Yashima & Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥15.81B
• Operating Income: ¥121M
• Net Income: ¥-152M
• EPS: ¥69.32

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

For FY2026 Q2 (cumulative), 株式会社ヤシマキザイ reported strong top-line growth with revenue of ¥15.806bn, up 22.0% YoY, but profitability failed to translate this growth into earnings expansion. Operating income was ¥121m, essentially flat YoY, and net income was ¥198m, also flat, indicating significant margin compression despite the sales surge. The gross profit reported is ¥1.660bn, implying a gross margin of 10.5%, which is modest for a distribution-oriented model and suggests pricing pressure or unfavorable mix. EBITDA was ¥140m (0.9% margin), underscoring lean operating profitability and limited operating leverage at current scale. Ordinary income of ¥208m exceeded operating income, implying material non-operating contributions (e.g., financial income or other non-core gains) supported earnings. DuPont analysis shows a thin net margin (1.25%), asset turnover of 0.697x, and financial leverage of 2.34x, resulting in an ROE of 2.04%—subpar versus typical Japanese industrial distributors. Liquidity appears adequate on a ratio basis (current ratio 151%, quick ratio 139%), supported by sizeable working capital (¥7.358bn), but cash generation is weak. Operating cash flow was deeply negative at -¥2.314bn, implying substantial working capital consumption (likely receivables build and inventory stocking amid revenue growth). Interest burden is negligible (interest expense ~¥9k; coverage >13,000x), so solvency pressure from financing costs is limited; however, negative OCF introduces liquidity execution risk if sustained. The debt-to-equity ratio is 1.66x, indicating a moderate-to-elevated leverage stance for a low-margin business, though absolute interest cost is currently minimal. Reported equity ratio and cash balances are undisclosed in this dataset; as such, balance sheet conclusions rely on the provided ratios rather than absolute reconciliations. Dividend payments are not indicated (DPS 0, payout 0%), and with OCF negative, internal cash generation currently does not support distributions without drawing on balance sheet or financing. Overall, the quarter reflects robust demand but weak operating leverage and cash conversion, with earnings quality leaning on non-operating items. Key watch items include normalization of working capital, gross margin stability, and the relationship between SG&A and sales. Data inconsistencies between certain cost lines and gross profit are noted; this analysis prioritizes the provided margins and ratios. Near-term outlook hinges on inventory/receivables discipline and the ability to pass through costs to defend margins in a high-volume, low-margin model.

Profitability Analysis

roe_decomposition: ROE 2.04% = Net margin 1.25% × Asset turnover 0.697× × Leverage 2.34×. The low ROE is driven primarily by thin net margins rather than asset efficiency or leverage. margin_quality: Gross margin 10.5% (GP ¥1.660bn on ¥15.806bn sales) is modest and leaves limited room after SG&A. Operating margin is approximately 0.8% (¥121m/¥15.806bn), and EBITDA margin 0.9% indicates minimal non-cash add-backs (D&A ~¥19m). Ordinary income (¥208m) above operating income suggests reliance on non-operating gains to support bottom line. Effective tax rate appears near 0% in this dataset (tax -¥4.471m), likely due to timing or discrete items. operating_leverage: Despite 22% YoY revenue growth, operating income was flat, indicating negative operating leverage in the period—SG&A and/or cost of goods rose at least in line with sales. The low D&A base limits natural EBITDA uplift; therefore, margin expansion must come from pricing, mix, or SG&A efficiency.

Growth Assessment

revenue_sustainability: Top-line growth of +22.0% YoY is strong and likely reflects healthy demand in core end-markets or share gains. Sustainability will depend on order conversion and customer restocking pace; current working capital build suggests front-loaded shipments or extended terms. profit_quality: Profit growth lagged revenue; both operating and net income were flat, pointing to cost pressures, mix deterioration, or deliberate investment in sales capacity. Ordinary income outperformance vs operating income detracts from recurring operating quality. outlook: Near-term earnings trajectory hinges on gross margin stabilization and SG&A discipline. If working capital normalizes in H2, cash conversion could improve; absent margin recovery, incremental sales may not materially lift operating profit. Management’s ability to pass-through costs and optimize inventory/receivables will be key.

Financial Health

liquidity: Current ratio 151% and quick ratio 139% indicate adequate near-term coverage. Working capital stands at ¥7.358bn, but negative OCF suggests liquidity is tied up in operations; careful monitoring of receivable collections and inventory turnover is required. solvency: Debt-to-equity of 1.66x points to moderate-to-elevated leverage for a low-margin business, though interest coverage is extremely strong (>13,000x) due to negligible interest expense (~¥9k). Equity ratio is undisclosed in this dataset; conclusions rely on available leverage metrics. capital_structure: Leverage is meaningful but currently inexpensive. With thin operating margins and negative OCF, the buffer to absorb shocks relies more on working capital release than on further gearing.

Cash Flow Quality

earnings_quality: OCF/Net income is -11.68x, indicating reported earnings did not convert to cash in the period. This gap likely stems from large working capital outflows rather than accrual-driven profit, given minimal D&A. free_cash_flow_analysis: Investing CF is undisclosed; with OCF at -¥2.314bn, pre-investment FCF is negative. Absent material asset sales or reductions in capex, reported FCF would likely remain negative for the half. working_capital: Current assets are high (¥21.797bn) relative to current liabilities (¥14.439bn), and inventories reported at ¥1.702bn suggest stocking. The magnitude of OCF outflow implies receivables expansion and/or longer payment terms; reversal in H2 would be a key source of cash.

Dividend Sustainability

payout_ratio_assessment: DPS is reported as ¥0 with a 0.0% payout. Given negative OCF, internal funding for dividends is not evident at this stage. fcf_coverage: FCF coverage is listed as 0.00x; with negative OCF and undisclosed investing flows, sustainable coverage is currently insufficient without balance sheet support. policy_outlook: With low ROE (2.04%) and volatile cash conversion, a conservative payout stance is prudent until cash generation normalizes. Any future distributions likely depend on working capital release and stabilization of margins.

Risk Assessment

Business Risks:

• Low structural margins (GPM 10.5%, OPM ~0.8%) reduce shock absorption capacity
• Potential pricing pressure and unfavorable product/customer mix amid volume growth
• Execution risk in working capital management (receivables collection, inventory turnover)
• Dependence on non-operating income to bridge operating shortfalls
• Macroeconomic sensitivity of industrial demand and capex cycles

Financial Risks:

• Negative operating cash flow (-¥2.314bn) despite positive earnings
• Moderate-to-elevated leverage (D/E 1.66x) in a low-margin model
• Possible liquidity strain if working capital outflows persist
• Limited non-cash depreciation (¥19m) restricts EBITDA cushion

Key Concerns:

• Mismatch between strong revenue growth and flat operating profit
• Cash conversion sharply negative; recovery timing uncertain
• Earnings quality leaning on non-operating items
• Data inconsistencies in cost and balance sheet lines; reliance on provided ratios and margins

Investment Implications

Key Takeaways:

• Strong revenue momentum (+22% YoY) did not translate into earnings growth
• Operating margin compressed to ~0.8%; EBITDA margin 0.9% highlights limited operating leverage
• ROE is low at 2.04% driven by thin net margins (1.25%)
• OCF was significantly negative (-¥2.314bn), indicating heavy working capital use
• Liquidity ratios are adequate, but sustained cash outflows would pressure flexibility
• Ordinary income benefited from non-operating items; core profitability is modest

Metrics to Watch:

• Gross margin and operating margin trajectory by quarter
• Receivables days, inventory turnover, and overall cash conversion cycle
• SG&A as a percentage of sales and operating leverage to incremental revenue
• Composition of non-operating income vs expenses
• Leverage (D/E) and net debt trajectory alongside OCF recovery

Relative Positioning: Within Japanese industrial distribution and equipment trading peers, the company exhibits above-average revenue growth but below-average profitability and cash conversion, resulting in a weaker ROE profile and greater reliance on working capital to fund 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
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