LIFEDRINK COMPANY,INC. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥28.67B
• Operating Income: ¥3.54B
• Net Income: ¥2.08B
• EPS: ¥45.26

Income Statement

Balance Sheet

Cash Flow Statement

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

Life Drink Company (TSE: 25850) delivered solid top- and bottom-line growth in FY2026 Q2 on a consolidated JGAAP basis, with revenue of ¥28.7bn up 19.0% YoY and operating income of ¥3.54bn up 15.5% YoY. Gross profit of ¥10.48bn implies a healthy gross margin of 36.6%, supporting an operating margin of 12.3% and net margin of 8.25%. Ordinary income of ¥3.47bn sits slightly below operating income, reflecting modest net non-operating costs including ¥48m of interest expense. EPS was ¥45.26, underpinned by disciplined cost control and pricing/mix resilience. DuPont metrics indicate a robust ROE of 15.2%, driven by an 8.25% net margin, asset turnover of 0.741x, and financial leverage of 2.49x. Balance sheet strength appears sound with total assets of ¥38.7bn and total equity of ¥15.6bn; the implied equity ratio is roughly 40.2% (equity/assets), despite a reported equity ratio of 0.0% which should be treated as undisclosed. Liquidity is adequate with a current ratio of 115% and a quick ratio of 94%, while working capital stands at ¥1.63bn. The company’s interest coverage is very strong at 73.7x, reflecting conservative debt service exposure. Operating cash flow of ¥3.38bn exceeds net income (OCF/NI of 1.43x), signaling good earnings-to-cash conversion; depreciation of ¥872m further supports cash generation quality. Free cash flow cannot be determined due to unreported investing cash flow, so capital intensity and growth capex needs should be monitored. Dividend data are not disclosed for the period (DPS and payout show 0, which indicates unreported), so dividend capacity assessment relies on earnings and OCF. Leverage measured as total liabilities to equity is 1.22x, consistent with a balanced capital structure. Overall profitability and cash conversion trends are favorable, but full assessment is constrained by missing capex/FCF and cash balance details. The outlook depends on sustaining revenue growth, managing input costs, and maintaining pricing power in beverages. Data limitations (equity ratio, C&E, investing CF, dividend figures) should be noted when interpreting ratios derived from incomplete disclosures.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.25%
• asset_turnover: 0.741x
• financial_leverage: 2.49x
• calculated_ROE: 15.2%
• drivers_commentary: ROE is primarily supported by a solid margin structure and moderate asset efficiency; leverage is not excessive, indicating quality-driven returns rather than debt amplification. margin_quality:
• gross_margin: 36.6%
• operating_margin: 12.3%
• ordinary_margin: 12.1%
• net_margin: 8.25%
• assessment: Margin profile is healthy for a beverage/consumer staples producer, with gross-to-operating drop-through indicating disciplined overhead control and pricing/mix resilience. Ordinary margin close to operating margin suggests limited non-operating drag. operating_leverage: Revenue grew 19.0% YoY while operating income grew 15.5% YoY, indicating modest negative operating leverage in the quarter/half (costs grew slightly faster than sales), but absolute margins remain solid; further scale benefits depend on cost inflation and utilization.

Growth Assessment

revenue_sustainability: 19.0% YoY revenue growth implies strong demand and/or price/mix; sustainability will hinge on repeat purchase dynamics, channel expansion, and price elasticity under consumer conditions. profit_quality: Operating income growth of 15.5% trails revenue growth, implying some cost pressure (possibly raw materials, logistics, or energy). Nonetheless, net margin at 8.25% and strong coverage ratios indicate resilient profitability. outlook: Near-term growth should remain supported by brand penetration and potential capacity utilization gains, subject to input cost volatility and competitive pricing. Monitoring gross margin stability and SG&A discipline will be key to sustaining double-digit ROE.

Financial Health

liquidity:

• current_ratio: 115.1%
• quick_ratio: 94.2%
• working_capital: ¥1,632m
• commentary: Liquidity is adequate with near-par quick coverage, suggesting manageable short-term obligations; inventory (¥2,254m) is a material component, typical for the category. solvency:
• total_assets: ¥38,703m
• total_equity: ¥15,561m
• total_liabilities: ¥18,976m
• debt_to_equity_total_liabilities_basis: 1.22x
• equity_ratio_implied: ≈40.2% (equity/assets)
• interest_coverage: 73.7x (operating income/interest expense)
• commentary: The implied equity buffer near 40% and high interest coverage indicate conservative solvency risk. Liability load is balanced relative to equity. capital_structure: Leverage is moderate, with financial flexibility supported by strong operating earnings. Absence of disclosed cash and gross debt details limits net leverage assessment.

Cash Flow Quality

earnings_quality:

• OCF: ¥3,375m
• net_income: ¥2,365m
• OCF_to_NI: 1.43x
• depreciation_amortization: ¥872m
• commentary: OCF comfortably exceeds net income, and D&A provides a meaningful non-cash component, indicating solid cash realization of earnings. FCF_analysis:
• free_cash_flow: Not determinable (investing CF undisclosed)
• capex_proxy_comment: Capex not disclosed; using D&A as a proxy would be speculative. True FCF and reinvestment intensity cannot be reliably assessed for the period. working_capital: Working capital is positive at ¥1.63bn; OCF suggests manageable WC swings, but detailed inventory/receivables/payables movements are not disclosed.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are not disclosed (zeros indicate undisclosed items). EPS at ¥45.26 suggests capacity for distributions in principle, but policy cannot be inferred here. FCF_coverage: Not assessable due to undisclosed investing cash flows; therefore FCF-based coverage cannot be calculated. policy_outlook: Without disclosure of dividend policy or track record in this period, sustainability assessment is deferred. Retained earnings and strong OCF support optionality for reinvestment or distributions.

Risk Assessment

Business Risks:

• Input cost volatility (PET resin, aluminum, sugar/sweeteners, energy) affecting gross margin.
• Pricing power and competitive intensity in beverages/private label channels.
• Demand elasticity amid consumer spending fluctuations.
• Operational risks: capacity utilization, logistics costs, and plant efficiency.
• Product mix shifts and private label/customer concentration risk.

Financial Risks:

• Interest rate fluctuations, though current coverage is strong.
• Working capital swings impacting OCF seasonally.
• Potential increase in leverage if capex accelerates (capex undisclosed).
• Limited visibility on cash balance and net debt due to undisclosed cash and investing cash flows.

Key Concerns:

• Sustainability of 19% revenue growth against tougher comps.
• Gross margin sensitivity to raw material and energy prices.
• Lack of capex and cash disclosure impeding FCF and net leverage assessment.

Investment Implications

Key Takeaways:

• ROE at 15.2% with strong margins and moderate leverage suggests quality returns.
• OCF exceeds net income (1.43x), supporting earnings quality.
• Liquidity and solvency appear sound with implied equity ratio around 40% and 73.7x interest coverage.
• Operating leverage modestly negative this period; watch cost inflation trajectory.
• Incomplete cash and capex disclosure limits FCF visibility.

Metrics to Watch:

• Gross and operating margin trends versus input cost indices (resin, energy).
• Volume versus price/mix contributions to revenue growth.
• Capex and investing cash flows to gauge reinvestment and FCF.
• Working capital turns (inventory days, receivables/payables days).
• Net leverage once cash and gross debt are disclosed.
• Dividend policy updates and payout guidance.

Relative Positioning: Positioned as a cost-disciplined beverage producer with solid profitability and cash conversion; balance sheet appears conservatively managed, though full competitive benchmarking is constrained by limited disclosure on cash, capex, and dividends in this period.

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