Makita : Consolidated Financial Results for the nine months ended December 31, 2016 (U.S. GAAP Financial Information) PDF / 244KB

Makita Corporation

Consolidated Financial Results for the nine months

ended December 31, 2016 (U.S. GAAP Financial Information)

(English translation of "KESSAN TANSHIN" originally issued in Japanese)

CONSOLIDATED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2016 (Unaudited)

January 31, 2017

Makita Corporation

Stock code: 6586

URL: http://www.makita.biz/

Shiro Hori, President, Representative Director

1. Summary operating results of the nine months ended December 31, 2016 (From April 1, 2016 to December 31, 2016)

2. CONSOLIDATED OPERATING RESULTS

   Yen (millions)

   For the nine months ended December 31, 2015		For the nine months ended December 31, 2016
   %	%
   Net sales................................................................	324,090	4.2	306,315	(5.5)
   Operating income .................................................	49,963	(10.1)	47,615	(4.7)
   Income before income taxes .................................	47,615	(11.2)	49,660	4.3
   Net income attributable to Makita Corporation ....	32,896	(10.4)	34,691	5.5
   Comprehensive income ........................................	21,886	(68.2)	28,161	28.7

   Earning per share net income attributable to Makita Corporation common shareholders

   Yen

   (Basic)............................................................... 242.36 255.58

   (Diluted) ........................................................... 242.35 255.57

   Notes:

3. Amounts of less than one million yen have been rounded.

4. The table above shows the changes in the percentage ratio of net sales, operating income, income before income taxes, net income attributable to Makita Corporation, and comprehensive income against the corresponding period of the previous year.

5. SELECTED CONSOLIDATED FINANCIAL POSITION

   Yen (millions)

   As of March 31, 2016	As of December 31, 2016
   Total assets............................................................	558,024	581,238
   Total equity ...........................................................	483,370	497,771
   Total Makita Corporation shareholders' equity.....	479,752	494,033
   Total Makita Corporation shareholders' equity
   ratio to total assets (%) .........................................	86.0%	85.0%

6. Dividend Information

7. For the year ended March 31, 2016

   Yen

   For the year ending March 31, 2017

   (Forecast)

   Cash dividend per share:

   Interim................................................................. 18.00 18.00

   Year-end .............................................................. 83.00 (Note)

   Total .................................................................... 101.00 (Note)

   Notes:

8. The forecast for cash dividend announced on April 27, 2016 has not been revised.

9. The projected amount of dividends for the year ending March 31, 2017 has not been determined yet. For further details, refer to "Explanation regarding proper use of business forecast, and other significant matters" on page 2.

1. Consolidated Financial Performance Forecast for the year ending March 31, 2017 (From April 1, 2016 to March 31, 2017)

   Yen (millions)

   For the year ending March 31, 2017

   %
   Net sales..................................................................................................	405,000	(4.4)
   Operating income ...................................................................................	60,500	(6.5)
   Income before income taxes ...................................................................	62,000	0.8
   Net income attributable to Makita Corporation ......................................	42,800	2.8

   Earning per share (Basic) Yen Net income attributable to

   Makita Corporation common shareholders............................................. 315.33

   Note: The consolidated financial forecast for the year ending March 31, 2017 has been revised.

2. Others

(Refer to [Qualitative Information and Financial Statements] Section 4 "Other" on page 4.)

1. Changes in important subsidiaries during the period (Changes in specified subsidiaries accompanied by changes in scope of consolidation during the quarter): None

2. Adoption of simplified accounting methods and accounting methods that are specific to the preparation of quarterly consolidated financial statements: Yes

3. Changes in accounting policies, procedures and presentation rule applied in the preparation of the quarterly consolidated financial statements:

4. Changes due to revisions to accounting standards: None

5. Changes due to other reasons: None

6. Number of shares outstanding (common stock)

7. Number of shares issued (including treasury stock): As of December 31, 2016: 140,008,760

   As of March 31, 2016: 140,008,760

8. Number of treasury stock: As of December 31, 2016: 4,277,996 As of March 31, 2016: 4,275,499

9. Average number of shares outstanding: For the nine months ended

10. December 31, 2016: 135,732,255

    For the nine months ended

    December 31, 2015: 135,734,342

    Information regarding quarterly review

    This consolidated financial results report is not subject to a quarterly review stipulated under the Financial Instruments and Exchange Act. As of the release date of this document, the quarterly consolidated review under the Financial Instruments and Exchange Act has not been completed.

    Explanation regarding proper use of business forecasts, and other significant matters

11. Regarding the assumptions for the forecasts and other matters, refer to [Qualitative Information and Financial Statements] Section 3 "Explanation of Information Relevant to Forecast such as Consolidated Financial Performance Forecast" on page 4. The financial forecast given above is based on information as available at the present time, and includes potential risks and uncertainties. As a consequence of the factors above and other, actual results may vary from the forecasts provided above.

12. Makita's basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or greater, with a lower limit on annual cash dividends of 18 yen per share. However, in the event special circumstances arise, computation of the amount of dividends will be based on consolidated net income attributable to Makita Corporation after certain adjustments.

The Board of Directors plans to meet in April 2017 for a report on earnings for the year ending March 31, 2017. At the time, in accordance with the basic policy regarding profit distribution mentioned above, the Board of Directors plans to propose a dividend equivalent to at least 30% of net income attributable to Makita Corporation. The Board of Directors will submit this proposal to the General Meeting of Shareholders scheduled for June 2017.

The consolidated dividend payout ratio is calculated as annual dividends per share divided by consolidated net income attributable to Makita Corporation per share (after adjustments for special circumstances) and multiplied by 100.

1. Qualitative Information and Financial Statements
1. Explanation of Consolidated Operating Results

   Looking at the global economic situation during the nine months (the "period") ended December 31, 2016, the regional economy remained robust in Europe, supported by solid domestic demand, although there was uncertainty regarding the outlook for the Western European economy in relation to Brexit (the British referendum on remaining in or leaving the E.U.). In the U.S., the economy recovered, driven by the favorable employment and income situation. In Asia, Southeast Asian countries and India saw their economies grow steadily, while the Chinese economy continued to slow down. Meanwhile, the economy gradually recovered in Japan, although some sectors, such as personal consumption, lacked strength.

   Our consolidated net sales for this period decreased by 5.5% to 306,315 million yen compared to the same period of the previous year, due to appreciation of the yen compared with the same period of the previous year, although sales grew steadily at home and abroad, mainly in developed countries. Operating income decreased by 4.7% to 47,615 million yen (operating income ratio: 15.5%) because net sales declined due to the influence of the exchange rate, although the Company managed to keep the operating income ratio almost unchanged. Meanwhile, income before income taxes increased by 4.3% to 49,660 million yen (income before income taxes ratio: 16.2%) and net income attributable to Makita Corporation shareholders increased by 5.5% to 34,691 million yen (ratio of net income attributable to Makita Corporation shareholders: 11.3%) because we had recorded valuation losses on securities in the previous year.

   Net sales by region are as follows:

   Net sales in Japan increased by 8.3% to 53,695 million yen compared to the same period of the previous year. This was because sales mainly on new products remained solid.

   Net sales in Europe decreased by 6.2% to 125,001 million yen. This was due to the appreciation of the yen against the euro from a year earlier, although sales in general were steady in European countries.

   Net sales in North America decreased by 6.0% to 50,810 million yen. This was due to the strengthening of the yen against the U.S. dollar compared to the same period of the previous year, despite an increase in local sales aided by the expanding U.S. economy.

   Net sales in Asia decreased by 8.9% to 29,163 million yen. This was due to the appreciation of the yen against local currencies compared to the previous year, although we saw local sales grow in Vietnam, Taiwan and India.

   Sales situations in other regions are as follows. Net sales in Oceania decreased by 1.1% to 18,100 million yen due to the yen's appreciation against local currencies, despite steady sales, mainly of lithium-ion battery products. Due to the impact of the yen's appreciation against local currencies, net sales in Central and South America, where the Brazilian economy remained stagnant, decreased by 20.5% to 17,022 million yen; while those in the Middle East and Africa, where recession continued in oil-producing countries, decreased by 19.0% to 12,524 million yen.

2. Explanation of Consolidated Financial Position

Total assets as of December 31, 2016 increased by 23,214 million yen to 581,238 million yen compared to the balance as of March 31, 2016. The increase was mainly due to the increase in "Cash and cash equivalents".

Total liabilities increased by 8,813 million yen to 83,467 million yen compared to the balance as of March 31, 2016. The increase was mainly due to the increase in "Short-term borrowings" and "Deferred income taxes".

Total equity increased by 14,401 million yen to 497,771 million yen compared to the balance as of March 31, 2016. The increase was mainly due to the increase in "Retained earnings".