VALQUA : posted summary of its FY ended March 2020 results.

May 14, 2020

Summary of Consolidated Financial Results for the Fiscal Year Ending March 31, 2020

VALQUA, LTD. (7995)

English translation from the original Japanese-language document

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan)

Consolidated Balance Sheets

				(Millions of yen)
		As of March 31, 2019	As of March 31, 2020
Assets
Current assets
Cash and deposits	7,109		6,644
Notes and accounts receivable - trade	12,113		11,357
Electronically recorded monetary claims -	2,012		1,885
operating
Merchandise and finished goods	2,690		3,000
Work in process	617		646
Raw materials and supplies	1,326		1,369
Accounts receivable - other	1,445		1,424
Other	868		498
Allowance for doubtful accounts	18		14
		▲	▲
Total current assets		28,166		26,811

－ 1 －

						(Millions of yen)
			As of March 31, 2019	As of March 31, 2020
Non-current assets
Property, plant and equipment
Buildings and structures			14,255		15,904
Accumulated depreciation			9,319		9,626
			▲4,935	▲6,278
Buildings and structures, net
Machinery, equipment and vehicles			13,170		13,643
Accumulated depreciation			10,054		10,290
Machinery, equipment and vehicles,		▲			▲
		3,115		3,353
net
Tools, furniture and fixtures			6,581		7,116
Accumulated depreciation			5,048		5,604
			▲1,532	▲1,511
Tools, furniture and fixtures, net
Land			4,004		4,005
Leased assets			216		612
Accumulated depreciation			128		296
				▲ 87	▲316
Leased assets, net
Construction in progress			579		401
Total property, plant and equipment			14,256		15,866
Intangible assets
Leased assets			1		－
Software			293		688
Other			239		218
Total intangible assets			533		906
Investments and other assets
Investment securities			3,893		2,982
Deferred tax assets			286		236
Retirement benefit asset			462		224
Other			1,931		1,100
Allowance for doubtful accounts			0		0
Total investments and other assets			6,573		4,544
		▲	▲
Total non-current assets			21,363		21,317
Deferred assets
Bond issuance costs			5		－
Total deferred assets			5		－
Total assets				49,535		48,128

－ 2 －

				(Millions of yen)
		As of March 31, 2019	As of March 31, 2020
Liabilities
Current liabilities
Notes and accounts payable - trade	5,798		5,190
Short-term borrowings	1,758		1,782
Current portion of long-term borrowings	154		130
Current portion of bonds payable	1,700		－
Lease obligations	53		138
Income taxes payable	629		362
Provision for bonuses	488		430
Provision for bonuses for directors (and	83		38
other officers)
Other		2,594		2,443
Total current liabilities		13,261		10,517
Non-current liabilities
Long-term borrowings	131		1,158
Lease obligations	27		168
Deferred tax liabilities	725		535
Retirement benefit liability	732		534
Other		278		283
Total non-current liabilities		1,895		2,680
Total liabilities		15,157		13,197
Net assets
Shareholders' equity
Share capital	13,957		13,957
Capital surplus	3,938		3,963
Retained earnings	15,400		16,558
Treasury shares		1,685		1,635
Total shareholders' equity		31,610		32,843
▲	▲
Accumulated other comprehensive income
Valuation difference on available-for-sale	1,490		1,054
securities
Foreign currency translation adjustment	19		131
Remeasurements of defined benefit plans	304		▲432
		▲	▲
Total accumulated other comprehensive	1,205		490
income
Non-controlling interests		1,562		1,596
Total net assets		34,378		34,930
Total liabilities and net assets		49,535		48,128

－ 3 －

Consolidated Statements of Income

					(Millions of yen)
			Fiscal year ended	Fiscal year ended
			March 31, 2019	March 31, 2020
Net sales	51,243		48,212
Cost of sales	32,149		30,237
Gross profit	19,093		17,974
Selling, general and administrative expenses
Remuneration, salaries and allowances for		5,828		6,096
directors (and other officers)
Provision for bonuses	345		292
Provision for bonuses for directors (and other		83		38
officers)
Retirement benefit expenses	79		191
Research and development expenses	1,068		1,065
Other	6,077		6,075
Total selling, general and administrative		13,484		13,760
expenses
Operating profit	5,609		4,214
Non-operating income
Interest income	3		5
Dividend income	74		57
Rental income from facilities	158		230
Share of profit of entities accounted for using		56		14
equity method
Foreign exchange gains	20		－
Gain on investments in silent partnerships	51		－
Other	76		118
Total non-operating income	442		426
Non-operating expenses
Interest expenses	62		63
Loss on sales of notes receivable - trade	23		23
Rental expenses on facilities	136		190
Foreign exchange losses		－	53
Other	37		52
Total non-operating expenses	261		384
Ordinary profit	5,791		4,256
Extraordinary income
Gain on sales of investment securities	512		127
Other	4		7
Total extraordinary income	517		135
Extraordinary losses
Loss on abandonment of non-current assets	54		22
Impairment loss		－	45
Amortization of goodwill	368		－
Compensation expenses for health damage		65		50
caused by asbestos
Company name change cost	85		－
Other	1		4
Total extraordinary losses	574		122
Profit before income taxes	5,733		4,270
Income taxes - current	1,434		1,182
Income taxes - deferred	117		91
Total income taxes	1,551		1,273
Profit	4,182		2,996
Profit attributable to non-controlling interests	95		78
Profit attributable to owners of parent		4,087		2,918

－ 4 －

Consolidated Statements of Comprehensive Income

					(Millions of yen)
		Fiscal year ended			Fiscal year ended
		March 31, 2019			March 31, 2020
Profit	4,182		2,996
Other comprehensive income
Valuation difference on available-for-sale	1,592		437
securities	▲			▲
Foreign currency translation adjustment		509		160
Remeasurements of defined benefit plans, net	▲			▲
	111		126
of tax	▲	▲
Share of other comprehensive income of
entities accounted for using equity method			12		4
Total other comprehensive income	2,225		729
▲	▲
		▲			▲
Comprehensive income		1,956		2,267
Comprehensive income attributable to
Comprehensive income attributable to owners	1,898		2,203
of parent
Comprehensive income attributable to non-		58		64
controlling interests

－ 5 －

Consolidated Statements of Shareholders' Equity

(Millions of yen)

Fiscal year ended

Shareholders' equity

Total

March 31, 2019

Retained

Treasury

Share capital

Capital surplus

shareholders'

earnings

shares

equity

Balance at beginning

13,957

4,169

12,899

1,382

29,643

of period

▲

Changes during period

Purchase of shares

▲231

▲231

of consolidated

subsidiaries

Dividends of surplus

1,586

1,586

Profit attributable to

▲4,087

▲4,087

owners of parent

Purchase of treasury

▲

303

▲

303

shares

Disposal of treasury

0

0

0

shares

Parent company's

stocks held by affiliated

0

0

companies adopted

▲

▲

equity method

Net changes in items

other than

shareholders' equity

Total changes during

－

230

2,501

303

1,966

period

▲

▲

Balance at end of

13,957

3,938

15,400

▲1,685

31,610

period

Accumulated other comprehensive income

Fiscal year ended

Valuation

Foreign

Remeasur

Total

Non-

Total net

difference

ements of

accumulated

controlling

March 31, 2019

currency

assets

on available-

translation

defined

other

interests

for-sale

benefit

comprehens

adjustment

securities

plans

ive income

Balance at beginning

3,085

497

189

3,394

1,554

34,592

of period

▲

Changes during period

Purchase of shares

▲231

of consolidated

subsidiaries

Dividends of surplus

1,586

Profit attributable to

▲4,087

owners of parent

Purchase of treasury

303

shares

▲

Disposal of treasury

0

shares

Parent company's

stocks held by affiliated

0

companies adopted

▲

equity method

Net changes in items

▲1,595

▲478

▲115

▲2,188

▲2,181

other than

7

shareholders' equity

Total changes during

1,595

478

115

2,188

7

214

period

▲

▲

▲

▲

▲

Balance at end of

1,490

19

▲304

1,205

1,562

34,378

period

－ 6 －

(Millions of yen)

Fiscal year ended

Shareholders' equity

Total

March 31, 2020

Retained

Treasury

Share capital

Capital surplus

shareholders'

earnings

shares

equity

Balance at beginning

13,957

3,938

15,400

1,685

31,610

of period

▲

Changes during period

Dividends of surplus

1,759

1,759

Profit attributable to

▲2,918

▲2,918

owners of parent

Purchase of treasury

3

3

shares

▲

▲

Disposal of treasury

25

52

78

shares

Parent company's

stocks held by affiliated

0

0

companies adopted

▲

▲

equity method

Net changes in items

other than

shareholders' equity

Total changes during

－

25

1,158

49

1,233

period

Balance at end of

13,957

3,963

16,558

▲1,635

32,843

period

Accumulated other comprehensive income

Fiscal year ended

Valuation

Foreign

Remeasur

Total

Non-

Total net

difference

ements of

accumulated

controlling

March 31, 2020

currency

assets

on available-

translation

defined

other

interests

for-sale

benefit

comprehens

adjustment

securities

plans

ive income

Balance at beginning

1,490

19

304

1,205

1,562

34,378

of period

▲

Changes during period

Dividends of surplus

1,759

Profit attributable to

▲2,918

owners of parent

Purchase of treasury

3

shares

▲

Disposal of treasury

78

shares

Parent company's

stocks held by affiliated

0

companies adopted

▲

equity method

Net changes in items

▲435

▲151

▲128

▲714

34

▲680

other than

shareholders' equity

Total changes during

435

151

128

714

34

552

period

▲

▲

▲

▲

Balance at end of

1,054

▲131

▲432

490

1,596

34,930

period

－ 7 －

Consolidated Statements of Cash Flows

					(Millions of yen)
		Fiscal year ended			Fiscal year ended
		March 31, 2019			March 31, 2020
Cash flows from operating activities
Profit before income taxes	5,733		4,270
Depreciation	1,716		2,099
Amortization of goodwill	449			－
Impairment loss		－		45
Interest and dividend income		77			62
Interest expenses	▲62	▲63
Decrease (increase) in retirement benefit asset	331			67
		▲			▲
Increase (decrease) in retirement benefit		4		▲	183
liability
Loss on abandonment of non-current assets		54			22
Loss (gain) on sales of investment securities	511			127
Decrease (increase) in trade receivables	▲262	▲723
Decrease (increase) in inventories	▲260		403
Increase (decrease) in trade payables	▲	88		▲609
Increase (decrease) in other non-current	▲			▲
	0			1
liabilities					▲
Other, net		225			688
Subtotal		6,715		6,458
Interest and dividends received		99			255
Interest paid		53			71
Income taxes refund	▲14	▲10
Income taxes paid	1,403		1,476
The amount of payment of the asbestos illness	▲			▲
	10			55
compensation money
▲			▲
Net cash provided by (used in) operating	5,362		5,121
activities
Cash flows from investing activities
Purchase of property, plant and equipment	2,454		2,497
Proceeds from sales of property, plant and	▲			▲
	10			10
equipment
Purchase of intangible assets	123			504
Proceeds from sales of investment securities	▲976	▲260
Payments for investments in capital	184
		▲				－
Payments of guarantee deposits	71			50
Proceeds from refund of guarantee deposits	▲34	▲31
Other, net	148			48
		▲			▲
Net cash provided by (used in) investing	1,960		2,799
activities		▲			▲

－ 8 －

					(Millions of yen)
		Fiscal year ended			Fiscal year ended
		March 31, 2019			March 31, 2020
Cash flows from financing activities
Proceeds from short-term borrowings	1,932			1,980
Repayments of short-term borrowings	2,129			1,968
Proceeds from long-term borrowings	▲	34		▲1,157
Repayments of long-term borrowings		176			166
Repayments of lease obligations	▲	32			▲285
		▲		▲
Redemption of bonds		160			1,700
Purchase of treasury shares	▲303	▲	3
		▲				▲
Dividends paid	1,583			1,754
Dividends paid to non-controlling interests	▲	25		▲	29
Payments from changes in ownership interests	▲		▲
in subsidiaries that do not result in change in	▲	261			－
scope of consolidation
Other, net			0			－
Net cash provided by (used in) financing	2,704			2,769
activities		▲			▲
Effect of exchange rate change on cash and cash		99			17
equivalents		▲		▲
Net increase (decrease) in cash and cash		598			465
equivalents						▲
Cash and cash equivalents at beginning of period		6,439			7,037
Cash and cash equivalents at end of period		7,037			6,571

－ 9 －

Appendix

1-a. Consolidated Results by Segment

		FY2019.3	FY2020.3
Seal Products Business	Net Sales	33,593	32,071
Segment Profit	4,447	3,360
High Performance Plastics Products	Net Sales	14,313	13,089
Business	Segment Profit	777	554
Other Business	Net Sales	3,336	3,051
Segment Profit	384	299
			(Millions of yen)

1-b. Orders Received and Order Backlog by Segment

		FY2019.3	FY2020.3
Seal Products Business	Orders Received	34,085	31,422
Order Backlog	4,232	3,583
High Performance Plastics Products	Orders Received	15,853	12,724
Business	Order Backlog	3,601	3,236
Other Business	Orders Received	3,482	2,992
Order Backlog	284	225
Total	Orders Received	53,421	47,140
Order Backlog	8,117	7,045
			(Millions of yen)

2. Consolidated Net Sales by Region

	FY2019.3	FY2020.3
Japan	36,486	33,958
Asia (ex. Japan)	10,165	9,859
North America	4,410	4,233
The Others	181	161
		(Millions of yen)

3. Stock and Dividends Information

(1) Number of Shares Issued (FY2020.3)

Number of Shares Issued at the End of the Period (including Treasury Shares)	18,688,733
Number of Treasury Shares at the End of the Period		1,083,592
The Average Number of Shares Issued during the Period		17,594,799
(2) Per Share Data
	FY2019.3	FY2020.3
Earnings Per Share	232.43	165.85
(3) Dividends		(Yen per share)
	FY2019.3	FY2020.3	FY2021.3
	(Forecast)
Interim Dividend	45.00	50.00	-
Year-End Dividend	50.00	50.00	-
Total Dividends for the Year	95.00	100.00	-
(Remarks)Dividends for the FY2021.3 have yet to be determined.	(Yen per share)

4. Earings Forecasts for the FY2021.3

VALQUA is currently studying the impact of COVID-19 with respect to our business and earnings forecasts for the FY2021.3. As it is difficult to calculate with rational grounds at present, we have not yet set forecasts.

We will notice an announcement regarding forecasts of the FY2021.3 promptly as soon as we can

－ 10 －