| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥486.1B | ¥494.6B | -1.7% |
| Operating Income / Operating Profit | ¥20.5B | ¥23.9B | -14.5% |
| Equity-method Investment Gains / Losses | - | - | - |
| Ordinary Income | ¥25.5B | ¥29.1B | -12.2% |
| Net Income / Net Profit | ¥16.4B | ¥21.5B | -23.6% |
| ROE | 4.8% | 6.1% | - |
For the fiscal year ended March 2026, Revenue / Net Sales were ¥486.1B (YoY -¥8.5B, -1.7%), Operating Income was ¥20.5B (YoY -¥3.4B, -14.5%), Ordinary Income was ¥25.5B (YoY -¥3.6B, -12.2%), and Net Income attributable to owners of the parent was ¥16.4B (YoY -¥5.1B, -23.6%). Despite the decline in sales and profits, Operating Cash Flow (OCF) improved to ¥33.5B (+25.4%), indicating stronger cash generation. Special gains of ¥5.5B, including investment securities disposal gains of ¥5.3B, were recorded; Net Income attributable to owners of the parent rose to ¥21.1B (prior year ¥19.2B), but after adjustments for non-controlling interests, consolidated Net Income was ¥16.4B, a decline. Regionally, West Japan performed well with Operating Income of ¥9.9B (+1.3%), while Chubu (-26.8%) and East (-27.9%) posted significant declines, compressing company-wide margins. Operating margin fell 0.6pp to 4.2% from 4.8% a year earlier. Selling, General & Administrative expenses (SG&A) increased to ¥76.5B despite lower sales, reversing operating leverage. The company executed share buybacks of ¥30.0B and paid dividends of ¥54, resulting in a Total Return Ratio of approximately 190%, signaling an aggressive shareholder-return stance.
[Revenue / Net Sales] Revenue / Net Sales of ¥486.1B represents a YoY decline of ¥8.5B (-1.7%). By segment, West Japan was ¥212.6B (-0.5%) with only a slight decrease, while Chubu was ¥140.4B (-3.9%) and East was ¥113.9B (-3.0%) showing deceleration. Overseas revenue grew to ¥19.2B (+10.8%) but is small in scale and had limited impact on consolidated results. By product category, measuring instruments were ¥112.6B (prior year ¥120.9B), machinery and equipment ¥146.0B (prior year ¥154.7B), and pneumatics / hydraulics ¥102.9B (prior year ¥100.3B). Demand softness was evident for core measuring instruments and machinery & equipment. With regionally focused sales, weaker customer demand in Chubu and East directly translated into lower sales.
[Profitability] Gross profit was ¥97.0B (gross margin 20.0%), down ¥0.9B YoY but gross margin improved 0.2pp from 19.8% a year earlier. SG&A increased to ¥76.5B (SG&A ratio 15.7%) from ¥73.9B, up ¥2.6B, and higher SG&A amid declining sales pressured Operating Income. Operating Income was ¥20.5B (YoY -¥3.4B, -14.5%), and Operating margin fell 0.6pp to 4.2% from 4.8% the prior year. By region, West Japan’s margin was 4.6% vs. Chubu 3.9% and East 3.3%, widening regional disparities; large decreases in Chubu and East (−26.8%, −27.9%) diluted consolidated margins. Non-operating income totaled ¥5.6B (including dividend income ¥1.1B) against non-operating expenses of ¥0.5B, leading to Ordinary Income of ¥25.5B (−12.2%). Special gains of ¥5.5B (including investment securities disposal gains ¥5.3B) and special losses of ¥0.1B produced profit before tax of ¥30.8B. After income taxes of ¥9.7B, Net Income was ¥16.4B (YoY −¥5.1B, −23.6%). Net Income attributable to owners of the parent was ¥21.1B (up ¥1.9B, +10.2% vs. prior year) due to special gains, but after non-controlling interest adjustments, consolidated Net Income declined. Excluding special gains, core earnings weakened at the operating and ordinary levels, resulting in a structural decline in both sales and profits.
West Japan segment: Revenue ¥212.6B (−0.5%), Operating Income ¥9.9B (+1.3%), margin 4.6% — solid performance. As the core segment contributing 48% of consolidated Operating Income, it secured profits despite lower sales. Chubu: Revenue ¥140.4B (−3.9%), Operating Income ¥5.5B (−26.8%), margin 3.9% — substantial decline. East: Revenue ¥113.9B (−3.0%), Operating Income ¥3.8B (−27.9%), margin 3.3% — weakest margin and struggling. Overseas: Revenue ¥19.2B (+10.8%) — growth, but Operating Income ¥1.3B (−9.2%) declined; margin 7.0% is high but scale is small. Declines in margins in Chubu and East depressed consolidated margins, and a worsening regional mix was the main driver of the 0.6pp decrease in Operating margin. West Japan’s stability has become the primary support for consolidated performance.
[Profitability] Operating margin 4.2% fell 0.6pp from 4.8% a year earlier. Gross margin 20.0% improved 0.2pp from 19.8%, but SG&A ratio rose to 15.7% from 14.9% (+0.8pp), reversing operating leverage. ROE attributable to owners of the parent was 6.3% (Net Income attributable to owners of the parent ¥21.1B ÷ average shareholders’ equity attributable to owners of the parent ¥334.9B), up from 5.7% a year earlier, though materially influenced by special gains and with recurring earnings power softened. ROA was 5.9% (Ordinary Income ¥25.5B ÷ average total assets ¥433.0B), down from 6.8%.
[Cash Quality] OCF was ¥33.5B, double Net Income of ¥16.4B, and cash conversion ratio was 1.3x (OCF ÷ EBITDA ¥25.9B), a high level. Accounts receivable collection improvement of ¥10.7B contributed to working-capital improvement, supporting solid cash generation.
[Investment Efficiency] Total asset turnover was 1.11x (Revenue ¥486.1B ÷ average total assets ¥433.0B), down from 1.17x. Capital expenditure was ¥2.6B, 48% of depreciation ¥5.4B, indicating continued capex restraint.
[Financial Soundness] Equity Ratio was 77.9%, down from 83.7% but still very high. Current ratio 309% and quick ratio 288% indicate ample liquidity. Short-term borrowings of ¥23.0B constitute all interest-bearing debt, covered 3.6x by cash and deposits of ¥83.7B. Debt/EBITDA 0.89x and interest coverage 146x (OCF ¥33.5B ÷ interest paid ¥0.2B) point to extremely high financial safety.
OCF was ¥33.5B (+25.4%). Profit before tax (pre-tax profit) was ¥30.8B; adding back non-cash charges such as depreciation ¥5.4B and goodwill amortization ¥0.6B, and with working capital improvements including accounts receivable reduction ¥10.7B contributing cash inflow while inventory increased ¥1.1B and trade payables increased ¥0.6B modestly, after corporate tax payments of ¥9.9B, the company generated final OCF of ¥33.5B from subtotal OCF of ¥42.4B. Investing cash flow was −¥6.0B: capital expenditure ¥2.6B and intangible asset acquisitions ¥1.0B versus investment securities purchases ¥10.5B and proceeds from sales ¥6.8B. Free Cash Flow was ¥27.5B, 2.7x dividend payments of ¥10.0B. Financing cash flow was −¥17.0B: despite new short-term borrowings of ¥23.0B, the company executed shareholder returns exceeding ¥40.0B in total (share buybacks ¥30.0B and dividends ¥10.0B). Cash and deposits increased ¥11.6B from ¥72.1B at the beginning of the period to ¥83.7B, further strengthening liquidity. OCF substantially exceeding Net Income indicates high accrual quality and improved working capital efficiency, supporting ample return capacity.
The gap between Ordinary Income ¥25.5B and Net Income ¥16.4B reflects special gains ¥5.5B (mainly investment securities disposal gains ¥5.3B) and tax burden ¥9.7B; one-off factors boosted Net Income attributable to owners of the parent to ¥21.1B (YoY +10.2%), but after non-controlling interest adjustments consolidated Net Income fell to ¥16.4B. Non-operating income ¥5.6B included dividend income ¥1.1B, equivalent to 0.2% of revenue, indicating limited dependency on non-operating/financial income. OCF of ¥33.5B is 2.0x Net Income ¥16.4B, cash conversion ratio 1.3x, and accrual ratio −2.8% — accrual quality is good. The divergence between Ordinary Income and final Net Income is large, and the repeatability of investment securities disposal gains ¥5.3B is limited, posing risk of profit normalization downward next year. Core earnings have softened at operating and ordinary stages, so recovery of operating margin is essential to sustainably improve earnings quality.
Full Year / FY guidance: Revenue ¥511.0B (+5.1%), Operating Income ¥20.7B (+1.1%), Ordinary Income ¥25.6B (+0.6%), Net Income ¥12.9B (−21.4%). Actual results achieved Revenue ¥486.1B (progress 95%), Operating Income ¥20.5B (99%), Ordinary Income ¥25.5B (100%)—generally on track. Net Income attributable to owners of the parent ¥21.1B exceeded the forecast ¥17.4B by 21%, mainly due to special gains such as investment securities disposal gains ¥5.3B. Consolidated Net Income ¥16.4B also exceeded forecast ¥12.9B. Excluding special gains, core earnings were in line with plan, and operating/ordinary stage progress of 99–100% is standard. Next-year EPS forecast is ¥99.32 and dividend ¥27 (post-share-split basis), representing a conservatively flat view year-on-year. The forecasted Net Income decline of −21.4% incorporates the reversal of special gains; ordinary-stage profitability is expected to be slightly higher.
Annual dividend ¥54 (post-share-split; ¥27 at year-end × 2), payout ratio 45.2% (based on EPS ¥119.29). Total dividend amount is approximately ¥10.0B (weighted average shares outstanding 18.0 million shares), representing 36% of Free Cash Flow ¥27.5B and 30% of OCF ¥33.5B — a sustainable level. Additionally, the company executed share buybacks of ¥30.0B; combined shareholder returns totaled approximately ¥40.0B, and the Total Return Ratio relative to Net Income attributable to owners of the parent ¥21.1B is approximately 190%, demonstrating a very proactive stance. Treasury stock increased to −¥69.3B (prior year −¥39.3B), contributing to capital-efficiency improvement. Cash and deposits ¥83.7B and a robust balance sheet (Equity Ratio 77.9%) support high returns. Meanwhile, capital expenditure ¥2.6B is only 48% of depreciation ¥5.4B, indicating restraint and a priority on returns. The dividend policy maintains stable dividends while using flexible buybacks to raise Total Return Ratio, but with Net Income expected to decline next year due to special gain reversal, the sustainability of this high return level warrants caution.
Regional mix deterioration risk: Operating margins in Chubu and East (3.9%, 3.3%) are significantly below West Japan (4.6%), and Operating Income in Chubu and East decreased substantially YoY (−26.8%, −27.9%). Since these two regions account for 52% of sales composition, prolonged profitability weakness there would further compress consolidated margins. Rapid restructuring of regional sales capabilities and margin improvement are needed.
SG&A fixed-cost increase risk: SG&A of ¥76.5B rose ¥2.6B (+3.5%) YoY despite declining sales (−1.7%). SG&A ratio increased to 15.7% from 14.9% (+0.8pp), reversing operating leverage. If personnel costs, IT investment, and other fixed-cost increases coincide with stagnant sales, there is a risk Operating margin falls below 4%. Measures to control SG&A in the absence of sales recovery are required.
Dependence on special gains and investment securities volatility risk: Investment securities ¥58.0B (13.3% of total assets, YoY +35.5%) are market-exposed assets; disposal gains of ¥5.3B boosted Net Income this period but repeatability is limited. The company holds valuation differences of ¥22.3B and deferred tax liabilities ¥9.2B; market deterioration could cause balance-sheet volatility through equity and tax-charge movements. The forecasted Net Income decline of −21.4% factors in special gain reversal, indicating recurring earnings remain at ordinary-stage levels.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.2% | 3.4% (1.4%–5.0%) | +0.9pp |
| Net Profit Margin | 3.4% | 2.3% (1.0%–4.6%) | +1.1pp |
Operating margin 4.2% outperforms the industry median 3.4% by 0.9pp; Net Profit Margin 3.4% exceeds the median 2.3% by 1.1pp. On a relative basis, profitability sits in the upper-middle of the industry, and overall earnings power including special gains is relatively favorable.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -1.7% | 5.9% (0.4%–10.7%) | -7.6pp |
Revenue growth of −1.7% lags the industry median +5.9% by 7.6pp, indicating underperformance versus peer growth trends. The impact of region-specific demand weakness is notable, and growth prospects lag within the industry.
※Source: Company compilation
Need to address softening core earnings and structural improvement: Operating margin 4.2% (−0.6pp) and Ordinary Income ¥25.5B (−12.2%) show declines at the ordinary stage. Large Operating Income declines in Chubu and East (−26.8%, −27.9%) are the main causes; regional mix deterioration and higher SG&A reversed operating leverage. Special gains of ¥5.3B temporarily boosted final income (Net Income attributable to owners of the parent ¥21.1B, +10.2%), but repeatability is limited. Next year’s forecasted Net Income decline of −21.4% reflects special-gain reversal; restoring ordinary-stage earnings (targeting a return to mid-5% Operating margin) is a medium-term challenge. Rebuilding sales capabilities in Chubu and East and controlling SG&A to improve operating leverage are key to raising margins.
Aggressive shareholder returns supported by a strong balance sheet and cash generation: OCF ¥33.5B (+25.4%) and Free Cash Flow ¥27.5B indicate high cash generation. With Equity Ratio 77.9%, cash & deposits ¥83.7B, and Debt/EBITDA 0.89x, financial health is very strong; dividends ¥54 (payout ratio 45.2%) plus share buybacks ¥30.0B produced a Total Return Ratio of ~190%, demonstrating an aggressive stance. Working-capital improvement (accounts receivable collected +¥10.7B) supported cash generation, showing sufficient return capacity. At the same time, capex ¥2.6B is only 48% of depreciation ¥5.4B, indicating prioritization of returns. Although Net Income is expected to decline next year due to special-gain reversal, strong OCF quality (OCF / Net Income 2.0x) and a robust balance sheet support the sustainability of returns. A mid-term redesign is needed to balance growth investment (increasing CapEx, advancing DX) and shareholder returns.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial data. Investment decisions are your responsibility; consult a professional advisor if necessary.