makino milling machine co., ltd. · 2020. 1. 23. · makino milling machine co., ltd. and its...

For the six months ended September 30, 2012

QUARTERLY REPORT

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(1) Qualitative Information Relating to Consolidated Quarterly Operating Results

During the first half of the fiscal year under review, the Company achieved net sales of ¥61,231 million (up 17.4% year

on year), operating income of ¥4,729 million (up 71.6% year on year), and a net income of ¥3,255 million (up 121.6%

year on year).

The details of operating results by region are as follows:

Makino Milling Machine Co., Ltd. and its subsidiaries in Japan

With regard to domestic orders received by Makino Milling Machine Co., Ltd. during the first half of the fiscal year

(April–September), sizeable orders were placed for horizontal machining centers mainly from the auto, construction

machinery, and industrial machinery industries. However, the current situation for orders received remains on a par with

the previous corresponding period, reflecting a pause in capital investment in the auto industry, and a temporary loss of

momentum in the construction machinery industry chiefly due to the effect of the Chinese market.

As for domestic orders for the second half of the fiscal year (October–March), expectations at the beginning of the

fiscal year were for the mild recovery trend to continue; however, it is now believed that a slowdown has started.

MAKINO ASIA PTE LTD (Singapore)

Orders received by the subsidiary in Asia during the first half of the fiscal year (April–September) were at record high

levels.

In China, the official policy of raising interest rates to control inflation loosened slowly, and orders from small local

manufacturers gradually recovered. The orders were mainly for electrical discharge machines and vertical machining

centers developed and manufactured by MAKINO ASIA PTE LTD. In the auto and IT industries, orders for horizontal

machining centers from foreign capital contributed greatly to sales.

The pace of capital investment is expected to slow down considerably during the second half of the fiscal year

(October–March) amid declining sales in the auto and construction machinery industries.

In the Indian market, one of the markets that the Company focuses on, we believe that it will take some time to

recover from the effects of the international financial uncertainty.

MAKINO INC. (USA)

At the IMTS 2012 (International Manufacturing Technology Show) held in September, we were given a strong impression

of the enthusiasm and confidence that American machine tool users had on the revitalization of competitiveness in the

industry. Although the trend in economic indicators in the United States is not favorable, auto, aircraft, and many other

manufacturing fields are strong.

The Company believes that orders will remain high in the second half of the fiscal year (October–March).

MAKINO Europe GmbH

Due to the low euro, intense competition continues with European machine tool manufacturers.

We have been able to maintain a minimum level of orders thanks to the Company’s unique products for niche

markets. Mainstay items are large machining centers for aircraft components and machining centers for microfabrication.

Despite the slump in the European economy, we anticipate a slight upswing in orders during the second half of the

fiscal year (October–March) although the level will remain low.

QUALITATIVE INFORMATION

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Full-year Consolidated Results Forecast

Although results for the first half of the fiscal year exceeded the forecast, this was accompanied by a slowdown in

current orders, along with development of large machinery and new products, which lead to the result that many orders

require time for delivery. The forecast of results remains unchanged from the beginning of the fiscal year (net sales of

¥112,000 million, operating income of ¥7,000 million).

(2) Qualitative Information on Consolidated Financial Position

Total assets on a consolidated basis at the end of the second quarter under review increased by ¥1,328 million from the

end of FY2011 to ¥179,689 million. Major changes included an increase of ¥4,342 million in notes and accounts

receivable and a decrease of ¥1,884 million in investment securities.

Total liabilities increased by ¥1,201 million from the end of FY2011 to ¥95,812 million, primarily due to an increase

of ¥2,165 million in short-term loans and a decrease of ¥1,429 million in notes and accounts payable.

Net assets increased by ¥126 million from the end of FY2011 to ¥83,877 million, mainly due to an increase of

¥2,819 million in retained earnings and a decrease of ¥1,476 million in foreign currency translation adjustments.

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Millions of yenThousands of

dollars

March 31, 2012 September 30, 2012 September 30, 2012

ASSETS

Current assets:

Cash and time deposits ¥ 28,935 ¥ 29,340 $ 378,092

Marketable securities 1,000 999 12,873

Notes and accounts receivable 31,071 35,414 456,365

Inventories 49,188 49,017 631,662

Deferred income taxes 2,032 2,131 27,461

Other current assets 3,907 2,678 34,510

Allowance for doubtful accounts (731) (673) (8,672)

Total current assets 115,404 118,908 1,532,319

Investments and other assets:

Investment securities 13,183 11,299 145,605

Long-term loans receivable 626 601 7,744

Deferred income taxes 840 765 9,858

Other long-term assets 5,072 4,831 62,255

Allowance for doubtful accounts (471) (457) (5,889)

Total investments and other assets 19,251 17,040 219,587

Property, plant and equipment:

Land 14,865 14,760 190,206

Buildings and structures 51,442 51,304 661,134

Machinery and equipment 23,977 24,732 318,711

Lease assets 3,222 3,183 41,018

Construction in progress 166 375 4,832

93,674 94,355 1,215,914

Accumulated depreciation (49,968) (50,614) (652,242)

Total property, plant and equipment 43,706 43,740 563,659

Total assets ¥ 178,361 ¥ 179,689 $ 2,315,579

The accompanying notes are an integral part of these statements.

CONSOLIDATED BALANCE SHEETSMakino Milling Machine Co., Ltd. and Consolidated Subsidiaries March 31, 2012 and September 30, 2012

US$1=¥77.60

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dollars

March 31, 2012 September 30, 2012 September 30, 2012

LIABILITIES AND NET ASSETSCurrent liabilities:

Notes and accounts payable:

Trade ¥ 21,896 ¥ 20,467 $ 263,750Other 4,932 5,145 66,301

Short-term loans 4,211 6,376 82,164Current portion of long-term debt 3,075 14,950 192,654Short-term lease obligations 497 518 6,675Accrued expenses 5,656 5,977 77,023Income taxes payable 819 777 10,012Other current liabilities 2,092 2,309 29,755

Total current liabilities 43,181 56,523 728,389

Long-term liabilities:Long-term debt 43,172 32,029 412,744Long-term lease obligations 2,166 2,017 25,992Allowance for employees’

retirement benefits 499 313 4,033Allowance for directors’ and

corporate auditors’ retirement benefits 31 36 463Deferred income taxes 3,766 3,146 40,541Other long-term liabilities 1,791 1,745 22,487

Total long-term liabilities 51,429 39,289 506,301

Net assets:Shareholders’ equity

Common stock, no par value 19,263 19,263 248,234Authorized : 300,000,000 shares

Issued : 119,944,543 shares

as of March 31 and September 30, 2012

Capital surplus 32,595 32,595 420,038Retained earnings 36,887 39,706 511,675Treasury stock (4,777) (4,777) (61,559)8,690,111 and 8,691,447 shares

as of March 31 and September 30, 2012, respectively

Total shareholders’ equity 83,969 86,787 1,118,389Accumulated other comprehensive loss

Unrealized gain on available-for-sale

securities 5,585 4,346 56,005Deferred gains (losses) on hedges (2) 11 141Foreign currency

translation adjustments (6,451) (7,927) (102,152)

Total accumulated other comprehensive loss (869) (3,569) (45,992)Minority interests 649 658 8,479

Total net assets 83,750 83,877 1,080,889Total liabilities and net assets ¥ 178,361 ¥ 179,689 $ 2,315,579


US$1=¥77.60

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CONSOLIDATED STATEMENTS OF INCOMEMakino Milling Machine Co., Ltd. and Consolidated Subsidiaries For the six months ended September 30, 2011 and 2012


dollars

Six months ended September 30, 2011



Net sales ¥ 52,161 ¥ 61,231 $ 789,059Cost of sales 37,821 43,745 563,724

Gross profit 14,339 17,486 225,335

Selling, general and administrative expenses 11,583 12,757 164,394Operating income 2,756 4,729 60,940

Other income (expenses):Interest and dividend income 152 130 1,675Interest expense (411) (451) (5,811)Gain on sales of property, plant and equipment 29 49 631Exchange gain (loss), net (404) (539) (6,945)Other, net (65) 193 2,487

Income (loss) before income taxes 2,056 4,111 52,976Income taxes (Note 2) 564 829 10,682Income before minority interests 1,492 3,282 42,293Minority interests in earnings (losses) of consolidated subsidiaries 23 26 335Net income ¥ 1,468 ¥ 3,255 $ 41,945

Yen Dollars

Per share of common stock:Net income ¥ 13.20 ¥ 29.26 $ 0.37

US$1=¥77.60

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEMakino Milling Machine Co., Ltd. and Consolidated Subsidiaries For the six months ended September 30, 2011 and 2012


dollars




Income before minority interests ¥ 1,492 ¥ 3,282 $ 42,293Other comprehensive loss:

Unrealized gain (loss) on available-for-sale securities (1,016) (1,239) (15,966)Deferred gains (losses) on hedges 51 14 180Foreign currency translation adjustments (2,629) (1,477) (19,033)

Other comprehensive loss: (3,594) (2,702) (34,819)Total comprehensive income (loss) ¥ (2,101) ¥ 579 $ 7,461

Total comprehensive income (loss) attributable to:Owners of the parent (2,122) 555 7,152Minority interests 20 24 309

¥ (2,101) ¥ 579 $ 7,461

US$1=¥77.60

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CONSOLIDATED STATEMENTS OF CASH FLOWSMakino Milling Machine Co., Ltd. and Consolidated Subsidiaries For the six months ended September 30, 2011 and 2012

US$1=¥77.60


dollars




Cash flows from operating activities:

Income before income taxes ¥ 2,056 ¥ 4,111 $ 52,976

Adjustments for:

Income taxes (paid) refund (692) (826) (10,644)

Depreciation and amortization 1,626 1,785 23,002

Amortization of goodwill (11) (11) (141)

Increase (decrease) in allowance for

directors’ and corporate auditors’ retirement benefits (279) 4 51

Increase (decrease) in allowance for employees’ retirement benefits 29 (57) (734)

Increase (decrease) in allowance for doubtful accounts (167) (40) (515)

(Gain) loss on sales of property, plant and equipment (29) (49) (631)

(Increase) decrease in notes and accounts receivable, trade (1,003) (5,349) (68,930)

(Increase) decrease in inventories (7,791) (908) (11,701)

Increase (decrease) in notes and accounts payable, trade (979) (284) (3,659)

Other, net 760 2,670 34,407

Net cash provided by (used in) operating activities (6,482) 1,042 13,427

Cash flows from investing activities:

(Increase) decrease in time deposits 0 (265) (3,414)

Purchases of property, plant and equipment (1,831) (2,262) (29,149)

Proceeds from sales of property, plant and equipment 143 105 1,353

Other, net (172) (158) (2,036)

Net cash provided by (used in) investing activities (1,861) (2,580) (33,247)

Cash flows from financing activities:

Increase (decrease) in short-term loans, net 1,232 2,425 31,250

Repayment of lease obligations (464) (249) (3,208)

Proceeds from long-term loans payable — 2,300 29,639

Repayment of long-term loans payable (1,472) (1,535) (19,780)

Purchases of treasury stock (2) (0) (7)

Purchases of treasury stock of subsidiaries in consolidation — (14) (180)

Dividends paid (441) (443) (5,708)

Net cash provided by (used in) financing activities (1,148) 2,482 31,984

Effect of exchange rate changes on cash and cash equivalents (1,158) (803) (10,347)

Net increase (decrease) in cash and cash equivalents (10,651) 140 1,804

Cash and cash equivalents, beginning of period 36,604 27,888 359,381

Cash and cash equivalents, end of period (Note 5) ¥ 25,952 ¥ 28,028 $ 361,185

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1. Basis of Presenting Financial Statements The accompanying consolidated financial statements of Makino Milling Machine Co., Ltd. (the “Company”) have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles and practices generally accepted and applied in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards. In preparing the consolidated financial statements, certain reclassifications and rearrangements have been made to the financial statements issued domestically in Japan in order to present these statements in a form, which is more familiar to the readers outside Japan. In addition, the notes to the consolidated financial statements include information, which is not required under generally accepted accounting principles and practices in Japan but is presented herein as additional information. Amounts of less than one million yen have been omitted as permitted under generally accepted accounting principles and practices in Japan. As a result, the totals shown in the accompanying consolidated financial statements (both in yen and dollars) do not necessarily agree with the sum of individual amounts. The United States dollar amounts presented in the accompanying consolidated financial statements are included solely for convenience and are stated, as a matter of arithmetical computation only, at the rate of ¥77.60 = US$1, which was the prevailing exchange rate on September 30, 2012.

2. Income TaxesThe Group estimates an annual effective tax rate derived from projected annual income before taxes and calculates interim income taxes by applying the effective tax rate to the income before taxes at the end of each interim period. Effective from April 1, 2012, the Company and some of its consolidated subsidiaries adopted the consolidated taxation system.

3. Change in Depreciation MethodEffective from April 1, 2012, the Company and its domestic consolidated subsidiaries changed the depreciation method for property, plant and equipment purchased on or after April 1, 2012 due to an amendment to the Corporation Tax Act. This change had no significant impact on the Group’s results of operations for the six months ended September 30, 2012.

4. DividendsA summary of information regarding dividends is as follows:(1) Dividends paid in the six months ended September 30, 2011

Resolution Class of shares Amount of dividends

Dividend per share

Funds for dividends Record date Effective date

General shareholders’ meeting (June 23, 2011)

Common stock¥445 million ¥4.00 Retained

earnings March 31, 2011 June 24, 2011$5,734 thousand $0.05

(2) Dividends in respect of the six months ended September 30, 2011 which become payable after the balance sheet date


Dividend per share


Board of directors (October 31,2011) Common stock

¥445 million ¥4.00 Retained earnings

September 30, 2011

December 5, 2011$5,734 thousand $0.05

(3) Dividends paid in the six months ended september 30, 2012


Dividend per share


General shareholders’ meeting (June 22, 2012)

Common stock¥445 million ¥4.00 Retained

earnings March 31, 2012 June 25, 2012$5,734 thousand $0.05

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMakino Milling Machine Co., Ltd. and Consolidated Subsidiaries

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(4) Dividends in respect of the six months ended September 30, 2012 which become payable after the balance sheet date


Dividend per share


Board of directors (October 31,2012) Common stock

¥445 million ¥4.00 Retained earnings

September 30, 2012

December 5, 2012$5,734 thousand $0.05

5. Cash FlowsReconciliation of cash and time deposits on the consolidated balance sheets to cash and cash equivalents on the consolidated statements of cash flows is as follows:

As of September 30,


dollars

2011 2012 2012

Cash and time deposits ¥26,062 ¥29,340 $378,092

Marketable securities 2,019 999 12,873

Subtotal 28,081 30,339 390,966

Time deposits with maturities over three months (2,128) (2,312) (29,793)Cash and cash equivalents ¥25,952 ¥28,028 $361,185

6. Segment InformationReportable segment informationThe Group’s reportable segments are defined as individual units where independent financial information is available and which are subject to regular review by the board of directors to evaluate their results and decide the allocation of management resources. The reportable segments are summarized as follows: Reportable segment I is a segment for which Makino Milling Machine Co., Ltd. is responsible. Its main areas are Japan, the Republic of Korea, China, Oceania, Russia, Norway, the United Kingdom, and all other areas not included in reportable segments II, III or IV. Reportable segment II is a segment for which MAKINO ASIA PTE LTD (Singapore) is responsible. Its main areas are China, ASEAN and India. Reportable segment III is a segment for which MAKINO INC. (Mason, Ohio, the United States of America) is responsible. It covers all countries in North and South America. Reportable segment IV is a segment for which MAKINO Europe GmbH (Hamburg, Germany) is responsible. It covers all countries in the European continent except Norway. Income for each reportable segment denotes operating income, and intersegments are based on market prices in general.

Six months ended September 30, 2011 (Millions of yen)

I II III IV Total

Net sales:

External customers ¥25,039 ¥13,272 ¥9,546 ¥4,302 ¥52,161

Intersegment 16,871 3,292 81 86 20,333

Total 41,911 16,565 9,627 4,388 72,494

Segment income (loss) ¥ 1,164 ¥ 988 ¥ 316 ¥ 98 ¥ 2,568

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Six months ended September 30, 2012 (Millions of yen)

I II III IV Total

Net sales:

External customers ¥19,853 ¥21,639 ¥16,144 ¥3,594 ¥61,231

Intersegment 26,839 2,863 93 81 29,878

Total 46,692 24,502 16,237 3,676 91,109

Segment income (loss) ¥ 3,037 ¥ 1,458 ¥ 654 ¥ (240) ¥ 4,909

Six months ended September 30, 2012 (Thousands of dollars)

I II III IV Total

Net sales:

External customers $255,837 $278,853 $208,041 $46,314 $ 789,059

Intersegment 345,863 36,894 1,198 1,043 385,025

Total 601,701 315,747 209,239 47,371 1,174,085

Segment income (loss) $ 39,136 $ 18,788 $ 8,427 $ (3,092) $ 63,260

Reconciliation of reportable segment information to consolidated financial statementsSix months ended September 30

Millions of yen

Thousands of dollars

2011 2012 2012Segment income ¥2,568 ¥4,909 $63,260Elimination 187 179 2,306Consolidated operating income ¥2,756 ¥4,729 $60,940

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3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, JapanPhone : +81-3-3717-1151Fax : +81-3-3725-2105URL : http://www.makino.co.jp/

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makino milling machine co., ltd. · 2020. 1. 23. · makino milling machine co., ltd. and its...

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