miratap inc. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥16.75B
• Operating Income: ¥-282M
• Net Income: ¥-438M
• EPS: ¥-24.55

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

Q4 FY2025 was weak: revenue grew modestly but cost pressure and high SG&A kept the company in the red with negative operating and net income. Revenue rose 3.9% YoY to 167.46, while operating loss widened to -2.82 (YoY -21.1%). Gross profit was 58.47, implying a gross margin of 34.9%, but SG&A of 61.29 (36.6% of sales) exceeded gross profit, resulting in an operating loss. Operating margin was -1.7% and ordinary margin was -1.7%, with net margin at -2.7%. Ordinary income came in at -2.91 (YoY -23.3%), and net income was -4.47 (YoY improvement in absolute terms, but still a loss). Cash generation was weak: operating CF was -0.55, investing CF -7.34, and FCF -7.89, indicating cash burn alongside capital spending and other investments. Liquidity is tight: current ratio is 104.5% and quick ratio 62.3%, with short-term loans of 23.00 exceeding cash of 13.08. Leverage is high at D/E 2.03x, and interest coverage is deeply negative at -8.54x, highlighting debt-servicing strain. ROE was -15.4% per DuPont (NPM -2.7% × AT 1.905 × leverage 3.03x), and ROIC was -4.2%, both signaling value destruction. The SG&A burden relative to sales is the central profitability issue; EBITDA was -0.77 despite 2.05 in D&A. Margin direction appears to have compressed YoY at the operating level (operating loss worsened), though precise bps change cannot be calculated given missing prior-period margin data. Earnings quality is low: OCF/NI is 0.12x, pointing to limited cash backing for reported losses and potential working capital drag. Inventory of 19.61 versus payables of 10.37 suggests cash tied in stock and some working capital risk. Forward-looking, the company needs to reduce SG&A intensity, normalize working capital (especially inventories), and address refinancing risk given the short-term debt load. Without a swift return to positive OCF and lower leverage, dividend capacity remains constrained (DOE 0.1% suggests a token payout only).

Profitability Analysis

ROE decomposition: ROE -15.4% = Net Profit Margin (-2.7%) × Asset Turnover (1.905x) × Financial Leverage (3.03x). The principal drag is the negative net profit margin; asset turnover is relatively healthy for a small cap at 1.9x, and leverage amplifies losses. Operating level metrics show gross margin 34.9% but SG&A ratio 36.6%, driving an operating margin of -1.7%. The year-over-year change is most visible in profitability (operating income -21.1% YoY), implying operating margin compression; limited data prevents quantifying bps change. Business drivers likely include higher personnel/overheads and insufficient revenue scale to cover fixed costs, while depreciation of 2.05 only partially offsets at the EBITDA level (EBITDA -0.77). Interest expense of 0.33 further widens losses below operating line. Sustainability: unless SG&A growth is curbed and pricing/mix improved, negative margins could persist; asset turnover appears sustainable given sales relative to asset base, but may decline if inventories stay elevated. Concerning trends: the SG&A envelope exceeds gross profit, and leverage at 3.03x assets/equity magnifies earnings volatility; interest coverage is negative, leaving little room for execution missteps.

Growth Assessment

Top-line growth of 3.9% YoY to 167.46 is modest and insufficient to absorb the fixed-cost base, as evidenced by the SG&A ratio of 36.6%. Revenue quality is mixed: asset turnover at 1.905x suggests adequate utilization, but elevated inventories (19.61) may indicate demand-supply imbalance or build for future sales. Profit quality is weak with operating margin -1.7% and net margin -2.7%; EBITDA is negative despite non-cash D&A, pointing to limited operating leverage at current scale. ROIC at -4.2% is well below a typical cost of capital, signaling value destruction; recovery requires either gross margin expansion or SG&A reduction of at least 200–300 bps to approach breakeven at the EBIT level. Near-term outlook hinges on cost rationalization, working-capital normalization, and refinancing of short-term loans; absent these, growth will likely remain profit-dilutive. With non-operating income/expenses netting to a small drag, the operating engine must drive improvement, as one-off gains are not evident in the data.

Financial Health

Liquidity is thin: current ratio 1.045 is only marginally above 1.0, and quick ratio 0.623 is below the 1.0 benchmark, signaling reliance on inventory conversion. Explicit warning: D/E 2.03x exceeds the 2.0 threshold, indicating high leverage. Maturity mismatch risk is notable: short-term loans of 23.00 compare to cash of 13.08 and receivables of 9.45; current assets of 48.55 barely cover current liabilities of 46.46. Interest coverage is -8.54x, implying weak capacity to service debt from operations; refinancing and covenant risks may be present. Noncurrent liabilities are 12.41, with long-term loans 5.63, suggesting a skew to short-term funding. No off-balance sheet commitments are disclosed in the provided data; absence of disclosure does not imply absence of obligations.

Cash Flow Quality

OCF of -0.55 versus net income of -4.47 yields OCF/NI of 0.12x, below the 0.8 threshold and indicating low cash conversion even relative to a loss year. FCF is -7.89, reflecting OCF -0.55 and investing outflows -7.34 (including capex -2.86 and likely other investments). With financing CF of +0.55 and share repurchases of -1.00, cash usage exceeded internal generation, increasing dependence on external funding. Working capital signs: inventories (19.61) are large versus payables (10.37) and receivables (9.45), implying cash is tied up; this aligns with negative OCF. No clear signs of quarter-end working capital pull-forward are identifiable from static data, but the inventory build is a risk to future OCF if sell-through lags. Sustaining dividends or incremental capex under current FCF is not feasible without additional financing or asset divestments.

Dividend Sustainability

Dividends are largely unreported; DOE of 0.1% suggests a minimal payout. Calculated payout ratios are not meaningful with negative earnings (computed payout -43.1% is not economically interpretable). FCF coverage is -4.10x, indicating cash outflows exceed operating inflows and capex, leaving no coverage for distributions. Given negative NI, negative OCF, and high leverage, dividend sustainability is weak near term; prudent policy would emphasize balance sheet repair over distributions. Outlook: any dividend continuation likely remains token-sized until OCF turns positive and D/E decreases toward <1.5x.

Risk Assessment

Business Risks:

• Persistent operating losses due to SG&A exceeding gross profit (operating margin -1.7%)
• Inventory risk (19.61) relative to receivables and sales, raising obsolescence and markdown risk
• Execution risk on cost reduction and monetization needed to lift ROIC from -4.2%
• Potential customer demand softness implied by limited operating leverage

Financial Risks:

• High leverage: D/E 2.03x (above warning threshold) and assets/equity 3.03x
• Liquidity tightness: current ratio 1.045, quick ratio 0.623, and short-term loans 23.00 vs cash 13.08
• Debt service strain: interest coverage -8.54x; reliance on refinancing of short-term debt
• Negative FCF (-7.89) necessitating external funding or balance sheet actions

Key Concerns:

• Earnings quality: OCF/NI 0.12x indicates poor cash backing
• Tax expense despite loss (effective rate ~33%) suggests deferred tax valuation allowance or nondeductible items risk
• Sensitivity to interest rate increases given floating-rate exposure is common for short-term loans
• Data gaps (e.g., SG&A breakdown, dividend details) limit visibility into cost drivers and capital allocation

Investment Implications

Key Takeaways:

• Top-line grew 3.9%, but negative operating and net margins persist
• SG&A intensity (36.6% of sales) above gross margin (34.9%) is the primary loss driver
• Leverage and liquidity metrics are stretched (D/E 2.03x, quick ratio 0.62)
• Cash burn evident with FCF -7.89 and OCF/NI 0.12x
• ROE -15.4% and ROIC -4.2% indicate value destruction requiring restructuring or scale-up

Metrics to Watch:

• Operating margin progression and SG&A-to-sales ratio (target: reduce below gross margin)
• OCF and inventory turns (inventory relative to sales and payables)
• Net debt and short-term debt rollover profile; interest coverage improvement
• ROIC trend versus a 7–8% target threshold
• Current and quick ratios to gauge near-term liquidity resilience

Relative Positioning: Within small-cap peers, the company exhibits weaker profitability and cash generation, higher financial leverage, and tighter liquidity; near-term performance hinges on cost containment and working-capital normalization rather than growth-led margin expansion.

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