Customer Activity Slowdown and Lower Sales Due to COVID-19

「Of the company’s sales, initial revenue from the licensing business varies according to customers’ new product development, royalty revenue according to customers’ product production and shipment levels, and revenue from the solutions business according to customers’ development, system construction and in-house use needs.」

「Of the company’s sales, initial revenue from the licensing business varies according to customers’ new product development, royalty revenue according to customers’ product production and shipment levels, and revenue from the solutions business according to customers’ development, system construction and in-house use needs.」

「During the six months ended the second quarter, Japan’s economy saw various measures to combat COVID-19 eased or lifted, raising expectations for a recovery in domestic demand, particularly in the food service and travel industries, through inbound demand and other channels.」

「Looking overseas, the US and Europe have returned to normal economic operations. However, the outlook remains uncertain, as renewed infections caused by disease variants are spreading in China following changes to its zero-COVID policy. Russia’s invasion of Ukraine, which began in February last year, shows no sign of ending, while soaring energy and food prices, accelerating inflation caused by supply-chain disruptions, and interest-rate hikes by central banks in various countries have raised concerns over recession, leaving considerable uncertainty over the outlook.」

「Although royalty revenue in the licensing business declined due to lower production and shipments of customers’ products resulting from a decline in solutions business sales and supply chain disruptions, several hardware licensing projects were won in the fourth quarter, resulting in a significant increase in net sales. However, the company was unable to cover costs including selling, general and administrative expenses and was forced to recognize a loss.」

「Against this backdrop, the Company, which provides a range of environmentally friendly, energy-efficient green products using DMNA algorithms, offering high image quality, high sound quality and low latency, is continuing its sales efforts to further bring to domestic and overseas markets enhanced compression/decompression technologies based on international standards, as well as proprietary codecs, lossless technologies that prevent data degradation even after compression, and various low-latency transmission devices as solution products. Although many customers continue to work remotely, substantive business discussions have gradually increased.」

「Against this backdrop, the Company, which provides a range of environmentally friendly, energy-efficient green products using DMNA algorithms, offering high image quality, high sound quality and low latency, is continuing its sales efforts to further bring to domestic and overseas markets enhanced compression/decompression technologies based on international standards, as well as proprietary codecs, lossless technologies that prevent data degradation even after compression, and various low-latency transmission devices as solution products. Although many customers continue to work remotely, substantive business discussions have gradually increased.」

「Against this backdrop, the Company, which provides a range of environmentally friendly, energy-efficient green products using DMNA algorithms, offering high image quality, high sound quality and low latency, is continuing its sales efforts to further bring to domestic and overseas markets enhanced compression/decompression technologies based on international standards, as well as proprietary codecs, lossless technologies that prevent data degradation even after compression, and various low-latency transmission devices as solution products. Although many customers continue to work remotely, substantive business discussions have gradually increased.」

「The company had expected sales to expand in the fourth quarter of the fiscal year. Although the solutions business broadly achieved its target, the significant impact of customers’ revised development plans and sluggish or suspended production and shipments due to the COVID-19 pandemic, together with the substantial shortfall in new projects and royalty revenue against plan in both the software and hardware divisions of the licensing business, was considered the primary cause of the significant decline in sales and recognition of a loss.」

「Against this backdrop, the Company, which provides a range of environmentally friendly, energy-efficient green products using DMNA algorithms, offering high image quality, high sound quality and low latency, is continuing its sales efforts to further bring to domestic and overseas markets enhanced compression/decompression technologies based on international standards, as well as proprietary codecs, lossless technologies that prevent data degradation even after compression, and various low-latency transmission devices as solution products. Although gradually, substantive business discussions have begun to progress with customers who continue to work remotely.」

「Against this backdrop, the Company, which provides a range of environmentally friendly, energy-efficient green products using DMNA algorithms, offering high image quality, high sound quality and low latency, is continuing its sales efforts to further bring to domestic and overseas markets enhanced compression/decompression technologies based on international standards, as well as proprietary codecs, lossless technologies that prevent data degradation even after compression, and various low-latency transmission devices as solution products. Although gradually, substantive business discussions have begun to progress with customers who continue to work remotely.」

「Under these circumstances, the company, which provides a range of environmentally friendly, energy-efficient green products using DMNA algorithms, offering high image and sound quality and low latency, is working to strengthen the functionality of compression and decompression technologies based on international standards and to win orders. It is also continuing its sales efforts to introduce original codecs based on its proprietary standards, lossless technology that prevents data degradation during compression, and various low-latency transmission systems as solution products to markets in Japan and overseas. However, as many customers are working remotely, opportunities for substantive business discussions have unfortunately remained limited.」

「Although demand for low-latency transmission equipment for remote studio broadcasting by US television stations increased as a result of the COVID-19 pandemic, the impact of customers’ revised and postponed development plans and the suspension or slowdown of product manufacturing and shipments was substantial, resulting in a significant decline in full-year net sales. Net sales for the fiscal year were ¥524 million, down 39.1% year on year, and the company posted an ordinary loss of ¥173 million, compared with ordinary income of ¥100 million in the previous fiscal year.」