Takamiya : Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020

FOR TRANSLATION PURPOSE ONLY

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes.

In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

August 6, 2020

Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020 (Based on Japanese GAAP)

Company name:	TAKAMIYA CO., LTD.
Stock exchange listing:	Tokyo
Stock code:	2445	URL:	https://www.takamiya.co/
Representative:	Representative Director, President and Chairman	KAZUMASA TAKAMIYA
Inquiries:	Executive Officer and General Manager,
	Finance & Accounting Department	TOMOYA TATSUMI	TEL: [phone]
Scheduled date to file Quarterly Securities Report:		August 7, 2020
Scheduled date to commence dividend payments:		－
Preparation of supplementary material on financial results:	Yes
Holding of financial results meeting:			No

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the three months ended June 30, 2020 (from April 1, 2020 to June 30, 2020)

(1) Consolidated operating results (cumulative)				Percentages indicate year-on-year changes
	Net Sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
	Million yen		%	Million yen	%	Million yen	%	Million yen	%
Three months ended June 30, 2020	9,660		(4.9)	475	(13.5)	380	(16.4)	237	(34.3)
Three months ended June 30, 2019	10,161		4.5	549	115.2	454	43.5	362	96.8

(Note) Comprehensive income Three months ended June 30, 2020:	259 million yen ((32.6)%)
Three months ended June 30, 2019:	385 million yen (−%)
	Earnings per share	Diluted earnings per share
		yen	yen
Three months ended June 30, 2020		5.11	4.97
Three months ended June 30, 2019		8.45	8.20

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of June 30, 2020

61,393

18,384

29.2

385.09

As of March 31, 2020

59,282

18,497

30.5

387.68

(Reference) Shareholders equity

As of June 30, 2020:

17,933 million yen

As of March 31, 2020:

18,054 million yen

2. Cash dividends

Annual dividends per share

1Q-end

2Q-end

3Q-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2020

－

6.00

－

8.00

14.00

Year ending March 31, 2021

－

Year ending March 31, 2021 (forecasts)

6.00

－

8.00

14.00

(Note) Revisions to dividend forecasts published most recently: No

Interim dividend at the 2Q-end of the Year ending March 31, 2020 (6.00 yen) comprises ordinary dividend of 4 yen and 50th anniversary commemorative dividend of 2 yen.

3. Forecast of consolidated financial results for the year ending March 31, 2021 (from April 1, 2020 to March 31, 2021)

Forecast of consolidated financial results for the year ending March 31, 2021 is yet to be determined, because at present it is difficult to correctly and rationally figure out impacts on the Company's operating results by the recent widespread of the new coronavirus infections. Such forecast will be made public promptly, when it becomes possible to figure out.

(Note) Revisions to performance forecasts published most recently: No

FOR TRANSLATION PURPOSE ONLY

4. Notes
(1) Changes in significant subsidiaries during the current quarter consolidated cumulative period
(changes in specified subsidiaries resulting in the change in scope of consolidation):	No
(2) Application of special accounting methods to the preparation of quarterly consolidated financial statement:	No

1. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
2. • Changes in accounting policies due to revisions to accounting standards and other regulations: No

②	Changes in accounting policies due to other reasons:	No
③	Changes in accounting estimates:	No
④	Restatement of prior period financial statements:	No

(4) Number of issued shares (common shares)

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

As of June 30, 2020	46,577,000 shares	As of March 31, 2020	46,577,000 shares
Number of treasury shares at the end of the period
As of June 30, 2020	7,020 shares	As of March 31, 2020	7,020 shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2020	46,569,980 shares	Three months ended June 30, 2019	42,873,801 shares

• Quarterly summary of financial results is not included in a quarterly review by a certified public accountant or an auditing firm.
• Explanation regarding appropriate use of the earnings forecast and other special notes (notes on descriptions about the future, etc.)

Descriptions about the future such as performance forecasts contained in this document are based on information currently available to the Company and certain presumptions considered as reasonable, and those are not intended to indicate the Company should assure that it would realize such forecasts. Meanwhile, actual performance in the future may differ substantially, influenced by a wide variety of factors. For preconditions for performance forecasts and precaution statements in using such forecasts, please see the appendix, page 2, "1. Qualitative information regarding the financial results for the current quarter: (3) Descriptions regarding future prospects such as consolidated performance forecasts".

(How to obtain supplementary references regarding quarterly results)

Supplementary references regarding the financial results will be posted on the Company's website as soon as possible.

FOR TRANSLATION PURPOSE ONLY	TAKAMIYA CO., LTD. (2445)
	Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020

• Table of Contents: Appendix

1. Qualitative Information regarding the Current Quarter .....................................................................................................	2
(1)	Descriptions regarding operating results......................................................................................................................	2
(2)	Descriptions regarding financial position ....................................................................................................................	2
(3)	Descriptions regarding future prospects such as consolidated performance forecasts .................................................	2
2. Quarterly consolidated financial statements and principal notes.......................................................................................	3
(1)	Quarterly consolidated balance sheets .........................................................................................................................	3
(2)	Quarterly consolidated statements of income and statement of comprehensive income .............................................	5
	Quarterly consolidated statements of income
	For the first quarter consolidated cumulative period ...............................................................................................	5
	Quarterly consolidated statement of comprehensive income
	For the first quarter consolidated cumulative period ...............................................................................................	6
(3)	Notes on quarterly consolidated financial statements ..................................................................................................	7
	(Going concern assumption) .......................................................................................................................................	7
	(Notes in case of significant changes in the amount of shareholders' equity) .............................................................	7
	(Segment information) ................................................................................................................................................	7

1

FOR TRANSLATION PURPOSE ONLY	TAKAMIYA CO., LTD. (2445)
	Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020

1. Qualitative information regarding the current quarter

(1) Descriptions regarding operating results

During the current first quarter consolidated cumulative period, global economy has experienced stagnation of economic activities due to widespread of the new coronavirus infections, which led to rapidly worsening economy and very tough situations.

Fortunately, concerning our Group, impacts of the widespread of the new coronavirus infections were relatively small both domestically and overseas. However, looking at the future, there still remains unpredictable situations both domestically and overseas. For example, overseas on one hand, Republic of the Philippines where a sales subsidiary resides still continues city-wide lockdown, and domestically on the other, there are concerns about occurrence of the second wave.

Amid such an environment, the Group has set out, in its three-years'mid-term management plan during which the year ending March 31, 2021 would be the last period, its mid-term management vision as "Create new value through transformation and aim to become a corporate group that drives qualitative development of the industry", and putting its efforts to four objectives: Strengthen management foundations; Drive innovation in the earning base; Accelerate overseas business development; and Create new growth businesses.

As a result, consolidated performance of the current first consolidated cumulative period was as follows: net sales of 9,660,729,000 yen (decrease by 4.9% YoY); operating income of 475,401,000 yen (decrease by 13.5% YoY); ordinary income of 380,334,000 yen (decrease by 16.4% YoY); and quarterly net profit attributable to owners of parent of 237,862,000 yen (decrease by 34.3% YoY).

Operating results of individual business segments are as follows.

• Sales business

There is still high level of interest in the next generation scaffolding. Inquiries about the system maintained steady growth in both new and on-going projects. However, amid the recent situations of uncertainty for the future, there was a tendency that some customers withhold their final decisions to purchase.

These operations resulted in net sales of 2,701,853,000 yen (decrease by 13.9% YoY) and operating income of 287,228,000 yen (decrease by 7.3% YoY).

• Rental business

Cessation and postponement of construction work were much concerned, but actually not prolonged, so that shipment of equipment could successfully maintain steady growth. In terms of profitability, segment profit rate decreased due to, for example, increase in temporary equipment maintenance cost because of returning after completion of large-scale construction sites, and increase in transportation cost of temporary equipment associated with relocation of equipment center.

These operations resulted in net sales of 6,112,756,000 yen (increase by 1.3% YoY) and operating income of 530,698,000 yen (decrease by 17.6% YoY).

• Overseas business

DIMENSION-ALL INC. (sales subsidiary in the Philippines) has faced limitation on its business activities due to the city-wide lockdown ordered during the second half of the current first quarter consolidated cumulative period, leading to decreased revenues. Hory Korea and Hory Vietnam, both manufacturing subsidiaries, were not given much impact on their procurement of raw materials and parts, and therefore they could achieve steady performance in manufacture and sales of temporary equipment for Japanese market.

These operations resulted in net sales of 1,376,461,000 yen (decrease by 11.8% YoY) and operating income of 18,918,000 yen (increase by 63.2% YoY).

(2) Descriptions regarding financial position

Total assets was 61,393,153,000 yen at the end of the current first quarter consolidated fiscal period, i.e. increase by 2,110,615,000 yen as compared to the end of previous consolidated fiscal year. This is mainly due to increase in cash and deposits by 3,103,930,000 yen, decrease in notes and accounts receivable - trade by 1,199,391,000 yen.

Total liabilities was 43,008,168,000 yen, i.e. increase by 2,223,436,000 yen since the end of the previous consolidated fiscal year. This is mainly due to increase in short-term loans payable by 2,171,120,000 yen.

Total net assets was 18,384,984,000 yen, i.e. decrease by 112,820,000 yen since the end of the previous consolidated fiscal year. This is mainly due to decrease in retained earnings by 134,697,000 yen because of quarterly net profit attributable to owners of parent of 237,862,000 yen and dividends from surplus of 372,559,000 yen.

(3) Descriptions regarding future prospects such as consolidated performance forecasts

Again, forecast of consolidated financial results for the year ending March 31, 2021 is yet to be determined, because at present it is difficult to correctly and rationally figure out impacts on the Company's operating results by the recent widespread of the new coronavirus infections. In the construction industry in which the Group operates, there would be various impacts such as temporary suspension of construction sites and extension of work. Forecasts will be made public promptly, when it becomes possible to figure out these impacts.

2

FOR TRANSLATION PURPOSE ONLY	TAKAMIYA CO., LTD. (2445)
	Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020

2. Quarterly consolidated financial statements and principal notes

1. Quarterly consolidated balance sheets

					(Thousand yen)
				As of March 31, 2020	As of June 30, 2020
	Assets
	Current assets
	Cash and deposits			7,242,638	10,346,569
	Notes and accounts receivable - trade	14,101,176	12,901,785
	Merchandise and finished goods			2,933,259	3,122,090
	Work in process	781,907	764,564
	Raw materials and supplies			1,002,598	993,850
	Other	695,502	983,511
	Allowance for doubtful accounts			(348,400)	(346,963)
	Total current assets	26,408,683	28,765,409
	Non-current assets
	Property, plant and equipment
	Assets for rent			39,486,729	39,487,437
	Accumulated depreciation-Assets for rent	(24,579,285)	(25,014,423)
	Assets for rent, net			14,907,443	14,473,013
	Buildings and structures	7,236,727	7,255,575
	Accumulated depreciation and impairment loss			(3,438,205)	(3,498,212)
	Buildings and structures, net	3,798,521	3,757,363
	Machinery, equipment and vehicles			2,579,935	2,684,557
	Accumulated depreciation	(1,320,016)	(1,380,415)
	Machinery, equipment and vehicles, net			1,259,918	1,304,142
	Land	7,839,049	7,840,575
	Leased assets			1,063,278	1,076,901
	Accumulated depreciation	(512,240)	(553,775)
	Leased assets, net			551,038	523,126
	Construction in progress	132,830	139,272
	Other			1,133,860	1,189,186
	Accumulated depreciation	(823,339)	(853,191)
	Other, net			310,521	335,994
	Total property, plant and equipment	28,799,323	28,373,488
	Intangible assets
	Leasehold right	327,821	327,821
	Goodwill			159,124	145,720
	Other	452,911	566,458
	Total intangible assets			939,858	1,040,000
	Investments and other assets
	Investment securities			444,763	459,297
	Guarantee deposits	691,564	716,473
	Net defined benefit asset			42,700	41,317
	Deferred tax assets	799,903	824,808
	Other			1,189,853	1,206,473
	Allowance for doubtful accounts	(34,112)	(34,113)
	Total investments and other assets			3,134,672	3,214,255
	Total non-current assets	32,873,854	32,627,744
	Total assets			59,282,537	61,393,153

3

	FOR TRANSLATION PURPOSE ONLY			TAKAMIYA CO., LTD. (2445)
		Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020
				(Thousand yen)
			As of March 31, 2020	As of June 30, 2020
	Liabilities
	Current liabilities
	Notes and accounts payable - trade		6,427,178	5,830,674
	Short-term loans payable	5,400,480	7,571,600
	Current portion of bonds		421,000	421,000
	Current portion of long-term loans payable	5,810,651	5,758,888
	Lease obligations		359,292	357,467
	Income taxes payable	766,520	253,957
	Provision for bonuses		292,189	102,914
	Provision for directors' bonuses	8,630	－
	Notes payable - facilities		136,537	111,125
	Other	2,107,963	2,942,998
	Total current liabilities		21,730,443	23,350,626
	Non-current liabilities
	Bonds payable		3,599,000	3,599,000
	Long-term loans payable	11,823,485	12,482,282
	Lease obligations		1,377,246	1,322,903
	Net defined benefit liability	945,664	963,725
	Asset retirement obligations		12,800	12,878
	Other	1,296,091	1,276,753
	Total non-current liabilities		19,054,288	19,657,542
	Total liabilities	40,784,731	43,008,168
	Net assets
	Shareholders' equity

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income

Valuation difference on available-for-sale securities

Deferred gains or losses on hedges

Foreign currency translation adjustment

Remeasurements of defined benefit plans

Total accumulated other comprehensive income

Subscription rights to shares

Non-controlling interests

Total net assets

Total liabilities and net assets

1,050,114	1,050,114
1,908,539	1,908,539
15,186,825	15,052,128
(3,331)	(3,331)
18,142,147	18,007,450
16,282	25,592
(15,334)	(13,273)
(23,183)	(22,432)
(65,508)	(63,915)
(87,743)	(74,029)
306,115	306,115
137,286	145,448
18,497,805	18,384,984
59,282,537	61,393,153

4

FOR TRANSLATION PURPOSE ONLY	TAKAMIYA CO., LTD. (2445)
	Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020

1. Quarterly consolidated statements of income and statement of comprehensive income (Quarterly consolidated statements of income)
   (For the first quarter consolidated cumulative period)

					(Thousand yen)
				Three months ended	Three months ended
				June 30, 2019	June 30, 2020
	Net sales			10,161,523	9,660,729
	Cost of sales	7,166,078	6,854,709
	Gross profit			2,995,445	2,806,020
	Selling, general and administrative expenses	2,445,609	2,330,618
	Operating income			549,836	475,401
	Non-operating income
	Interest income			2,872	2,357
	Dividend income	4,232	3,829
	Rent income			18,622	16,286
	Contribution for Assets for rent	－	8,131
	Gain on sales of Scrap			18,312	13,965
	Reversal of allowance for doubtful accounts	6,057	934
	Other			18,449	25,853
	Total non-operating income	68,547	71,356
	Non-operating expenses
	Interest expenses	68,966	64,942
	Commission fee			15,548	16,033
	Foreign exchange losses	64,484	67,763
	Other			14,543	17,684
	Total non-operating expenses	163,542	166,424
	Ordinary income			454,841	380,334
	Extraordinary income
	Gain on sales of non-current assets			125,404	－
	Total extraordinary income	125,404	－
	Extraordinary losses
	Loss on sales of non-current assets	1,286	5,805
	Total extraordinary losses			1,286	5,805
	Profit before income taxes	578,959	374,529
	Income taxes - current			211,902	159,427
	Income taxes - deferred	(2,497)	(30,917)
	Total income taxes			209,404	128,509
	Profit (loss)	369,555	246,019
	Profit (loss) attributable to non-controlling interests			7,385	8,156
	Profit (loss) attributable to owners of parent		362,170	237,862

5

	FOR TRANSLATION PURPOSE ONLY		TAKAMIYA CO., LTD. (2445)
	Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020
	(Quarterly consolidated statements of income)
	(For the first quarter consolidated cumulative period)
				(Thousand yen)
			Three months ended	Three months ended
			June 30, 2019	June 30, 2020
	Profit (loss)		369,555	246,019
	Other comprehensive income
	Valuation difference on available-for-sale securities		(11,013)	9,314
	Deferred gains (losses) on hedges	1,062	2,060
	Foreign currency translation adjustment		25,644	751
	Remeasurements of defined benefit plans, net of tax	211	1,592
	Total other comprehensive income		15,905	13,719
	Comprehensive income	385,460	259,738
	Comprehensive income attributable to
	Comprehensive income attributable to owners of parent	378,097	251,576
	Comprehensive income attributable to non-controlling interests		7,362	8,162

6

FOR TRANSLATION PURPOSE ONLY	TAKAMIYA CO., LTD. (2445)
	Summary of Consolidated Financial Results for the Three Months Ended June 30, 2020

1. Notes on quarterly consolidated financial statements
   (Going concern assumption) Not applicable.
   (Notes in case of significant changes in the amount of shareholders' equity)
   Not applicable. (Segment information)

【Segment Information】

1. Previous first quarter consolidated cumulative period (from April 1, 2019 to June 30, 2019)
   1. Information on amount of net sales and of income/loss for each reportable segment.

						(Thousand yen)
						Amount allocated
	Sales	Rental	Overseas	Total	Adjustment	to the quarterly
	consolidated P/L
	business	business	business	(Note 1)
		statement
						(Note 2)
Net sales
Sales to external customers	3,117,345	6,021,970	1,022,207	10,161,523	－	10,161,523
Inter-segment sales or transfer	19,496	12,644	538,711	570,852	(570,852)	－
Total	3,136,841	6,034,615	1,560,918	10,732,376	(570,852)	10,161,523
Segment income (loss)	309,889	643,710	11,595	965,196	(415,359)	549,836

Notes: 1. Adjusted segment profit (loss) of (415,359) thousand yen includes inter-segment transaction elimination of 81,514 thousand yen and corporate expenses not allocated to individual reportable segments of (496,874) thousand yen. Corporate expenses comprises mainly of general and administrative expenses not attributable to reportable segments.

2. Segment income (loss) has been aligned with the operating income (loss) presented on the Quarterly consolidated statements of income.

2. Information on impairment loss of non-current assets or goodwill, etc. for each reportable segment.

Not applicable.

1. Current first quarter consolidated cumulative period (from April 1, 2020 to June 30, 2020)
   1. Information on amount of net sales and of income/loss for each reportable segment.

						(Thousand yen)
						Amount allocated
	Sales	Rental	Overseas	Total	Adjustment	to the quarterly
	consolidated P/L
	business	business	business	(Note 1)
		statement
						(Note 2)
Net sales
Sales to external customers	2,662,948	6,102,994	894,787	9,660,729	－	9,660,729
Inter-segment sales or transfer	38,905	9,762	481,674	530,342	(530,342)	－
Total	2,701,853	6,112,756	1,376,461	10,191,071	(530,342)	9,660,729
Segment income (loss)	287,228	530,698	18,918	836,846	(361,444)	475,401

Notes: 1. Adjusted segment profit of (361,444) thousand yen includes inter-segment transaction elimination of 82,228 thousand yen and corporate expenses not allocated to individual reportable segments of (443,673) thousand yen. Corporate expenses comprises mainly of general and administrative expenses not attributable to reportable segments.

2. Segment income (loss) has been aligned with the operating income (loss) presented on the Quarterly consolidated statements of income.

2. Information on impairment loss of non-current assets or goodwill, etc. for each reportable segment.

Not applicable.

7