Rezil Inc. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥16.06B
• Operating Income: ¥1.54B
• Net Income: ¥1.04B
• EPS: ¥29.96

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

レジル株式会社 reported strong top-line momentum in FY2026 Q1 with revenue of ¥16.06bn, up 27.6% year over year, indicating robust demand or successful expansion initiatives. Gross profit was disclosed at ¥2.66bn, implying a gross margin of 16.6%, while operating income reached ¥1.54bn (+6.2% YoY), translating into an operating margin of roughly 9.6%. Ordinary income was ¥1.51bn, close to operating income, suggesting limited non-operating drag, with interest expense modest at ¥8.1m. Net income came in at ¥574m, down 45.0% YoY, which implies material below-the-line headwinds (e.g., extraordinary items, minority interests, or tax effects), as operating performance improved but did not translate to bottom-line growth. The DuPont profile shows net profit margin of 3.57%, asset turnover of 0.574x, and financial leverage of 2.71x, yielding an ROE of 5.55% for the quarter. Liquidity appears sound with a current ratio of 166% and negligible inventory intensity (inventories ¥55m), supporting working capital flexibility. The balance sheet indicates total assets of ¥28.0bn and equity of ¥10.35bn, implying an equity ratio around 37% (the disclosed 0% equity ratio appears to be an unreported placeholder), and a debt-to-equity of 1.63x, consistent with moderate leverage. Interest coverage is very strong at ~190x on operating income, underscoring limited near-term solvency risk from interest burdens. Cash flow statements were not disclosed (zeros are placeholders), limiting our ability to validate earnings quality and free cash flow conversion for the quarter. Reported tax expense was ¥402m; using ordinary income as a proxy for pre-tax profit implies an effective tax rate in the mid-20s, so the provided 0% effective tax rate appears mechanical from missing cash flow data. The divergence between the disclosed cost of sales and gross profit suggests classification differences or data mapping issues, but the gross margin and operating income figures are internally consistent and are used for analysis. Despite healthy operating momentum, the sharp decline in net income compresses ROE and raises questions about one-off losses or non-operating factors. With dividends undisclosed (DPS 0 placeholder), capital return visibility is limited; retained earnings are likely being prioritized, or disclosure is pending. Overall, the quarter reflects solid operational execution and resilient margins, tempered by bottom-line volatility and limited cash flow disclosure. Balance sheet quality and interest coverage mitigate financial risk, but clarity on extraordinary items and cash generation will be critical to assess sustainability. The outlook hinges on sustaining double-digit revenue growth while stabilizing below-the-line items to translate operating gains into net profit and ROE expansion.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 3.57%
• asset_turnover: 0.574x
• financial_leverage: 2.71x
• calculated_ROE: 5.55%
• interpretation: ROE is modest, driven by decent asset turnover and moderate leverage, but constrained by a thin net margin due to below-the-line headwinds. margin_quality:
• gross_margin: 16.6% (GP ¥2,659.8m on revenue ¥16,059.0m)
• operating_margin: 9.6% (OP ¥1,541.0m)
• ordinary_margin: 9.4% (OI ¥1,511.0m)
• net_margin: 3.57% (NI ¥574.0m)
• commentary: Operating margin expansion versus revenue growth indicates cost discipline and favorable mix. The large gap from operating to net profit signals extraordinary/non-operating items or tax/minority effects weighing on the bottom line. operating_leverage: Revenue grew 27.6% YoY while operating income grew 6.2% YoY, implying negative operating leverage in the quarter (incremental margins compressed). This suggests higher SG&A, strategic investments, or mix effects; however, operating profitability remains solid at ~9.6%.

Growth Assessment

revenue_sustainability: The 27.6% YoY revenue increase suggests strong underlying demand or business expansion. Sustainability will depend on order backlog, retention, and pipeline conversion; disclosure is limited this quarter. profit_quality_and_drivers: Ordinary income near operating income indicates limited non-operating drag from interest or financial items. The sharp decline in net income suggests non-recurring losses, higher tax/minority interest, or extraordinary charges. outlook: If revenue momentum persists and below-the-line volatility normalizes, net margins could recover toward operating performance, supporting ROE improvement. Near-term focus is on confirming whether the net income decline is transitory.

Financial Health

liquidity:

• current_ratio: 166.3% (CA ¥13,306.9m / CL ¥8,003.8m)
• quick_ratio: 165.6% (low inventory intensity with inventories ¥55.2m)
• working_capital: ¥5,303.1m
• assessment: Comfortable short-term liquidity with minimal inventory risk. solvency_and_capital_structure:
• total_assets: ¥27,997.0m
• total_liabilities: ¥16,873.7m
• total_equity: ¥10,345.0m
• equity_ratio_proxy: ≈36.9% (calculated), disclosed 0% likely a placeholder
• debt_to_equity: 1.63x (using total liabilities as proxy for debt under JGAAP)
• interest_coverage: ≈190x (OP ¥1,541.0m / interest expense ¥8.1m)
• assessment: Moderate leverage with excellent interest coverage; solvency risk appears contained.

Cash Flow Quality

earnings_quality: Cash flow data were not disclosed (zeros are placeholders); therefore, operating cash conversion cannot be assessed for this quarter. free_cash_flow: FCF cannot be derived due to missing OCF and capex data; EBITDA is undisclosed. working_capital_dynamics: Given the strong liquidity ratios and low inventories, working capital management appears disciplined, but lack of cash flow statements limits validation of receivables/payables movements.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as 0, indicating non-disclosure rather than policy. With positive earnings but missing cash flow, payout capacity cannot be quantified. FCF_coverage: Not assessable due to unreported operating and investing cash flows. policy_outlook: Without a disclosed dividend policy or history for the period, we cannot infer capital return intentions; retained earnings likely prioritized for growth or balance sheet reinforcement.

Risk Assessment

Business Risks:

• Revenue growth durability amid potential demand normalization after rapid expansion (+27.6% YoY).
• Margin pressure from higher SG&A or strategic investments, given weaker operating leverage.
• Product/service mix shifts that could cap gross margin at mid-teens levels.
• Customer concentration or contract timing risk (not disclosed) that could increase quarterly volatility.

Financial Risks:

• Bottom-line volatility from extraordinary items, minority interests, or tax effects (net income -45% YoY despite OP +6%).
• Data limitations on cash flows preventing assessment of cash conversion and FCF sufficiency.
• Moderate leverage (D/E 1.63x) could constrain flexibility if earnings weaken.
• Potential working capital swings tied to rapid growth affecting liquidity.

Key Concerns:

• Large gap between operating and net income; need clarity on one-off or structural drivers.
• Inconsistency between disclosed cost of sales and gross profit; reliance on reported gross margin for analysis.
• Absence of cash flow disclosure and dividend policy limits assessment of payout sustainability.

Investment Implications

Key Takeaways:

• Strong top-line growth with solid operating profitability (~9.6% OPM).
• ROE at 5.55% is constrained by thin net margin due to below-the-line items.
• Liquidity is comfortable; interest coverage is very strong, mitigating near-term solvency risk.
• Negative operating leverage in the quarter warrants monitoring of cost discipline.
• Data gaps (cash flows, dividend policy) limit confidence in earnings quality assessment.

Metrics to Watch:

• Reconciliation from operating to net income (extraordinary items, minority interest, and tax).
• Order backlog/book-to-bill or pipeline indicators to validate revenue sustainability.
• Operating cash flow and free cash flow conversion versus net income.
• SG&A ratio and incremental margins to assess operating leverage.
• Equity ratio and net debt trends to monitor balance sheet resilience.

Relative Positioning: Compared to typical TSE-listed mid-cap peers, the company exhibits faster revenue growth and strong operating margins with moderate leverage and robust interest coverage, but trails on bottom-line stability and disclosure quality (cash flow and dividend data), resulting in a mid-tier ROE profile.

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