Y.A.C.HOLDINGS CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥12.85B
• Operating Income: ¥773M
• Net Income: ¥23M
• EPS: ¥20.04

Income Statement

Balance Sheet

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

Y.A.C. Holdings Co., Ltd. (TSE: 6298) reported FY2026 Q2 consolidated results under JGAAP showing solid topline expansion with revenue of ¥12.85bn, up 13.8% YoY. Gross profit reached ¥3.10bn, implying a gross margin of 24.1%, indicating healthy pricing and/or cost control against cost of sales of ¥8.19bn. Operating income rose 28.5% YoY to ¥0.77bn, outpacing revenue growth and demonstrating positive operating leverage. Ordinary income was ¥0.66bn, below operating income, reflecting net non-operating costs including ¥0.07bn of interest expense and likely other non-operating items. Net income fell sharply by 96.6% YoY to ¥0.37bn, a stark divergence from operating performance that points to sizeable non-operating and/or extraordinary losses and potential tax effects. The DuPont decomposition indicates a net margin of 2.87%, asset turnover of 0.310x, and financial leverage of 2.46x, yielding a calculated ROE of 2.19%. The operating margin is approximately 6.0% (¥0.77bn/¥12.85bn), illustrating improved cost absorption versus revenue growth. Liquidity appears strong with a current ratio of 198% and quick ratio of 190%, supported by current assets of ¥29.76bn versus current liabilities of ¥15.01bn. Capital structure is moderate with total liabilities of ¥23.99bn and total equity of ¥16.85bn, implying a liabilities-to-equity ratio of 1.42x; the implied equity ratio is about 40.6% (equity/assets), despite the reported equity ratio metric displaying 0.0% due to disclosure limitations. Interest coverage is comfortable at roughly 10.7x based on operating income and interest expense. Cash flow statements were not disclosed in this dataset (values presented as zero reflect non-disclosure), so operating cash flow, free cash flow, and cash balances cannot be analyzed. Dividend per share is shown as zero for the period, suggesting no distribution in this interim snapshot; payout and FCF coverage metrics shown as zero should be treated as not available. Overall, the core business shows resilience with expanding revenue and operating profit, but bottom-line volatility from non-operating/extraordinary factors has materially diluted ROE and EPS. Balance sheet strength and liquidity provide a buffer to navigate order timing and project execution risks. The key questions for the outlook are the sustainability of double-digit revenue growth, normalization of non-operating items, and conversion of earnings to cash flow once disclosures are available.

Profitability Analysis

ROE decomposes to 2.19% via net profit margin of 2.87%, asset turnover of 0.310x, and financial leverage of 2.46x. The net margin is depressed relative to the operating margin (~6.0%), indicating material drag below the operating line (non-operating expenses, potential extraordinary losses, and/or tax effects). Gross margin of 24.1% suggests reasonable pricing power and product mix; without historical margin data, we infer some improvement given operating income outpaced sales growth. Operating leverage is positive: operating income growth (+28.5% YoY) exceeded revenue growth (+13.8% YoY), implying better fixed-cost absorption and/or improved mix. Ordinary income of ¥0.66bn versus operating income of ¥0.77bn points to net non-operating expense burden of roughly ¥0.11bn, including ¥0.07bn interest expense and other items (e.g., FX, equity-method, or valuation effects). The gap between ordinary income and net income (¥0.66bn to ¥0.37bn) implies additional below-the-line headwinds (special losses and/or higher tax burden), which diluted ROE despite healthy operating trends. EBITDA-based metrics are not assessable due to undisclosed depreciation/amortization; the reported EBITDA and margin of zero reflect non-disclosure rather than actual zero.

Growth Assessment

Revenue grew 13.8% YoY to ¥12.85bn, reflecting solid demand and/or backlog conversion in the company’s equipment and systems businesses. Operating income rose 28.5% YoY to ¥0.77bn, demonstrating favorable operating leverage from scale and potentially improved product mix. The severe decline in net income (-96.6% YoY to ¥0.37bn) is inconsistent with operating improvements and likely driven by non-operating or extraordinary factors rather than a deterioration in core demand. Sustainability of revenue growth will hinge on order intake, book-to-bill, and backlog execution in semiconductor/FPD/industrial equipment end markets that are inherently cyclical. Profit quality at the operating level appears sound, given margin progression; however, bottom-line quality is currently impaired by below-the-line items. Outlook considerations include normalization of non-operating expenses, stabilization of tax rate effects, and the cadence of large project deliveries. If non-operating headwinds abate, net margin could converge closer to the operating margin, improving ROE; conversely, continued extraordinary charges would cap earnings growth despite revenue expansion.

Financial Health

Total assets are ¥41.50bn and total equity is ¥16.85bn, implying an equity ratio around 40.6% (despite the reported 0.0%, which reflects non-disclosure in the metric field). Total liabilities are ¥23.99bn, resulting in a liabilities-to-equity ratio of 1.42x. Liquidity is strong with current assets of ¥29.76bn and current liabilities of ¥15.01bn, yielding a current ratio of 1.98x and a quick ratio of 1.90x; inventories are modest at ¥1.30bn, suggesting a current asset base dominated by cash, receivables, and other liquid assets (actual cash not disclosed here). Working capital stands at ¥14.75bn, providing flexibility to manage project timing and supply chain needs. Interest expense is ¥0.07bn with operating income of ¥0.77bn, producing interest coverage of about 10.7x and indicating manageable financing costs. The financial leverage factor in DuPont is 2.46x (assets/equity), a moderate level for an equipment/system integrator profile. No cash or debt breakdown is disclosed in this dataset, so short-term debt composition and long-term maturity profile cannot be assessed.

Cash Flow Quality

Operating cash flow, investing cash flow, financing cash flow, and cash/equivalents are not disclosed in the provided data (zeros denote unreported, not actual values). As a result, the OCF/Net Income ratio of 0.00 and FCF of 0 should be treated as not available rather than indicative of poor cash generation. Earnings quality cannot be validated through cash conversion in this period; assessment of working capital movements (receivables collection, inventory turns, advance payments) is not possible from the provided snapshot. Given the project-based nature of the business, quarterly cash flows can be lumpy; alignment of revenue recognition with milestone billings and acceptance tests typically drives volatility in OCF. In the absence of cash flow data, reliance on accrual metrics (margins, operating income) increases uncertainty around the persistence of earnings. Monitoring future disclosures for OCF, capex, and changes in contract assets/liabilities will be important to confirm profit-to-cash conversion.

Dividend Sustainability

Dividend per share is shown as ¥0.00 in this period, with a payout ratio metric of 0.0% that reflects non-disclosure for the interim snapshot. Without cash flow data and with net income depressed by non-operating/extraordinary items, assessing dividend capacity relies on balance-sheet strength and normalized earnings. Liquidity and working capital are ample, but sustainable distributions would require consistent OCF and visibility on non-operating normalization. FCF coverage is shown as 0.00x due to missing data and should not be interpreted as an inability to cover dividends. Policy outlook depends on management’s capital allocation stance and earnings stabilization; interim suspensions or conservative payouts are common in volatile equipment cycles until cash flows normalize.

Risk Assessment

Business Risks:

• Cyclical demand in semiconductor/FPD/industrial equipment end-markets driving order and revenue volatility
• Project execution risk including acceptance timing, change orders, and warranty costs
• Supply chain and component availability affecting lead times and costs
• Pricing pressure from customers amid competitive bidding
• Geopolitical and export control risks impacting cross-border shipments and customer qualification
• FX volatility influencing import costs and overseas revenue translation
• Customer concentration and large-order dependence

Financial Risks:

• Below-the-line volatility (non-operating and extraordinary losses) materially affecting net income
• Interest rate risk on floating-rate borrowings, though current interest burden appears manageable
• Working capital swings inherent to milestone-based projects potentially straining OCF
• Limited visibility on cash balances and capex due to non-disclosure in this dataset
• Tax rate volatility affecting effective tax burden and net profitability

Key Concerns:

• Sharp -96.6% YoY decline in net income despite stronger operating profit, suggesting transitory or significant one-off headwinds
• Lack of cash flow disclosure prevents validation of earnings quality and cash conversion
• Non-operating expense burden (ordinary to net income gap) and tax effects suppressing ROE

Investment Implications

Key Takeaways:

• Topline growth of +13.8% YoY with operating income up +28.5% indicates positive operating leverage
• Gross margin at 24.1% and operating margin around 6.0% reflect reasonable profitability at the core business level
• Net margin of 2.87% and ROE of 2.19% are depressed by non-operating/extraordinary items
• Strong liquidity (current ratio ~1.98x; quick ratio ~1.90x) and moderate leverage (assets/equity 2.46x) support resilience
• Interest coverage of ~10.7x suggests manageable financing costs
• Cash flow metrics are undisclosed; validation of earnings quality awaits future filings

Metrics to Watch:

• Order intake, backlog, and book-to-bill ratio to gauge revenue sustainability
• Gross and operating margin trajectory for evidence of mix and cost control
• Non-operating/extraordinary items and their normalization pathway
• Effective tax rate trends and drivers
• Operating cash flow, capex, and free cash flow for cash conversion assessment
• Working capital movements (receivables, contract assets, advances) and inventory turns
• Interest expense and coverage as rates evolve
• Equity ratio and net debt once cash and debt disclosures are available

Relative Positioning: Within Japanese industrial equipment peers, the company exhibits healthy operating momentum and solid liquidity but underperforms on bottom-line stability and ROE this period due to non-operating and extraordinary headwinds; normalization of below-the-line items and demonstrable cash conversion would be necessary to align with stronger-return peers.

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