Interim report
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Note : This document has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( Under Japanese GAAP ) ( April 1 - June 30 , 2026 ) Listed Company Name : Rinnai Corporation August 6 , 2026 Listings : Prime Sections of Tokyo Stock Exchange , and Premiere Section of Nagoya Stock Exchange ( Securities Code : 5947 ) Website : https://www.rinnai.co.jp Representative : Hiroyasu Naito , President Contact : Takuya Ogawa , Managing Executive Officer , Chief of Corporate Administration Headquarters TEL : +81 ( 52 ) 361-8211 Anticipated date to begin distributing dividends : Supplemental information sheets of quarterly results : Yes Information meeting of quarterly results : Yes ( for analysts and institutional investors ) I. Performance in the First Quarter of the Fiscal Year Ending March 31 , 2027 ( April 1― June 30 , 2026 ; amounts less than one million yen are omitted ) ( 1 ) Consolidated Operating Results Percentage figures in parentheses indicate increase or decrease from the previous term . Net Sales Operating Income Ordinary Income ( ¥ millions ; % ) Net income attributable to owners of the parent company First Quarter to June 2026 ¥ 113,669 [ + 10.6 % ] ¥ 9,195 [ -5.2 % ] ¥ 10,302 [ -3.5 % ] First Quarter to 102,749 [ + 4.6 % ] 9,697 [ + 11.2 % ] 10,679 [ -1.9 % ] June 2025 ¥ 6,744 [ + 1.8 % ] 6,622 [ -2.9 % ] Notes : Comprehensive income : First quarter of the year ending March 31 , 2027 ; ¥ 9,425 million [ - % ] First quarter of the year ended March 31 , 2026 ; ¥ ( 1,939 ) million [ - % ] Net Income per Share Fully Diluted Net Income per Share ( ¥ ) First Quarter to June 2026 ¥ 48.85 47.15 First Quarter to June 2025 ( 2 ) Consolidated Financial Position Total Assets Net Assets ( \ millions ; % ) Equity Ratio ( % ) June 30 , 2026 March 31 , 2026 ¥ 647,567 649,569 ( Reference ) Equity capital : First quarter of the year ending March 31 , 2027 : ¥ 437,881 million Year ended March 31 , 2026 : ¥ 437,253 million ¥ 491,140 494,124 67.6 % 67.3 II . Dividends Fiscal 2026 Fiscal 2027 Fiscal 2027 ( anticipated ) Dividend per Share 1st Quarter ( ¥ ) Interim 3rd Quarter Fiscal Year - End ( ¥ ) ( ¥ ) ¥ 50.00 ( ¥ ) ¥ 50.00 Full Year ( ¥ ) ¥ 100.00 53.00 Notes : 1. Revision of dividend forecast in period under review : None 53.00 106.00
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2 III. Forecast for the Fiscal Year Ending March 31, 2027 (Consolidated) (April 1, 2026, to March 31, 2027) (¥ millions/%) Net Sales Operating Income Ordinary Income Net income attributable to owners of the parent company Net Income per Share (¥) First half ¥231,000 [+6.7%] ¥19,600 [-13.8%] ¥21,400 [-15.3%] ¥13,000 [-18.3%] ¥ 94.15 Full year 500,000 [+6.3] 50,500 [-0.1] 54,100 [-6.2] 36,300 [+0.4] 262.91 Note: Percentage figures in parentheses indicate increase or decrease from the previous fiscal year. Note: Revision of fiscal year forecast in period under review: None * Notes (1) Changes in scope of consolidation of major subsidiaries during the period: None Newly included — (Company name: —): Excluded — (Company name: —) (2) Application of special accounting method for quarterly consolidated financial reporting: None (3) Changes in accounting policies; changes in accounting estimates; retrospective restatement (a) Changes due to revision of accounting standard: None (b) Other changes than (a): None (c) Changes in the rules for the accounting estimates: None (d) Retrospective restatement: None (4) Number of Outstanding Shares (Common Stock) (a) Number of outstanding shares at term-end (including treasury stock) June 30, 2026: 141,126,771 shares March 31, 2026: 141,126,771 shares (b) Number of treasury stock shares at term-end June 30, 2026: 3,057,159 shares March 31, 2026: 3,054,379 shares (c) Average number of shares during the term First quarter of the fiscal year ending March 2027: 138,070,576 shares First quarter of the fiscal year ended March 2026: 140,455,431 shares * Quarterly review process by certified public accountants and accounting auditors: None * Note on appropriate use of performance forecasts, and other specified notes Performance forecasts contained in this document are based on information currently available and certain judgments deemed by the Corporation to be reasonable. No intent is implied of promise by the Corporation to achieve such forward-looking statements. Actual results may differ significantly from such forecasts due to various factors. For more information, please refer to “1. Consolidated Performance, (3) Consolidated Performance Forecasts” on page 5 of this report. Supplemental information sheets of quarterly results: Please refer to Supplemental information sheets of quarterly results, which will be posted on the Corporation’s website on Thursday, August 6, 2026.
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3 1. Consolidated Performance (1) Operating Results In the first quarter under review (April 1–June 30, 2026), business conditions remained unstable due to heightened geopolitical risks stemming from escalating tensions in the Middle East. In addition, the operating environment continues to be unpredictable due to rising raw material prices and other factors. The domestic economy saw improvements in employment and income conditions, but we must continue closely monitoring the soaring prices of raw materials and energy, as well as the impact on supply chains, resulting from the prolonged situation in the Middle East. In the domestic housing industry, new housing starts are expected to continue declining gradually, while replacement demand driven by renovations continues to underpin overall demand. Against this backdrop, the Rinnai Group launched its new medium-term business plan, “accelerate 2030,” which began in April 2026. The plan will further strengthen our business foundation while creating new business and regional opportunities to accelerate sustainable growth. Through these initiatives, the Rinnai Group will leverage diverse energy sources to help address social issues in the fields of “heat and lifestyles” and “health and lifestyles” as we strive to become a global solutions company that continues creating better lifestyles. At the same time, we will fulfill our promise to customers— “Creating a healthier way of living”—while achieving sustainable growth, with the aim of enhancing corporate value over the medium to long term. In the period under review, we reported record-high net sales due to contributions from acquired companies and increased sales at our overseas affiliates. This was despite the impact of economic slowdown in the Chinese market. On the earnings side, operating income declined year on year as higher raw material prices and rising costs across the business put pressure on profits. As a result, net sales increased 10.6% year on year, to ¥113,669 million. Operating income declined 5.2%, to ¥9,195 million, and ordinary income decreased 3.5%, to ¥10,302 million. Net income attributable to owners of the parent company increased 1.8%, to ¥6,744 million. Our results by geographical segment were as follows: Japan While Japan’s new housing market was weakened by higher inflation and interest rates, the renovation market remained firm, supported by steady demand. Against this business backdrop, sales of gas clothes dryers and air bubble products, which address consumers’ growing demand for more comfortable and higher-quality lifestyles, remained strong. As a result, sales in Japan increased 4.0% year on year, to ¥47,808 million. Operating income declined 4.6%, to ¥4,475 million, as the impact of higher raw material prices outweighed the benefits of increased sales. United States Amid inflationary pressures and elevated interest rates, housing demand in the United States remained subdued. Under these conditions, sales of our core condensing water heaters performed strongly. As a result, sales in the United States rose 8.4%, to ¥18,782 million. On the earnings side, we reported an operating loss of ¥14 million (operating income of ¥509 million at first quarter of fiscal 2026). This is mainly due to R&D investments
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4 aimed at future growth, as well as increased burden of fixe-costs due to sales unit decrease of non-condensing water heaters produced in United States. Australia In Australia, housing demand remained at a high level, while the water heater market continued its shift from gas to electric models. In this business environment, sales synergies through cross-selling by acquired Smart Energy Group companies contributed to strong sales of electrified products, including heat pump water heaters and battery storage systems. As a result, sales in Australia jumped 36.9%, to ¥12,704 million, and operating income surged 263.0%, to ¥518 million. China In China, unit sales of various products declined as consumer sentiment remained weak amid an economic slowdown. As a result, sales declined 18.9%, to ¥7,055 million. While we worked to secure earnings through flexible production adjustments and cost controls, the impact of lower sales was significant, and we were unable to fully offset the burden of fixed costs. Accordingly, we reported an operating loss of ¥11 million (operating income of ¥1,181 million at first quarter of fiscal 2026). South Korea While the local economy remained lackluster, sales of core boiler equipment increased. Sales in South Korea increased 5.7% year on year, to ¥9,501 million, and operating income rose 19.5%, to ¥546 million. Indonesia Supported by steady demand for mainstay tabletop stoves, sales in Indonesia increased 21.8%, to ¥5,280 million, and operating income rose 22.5%, to ¥1,158 million. (For references 1) Sales Composition by Business Segment (¥ millions; %) First Quarter to June 30, 2025 First Quarter to June 30, 2026 Change Year to March 31, 2026 Amount % of total Amount % of total Amount % Amount % of total Water heaters ¥ 60,605 59.0% ¥ 65,190 57.4% ¥4,585 7.6% ¥281,920 59.9% Kitchen appliances 21,957 21.4 23,408 20.6 1,450 6.6 93,279 19.8 Air conditioning appliances 4,307 4.2 5,000 4.4 693 16.1 24,269 5.2 Commercial-use equipment 2,330 2.3 3,056 2.7 726 31.2 11,921 2.5 Others 13,549 13.2 17,013 15.0 3,464 25.6 59,001 12.5 Total ¥102,749 100.0% ¥113,669 100.0% ¥10,920 10.6% ¥470,392 100.0% (For references 2) Overseas Sales (¥ millions; %) First Quarter to June 30, 2025 First Quarter to June 30, 2026 Asia Others Total Asia Others Total I. Overseas sales ¥27,571 ¥30,798 ¥ 58,369 ¥27,975 ¥39,850 ¥ 67,826 II. Consolidated net sales — — 102,749 — — 113,669 III. Composition ratio of overseas sales to consolidated net sales 26.8% 30.0% 56.8% 24.6% 35.1% 59.7% Note: Above indicates sales of the Corporation and consolidated subsidiaries in overseas countries or regions.
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5 (2) Financial Position As of June 30, 20 26, Rinnai had total assets of ¥ 647,567 million, down ¥2,001 million from March 31, 2026. Total liabilities increased ¥981 million, to ¥156,426 million. Net assets were down ¥2,983 million, to ¥491,140 million. The equity ratio at the end of the period was 67.6%. (3) Consolidated Performance Forecasts Rinnai has not changed its forecasts for the first two-quarter period ending September 30, 2026 or the full-year period ending March 31, 2027 (Those forecasts were released on May 12, 2026.)
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6 2. Consolidated Financial Statements and Main Notes (1) Consolidated Balance Sheets (¥ millions) At March 31, 2026 (Fiscal 2026) At June 30, 2026 (First Quarter of Fiscal 2027) ASSETS: Current assets Cash and deposits Notes and accounts receivable, and contract assets Electronically recorded monetary claims Marketable securities Products Raw materials and stores Other Less allowance for doubtful accounts ¥172,202 94,649 13,494 12,922 44,324 36,104 6,973 (6,485) ¥166,825 90,985 12,446 13,610 46,808 36,289 9,161 (6,474) Total current assets 374,185 369,653 Fixed assets Tangible fixed assets Intangible fixed assets Goodwill Other 157,817 6,891 11,055 164,386 6,615 10,682 Total intangible fixed assets 17,946 17,297 Investments and advances Investments in securities Other Less allowance for doubtful accounts 33,829 65,801 (12) 29,209 67,033 (12) Total investments and advances 99,618 96,230 Total fixed assets 275,383 277,914 Total assets ¥649,569 ¥647,567
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7 (¥ millions) At March 31, 2026 (Fiscal 2026) At June 30, 2026 (First Quarter of Fiscal 2027) LIABILITIES: Current liabilities Notes and accounts payable Electronically recorded obligations Short-term borrowings Accrued income taxes Accrued employee’s bonuses Allowance for product guarantee Other allowances Other ¥ 29,439 12,923 12,801 7,069 6,644 5,481 1,671 34,584 ¥ 28,735 11,191 10,092 4,276 3,281 5,414 1,564 43,385 Total current liabilities 110,615 107,941 Long-term liabilities Allowance environmental measures Other allowances Net defined benefit liabilities Other 2,255 78 7,389 35,106 2,255 81 7,095 39,053 Total long-term liabilities 44,829 48,485 Total liabilities 155,445 156,426 NET ASSETS: Shareholders’ equity: Common stock Capital surplus Earned surplus Treasury stock 6,484 8,324 367,029 (10,568) 6,484 8,324 366,870 (10,568) Total shareholders’ equity 371,269 371,110 Other comprehensive income: Unrealized gain on marketable securities Foreign exchange translation adjustment Remeasurements of defined benefit plans 12,024 34,213 19,745 10,888 36,785 19,097 Total of other comprehensive income 65,983 66,771 Non-controlling interests 56,870 53,258 Total net assets 494,124 491,140 Total liabilities and net assets ¥649,569 ¥647,567
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8 (2) Consolidated Statements of Income, and Sta tements of Comprehensive Income Consolidated Statements of Income (¥ millions) First Quarter of Fiscal 2026 (From April 1 to June 30, 2025) First Quarter of Fiscal 2027 (From April 1 to June 30, 2026) Net sales Cost of sales ¥102,749 67,402 ¥113,669 75,830 Gross profit 35,347 37,839 Selling, general and administrative expenses 25,650 28,643 Operating income 9,697 9,195 Other income: Interest income Dividends received Other 742 492 271 729 496 261 Total other income 1,507 1,488 Other expenses: Interest expenses Foreign exchange loss Loss on retirement of fixed assets Depreciation Other 32 387 9 77 16 130 196 8 17 30 Total other expenses 524 381 Ordinary income 10,679 10,302 Extraordinary losses: Excavation research expenses for buried cultural properties — 146 Total extraordinary losses — 146 Income before income taxes 10,679 10,155 Income taxes (current) Income taxes (deferred) 3,119 (276) 3,516 (786) Total income taxes 2,842 2,729 Net income 7,836 7,426 Net income attributable to non-controlling interests 1,214 681 Net income attributable to owners of the parent company ¥ 6,622 ¥ 6,744
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9 Consolidated Statements of Comprehensive Income (¥ millions) First Quarter of Fiscal 2026 (From April 1 to June 30, 2025) First Quarter of Fiscal 2027 (From April 1 to June 30, 2026) Net income Other comprehensive income Unrealized gain on marketable securities Foreign exchange translation adjustment Remeasurements of defined benefit plans ¥ 7,836 703 (10,238) (241) ¥ 7,426 (1,136) 3,783 (647) Total of other comprehensive income (9,776) 1,999 Comprehensive income (1,939) 9,425 Total comprehensive income attributable to: Owners of Rinnai Corporation Non-controlling interest (335) (1,604) 7,532 1,893
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10 (3) Notes to Quarterly Consolidated Financial Statements Segment Information 1. First Quarter of the Fiscal Year Ended March 31, 2026 (From April 1 to June 30, 2025) Sales and Income by Reportable Segment (¥ millions) Reportable Segments Others (Note 3) Adjustments (Note 4) Amounts in Consolidated Statements of Income (Note 5) Japan United States (Note 1) Australia (Note 2) China South Korea Indonesia Total Net sales Sales to outside customers ¥45,961 ¥17,332 ¥9,276 ¥8,695 ¥8,988 ¥4,333 ¥ 94,587 ¥8,161 ¥ － ¥102,749 Intersegment sales 12,383 － 22 897 158 127 13,588 863 (14,452) － Total 58,344 17,332 9,299 9,592 9,146 4,460 108,176 9,025 (14,452) 102,749 Segment Income 4,691 509 142 1,181 457 944 7,927 1,193 576 9,697 Notes:1. “United states” include sales from subsidiaries in Canada, Mexico, and Costa Rica, which conduct integrate business activities based on comprehensive sales strategies. 2. “Australia” include sales from a subsidiary in Malaysia, which complements the production system, and conducts integrate business activities. 3. “Others” include sales from subsidiaries in Taiwan, Thailand, Vietnam, New Zealand, Brazil and other regions. 4. “Adjustments” of segment income refers to intersegment transactions to eliminate. 5. “Segment income” is adjusted from operating income in Consolidated Statements of Income. 2. First Quarter of the Fiscal Year Ending March 31, 2027 (From April 1 to June 30, 2026) Sales and Income (Loss) by Reportable Segment (¥ millions) Reportable Segments Others (Note 3) Adjustments (Note 4) Amounts in Consolidated Statements of Income (Note 5) Japan United States (Note 1) Australia (Note 2) China South Korea Indonesia Total Net sales Sales to outside customers ¥47,808 ¥18,782 ¥12,704 ¥7,055 ¥9,501 ¥5,280 ¥101,133 ¥12,536 ¥ － ¥113,669 Intersegment sales 10,885 － 31 776 117 139 11,949 795 (12,744) － Total 58,694 18,782 12,735 7,831 9,618 5,419 113,082 13,332 (12,744) 113,669 Segment Income (loss) 4,475 (14) 518 (11) 546 1,158 6,673 1,747 774 9,195 Notes:1. “United states” include sales from subsidiaries in Canada, Mexico, Costa Rica, and other regions, which conduct integrate business activities based on comprehensive sales strategies. 2. “Australia” include sales from a subsidiary in Malaysia, which complements the production system, and conducts integrate business activities. 3. “Others” include sales from subsidiaries in Taiwan, Thailand, Vietnam, New Zealand, Brazil, Peru and other regions. 4. “Adjustments” of segment income (loss) refers to intersegment transactions to eliminate. 5. “Segment income (loss)” is adjusted from operating income in Consolidated Statements of Income. Major Changes in Shareholders’ Equity Not applicable. Assumptions for Going Concern Not applicable.
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11 Note on Quarterly Consolidated Statements of Cash Flows The Corporation has not prepared quarterly consolidated statements of cash flows for the period under review. Depreciation (including intangible assets which exclude goodwill) and goodwill amortization for the period under review are as follows: First Quarter of Fiscal 2026 (From April 1 to June 30, 2025) First Quarter of Fiscal 2027 (From April 1 to June 30, 2026) Depreciation Goodwill amortization ¥3,527 million 146 million ¥4,060 million 273 million