Expansion into cutting-tool manufacturing

「In the KMS business, the company expanded sales of proprietary products planned by the Manufacturing Business Division, including electroplated tools for processing brittle materials, while sales at its subsidiaries in the Philippines and Vietnam remained solid. Although it worked to improve gross margins and reduce selling, general and administrative expenses, both revenue and profit fell short of the segment budget set for the current interim consolidated accounting period, due in part to a slowdown among customers related to semiconductor manufacturing equipment caused by declining demand for electric vehicles.」

「Combine Kamogawa HD Group's end-to-end supply expertise as a comprehensive supplier of production goods with the Group's strengths, including its global sales network and customer base centered on major automakers.」

「Amid this uncertain environment, the Company established "transforming into a highly specialized trading company that contributes to genuine productivity improvements" as its medium- to long-term basic policy. In the second year of the new medium- to long-term plan, it actively pursued initiatives to improve customer productivity, including developing new markets such as the EV industry and transforming itself from a specialized trading company focused on cutting tools into a "specialized trading company for manufacturing," as strategies to achieve "sustainable growth" and "reform."」

「The performance of the manufacturing business, comprising 川野辺製作所, which became a subsidiary in the previous consolidated fiscal year, KNB TOOLS OF AMERICA,INC. and the Company's manufacturing division, has been included in "Other."」

「From the first quarter of the current consolidated accounting period, following a partial revision of the Group's internal performance-management classifications, the performance of the e-commerce business, previously included in the cutting-tool business, comprising さくさく株式会社 and the Company's e-commerce division, has been included in "Other." The performance of the manufacturing business, comprising 川野辺製作所, which became a subsidiary in the previous consolidated fiscal year, KNB TOOLS OF AMERICA,INC. and the Company's manufacturing division, has also been included in "Other."」

「The Company entered into this agreement after determining that acquiring the high level of production technology, personnel and diverse production equipment developed through the other company's cutting-tool manufacturing operations would expand and enhance the manufacturing scope of its cutting-tool business and contribute to the sustainable growth of the Group as a whole.」