Risk of earnings volatility due to concentration of 2 key projects in the fourth quarter

「Meanwhile, deliveries of FA equipment and solar panel dismantling equipment for overseas customers shifted into the second half due to delays in customers arranging sea freight, while delivery of solar panel dismantling equipment for domestic customers shifted into the second half because customers were late preparing to receive it.」

「Some projects shifted into the fiscal year ending August 2025 due to the timing of acceptance inspections for on-site work.」

「Although part of an overseas panel dismantling equipment project was postponed at the customer's request, revenue was recognized on 3 semi-automated solar panel dismantling machines, or frame removal machines, for a domestic industrial waste management company.」

「Some project revenue shifted into the second half.」

「For an overseas panel dismantling equipment project, the timing of on-site acceptance was brought forward due to a delay in sea freight, and revenue recognition shifted to the next fiscal year, the fiscal year ending August 2023.」

「Under these circumstances, revenue for the cumulative second quarter of the current consolidated fiscal year was ¥1,592 million, below the initial forecast, due to shifts in revenue recognition timing caused by extended lead times for parts and schedule changes to some on-site work projects because customer factories were operating at full capacity. This represented a year-on-year decrease of ¥4,200 million.」

「The timing of revenue recognition for some solar cell manufacturing equipment and FA equipment projects was postponed.」

「In the equipment-related business, the group modified and expanded equipment for its major customer, a US solar cell manufacturer, and recognized revenue on solar cell manufacturing equipment for other US solar cell manufacturers. It also recognized revenue on FA equipment, mainly for domestic electronic component manufacturers, but due in part to customer-requested schedule changes on some overseas FA equipment projects, revenue was ¥4,905 million, a decrease of ¥2,579 million year on year, and slightly below plan.」

「Meanwhile, the revenue recognition timing for some solar cell manufacturing equipment projects shifted into the second half, and revenue fell below the initial forecast.」

「This was because expansions and modifications were carried out on existing lines at a US solar cell manufacturer, and sales of high-margin parts performed strongly, far exceeding the plan. Meanwhile, the timing of revenue recognition for some solar cell manufacturing equipment and FA equipment projects shifted between fiscal periods, and revenue fell below the initial forecast.」

「Design changes or changes to the timing of acceptance inspections may occur at the customer's request, and the resulting postponement of the originally scheduled revenue recognition timing may affect short-term performance.」

「The company planned for performance to be weighted toward the second half of the fiscal year. Because the first quarter of the current consolidated fiscal year focused mainly on manufacturing large lines scheduled for revenue recognition in the second half, performance for the quarter was broadly in line with the initial plan.」

「Transactions involving FA equipment in the equipment-related business are recognized under either a shipment basis or an acceptance basis, in accordance with the contractual terms with customers, but design changes or changes to the timing of acceptance inspections may occur at the customer's request. In the environmental business, the timing of revenue recognition may also shift from the originally scheduled period due to customer-related factors, weather and other influences, potentially affecting the performance of the group.」

「Transactions involving the solar cell manufacturing equipment supplied by the group are recognized under either a shipment basis or an acceptance basis, in accordance with the contractual terms with customers. If design changes or changes to the timing of acceptance inspections occur at the customer's request, the timing of revenue recognition may shift from the originally scheduled period, potentially affecting the performance of the group.」

「Large, high-value integrated production lines and composite equipment require approximately 4–6 months before delivery and acceptance inspection. If the number of such projects increases, quarterly performance may fluctuate significantly depending on the timing of acceptance inspections. In addition, if design changes or changes to the timing of acceptance inspections occur at the customer's request, the timing of revenue recognition may shift from the originally scheduled period, potentially affecting the performance of the group.」

「Large, high-value integrated production lines and composite equipment require approximately 4–6 months before delivery and acceptance inspection. If the number of such projects increases, quarterly performance may fluctuate significantly depending on the timing of acceptance inspections. In addition, if design changes or changes to the timing of acceptance inspections occur at the customer's request, the timing of revenue recognition may shift from the originally scheduled period, potentially affecting the performance of the group.」

「As 2 projects with a significant impact on the current fiscal year's revenue plan are concentrated in the fourth quarter, performance through the third quarter remained weak.」