Columbia Works Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥28.70B
• Operating Income: ¥4.89B
• Net Income: ¥1.69B
• EPS: ¥431.00

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Columbia Works (146A0) reported FY2025 Q3 consolidated results under JGAAP showing strong topline and bottom-line momentum, albeit with notable data limitations in cash flow and certain balance sheet detail. Revenue rose 70.5% year over year to ¥28.7bn, indicating a sharp acceleration in business activity and successful execution in core operations. Operating income increased 61.4% YoY to ¥4.891bn, implying some operating margin compression despite scale benefits. Net income grew 76.6% YoY to ¥2.992bn, lifting the net margin to 10.43%, supported by robust operating performance and manageable financing costs. DuPont decomposition indicates ROE of 20.34%, driven by a healthy net margin (10.43%), moderate asset turnover (0.486x), and elevated financial leverage (4.01x). Liquidity appears strong with a current ratio of 4.47x and working capital of ¥31.65bn, suggesting ample short-term flexibility. The capital structure shows total liabilities of ¥40.09bn and total equity of ¥14.71bn, implying a debt-to-equity ratio of 2.73x and an equity ratio of approximately 24.9% (reconstructed from the balance sheet despite the reported 0.0% equity ratio). Interest expense was ¥265m, yielding an interest coverage of roughly 18.5x on operating income, which is comfortable. Ordinary income of ¥4.241bn sits below operating income, indicating net non-operating expenses (likely interest and other items) of roughly ¥0.65bn. The effective tax burden calculated from disclosed figures is around 23.6% (¥1.002bn tax on approximately ¥4.241bn pre-tax), despite a 0.0% effective tax rate shown in the provided derived metrics. Some internal inconsistencies exist: reported gross profit (¥4.321bn) is lower than operating income, and revenue minus cost of sales does not reconcile to the stated gross profit, suggesting classification differences or partial disclosure. Cash flow statements (OCF/ICF/FCF) are unreported in XBRL and thus appear as zero; dividend data and per-share metrics are also unreported. Given these gaps, assessment focuses on the non-zero, disclosed core P/L and balance sheet items. Overall, the company exhibits strong profitability and improving scale, supported by adequate liquidity and manageable financing costs, but leverage is meaningful and cash flow quality cannot be verified due to disclosure gaps. The sustainability of growth and margins will depend on maintaining pricing/volume mix, controlling cost inflation, and managing non-operating expenses. Monitoring working capital dynamics is important given rapid growth and a large current asset base.

Profitability Analysis

ROE decomposition: ROE 20.34% = Net margin 10.43% × Asset turnover 0.486 × Financial leverage 4.01. The ROE is balanced between margin strength and leverage, with moderate asset efficiency. margin quality: Net profit margin is 10.43%. Reported gross margin is 15.1% (¥4.321bn/¥28.7bn), but gross profit being below operating income suggests classification anomalies; therefore operating margin (17.1%) appears the more reliable profitability indicator. Ordinary income (¥4.241bn) implies some drag from non-operating items (¥0.65bn). Effective tax rate inferred at ~23.6%. operating_leverage: Revenue +70.5% YoY vs operating income +61.4% YoY suggests modest margin compression, implying that incremental costs (e.g., SG&A, logistics, input costs) partially offset scale benefits. Nevertheless, double-digit operating margin indicates solid cost control in aggregate.

Growth Assessment

revenue_sustainability: Revenue surged to ¥28.7bn (+70.5% YoY), indicating strong demand and/or successful expansion. Sustainability will hinge on repeatability of demand drivers, contract retention, and market conditions. profit_quality: Operating income growth (+61.4% YoY) lagged revenue growth, pointing to some dilution in operating margin. Ordinary income below operating income indicates non-operating headwinds (interest and other). Net income growth (+76.6% YoY) is strong, but without OCF data, earnings-to-cash conversion cannot be validated. outlook: With a 10.43% net margin and strong ROE (20.34%), the company is positioned well if growth persists. Key sensitivities are input cost inflation, pricing discipline, and the trajectory of non-operating expenses amid a leveraged balance sheet.

Financial Health

liquidity: Current assets ¥40.764bn vs current liabilities ¥9.117bn yields a current ratio of 4.47x and working capital of ¥31.65bn, indicating strong short-term liquidity. Quick ratio is shown as 4.47x due to inventories being unreported. solvency: Total liabilities ¥40.085bn vs total equity ¥14.708bn yields debt-to-equity of 2.73x. Reconstructed equity ratio is ~24.9% (¥14.708bn/¥59.002bn), despite a reported 0.0% figure, indicating moderate leverage. capital_structure: Financial leverage (assets/equity) at 4.01x underpins ROE but elevates sensitivity to interest costs and refinancing conditions. Interest coverage of ~18.5x (OI/interest) is comfortable at current earnings levels.

Cash Flow Quality

earnings_quality: OCF is unreported (displayed as zero in the dataset), so OCF/Net Income cannot be interpreted. As a result, the conversion of earnings to cash and the sustainability of margins cannot be corroborated. FCF_analysis: Free cash flow is unreported. Given rapid growth, potential working capital absorption (receivables, inventory) could be material; absent disclosure, FCF coverage of growth investments remains uncertain. working_capital: Current assets are large at ¥40.764bn relative to current liabilities at ¥9.117bn. Without receivables/inventory breakdown, the quality and velocity of working capital are unknown; monitoring DSO/DIO/CCC is important once disclosed.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are unreported (displayed as zero). Based on earnings of ¥2.992bn, the capacity to fund dividends exists in principle, but absence of cash flow data limits assessment. FCF_coverage: FCF is unreported; thus, dividend coverage by FCF cannot be evaluated. policy_outlook: No dividend policy information is provided. If management targets balance sheet reinforcement given 2.73x D/E, retained earnings may be prioritized until cash flow visibility improves.

Risk Assessment

Business Risks:

• Margin pressure from input cost inflation and logistics costs amid rapid scale-up
• Dependence on sustaining elevated growth rates to maintain operating leverage
• Customer concentration or contract renewal risk (not disclosed)
• Supply chain and procurement volatility impacting gross margins
• Competitive pricing dynamics potentially eroding margins

Financial Risks:

• Moderate-to-high leverage (D/E 2.73x; financial leverage 4.01x) increasing sensitivity to interest rates
• Non-operating expense drag (ordinary income below operating income by ~¥0.65bn)
• Cash flow visibility is limited due to unreported OCF/FCF
• Refinancing and covenant risks cannot be assessed without debt schedule details

Key Concerns:

• Inability to verify cash generation and working capital trends due to unreported cash flow statements
• Apparent inconsistency between revenue, cost of sales, and gross profit suggests classification differences
• Potential operating margin compression as growth outpaces cost efficiencies

Investment Implications

Key Takeaways:

• Topline grew 70.5% YoY to ¥28.7bn with strong operating and net income growth
• ROE of 20.34% supported by 10.43% net margin and 4.01x financial leverage
• Operating margin appears solid (~17.1%) but likely compressed YoY
• Liquidity robust (current ratio 4.47x; working capital ¥31.65bn)
• Leverage is meaningful (D/E 2.73x; equity ratio ~24.9%) but interest coverage is comfortable (~18.5x)
• Non-operating expenses weigh on ordinary income relative to operating income
• Cash flow data absent; dividend data not disclosed

Metrics to Watch:

• Operating margin trend vs gross margin once classifications are clarified
• OCF, FCF, and working capital metrics (DSO, DPO, DIO, CCC) when disclosed
• Net debt/EBITDA (requires EBITDA and debt detail) and interest coverage trajectory
• Ordinary income components (interest and other non-operating items)
• Equity ratio and D/E movement as earnings are retained
• Revenue growth mix (price vs volume) and customer diversification

Relative Positioning: Based on disclosed metrics, the company exhibits above-market growth and strong ROE supported by leverage, with liquidity strength but limited cash flow transparency; margin classification differences and reliance on leverage temper the quality assessment relative to best-in-class peers with fully reconciled cash generation.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis