PLATZ Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥1.88B
• Operating Income: ¥-22M
• Net Income: ¥33M
• EPS: ¥-3.36

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

Verdict: FY2026 Q1 was a weak quarter with topline contraction and a small operating loss, partially cushioned by non-operating gains but ending in a net loss. Revenue declined 4.7% YoY to 18.78, with gross profit of 6.02 and a gross margin of 32.1%. SG&A was 5.62, absorbing nearly all gross profit, leading to operating income of -0.22 (operating margin -1.2%). Non-operating income of 0.28 versus non-operating expenses of 0.16 provided a net lift of 0.12, improving ordinary income to -0.10. Despite that, reported profit before tax is shown as 0.51, while net income was -0.11, indicating the presence of extraordinary items and/or other below-the-line effects not disclosed in detail. Net margin printed at -0.6%, and ROE was -0.4% on the DuPont calculation for the quarter. On efficiency, asset turnover was 0.287 (quarterly), and financial leverage stood at 2.14x. The gross margin of 32.1% suggests product-level profitability is intact, but the SG&A ratio of 29.9% left insufficient operating leverage at this scale of sales. Interest coverage was -6.21x (warning), reflecting negative EBIT against interest expense of 0.04, though liquidity is strong with a current ratio of 221.8%. Balance sheet quality is supported by cash and deposits of 17.37 against total interest-bearing loans of roughly 17.86 (short-term 8.00, long-term 9.86), implying near net-cash neutrality. Working capital is ample at 23.48, with receivables of 10.92 and inventories of 8.53 versus payables of 2.62. Earnings quality cannot be assessed due to unreported cash flow, but the divergence between PBT and net income signals non-recurring items or tax/minority effects that warrant monitoring. Forward-looking, the immediate task is restoring operating margin to positive territory by protecting gross margin and tightening SG&A, while ensuring debt service capacity improves. With ROIC at -0.5% (below a 5% warning threshold), capital efficiency must improve for value creation. Overall, the quarter shows revenue softness, thin operating leverage, and reliance on non-operating items, with adequate liquidity acting as a buffer but debt service metrics requiring attention.

Profitability Analysis

ROE decomposition (DuPont): Net Profit Margin (-0.6%) × Asset Turnover (0.287) × Financial Leverage (2.14x) = approximately -0.4% ROE for the quarter. Among the components, net profit margin is the primary drag due to an operating loss (-1.2% operating margin) despite decent gross margin. Asset turnover is modest for a manufacturing profile at 0.287 on quarterly revenue against total assets, indicating limited fixed cost absorption at this revenue level. Financial leverage (2.14x) is moderate and not the main driver of quarterly ROE weakness. Business reason: SG&A (29.9% of sales) nearly matched gross profit (32.1% margin), leaving little room for operating profit; non-operating gains partially offset but could not reverse the bottom line. Sustainability: The gross margin appears structurally sound, but the SG&A load at the current revenue scale is the key pressure point; absent sales recovery or SG&A restraint, margin improvement may be limited. Concerning trends: revenue (-4.7% YoY) declined while SG&A remained high, implying SG&A deleveraging; this combination compresses operating margin. Margin comparison in basis points is constrained by negative prior-period profit bases and unreported historical margins; however, the current net margin of -0.6% likely represents a modest YoY compression given revenue decline and the reported larger net loss.

Growth Assessment

Revenue fell 4.7% YoY to 18.78, signaling weak demand or timing issues in shipments within the quarter. Gross profit of 6.02 (32.1% margin) suggests product pricing/cost position is acceptable, but insufficient volume drove negative operating leverage. Ordinary income improved versus operating income on the back of net non-operating gains (0.12), indicating reliance on non-core items to stabilize earnings in the quarter. Net income of -0.11 deteriorated 36.9% YoY, consistent with pressure from lower sales and limited SG&A flexibility. With no segment or order-book data disclosed, revenue sustainability is uncertain; inventory of 8.53 and receivables of 10.92 indicate ongoing activity but also potential working capital tie-up. Outlook hinges on restoring sales growth (e.g., institutional demand, care facility capex cycles) and containing fixed costs; absent that, operating losses could persist.

Financial Health

Liquidity is strong: current ratio 221.8% and quick ratio 177.6%, comfortably above benchmarks; no warning on current ratio. Short-term debt (8.00) is well covered by cash (17.37) and current assets (42.75), indicating limited maturity mismatch risk. Solvency: Debt-to-equity 1.14x (moderate) and total liabilities of 34.83 versus equity of 30.63; interest-bearing debt totals about 17.86 against cash of 17.37, leaving near net-debt neutrality. However, interest coverage at -6.21x is a clear warning for debt service from operations; improvement in EBIT is needed to ensure sustainable service absent cash burn. No off-balance sheet items were disclosed; thus, guarantees/leases cannot be assessed from available data.

Cash Flow Quality

Operating, investing, and financing cash flows are unreported, so OCF/Net Income and FCF cannot be calculated. Consequently, earnings quality cannot be validated via cash conversion. Working capital configuration (AR 10.92, inventory 8.53, AP 2.62) suggests a cash conversion cycle where inventory and receivables funding needs exceed payables, which can drag OCF if sales weaken. No clear signs of working capital manipulation can be inferred without period-to-period movements. Dividend and capex coverage by FCF cannot be assessed; cash on hand (17.37) provides a short-term buffer but not a substitute for recurring OCF.

Dividend Sustainability

Dividend data are unreported; a calculated payout ratio of -609.7% implies any dividend compared against a negative net income would be economically unsustainable from earnings. Without OCF and capex data, FCF coverage cannot be assessed. With retained earnings of 25.45 and cash of 17.37, near-term distributions could be funded from the balance sheet if the policy requires, but sustained payouts would require a return to positive OCF and operating profit. Policy outlook is unclear due to lack of disclosures; prudence would favor aligning dividends with improved profitability and cash generation.

Risk Assessment

Business Risks:

• Revenue softness (-4.7% YoY) leading to negative operating leverage and an operating loss.
• High SG&A ratio (29.9% of sales) reducing flexibility to absorb demand volatility.
• Potential pricing and raw material cost pressures impacting gross margin sustainability.
• Dependence on non-operating gains (net +0.12) to mitigate operating loss.

Financial Risks:

• Debt service risk: interest coverage -6.21x (warning) despite moderate leverage.
• Working capital intensity (AR + inventory far exceeding AP) can pressure OCF if sales decelerate.
• ROIC at -0.5% is below the 5% warning threshold, signaling value dilution if persistent.

Key Concerns:

• Unreconciled P/L lines: positive profit before tax (0.51) alongside a net loss (-0.11) implies undisclosed extraordinary items or non-recurring charges.
• Lack of cash flow disclosure obscures earnings quality and dividend capacity.
• Exposure to healthcare policy/reimbursement cycles and institutional procurement timing (industry-specific).
• Potential FX and supply chain risks if components are imported (steel, electrical/mechanical parts).

Investment Implications

Key Takeaways:

• Topline contraction and high SG&A drove a small operating loss despite a solid gross margin.
• Non-operating gains partly offset weak operations but were insufficient to prevent a net loss.
• Liquidity is robust, and net debt is near zero, but interest coverage is poor and must improve.
• Capital efficiency is weak (ROIC -0.5%), necessitating margin recovery and/or asset turnover improvement.

Metrics to Watch:

• Order intake and backlog visibility to gauge revenue recovery.
• Gross margin vs. raw material costs and pricing actions.
• SG&A ratio trajectory and fixed-cost containment.
• Operating margin and interest coverage (>2x as a minimum target).
• Inventory and receivables turnover for OCF health.
• Disclosure of extraordinary items driving the gap between PBT and net income.

Relative Positioning: Within Japanese nursing care and medical bed peers, Platz appears smaller scale with higher earnings volatility and thinner operating leverage versus larger peers that typically maintain positive operating margins through cycles; liquidity is adequate, but profitability and ROIC lag peer benchmarks.

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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