grems,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥17.43B
• Operating Income: ¥3.65B
• Net Income: ¥2.33B
• EPS: ¥108.57

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Glimpse of FY2026 Q2 performance for 株式会社グリムス (consolidated, JGAAP) shows steady top-line expansion with improving operating leverage and robust balance sheet strength. Revenue grew 3.9% YoY to ¥17,425 million, while operating income rose 8.1% YoY to ¥3,647 million, indicating positive operating leverage. Gross profit of ¥5,622 million translates to a gross margin of 32.3%, supporting an operating margin of approximately 20.9%. Ordinary income reached ¥3,705 million and net income ¥2,508 million, yielding a net margin of 14.39%, consistent with the provided DuPont inputs. ROE is a solid 14.37%, driven by a healthy margin profile, moderate asset turnover (0.654x), and modest financial leverage (assets/equity ≈ 1.53x). Liquidity appears strong with a current ratio of about 305% and working capital of roughly ¥14,470 million; however, cash and equivalents were not disclosed in the XBRL. The balance sheet indicates equity of ¥17,448 million against total assets of ¥26,632 million, implying an equity ratio of roughly 65.5% (despite the reported 0.0% placeholder), and total liabilities of ¥9,726 million, keeping leverage low (debt-to-equity ≈ 0.56x using total liabilities as a proxy). Interest burden is minimal (interest expense ¥7.9 million) with extraordinarily high interest coverage (~464x), underscoring low financial risk. Operating cash flow was ¥2,119 million, about 0.84x net income, which is acceptable but suggests some working capital absorption; investing cash flow was not disclosed, so true free cash flow cannot be assessed. The reported effective tax rate of 0.0% is a placeholder; using disclosed income tax (¥1,113 million) and ordinary income as a proxy, the effective tax rate appears around 30%. Dividend figures are not disclosed (DPS and payout shown as 0.00 are placeholders), limiting assessment of shareholder return policy from this dataset alone. Overall, profitability is healthy, cash conversion is reasonable but merits monitoring, and solvency/liquidity are strong. The growth outlook from the numbers suggests stable core demand with incremental margin gains. Data gaps (notably cash, investing flows, detailed working capital breakdown, and dividends) constrain depth of analysis and require caution in interpretation.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 14.39%
• asset_turnover: 0.654
• financial_leverage: 1.53
• calculated_ROE: 14.37%
• comments: ROE is primarily driven by solid margins with moderate asset intensity and modest leverage; equity-heavy capital structure tempers leverage contribution. margin_quality:
• gross_margin: 32.3%
• operating_margin: 20.9% (3,647 / 17,425)
• ordinary_income_margin: 21.3% (3,705 / 17,425)
• net_margin: 14.39%
• tax_rate_note: Reported effective tax rate of 0.0% is a placeholder; implied effective tax rate ≈ 30% using income tax / ordinary income. operating_leverage: Revenue grew +3.9% YoY while operating income rose +8.1% YoY, evidencing positive operating leverage and cost discipline. other_observations: EBITDA of ¥3,745 million (margin 21.5%) and minimal interest expense support strong operating profitability.

Growth Assessment

revenue_sustainability: Top-line growth of +3.9% YoY suggests steady demand; no segment data disclosed to assess mix or one-off effects. profit_quality: Operating income growth outpacing sales indicates improved efficiency or scale benefits; gross margin stability at 32%+ supports sustainability. outlook: Absent guidance and segment detail, baseline expectation is for continued measured growth with margin resilience, contingent on maintaining cost controls and stable demand conditions.

Financial Health

liquidity:

• current_assets: 21518496000
• current_liabilities: 7048659000
• current_ratio: ≈305%
• quick_ratio: ≈305% (inventories not disclosed)
• working_capital: 14469837000
• cash_and_equivalents: Not disclosed in XBRL; actual cash position unknown. solvency:
• total_assets: 26632000000
• total_liabilities: 9725640000
• total_equity: 17448000000
• equity_ratio_implied: ≈65.5% (equity/assets), reported 0.0% is a placeholder
• debt_to_equity: ≈0.56x (using total liabilities as proxy)
• interest_coverage: ≈464x (operating income / interest expense)
• comment: Low leverage and strong coverage indicate ample solvency headroom. capital_structure: Equity-heavy balance sheet with modest liabilities; minimal interest burden suggests limited reliance on interest-bearing debt.

Cash Flow Quality

earnings_quality: OCF/Net Income of ~0.84 indicates reasonable cash conversion but below 1.0, implying some working capital consumption or timing effects. free_cash_flow: True FCF cannot be derived as investing cash flows (and capex) were not disclosed; reported FCF of 0 is a placeholder. working_capital: Strong absolute working capital (≈¥14.47bn); the OCF/NI ratio suggests WC movements weighed on cash generation in the period. other: Financing CF outflow of ¥1,162 million points to debt repayment and/or shareholder returns, but the split is not disclosed.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout are not disclosed (zeros are placeholders). With EPS at ¥108.57 and solid profitability, capacity for distributions exists, but policy cannot be inferred from the provided data. FCF_coverage: Cannot assess due to lack of capex/investing CF disclosure. policy_outlook: No guidance provided; evaluate management’s historical stance and upcoming disclosures for clarity on payout intentions and balance between growth investment and returns.

Risk Assessment

Business Risks:

• Revenue concentration risks or contract renewal exposure (no segment/customer disclosure provided).
• Potential margin pressure from input cost fluctuations or pricing competition.
• Regulatory or policy changes affecting the company’s end markets (details undisclosed).
• Execution risk in scaling operations while sustaining margin improvements.

Financial Risks:

• Working capital volatility impacting cash conversion (OCF/NI at ~0.84).
• Uncertainty around actual cash balance due to non-disclosure of cash and equivalents.
• Potential refinancing or repayment timing risks not visible given limited debt detail (though interest burden is minimal).

Key Concerns:

• Data gaps: cash, investing cash flows/capex, dividend details, and equity ratio disclosure.
• Sustainability of operating leverage if growth slows.
• Tax rate normalization effects on net margins (implied ~30% tax vs placeholder 0%).

Investment Implications

Key Takeaways:

• Steady growth with improving operating leverage: +3.9% revenue and +8.1% operating income YoY.
• Healthy profitability: operating margin ~20.9%, net margin 14.39%, ROE 14.37%.
• Strong balance sheet: implied equity ratio ~65.5%, low leverage (liabilities/equity ~0.56x), very high interest coverage.
• Reasonable but sub-1.0 cash conversion (OCF/NI ~0.84); monitor working capital dynamics.
• Dividend and capex data not disclosed; true FCF and payout sustainability cannot be assessed from this dataset.

Metrics to Watch:

• Working capital components (receivables/payables days) and OCF/NI trend.
• Capex and investing cash flows to assess FCF and growth reinvestment.
• Order intake/backlog or contract wins to gauge revenue visibility.
• Gross and operating margin trajectory for signs of sustained operating leverage.
• Actual equity ratio/cash balance disclosures and any changes in financing cash flows.
• Effective tax rate and its impact on net margin and EPS.

Relative Positioning: Within Japanese small/mid-cap peers, the company appears to exhibit above-average margins, strong solvency, and disciplined cost control, albeit with limited disclosure on cash, capex, and dividends that tempers comparative visibility.

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