TOLI : Financial Announcement for 1st Quarter of the Year Ending March 2023

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

(Consolidated)

				July 29, 2022
Company name: TOLI Corporation	Stock exchanges:	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, Director,	(Name) Yozo Araki	TEL [phone]
for inquiries		Administrative Division and Manager, Accounting
		and Finance Department

Scheduled date for submission of quarterly reports:	August 9, 2022
Scheduled date for start of dividend payments:	-
Preparation of supplementary explanatory materials for the quarterly financial announcement	:	None
Holding of a briefing on the quarterly financial announcement	:	None

(Amounts of less than 1 million yen are rounded off)

1. Consolidated results for first quarter of the year ending March 2023 (April 1, 2022 to June 30, 2022)

(1)	Consolidated results (year to date)							(% shows change for the quarter against 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	%
Q1 for year ending March	20,651	5.1	(120)		-		(45)			-	(67)	-
2023
Q1 for year ended March	19,658	7.9	(95)		-		26			-	22	-
2022
(Note) Comprehensive income for	Q1 of year ending March 2023	22 million yen (-%)
			Q1 for year ended March 2022	(53) million yen (-%)
				Profit per share				Profit per share - diluted
							Yen					Yen
Q1 for year ending March					(1.13)				-
2023
Q1 for year ended March					0.36				-
2022
(2)	Consolidated assets
					Total assets							Net assets		Capital-to-asset ratio
						Million yen				Million yen				%
Q1 for year ending March					77,210					37,790				48.6
2023
Year ended March 2022					79,982					38,285				47.5
Reference: Equity capital		Q1 for year ending March 2023		37,531 million yen
			Year ended March 2022		38,013 million yen
2.	Dividend payments
												Annual dividend
					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				-
Year ending March 2023 (forecast)									0.00		-				8.00		8.00

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

3. Consolidated forecasts for year ending March 2023 (April 1, 2022 to March 31, 2023)

(% shows changes from the previous year for full term and from the same quarter of the previous year for each quarter)

	Net sales		Operating income	Ordinary income		Profit attributable to	Profit per
			owners of parent	share
	Million yen		%	Million yen	%	Million yen		%	Million yen	%	Yen
Q2 (year to date)	42,000		4.4	(800)	-	(600)	-		(450)	-	(7.47)
Full term	92,000		3.9	1,100	25.3	1,450		16.5	950	31.9	15.78

(Note) Adjustment from most recently published performance projections: None

*Notes

1. Significant changes to subsidiaries during the consolidated first quarter 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, 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

(4) Number of outstanding shares (ordinary shares)

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

Q1 for year ending	66,829,249 shares	Year ended March	66,829,249 shares
March 2023	2022
Q1 for year ending	6,642,769 shares	Year ended March	6,494,889 shares
March 2023	2022
Q1 for year ending	60,223,490 shares	Q1 for year ended	61,187,107 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 ensure 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.

• Contents of the supplementary materials

1.	Qualitative information regarding quarterly results	2
(1)	Explanation of the management performance	2
(2)	Explanation of the financial situation	3
(3)	Explanation concerning future predictive information, such as consolidated forecasts	3
2.	Quarterly consolidated financial statements and major notes	4
(1)	Consolidated balance sheets	4
(2)	Consolidated statement of income and consolidated statement of comprehensive income	6
	Consolidated statement of income
	Consolidated first quarter	6
	Consolidated statement of comprehensive income
	Consolidated first quarter	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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1. Qualitative information regarding quarterly results

(1) Explanation of the management performance

During the consolidated first quarter under review, the Japanese economy showed signs of gradual recovery, but the outlook remains uncertain due to the rapid depreciation of the yen, soaring oil and energy prices, and prolonged geopolitical risks.

In the construction industry, which is closely related to our Group's business, although the number of new housing starts has maintained a recovery trend, the business environment remains unpredictable due to soaring prices of various construction materials and greater supply concerns caused by disruption in the supply chain.

Under these circumstances, our Group is pursuing the following five key strategies in the Medium-term Business Plan "SHINKA Plus ONE" toward the realization of our long-term vision "TOLI VISION 2030": 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. During the period under review, in response to several rounds of raw material cost increases since last year, the Company worked to improve profitability through cost-reduction activities as well as by revising selling prices that started in May. However, raw material prices continued to rise, and we decided to conduct the third round of selling price revisions since last summer, starting on September 20.

As a result, for the consolidated first quarter under review, the Company posted net sales of 20,651 million yen (up 5.1% compared with the same period of the previous year), operating loss of 120 million yen (operating loss of 95 million yen for the same period of the previous year), ordinary loss of 45 million yen (ordinary income of 26 million yen for the same period of the previous year), and loss attributable to owners of parent of 67 million yen (profit attributable to owners of parent of 22 million yen for the same period of the previous year).

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

In the Product Business, net sales increased due to a recovery in sales volume and the effect of sales price revisions.

In the area of vinyl flooring materials, "Sheet Collection," a vinyl floor sheet sample book launched last year, penetrated the market, and sales of the "NW Series," flooring materials that require no wax maintenance for a long period of time, were strong. In April, "ToughtecTile" was also launched, a new, third flooring material that combines the strengths of vinyl floor tiles and ceramic tiles, focusing on appeal to the markets.

In carpets, we focused on expanding sales of the "GX Series" of graphic carpet tiles, which were launched last year. In June, "GA-3600 Sustive Back" was also launched, an environment-friendly carpet tile that reuses used carpet tiles, focusing on reducing industrial waste and emissions.

In wall covering materials, with a background of robust housing markets, there was growth in sales of "VS," a general- purpose vinyl wallpaper, and "POWER1000," featuring design and functionality, which was revised last October.

As for curtains, "contract curtains" (with special functions) for various facilities such as medical and welfare facilities drove overall sales.

As a result, the Product Business reported net sales of 12,434 million yen (up 5.3% year on year).

In terms of profit, segment income was 56 million yen (down 68.5% year on year) due to a continuous rise in raw material costs, while, in addition to the effect of sales price revisions, the promotion of in-house production of nylon yarn for carpets and the full-scale operation of a carpet tile recycling plant have helped to reduce manufacturing costs.

Net sales in the Interior Wholesaling Business were up year on year due to efforts to capture small-lot demand amid a declining trend in large-lot demand and due to shifting higher procurement costs onto the product prices. As for TOLI (Shanghai) Corporation, although the Shanghai area was locked down, the impact on the company's first quarter (January- March 2022) results was negligible, resulting in an increase in both sales and profit.

As a result, the Interior Wholesaling and Installation Business reported net sales of 13,600 million yen (up 5.5% compared with the same period of the previous year) and segment income of 74 million yen (up 305.5% compared with the same period of the previous year).

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1. Explanation of the financial situation

Current assets at the end of first quarter of the fiscal year under review were down 2,465 million yen compared with the end of the previous fiscal year to 44,373 million yen. This was mainly due to a decrease in notes and accounts receivable-trade resulting from collection of notes and accounts receivable and others. Non-current assets were down 306 million yen compared with the end of the previous fiscal year to 32,836 million yen.

As a result, total assets were down 2,772 million yen compared with the end of the previous fiscal year to 77,210 million yen.

Current liabilities at the end of first quarter of the fiscal year under review were down 1,866 million yen compared with the end of the previous fiscal year to 27,486 million yen. This was mainly due to a decrease in notes and accounts payable-trade resulting from payment of notes and accounts payable and others. Non-current liabilities were down 410 million yen compared with the end of the previous fiscal year to 11,932 million yen.

As a result, total liabilities were down 2,277 million yen compared with the end of the previous fiscal year to 39,419 million yen.

Total net assets at the end of first quarter of the fiscal year under review were down 494 million yen compared with the end of the previous fiscal year to 37,790 million yen. This was mainly due to a decrease in retained earnings resulting from dividends paid.

(3) Explanation concerning future predictive information, such as consolidated forecasts

No revision has been made to the consolidated performance forecast, which was announced on May 9, 2022.

In case an event occurs that has an impact on TOLI Group's performance and a revision to forecasts becomes necessary, the Company will promptly announce to that effect.

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