DAYTONA CORPORATION FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥11.02B
• Operating Income: ¥1.28B
• Net Income: ¥938M
• EPS: ¥379.93

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

Daytona (72280) delivered modest top-line growth in FY2025 Q3, with revenue up 3.4% year over year to ¥11.016 billion. Despite the growth, operating income declined 2.5% YoY to ¥1.276 billion, signaling some margin compression or cost pressure in the period. Reported net income was ¥903 million, down 3.1% YoY, translating to a net margin of 8.2%. Gross profit is shown at ¥4.174 billion, implying a gross margin of 37.9%; however, this figure does not arithmetically reconcile with revenue minus cost of sales, suggesting classification differences or partial disclosure—our analysis relies on the provided gross profit figure. Operating margin stands at approximately 11.6%, and ordinary income of ¥1.3 billion yields an ordinary margin of about 11.8%. The implied effective tax rate from the non-zero data (income tax expense of ¥399.5 million) is roughly 30.7% using ordinary income as a proxy for pre-tax income. Balance sheet strength is notable: total assets are ¥11.459 billion against total equity of ¥9.193 billion, implying an equity ratio around 80%, despite a reported equity ratio field of 0.0% which appears to be undisclosed rather than zero. Leverage is low (financial leverage of 1.25x by DuPont, total liabilities/equity about 0.25x), and interest burden is negligible with interest expense of only ¥5.9 million and an interest coverage of around 215x. Liquidity is strong, with a current ratio of about 420% and a quick ratio of about 228%, supported by sizeable working capital of ¥6.43 billion. Inventories are sizeable at ¥3.86 billion, comprising roughly 45.8% of current assets and 33.7% of total assets, which warrants monitoring for turnover and obsolescence risk. DuPont analysis yields an ROE of 9.82% (net margin 8.20% × asset turnover 0.961 × leverage 1.25), a healthy but not high level relative to quality mid-cap peers. Operating leverage appears negative this quarter as operating income declined despite revenue growth, pointing to SG&A inflation, product mix, or pricing pressures. Cash flow statements are not disclosed in the data provided (zeros indicate unreported), so free cash flow and cash conversion cannot be assessed here. Dividend information is also undisclosed (DPS and payout appear as zero, which we treat as unreported), leaving policy assessment to qualitative inference from balance sheet strength. Overall, Daytona remains financially conservative with strong liquidity and low leverage, but the quarter reflects modest growth with slight profitability pressure and a working-capital-intensive profile.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.20%
• asset_turnover: 0.961
• financial_leverage: 1.25
• calculated_ROE: 9.82%
• ROA: 7.9% (NI ¥903m / Assets ¥11,459m) margin_quality:
• gross_profit: ¥4,174m (gross margin 37.9%)
• operating_income: ¥1,276m (operating margin ~11.6%)
• ordinary_income: ¥1,300m (ordinary margin ~11.8%)
• net_income: ¥903m (net margin 8.2%)
• commentary: Margins remain solid in absolute terms but compressed YoY as operating income fell 2.5% despite a 3.4% revenue increase. The implied tax rate is ~30.7% (¥399.5m / ¥1,300m). Interest burden is immaterial (interest expense ~0.05% of revenue). operating_leverage: Negative in this quarter: revenue +3.4% YoY vs operating income -2.5% YoY suggests cost inflation (likely SG&A) or adverse mix/pricing offsetting top-line growth.

Growth Assessment

revenue_sustainability: Revenue grew 3.4% YoY to ¥11.016bn, indicating steady demand but not rapid expansion. Inventory levels suggest the company is supporting sales with ample stock, which can sustain deliveries but increases carrying risk. profit_quality: Net margin at 8.2% and operating margin ~11.6% are healthy, but the YoY decline in operating income indicates pressure from costs or mix. Ordinary income exceeded operating income slightly, helped by minimal non-operating drag. outlook: Near-term growth likely tracks low-to-mid single digits absent price hikes or product mix upgrades. Key sensitivities include consumer demand in the motorcycle aftermarket, FX for imported goods, and the pace of SG&A normalization. Improving inventory turnover could support profitability and cash conversion.

Financial Health

liquidity:

• current_ratio: 419.9% (CA ¥8,436.5m / CL ¥2,009.3m)
• quick_ratio: 227.7% (CA−Inv ¥4,575.9m / CL ¥2,009.3m)
• working_capital: ¥6,427.2m solvency:
• total_assets: ¥11,459m
• total_liabilities: ¥2,298.9m
• total_equity: ¥9,193m
• equity_ratio_estimated: ≈80.2% (Equity / Assets), reported 0.0% appears undisclosed
• interest_coverage: ≈215x (Operating income ¥1,276m / Interest expense ¥5.936m)
• debt_to_equity_proxy: 0.25x (Total liabilities / Equity; interest-bearing debt not disclosed) capital_structure: Conservative balance sheet with low leverage and high equity buffer. Interest-bearing debt and net cash not disclosed; however, low interest expense implies minimal borrowings.

Cash Flow Quality

earnings_quality: Cash flow statements are undisclosed in the provided data. With a sizable inventory base (33.7% of assets), working capital dynamics likely influence cash conversion materially. FCF_analysis: Free cash flow cannot be assessed due to missing OCF and capex data. Depreciation and amortization are also undisclosed, limiting EBITDA and maintenance capex inferencing. working_capital: Inventories ¥3,860.6m (45.8% of current assets) indicate potential cash tied up; monitoring turnover and obsolescence risk is important for cash realization.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are shown as zero but should be treated as undisclosed. On earnings capacity alone (NI ¥903m) and low leverage, the company appears to have room for distributions; however, lack of cash flow data prevents assessment of sustainability. FCF_coverage: Not assessable given undisclosed operating and investing cash flows. policy_outlook: No disclosed guidance in the provided data. Balance sheet flexibility is high; actual policy likely balances growth investments, working capital needs, and shareholder returns.

Risk Assessment

Business Risks:

• Demand cyclicality in motorcycle aftermarket and consumer discretionary spending
• Inventory obsolescence risk given high inventory intensity
• Foreign exchange exposure on imported merchandise and components
• Supply chain disruptions affecting availability and lead times
• Competitive pricing pressure in aftermarket parts and accessories

Financial Risks:

• Cash conversion risk from working capital build, especially inventories
• Limited visibility on cash flows and capex complicates FCF assessment
• Potential gross margin volatility from input cost/FX fluctuations

Key Concerns:

• Operating income decline despite revenue growth indicates margin pressure
• High proportion of inventories within assets could weigh on OCF if turnover slows
• Lack of disclosed cash flow data limits visibility on dividend capacity and reinvestment

Investment Implications

Key Takeaways:

• Steady revenue growth (+3.4% YoY) but slight deterioration in operating profit (−2.5% YoY)
• Healthy profitability profile: operating margin ~11.6%, net margin 8.2%
• Strong balance sheet with estimated ~80% equity ratio and minimal interest burden
• Robust liquidity: current ratio ~420%, quick ratio ~228%, working capital ¥6.43bn
• ROE of 9.82% driven by moderate margins and low leverage; ROA ~7.9%
• Inventory-heavy model requires vigilant turnover management to protect cash conversion

Metrics to Watch:

• Inventory turnover days and trend in inventories-to-sales
• SG&A ratio and operating margin trajectory
• Gross margin movements (pricing and mix)
• Ordinary income vs operating income (non-operating items and FX impact)
• Cash flow from operations and capex once disclosed
• Effective tax rate stability (~31% implied)

Relative Positioning: Financially conservative small-cap auto-parts/accessories player with strong liquidity and low leverage, mid-level efficiency (asset turnover ~1x) and mid-to-high single-digit ROE; profitability solid for a distributor-like model but below high-ROE specialty manufacturers.

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