Expansion of the private-sector business mix

「As a result of efforts to level out delivery schedules for products supplied to the Ministry of Defense, whose deliveries are concentrated in the second half, and to expand orders for private-sector products, revenue increased from the same period of the previous year. Government agencies 196,553 27,824 224,377 Private-sector and other customers 387,625 3,219 390,844」

「Ministry of Defense 1,089,387 51.0 Private-sector and other 850,689 39.8」

「The Company sought to improve first-half sales by expanding orders from private-sector companies, but has not succeeded in eliminating its revenue structure's concentration in the second half.」

「Sales exceeded the plan because orders from private-sector companies increased for precision pyrotechnic products and relatively large-scale evaluation testing.」

「The increase in relatively highly profitable private-sector contracts and spot contracts in the chemical products field contributed to a substantial improvement in the profit margin. As a result, net sales were ¥595 million, up 27.4% year on year, and segment profit was ¥142 million, up 194.9%.」

「The increase in highly profitable orders in the private sector also enabled the Company to secure more profit than expected.」

「Private-sector and other 573,908 3,542 577,451」

「The Company increased sales through contract work for private-sector companies and other activities, and performance remained solid.」

「Orders for private-sector products increased, but the Company's core products supplied to the Ministry of Defense struggled.」

「Sales of other products were generally solid, and orders for evaluation testing and incineration disposal also increased as the economy recovered, but this was insufficient to offset the decline in orders for products supplied to the Ministry of Defense.」

「Although order volumes for products sold to private-sector customers increased, sales declined from the previous fiscal year because of the impact of significant declines in orders for pyrotechnic products and chemical products sold to the Ministry of Defense.」

「Cost inflation also continued in the pyrotechnic products field, and the Company worked to pass on higher costs appropriately, mainly for private-sector products. However, sales declined because of a substantial decrease in orders for its core products supplied to the Ministry of Defense. Private-sector and other 405,500 2,358 407,859」

「Although orders for products sold to private-sector customers increased as the market recovered, net sales decreased from the previous fiscal year because orders for the core products sold to the Ministry of Defense declined significantly.」

「We will continue to provide quality products with safety and reliability as our top priorities, while actively pursuing the development of new products and the cultivation of new markets.」

「Sales in the pyrotechnic products business increased from the previous period because orders for chemical products for the private sector and contracted services such as evaluation testing using the Company's facilities were strong.」

「However, sales of private-sector products declined because of factors including the spread of the novel virus infection.」

「The Company also newly developed a small mountain-rescue smoke flare for emergency use and began selling it through major outdoor retailers and other outlets, but was unable to secure a profit in the pyrotechnic products business.」

「The private-sector products market stagnated as a result of the spread of the infectious disease, and sales declined.」

「Sales declined from the previous period because of factors including stagnation in the private-sector products market caused by the spread of the infectious disease.」

「Sales of private-sector products struggled because economic activity stagnated as a result of the spread of the infectious disease.」

「In the pyrotechnic products business, sales declined because, in addition to deliveries of relatively high-margin products being postponed, private-sector products struggled amid the stagnation of economic activity caused by the spread of the infectious disease. As a result, net sales were ¥186 million, down 33.0% year on year, and the segment loss was ¥8 million, a 137.1% decline.」

「Although the private-sector pyrotechnic products business received orders for a new business, sales declined because of lower orders for training pyrotechnic products supplied to the Ministry of Defense, the core business.」

「Although the Company's core pyrotechnic products business benefited from higher sales of pyrotechnic products to the private sector and new orders for hydrazine nitrate products, a chemical product, the impact of restrained defense spending on training pyrotechnic products and other items continued. Orders for products supplied to the Ministry of Defense declined substantially, resulting in lower sales than in the previous period. In the pyrotechnic products business, net sales were ¥838 million, down 8.0% year on year, and segment profit was ¥45 million, down 62.2%.」

「In the pyrotechnic products business, sales of pyrotechnic products to the private sector and contracted evaluation testing increased, but the decline in sales of pyrotechnic products to the Ministry of Defense had an impact. Net sales were ¥537 million, down 0.8% year on year, and segment profit was ¥52 million, down 11.4%.」

「Against this backdrop, net sales exceeded the same period of the previous year, as sales of our core pyrotechnic products for the Ministry of Defense progressed generally as planned and sales in the private sector also increased.」

「Against this backdrop, although we had anticipated difficult sales conditions from the beginning of the fiscal year, net sales for the fiscal year exceeded the previous year's result by ¥122 million and increased, owing to factors including some contracts from the Ministry of Defense being brought forward from government bond-funded contracts to expenditure-funded contracts, private-sector pyrotechnic products being recognized as sales as planned, and higher rental income.」

「During the cumulative third quarter, net sales in the pyrotechnic products business were ¥911 million, up 17.9% year on year and above the same period of the previous year, as orders for pyrotechnic products from the Ministry of Defense increased in addition to those for the private sector.」

「During the cumulative second quarter, the pyrotechnic products business generated net sales of ¥542 million, up 20.9% year on year and above the same period of the previous year, owing mainly to increased order volumes for private-sector pyrotechnic products.」

「During the cumulative first quarter, the pyrotechnic products business benefited from solid orders for private-sector pyrotechnic products, as well as additional pyrotechnic products whose delivery dates were changed and whose sales were therefore recognized in the quarter. Net sales were ¥245 million, an increase of ¥51 million, or 26.4%, from the same period of the previous year.」

「Revenue increased because of additional orders resulting from, among other factors, supplementary budgets for the Ministry of Defense, as well as orders for private-sector pyrotechnic products exceeding the plan.」

「During the cumulative second quarter, the pyrotechnic products business generated net sales of ¥448 million, up 3.8% year on year and above the same period of the previous year, owing to factors including a review of order volumes for pyrotechnic products for the private sector, in addition to orders from the Ministry of Defense.」

「Because orders for pyrotechnic products from the Ministry of Defense are concentrated in the second half of the fiscal year under the contracts, we have been working mainly in the first half to increase sales of pyrotechnic products to the private sector. However, performance has still not reached the planned level.」

「Accordingly, in addition to working to increase orders for pyrotechnic products for the private sector, we will strengthen our financial base by developing new businesses and pursue stable corporate management by addressing the following as important issues.」

「Because the business serving government agencies, including the Ministry of Defense, our main customer, is not expected to see a substantial increase in orders for the time being, given trends in the national budget and the characteristics of our products, we intend to promote our private-sector business and work to increase the private-sector share of net sales.」