MIMAKI ENGINEERING CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥39.38B
• Operating Income: ¥3.99B
• Net Income: ¥3.27B
• EPS: ¥95.21

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

MIMAKI ENGINEERING CO., LTD. reported FY2026 Q2 (cumulative) revenue of ¥39.38bn, down 3.8% YoY, indicating softer demand or a less favorable product/geographic mix versus the prior year. Despite the top-line contraction, the company maintained a high gross margin of 48.6%, underscoring a value-added product mix and pricing discipline in industrial inkjet and related solutions. Operating income declined 15.1% YoY to ¥3.99bn, with an operating margin of approximately 10.1%, highlighting operating deleverage as fixed costs weighed more heavily on a lower revenue base. Ordinary income of ¥3.76bn was below operating income, reflecting net non-operating expense, primarily interest expense of ¥235m. Net income declined 15.3% YoY to ¥2.75bn, translating to a net margin of 6.99% and EPS of ¥95.21. DuPont decomposition yields a calculated ROE of 7.88% (net margin 6.99% × asset turnover 0.513 × financial leverage 2.20), which is moderate for a mid-cap industrial technology company. The balance sheet shows total assets of ¥76.72bn and total equity of ¥34.93bn, implying an equity ratio of roughly 45.5% (though equity ratio was not disclosed in the metrics table). Liquidity is solid with a current ratio of 154.5% and quick ratio of 109.3%, supported by working capital of ¥20.31bn. Inventories stand at ¥16.85bn; against H1 COGS of ¥21.82bn, this suggests an annualized inventory turnover of roughly 2.6x (about 140 days), warranting monitoring amid slower sales. Interest coverage is healthy at about 17x, indicating ample headroom against current financing costs. Based on income tax expense of ¥1.06bn and profit levels, the effective tax rate appears around the high-20% range, despite the tabular “0.0%” indicator. Cash flow statements and D&A were not disclosed in the dataset (zeros represent unreported, not actual zero), limiting cash conversion and FCF analysis; EBITDA is therefore not meaningfully interpretable from the provided figures. Capital structure appears moderate with a liabilities-to-equity ratio near 1.25x, consistent with balanced leverage. Dividends were not disclosed (DPS and payout shown as zero), so policy and sustainability cannot be inferred from this release alone. Overall, the company exhibits resilient gross profitability and solid liquidity, but softer revenue and operating deleverage compressed earnings, and elevated inventories increase execution risk if demand softness persists. Data limitations on cash flows and D&A require cautious interpretation of earnings quality until full disclosures are available.

Profitability Analysis

ROE is estimated at 7.88%, decomposed into a 6.99% net margin, 0.513x asset turnover, and 2.20x financial leverage. The gross margin of 48.6% is strong for the sector, signaling pricing power and/or favorable mix in hardware, inks, and consumables. Operating margin of ~10.1% lagged the gross margin expansion potential due to SG&A and R&D intensity, and operating income fell 15.1% YoY on a 3.8% revenue decline, evidencing operating deleverage. Ordinary income was impacted by net non-operating costs, chiefly ¥234.8m in interest expense, partially offset by other non-operating items. Net margin of 6.99% reflects both operating deleverage and financing/tax headwinds. With revenue/assets at 0.513x, asset turnover is moderate; inventory levels suggest a working-capital-heavy model that can suppress turnover when demand softens. Implied tax burden is in the high-20% range based on ¥1.06bn tax on pre-tax profit, though the reported “effective tax rate” figure is not representative due to non-disclosure artifacts. Overall profitability remains solid but below prior-year levels as lower sales translated into a larger percentage decline in operating profit.

Growth Assessment

Revenue declined 3.8% YoY to ¥39.38bn, indicating a pause in growth amid macro or end-market softness. Profit declines (OP -15.1%, NI -15.3%) were larger than the topline contraction, consistent with operating deleverage and potentially higher fixed cost absorption. The strong gross margin suggests core product economics remain intact, but lower throughput and mix effects pressured operating margins. With inventories elevated relative to H1 COGS, near-term growth may depend on demand normalization and successful sell-through of existing stock. Ordinary income trailing operating income points to a modest drag from financing costs, which could continue if rates remain elevated. Without order/backlog disclosures, revenue visibility is limited; watch incoming orders, regional performance, and consumables attachment rates. Absent cash flow data, we cannot confirm cash conversion, which is a key ingredient for sustaining growth investments. Near-term outlook hinges on macro conditions in industrial printing, capex appetite among SMEs, and currency moves affecting export competitiveness and translation.

Financial Health

Total assets ¥76.72bn, total equity ¥34.93bn; implied equity ratio ~45.5%. Total liabilities ¥43.80bn, of which current liabilities ¥37.29bn, yielding a manageable liabilities-to-equity ratio of ~1.25x. Liquidity is strong: current ratio 154.5% and quick ratio 109.3%, supported by working capital of ¥20.31bn. Inventory of ¥16.85bn is sizable; against H1 COGS, annualized turnover is roughly 2.6x, indicating moderate working capital intensity. Interest coverage of ~17x provides ample cushion against financing costs. The capital structure appears balanced with no indication of excessive leverage; however, detailed debt maturity and interest rate mix were not disclosed. Equity base supports ongoing operations and investment needs, contingent on maintaining cash generation.

Cash Flow Quality

Operating, investing, and financing cash flows were not disclosed in the provided data (zeros indicate unreported), preventing a direct assessment of cash conversion, capex intensity, or free cash flow. As a proxy, earnings quality appears mixed: high gross margins support underlying economics, but operating deleverage and elevated inventories raise the risk of working capital absorption. Without D&A disclosure, EBITDA and non-cash expense mix cannot be assessed. Free cash flow cannot be calculated, and OCF/NI ratio shown as 0.00 is not interpretable. Key variables for cash flow quality will be inventory normalization, receivables collection, and the cadence of capex versus R&D/SG&A in support of new product cycles.

Dividend Sustainability

Dividend per share and payout ratio are shown as zero, indicating dividends were not disclosed in this dataset. In the absence of cash flow disclosure, FCF coverage cannot be assessed. From an earnings standpoint, net income of ¥2.75bn would ordinarily provide room for distributions if policy permits, given moderate leverage and solid liquidity. However, inventory levels and operating deleverage argue for a conservative stance until cash conversion is evidenced. Dividend sustainability and policy outlook should be revisited upon release of full cash flow statements and management guidance.

Risk Assessment

Business Risks:

• Demand cyclicality in industrial inkjet/capital goods end-markets
• Product mix and pricing pressure from competitors
• Channel and geographic exposure, including Europe/USA currency-driven volatility
• Inventory obsolescence risk amid slower sales or rapid model cycles
• Supply chain constraints affecting component availability and lead times
• Technological disruption and need for sustained R&D to maintain differentiation

Financial Risks:

• Operating deleverage if revenue softness persists
• Working capital absorption from elevated inventories and receivables
• Interest expense drag (ordinary income below operating income)
• FX translation and transaction impacts on margins and earnings
• Potential cash flow volatility (cash flow statements not disclosed in period)

Key Concerns:

• Revenue decline of 3.8% YoY with a 15.1% drop in operating profit
• Inventory of ¥16.85bn implying moderate turnover and risk if demand weakens
• Lack of disclosed cash flows and D&A obscures earnings quality and FCF
• Ordinary income impact from financing costs amid a rising-rate backdrop

Investment Implications

Key Takeaways:

• Top line declined 3.8% YoY to ¥39.38bn; operating income fell 15.1% YoY to ¥3.99bn
• Gross margin robust at 48.6%; operating margin ~10.1% reflecting deleverage
• ROE at 7.88% on 6.99% net margin, 0.513x asset turnover, and 2.20x leverage
• Liquidity strong (current ratio 154.5%, quick 109.3%); implied equity ratio ~45.5%
• Interest coverage ~17x; ordinary income below operating income due to interest
• Inventories ¥16.85bn; annualized turnover ~2.6x (~140 days) warrants monitoring
• Cash flow, capex, and D&A not disclosed; EBITDA/FCF metrics not interpretable
• Dividend not disclosed; payout assessment deferred pending cash flow data

Metrics to Watch:

• Order intake and backlog by region and product
• Inventory turnover, days sales outstanding, and working capital as % of sales
• Operating margin trajectory and SG&A/R&D ratios
• OCF/Net income and FCF once cash flows are disclosed
• FX rates (USD/JPY, EUR/JPY) and hedging impact
• Capex and D&A disclosure to gauge maintenance vs. growth investment
• Non-operating gains/losses and interest cost trend

Relative Positioning: Versus domestic and global industrial inkjet peers, Mimaki’s gross margin appears above average, operating margin in the mid-range, ROE moderate, and balance sheet/liquidity solid; execution on inventory normalization and cash conversion will be key to maintaining this relative standing.

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