Entry into the Healthcare Business

「防犯・防災セキュリティー管理システムの販売につきましては、北陸及び新潟地区を中心に順調に推移いたしました。南九州エリアにつきましては、営業開始が当初予定よりやや遅れたものの、その後は順調に立ち上がっており、今後の販売拡大に向けた体制整備を進めております。」

「Sales of the security management system for crime prevention and disaster preparedness progressed mainly in the Hokuriku and Niigata regions. In addition, preparations began for launching sales in southern Kyushu. As a result, the Healthcare Business reported revenue of ¥321.361 million, up 47.9% year on year, and operating profit of ¥34.278 million, up 441.7% year on year, for the current consolidated fiscal year.」

「この結果、ヘルスケア事業の当連結会計年度の業績は、売上高321,361千円（前年同期比47.9％増）、営業利益34,278千円（前年同期比441.7％増）となりました。」

「Sales of the security management system for crime prevention and disaster preparedness, launched in the previous consolidated fiscal year, expanded steadily across the three Hokuriku prefectures and the Niigata region, with both revenue and operating profit exceeding budget. As a result, the Healthcare Business reported revenue of ¥165.023 million, up 151.7% year on year, and operating profit of ¥18.602 million, compared with an operating loss of ¥1.826 million in the same period of the previous year, for the current interim consolidated accounting period.」

「Full-scale sales activities for the newly launched security management system for crime prevention and disaster preparedness began in late August 2024, and sales expanded steadily across the Hokuriku region. As sales progressed steadily, operating profit exceeded plan. As a result, the Healthcare Business reported revenue of ¥217.172 million, up 64.3% year on year, and operating profit of ¥6.327 million, up 358.5% year on year, for the current consolidated fiscal year.」

「During the current interim consolidated accounting period, sales at subsidiary 中部薬品工業 progressed steadily, with "Chuyaku Tankiri Throat Lozenges" newly introduced as a regular product at major drugstores and continuing to increase sales. The new wafer supplements were also increasingly introduced in the pharmaceutical sections of major retailers and achieved sales above the initial plan. In addition, full-scale sales activities for a new offering, a security management system for crime prevention and disaster preparedness, began in late August 2024, and sales have progressed steadily.」

「中部薬品工業, a subsidiary, steadily met its sales plans by product, enabling the segment as a whole to achieve operating profitability. In particular, sales of throat-lozenge products performed well as their presence at major drugstores expanded. Wafer snacks launched in February 2024 are also being introduced to the market steadily and are expected to make a significant contribution to revenue in the next consolidated fiscal year.」

「During the first nine months of the current consolidated fiscal year, 中部薬品工業, a subsidiary, steadily met its sales plans by product, with products related to throat lozenges performing particularly well as their presence at major drugstores expanded. Although the postponement of the launch of a new product was a negative factor in some areas, the business as a whole achieved operating profitability.」

「During the first six months of the current consolidated fiscal year, exports of Japanese-made cosmetics to Hong Kong, which began in the first quarter, continued. Subsidiary 中部薬品工業 has been meeting its sales plan steadily, and products related to throat lozenges have performed particularly well as their presence at major drugstores expanded.」

「During the first quarter of the current consolidated fiscal year, we exceeded our operating profit plan as a result of beginning exports of Japanese-made cosmetics to Hong Kong and steady progress in improving the earnings structure of subsidiary 中部薬品工業. As a result, the Healthcare Business reported revenue of ¥31.920 million, up 37.4% year on year, and operating profit of ¥2.788 million, compared with an operating loss of ¥10.555 million in the same quarter of the previous year.」

「Going forward, we plan to improve the soundness of our earnings structure by discontinuing old products with deteriorating margins across the segment and shifting to new products with higher margins.」

「At subsidiary 中部薬品工業, sales volume of its existing flagship product, powder toothpaste, has declined. However, sales of new contract-manufactured products have been gradually increasing since they began to be carried by drugstore chains in March 2022, as they have captured market needs.」

「At subsidiary 中部薬品工業, a new product began to be carried by drugstore chains in March 2022, and sales have been strong. However, the order contract for the company's powder toothpaste was delayed from the originally planned timing, reducing the sales volume of manufactured products.」

「② Change in the Healthcare Business portfolio　The Healthcare Business will focus on strengthening the development of oral care products and health supplements centered on consolidated subsidiary 中部薬品工業, shifting away from the manufacture and sale of nonwoven masks under the "KITABO" brand.」

「Orders for existing nonwoven masks temporarily declined due to changes in the business environment, including intensifying competition in the industry since the end of the previous fiscal year. However, from the first quarter of the current consolidated fiscal year onward, production has been recovering after consumer cooperatives recognized the quality of the wholly Japan-made masks and their compliance with JIS standards, leading to continuing orders from July 2021. 中部薬品工業, a consolidated subsidiary, began selling renewed versions of existing products in September 2021, although the planning and development of new products is behind schedule.」

「In the Healthcare Business, orders for existing nonwoven masks temporarily declined due to changes in the business environment, including intensifying competition in the industry since the end of last year. From the second quarter onward, we have been promoting the quality of wholly Japan-made masks, renewing existing products and planning new products at our subsidiary 中部薬品工業, and working to expand our sales channels.」

「During the consolidated fiscal year, we acquired all shares of 中部薬品工業 through a simplified share exchange. 中部薬品工業 operates a business selling healthcare products, including toothpaste powder, health tea, throat lozenges and cod-liver-oil drops, in Japan and overseas through major domestic drugstore chains, major Japanese e-commerce sites and major Chinese cross-border e-commerce sites. By making the company a subsidiary, we will accelerate growth in the Healthcare Business, improve earnings in new business areas and further strengthen our management base.」

「This share exchange was carried out with 12 January 2021 as the effective date, and 中部薬品工業 became a wholly owned subsidiary of the company. Through the acquisition of 中部薬品工業 as a wholly owned subsidiary, we aim to accelerate growth in the Healthcare Business and improve earnings in new business areas.」

「Property, plant and equipment amounted to ¥1,073.090 million, a decrease of ¥74.382 million from the end of the previous fiscal year. This was mainly because investment securities under investments and other assets decreased by ¥80.043 million due to the sale of shares held and a decline in their market value, despite a ¥4.407 million increase in property, plant and equipment from capital investment in the building housing the new cleanroom for mask manufacturing.」

「We are working to establish a new business by selling disposable medical protective clothing made from polypropylene nonwoven fabric and manufacturing and selling nonwoven masks under the "KITABO" brand.」

「We are working to establish a new business by selling disposable medical protective clothing made from polypropylene nonwoven fabric and manufacturing and selling nonwoven masks under the "KITABO" brand.」