Short-term borrowings		4,585	6,885
	Accrued expenses	809	988
	Income taxes payable		309	481
	Accrued consumption taxes	158	53

	Contract liabilities		129	82
	Deposits received	160	154
	Provision for bonuses for directors (and other officers)		54	27
	Provision for bonuses	737	842
	Provision for loss on orders received		777	915
	Provision for product warranties	156	443

	Other		386	196
	Total current liabilities	15,240	18,082
	Non-current liabilities
	Long-term borrowings	6,003	5,710
	Long-term accounts payable - other		11	11
	Deferred tax liabilities	164	-

	Retirement benefit liability		4,151	4,122
	Other	11	9
	Total non-current liabilities		10,341	9,853
	Total liabilities	25,582	27,936
	Net assets
	Shareholders' equity
	Share capital		4,998	4,998
	Capital surplus	3,177	3,177
	Retained earnings		12,299	12,820
	Treasury shares	(596)	(751)
	Total shareholders' equity		19,878	20,244
	Accumulated other comprehensive income

	Valuation difference on available-for-sale securities		5,696	4,943
	Foreign currency translation adjustment	485	650
	Remeasurements of defined benefit plans		9	20
	Total accumulated other comprehensive income	6,191	5,614
	Total net assets		26,070	25,859
Total liabilities and net assets		51,652	53,796

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

Semi-annualConsolidated Statement of Income and Semi-annual Consolidated Statement of Comprehensive Income

Semi-annual Consolidated Statements of Income

						(Millions of yen)
				Six months ended November	Six months ended November
		30, 2023		30, 2024
				(from June 1, 2023,	(from June 1, 2024,
				to November 30, 2023)	to November 30, 2024)
	Net sales			14,817		19,015
Cost of sales	11,054	14,447
	Gross profit			3,762		4,567
Selling, general and administrative expenses	3,575	3,805
	Operating profit			187		762
Non-operating income

	Interest income			0		1
	Dividend income	113	153
	Share of profit of entities accounted for using equity			209		125
	method

	Foreign exchange gains	57	-
	Miscellaneous income			24		22
	Total non-operating income	405	303
	Non-operating expenses
	Interest expenses	24	29
	Foreign exchange losses			-		43
	Miscellaneous losses	12	4
	Total non-operating expenses			36		78
Ordinary profit	556	987

	Extraordinary income
	Gain on sale of investment securities	158	150
	Total extraordinary income			158		150
Extraordinary losses
	Business structural reform expenses			191		-
	Total extraordinary losses	191	-
	Profit before income taxes			523		1,138
Income taxes - current	99	443
	Income taxes - deferred			105		(105)
Total income taxes	204	337
	Profit			318		800
Profit attributable to owners of parent		318	800

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

Semi-annual Consolidated Statement of Comprehensive Income

				(Millions of yen)
			Six months ended November	Six months ended November
		30, 2023	30, 2024
			(from June 1, 2023,	(from June 1, 2024,
			to November 30, 2023)	to November 30, 2024)
	Profit		318	800
Other comprehensive income
	Valuation difference on available-for-sale securities		528	(752)
	Foreign currency translation adjustment	-	(17)

	Remeasurements of defined benefit plans, net of tax		11	10
	Share of other comprehensive income of entities accounted		64	181
	for using equity method

	Total other comprehensive income		605	(576)
Comprehensive income	923	223

	Comprehensive income attributable to
	Owners of parent	923	223
	Non-controlling interests		-	-

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

(3) Semi-annual Consolidated Statement of Cash Flows

				(Millions of yen)
			Six months ended November	Six months ended November
		30, 2023	30, 2024
			(from June 1, 2023,	(from June 1, 2024,
			to November 30, 2023)	to November 30, 2024)
	Cash flows from operating activities
	Profit before income taxes	523	1,138
	Depreciation		349	321
	Increase (decrease) in allowance for doubtful accounts	37	15

	Increase (decrease) in provision for bonuses		4	105
	Increase (decrease) in retirement benefit liability	41	(28)
	Increase (decrease) in provision for loss on orders received		(261)	138
	Interest and dividend income	(113)	(155)

	Interest expenses		24	29
	Share of loss (profit) of entities accounted for using equity	(209)	(125)
	method

	Loss (gain) on sale of investment securities		(158)	(150)
	Business structural reform expenses	191	-
	Decrease (increase) in trade receivables		70	(4,551)
	Decrease (increase) in inventories	(451)	(380)
	Increase (decrease) in trade payables		(266)	33
	Increase (decrease) in accrued expenses	169	170
	Increase (decrease) in accrued consumption taxes		(33)	(104)
	Increase (decrease) in contract liabilities	28	(47)

	Increase (decrease) in provision for product warranties		41	287
	Other	(152)	(91)
	Subtotal		(163)	(3,395)
	Interest and dividends received	123	260
	Interest paid		(24)	(21)
	Income taxes refund (paid)	(37)	(272)
	Net cash provided by (used in) operating activities		(101)	(3,429)
Cash flows from investing activities
	Purchase of property, plant and equipment		(139)	(331)
	Proceeds from sale of property, plant and equipment	0	-
	Purchase of intangible assets		(60)	(10)
	Purchase of investment securities	(7)	(5)
	Proceeds from sale of investment securities		268	228
	Payments into time deposits	-	(146)

	Purchase of shares of subsidiaries		-	(18)
	Other	(61)	(33)
	Net cash provided by (used in) investing activities		0	(318)
Cash flows from financing activities
	Net increase (decrease) in short-term borrowings		-	2,300
	Repayments of long-term borrowings	(292)	(292)

	Purchase of treasury shares		(0)	(154)
	Dividends paid	(282)	(277)
	Other		(0)	(2)
	Net cash provided by (used in) financing activities	(576)	1,572
	Effect of exchange rate change on cash and cash equivalents		2	(7)
Net increase (decrease) in cash and cash equivalents	(674)	(2,182)
	Cash and cash equivalents at beginning of period		5,520	6,423
Cash and cash equivalents at end of period	4,845	4,240

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

(4) Notes to Semi-annual Consolidated Financial Statements

(Notes on Going Concern Assumption) Not applicable

(Notes on Significant Changes in Shareholders' Equity) Not applicable

(Notes on Changes in Accounting Policies)

The Company has been applying the "Accounting Standard for Current Income Taxes" (ASBJ Statement No. 27, October 28, 2022; hereinafter referred to as the "Accounting Standard Revised in 2022") since the beginning of the six months of the fiscal year under review.

In response to the revision of the accounting classifications for income taxes (taxation on other comprehensive income), the Company adheres to the transitional provisions stipulated in the proviso to Paragraph 20-3 of the Accounting Standard Revised in 2022 and the proviso to Paragraph 65-2 (2) of the "Guidance on Accounting Standard for Tax Effect Accounting" (ASBJ Guidance No. 28, October 28, 2022; hereinafter referred to as the "Guidance Revised in 2022"). This change to the accounting policy has no impact on the semi-annual consolidated financial statements.

In response to the revised guidance on the deferral of gains and losses in the consolidated financial statements related to the sale of shares in subsidiaries between consolidated companies for tax purposes, the Company has been applying the Guidance Revised in 2022 since the start of the six months of the fiscal year under review. This change in accounting policy is applied retrospectively, and is reflected in the semi-annual consolidated financial statements and consolidated financial statements for the previous fiscal year. This change has no impact on the semi-annual consolidated financial statements or the consolidated financial statements for the previous fiscal year.

Consolidated Financial Results of Toyo Denki Seizo K.K. (6505) for the Six Months Ended November 30, 2024(Under Japanese GAAP)

(Segment Information, etc.)

[Segment Information]

Six months ended November 30, 2023 (from June 1, 2023, to November 30, 2023)

1. Information regarding net sales and profit (Loss) by reporting segment

									(Millions of yen)
		Reporting segments						Amount
										recorded on
					ICT	Other		Adjustments		semi-annual
		Transportation	Industry		Total		consolidated
			(Note 1)	(Note 2)
			Solution
		Business	Business				statement of
			Business					income


										(Note 3)
Net sales
Net sales to external	9,541	4,788		483	3	14,817	-		14,817
customers

Intersegment sales and	8	9		-	159	176	(176)		-
transfers

Total	9,549	4,797		483	162	14,993	(176)		14,817
Segment profit (loss)	1,121	321		119	(1)	1,561	(1,374)		187
(Notes) 1	"Other" is a business segment that is not included in reporting segments, and includes the worker dispatching business.

Adjustments to segment profit (loss) of ¥(1,374) million are the elimination of intersegment transactions of ¥(0) million and corporate expenses of ¥(1,373) million that are not attributable to reporting segments. Corporate expenses are primarily general and administrative expenses as well as research and development expenses that are not attributable to reporting segments.
Segment profit (loss) has been adjusted with operating profit recorded on the semi-annual consolidated statement of income.

Six months ended November 30, 2024 (from June 1, 2024, to November 30, 2024)

1. Information regarding net sales and profit (Loss) by reporting segment

									(Millions of yen)
		Reporting segments						Amount
										recorded on
					ICT	Other		Adjustments		semi-annual
		Transportation	Industry		Total		consolidated
			(Note 1)	(Note 2)
			Solution
		Business	Business				statement of
			Business					income


										(Note 3)
Net sales
Net sales to external	13,373	4,944		695	1	19,015	-		19,015
customers

Intersegment sales and	24	1		-	164	190	(190)		-
transfers

Total	13,397	4,946		695	166	19,205	(190)		19,015
Segment profit (loss)	1,495	603		191	(0)	2,290	(1,527)		762

(Notes) 1	"Other" is a business segment that is not included in reporting segments, and includes the worker dispatching business.

Adjustments to segment profit (loss) of ¥(1,527) million are the elimination of intersegment transactions of ¥(0) million and corporate expenses of ¥(1,527) million that are not attributable to reporting segments. Corporate expenses are primarily general and administrative expenses as well as research and development expenses that are not attributable to reporting segments.
Segment profit (loss) has been adjusted with operating profit recorded on the semi-annual consolidated statement of income.

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