Risk of economic stagnation and delays in customer projects due to the spread of COVID-19

「Japan’s economy in the third quarter was moving toward normalisation of social and economic activity as restrictions on activities related to COVID-19 were eased, but the outlook remained uncertain due to factors including the prolonged Russia-Ukraine situation, the weakening yen, and rising prices.」

「Japan’s economy in the first quarter was gradually recovering as restrictions on activities related to COVID-19 were eased and the disease was reclassified as a Category V infectious disease, but the outlook remains uncertain due to factors including the prolonged Russia-Ukraine situation, the weakening yen, and rising prices.」

「During the third quarter, Japan's economy was showing signs that the impact of COVID-19 was subsiding, and normalization of socioeconomic activity was progressing as vaccination coverage increased and restrictions on activity were eased, raising expectations for an economic recovery.」

「There have been no material changes to the assumptions, including the future spread and timing of the subsidence of COVID-19, disclosed under Additional Information in the previous fiscal year's annual securities report.」

「There have been no material changes to the assumptions, including the future spread and timing of the subsidence of COVID-19, disclosed under Additional Information in the previous fiscal year's annual securities report.」

「Although the company continued to be affected by economic stagnation associated with the state of emergency and some delays in system construction and deliveries occurred across the sales channels for its products and services, demand for replacement of the aforementioned VOTIRO Disarmer file sanitization solution for local governments remained solid. In addition, orders for large projects related to Check Point contributed to net sales of ¥3,167 million, compared with ¥2,795 thousand in the same period of the previous year.」

「Operating performance continued to be affected by economic stagnation associated with the state of emergency. Although some delays in system construction and deliveries occurred across the sales channels for our products and services, demand for replacement of VOTIRO Disarmer, a file sanitization solution for local governments that we previously sold and that has become the de facto standard, remained solid. Net sales were ¥2,275 million, compared with ¥2,107 million in the same period of the previous year.」

「Operating performance continued to be affected by economic stagnation associated with the state of emergency. Although some delays in system construction and deliveries occurred across the sales channels for our products and services, orders for large projects contributed to net sales of ¥1,547 million, compared with ¥1,366 million in the same period of the previous year.」

「Operating performance continued to be affected by economic stagnation associated with the state of emergency. Delays in system construction and deliveries across the sales channels for our products and services contributed to net sales of ¥710 million, compared with ¥737 million in the same period of the previous year.」

「Delays in system construction and deliveries occurred throughout the year across the sales channels for our products and services. Although procurement of some large projects, including public-sector projects, began in the second half of the fiscal year, large projects were carried forward to the following fiscal year and beyond.」

「Although delays in system construction and deliveries continued among SIers and end users, the sales channels for our products and services, procurement of some large projects for government agencies and enterprises began, resulting in higher sales in the third quarter alone than in the same quarter of the previous year. However, the resurgence of COVID-19 also began, and the delays in the first half could not be recovered. Net sales were ¥2,107 million, down 11.3% year on year.」

「Although the market is certain to expand, with new demand for security measures arising from the widening scope of cyber risks accompanying changes in working styles such as telework and the advance of DX, as well as IoT device security becoming subject to guidelines, economic stagnation caused by the spread of COVID-19 has recently led to delays in system construction and deliveries among SIers and end users, the sales channels for our products and services. As a result, net sales were ¥1,366 million, down 18.3% year on year.」

「Regarding operating performance, the company was affected by reviews of the scale and timing of system implementations for some projects in response to requests to refrain from going out under the state of emergency. Net sales were ¥737 million, down 9.2% year on year.」

「The spread of COVID-19 has raised concerns about an economic slowdown and stagnation in Japan and overseas, making it difficult to forecast when the pandemic will subside and how consumer trends will develop afterward. Among major customers for our products, including government agencies and enterprises, there have been numerous cases in which the scale and timing of system implementations were reviewed in response to requests to refrain from going out under the state of emergency. This may affect our financial condition and operating results.」