Increase in labor costs and other expenses associated with improvements in employee compensation

「Against this backdrop, we continued to face a challenging operating environment, including soaring energy prices, higher labor costs, and difficulty procuring raw materials and components. Nevertheless, demand for defense equipment overall remained high, and higher order volumes for some of our products offset declines in others.」

「During the interim accounting period, there were no new business or other risks and no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Personnel costs also increased due to wage increases and the payment of year-end allowances, but earnings increased substantially as the effect of higher sales was supplemented by thorough improvements in operating efficiency.」

「In terms of earnings, fixed costs increased as the Company invested in human capital and plant and equipment, but earnings increased as improvements in workability across all operations enhanced profitability.」

「During the cumulative second-quarter period, there were no new business or other risks, and no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「In terms of earnings, the cost burden increased as the Company continued to invest in improving employees’ working environment and incurred repair costs for buildings used in the rental business, among other expenses, and was unable to secure operating profit.」

「Gross profit for the fiscal year amounted to ¥509 million, a decrease of ¥14 million from the previous fiscal year, as the Company continued to improve employee compensation and the work environment as investments to improve working conditions, despite an increase in highly profitable contract work.」

「In terms of earnings, a decline in profitability was unavoidable due to soaring raw-material and energy prices and higher labor costs. However, efficiency improved through investigating the causes of even minor bottleneck processes and making successive improvements, and although profit declined from the previous fiscal year, the profit margin improved.」

「In terms of earnings, profitability was expected to decline due to soaring raw-material and energy prices and higher labor costs associated with improved employee compensation. However, from the current fiscal year, the organization was changed to match product characteristics, the production structure was rebuilt, and each process was reviewed to improve production efficiency. As a result, earnings increased.」

「In terms of earnings, profitability improved through greater efficiency and labor saving at production sites, but the improvement was insufficient to offset the increase in fixed costs, and the Company was unable to secure a profit.」

「In terms of earnings, fixed costs increased as the Company proceeded with capital expenditures to improve the working environment and improved employee compensation, resulting in lower profit than in the previous fiscal year.」

「In terms of profit, the company has continued investing in creating a safe and comfortable working environment and improving employee compensation and benefits, but」

「Fixed costs increased partly because the company has continued improving employee compensation and benefits from a long-term perspective.」

「As a result, sales increased from the same period of the previous year, but profit declined because the increase in fixed costs, including personnel costs, could not be absorbed.」

「Selling, general and administrative expenses for the fiscal year amounted to ¥324 million, an increase of ¥9 million from the previous fiscal year, mainly due to improvements in employee compensation.」

「For the fiscal year, both revenue and profit declined due to lower sales and increases in personnel costs and depreciation resulting from planned investment.」

「In terms of profit and loss, cost reductions from process improvements for each product achieved a certain level of results, but profit declined compared with the previous fiscal year because of the effects of capital investment, improved employee compensation and investments in personnel to support business expansion.」

「Profit declined from the previous fiscal year, mainly due to higher depreciation resulting from capital expenditures planned continuously since the previous fiscal year and higher personnel costs associated with improving employee compensation.」

「In terms of profit and loss, although the company continued to improve efficiency in the manufacturing process, profit declined year on year because of higher personnel expenses resulting from improved employee compensation and higher depreciation expenses from capital investment.」

「During the nine-month period, there were no new business or other risks, nor any material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the cumulative second quarter under review, there was no emergence of new business or other risks, nor were there any material changes to the business or other risks described in the annual securities report for the preceding fiscal year.」

「In terms of earnings, the decline in gross profit could not absorb the increase in labor and other costs resulting from improved employee compensation, and operating profit and subsequent profit measures were consequently below the levels of the same period of the previous year.」