SAMCO INC. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥1.53B
• Operating Income: ¥151M
• Net Income: ¥124M
• EPS: ¥15.44

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

Samco Co., Ltd. (TSE: 6387) reported solid FY2026 Q1 results on a standalone JGAAP basis, with revenue of 15.26 and operating income of 1.51, up 19.6% and 29.7% YoY respectively. Gross profit of 6.45 implies a gross margin of 42.3%, supporting a recovery in profitability despite limited disclosure on SG&A components. Operating margin improved to 9.9%, outpacing revenue growth and indicating positive operating leverage in the quarter. Ordinary income was 1.77, and net income reached 1.24, delivering a net margin of 8.1% and a 38.3% YoY increase in bottom line. DuPont decomposition shows net margin of 8.1%, asset turnover of 0.088x (quarterly, based on period-end assets), and financial leverage of 1.31x, resulting in a quarterly ROE of 0.9% (approx. 3.6% annualized if run-rate sustains). Liquidity is very strong, with current assets of 125.22 against current liabilities of 32.15, producing a current ratio of 3.90x and working capital of 93.07. The company holds significant cash and deposits of 69.83 versus reported loans totaling about 10.23 (short-term 10.00 and long-term 0.23), leaving an estimated net cash position around 59.6. Capital structure is conservative with total liabilities of 42.16 against equity of 132.50 (liabilities/equity ~0.32x), and interest coverage is ample at 96.55x per provided ratio. The effective tax rate of roughly 30% appears in line with a domestic statutory range. Cash flow statements, depreciation, R&D, capex, inventory, and dividend details were not disclosed, limiting assessment of earnings quality, FCF, and working capital dynamics. Reported payout ratio of 389.2% is not reliable for this quarter due to missing DPS data and likely timing mismatches between quarterly EPS and annual dividends. EPS (basic) prints at 15.44 JPY, and book value per share is approximately 1,650 JPY, underscoring a robust equity base. Given the equipment-oriented business nature, quarterly asset turnover is naturally low and should be interpreted on an annualized basis. Overall, Q1 shows healthy topline momentum and operating leverage, underpinned by a strong balance sheet and net cash, though the lack of cash flow and capex disclosure constrains a full quality-of-earnings review. Outlook hinges on order intake, backlog conversion, and capex cycles in end-markets, which are not provided here. We acknowledge data limitations and base conclusions solely on the available non-zero disclosures and calculated metrics provided.

Profitability Analysis

ROE decomposition (DuPont): net margin 8.1% × asset turnover 0.088 × leverage 1.31x = ~0.9% quarterly ROE (≈3.6% annualized if performance persists). Gross margin at 42.3% reflects solid pricing and/or favorable mix, with cost of sales of 6.31 against revenue of 15.26. Operating margin is 9.9% (1.51/15.26), improving YoY alongside operating income growth outpacing sales, indicating positive operating leverage. Ordinary income margin is 11.6% (1.77/15.26), supported by modest non-operating gains; note that individual non-operating line items are largely unreported. Net margin is 8.1% (1.24/15.26) with an effective tax rate near 30%, consistent with domestic norms. Margin quality: While gross and operating margins have improved, absence of depreciation, R&D, and SG&A detail (e.g., personnel, rent) limits assessment of fixed-cost absorption and sustainability. Operating leverage: With SG&A of 5.28 relatively contained versus gross profit of 6.45, incremental margins appear healthy; sustainability will depend on demand visibility and potential normalization of SG&A as activity scales. Interest burden is negligible in P/L terms given strong coverage (96.55x) and net cash, leaving profitability primarily driven by core operations.

Growth Assessment

Revenue grew 19.6% YoY to 15.26, indicating renewed demand momentum in Q1. Operating income expanded 29.7% YoY to 1.51, outpacing sales and signaling improved operating efficiency and/or richer mix. Ordinary income rose 38.0% YoY to 1.77 and net income increased 38.3% to 1.24, highlighting broad-based profit recovery through the P/L. Profit quality is supported by core operating gains; however, lack of depreciation/R&D disclosure prevents evaluation of whether higher profits are aided by lower D&A or deferrals. Sustainability: Quarterly asset turnover is low (0.088x) as typical for capital goods, and should be viewed on an annualized basis (~0.35x using simple x4), implying that multi-quarter order conversion will be key for sustaining growth. No order backlog or book-to-bill data are provided, constraining forward visibility. Non-operating contributions are small this quarter, so growth appears predominantly operating-driven. Outlook: With a strong cash reserve and minimal leverage, the company is well-positioned to fulfill orders and invest in growth; that said, end-market cyclicality (semiconductor/industrial equipment context) and timing of shipments may drive quarterly volatility. Absent guidance, we assume moderate demand continuity with margins supported by mix and cost control, but we flag potential normalization as volumes evolve.

Financial Health

Liquidity is strong: current assets 125.22 vs current liabilities 32.15 yields a current ratio of 389.5% (3.90x) and working capital of 93.07. Quick ratio is reported equal to current ratio due to unreported inventories; using disclosed cash (69.83) and receivables (28.49), implied quick resources of 98.32 still comfortably cover current liabilities (32.15), suggesting robust liquidity even after adjusting for the disclosure gap. Solvency: Total liabilities/equity stands at ~0.32x (42.16/132.50), reflecting conservative leverage. Interest-bearing debt identified totals about 10.23 (short-term 10.00, long-term 0.23), while cash and deposits are 69.83, implying net cash of ~59.6. Interest coverage is ample at 96.55x, indicating minimal financial strain from borrowing costs. Asset base: total assets 173.44 with noncurrent assets 52.52 and intangibles 0.35 denote a predominantly tangible asset structure; depreciation is unreported, limiting assessment of future maintenance capex needs. Overall, balance sheet strength is a clear support for operations and any near-term investment or working capital requirements.

Cash Flow Quality

Cash flow statements (OCF, ICF, FCF) are unreported, preventing direct assessment of earnings-to-cash conversion. Working capital detail is partial: receivables are 28.49 and cash is 69.83, but inventories are unreported, precluding a full view of operating cycle dynamics. With no depreciation disclosed, EBITDA and non-cash expense analysis are not feasible. The strong net cash position reduces immediate cash flow risk, but without OCF we cannot validate whether Q1 profit was cash-generative. Free cash flow cannot be calculated due to missing OCF and capex; thus, we refrain from drawing conclusions on FCF coverage of dividends or growth investments. We recommend monitoring receivable collection, any subsequent inventory disclosures, and capital expenditure trends in upcoming quarters to gauge earnings quality.

Dividend Sustainability

Dividend data (DPS, total dividends paid, DOE) are unreported this quarter. The calculated payout ratio of 389.2% appears non-comparable for Q1, likely reflecting a mismatch between quarterly EPS (15.44 JPY) and an annualized dividend assumption; as such, it should not be used to judge sustainability. In absence of DPS, we assess capacity via balance sheet strength: net cash of ~59.6 and low leverage suggest ample flexibility to maintain customary dividends, subject to full-year earnings. FCF coverage cannot be assessed without OCF and capex. Policy outlook is unclear due to lack of disclosure; we will look for management guidance on payout ratio or DOE in subsequent filings. Until then, dividend sustainability should be viewed as supported by balance sheet liquidity but unverified by cash flow metrics.

Risk Assessment

Business Risks:

• Demand cyclicality in capital equipment end-markets (e.g., semiconductor/industrial) can drive volatile orders and shipments
• Mix and pricing fluctuations affecting gross margin sustainability
• Supply chain constraints or lead-time variability impacting delivery and cost of sales
• Customer concentration risk typical of equipment suppliers (not disclosed here)
• Project timing risk causing quarter-to-quarter revenue and profit swings

Financial Risks:

• Limited disclosure on cash flows, capex, and depreciation impedes assessment of earnings quality and reinvestment needs
• Potential working capital swings (receivables/inventories) not fully visible due to unreported items
• Interest rate risk minimal given net cash, but refinancing of short-term loans (10.00) bears monitoring
• Tax rate variability around the ~30% effective rate could affect net income

Key Concerns:

• Absence of OCF/FCF and capex data limits visibility on cash generation and free cash flow
• Unreported inventories obscure operating cycle health and potential margin risk from inventory valuation
• Dividend metrics unreported; reported payout ratio appears unreliable for Q1
• EBITDA and D&A unreported, constraining evaluation of operating cash earnings and maintenance capital needs

Investment Implications

Key Takeaways:

• Solid Q1 with 19.6% YoY revenue growth and 29.7% YoY operating income growth indicates improving demand and operating leverage
• Margins strengthened: gross margin 42.3% and operating margin 9.9%
• Quarterly ROE ~0.9% reflects low asset turnover typical for equipment businesses; annualized ROE would be higher if momentum persists
• Balance sheet strength with net cash ~59.6 and liabilities/equity ~0.32x provides resilience
• Limited cash flow and capex disclosure is the main analytical gap

Metrics to Watch:

• Order backlog and book-to-bill to gauge revenue sustainability
• Operating cash flow and free cash flow conversion versus net income
• Capex and depreciation trends to assess maintenance versus growth investment
• Inventory levels and turns once disclosed, and receivable days
• Operating margin trajectory and SG&A efficiency as volumes scale
• Dividend policy disclosures (DPS, payout ratio, DOE) for clarity on capital returns

Relative Positioning: Within capital equipment peers, Samco’s Q1 shows healthy margin recovery and a conservative balance sheet with net cash, suggesting above-average financial resilience; however, limited disclosure on cash flow and investment intensity places it at a transparency disadvantage versus peers with fuller reporting.

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