Strengthening Capital Expenditures and R&D Investment

「Total research and development expenses for the interim accounting period were ¥58 million. The Company is currently developing hydrogen compressors and other equipment for large-scale P2G systems as a member of the Yamanashi Hydrogen Energy Society (H2-YES), led by the Yamanashi Prefectural Enterprise Bureau. Research and development expenses declined significantly year on year because these development activities reached a major milestone in the previous fiscal year.」

「Total R&D expenses for the fiscal year were ¥276 million. The company delivered the hydrogen compressors and dehumidifiers for which it was responsible to Hokuto, Yamanashi Prefecture, where the demonstration was conducted, and carried out on-site installation and commissioning tests.」

「全社視点のDX戦略策定と「稼ぐ力の最大化」の生産性向上にフォーカスした展開」

「Total R&D expenses for the six-month period were ¥203 million. Cash used in investing activities decreased by ¥228 million (a decrease of ¥57 million in the same period of the previous year). This was mainly due to ¥221 million in expenditures for the acquisition of property, plant and equipment and ¥7 million for the acquisition of intangible assets.」

「Total R&D expenses for the fiscal year were ¥268 million.」

「Total R&D expenses for the interim accounting period were ¥92 million. There were no material changes in the status of the company's R&D activities during the interim accounting period.」

「Total test and research expenses for the current fiscal year were ¥150 million.」

「Total R&D expenses for the cumulative first quarter period were ¥56 million. There were no material changes in the status of the company's R&D activities during the cumulative first quarter period.」

「During the current fiscal year, the second phase of construction related to the integrated assembly plant, part of the large-scale capital investment plan, was completed, bringing all construction work to completion.」

「The main factors were increases of ¥429 million in electronically recorded monetary claims, ¥433 million in work in process and ¥482 million in property, plant and equipment resulting from completion of the head-office integrated assembly plant, among other factors, despite decreases of ¥320 million in cash and deposits and ¥261 million in notes receivable.」

「Total assets at the end of the cumulative second quarter period were ¥10,168 million, an increase of ¥484 million from the previous fiscal year-end. This was mainly due to increases of ¥241 million in accounts receivable and contract assets and ¥530 million in property, plant and equipment resulting from completion of the head-office integrated assembly plant, despite a decrease of ¥278 million in notes receivable.」

「With completion of the head-office integrated assembly plant under construction approaching, the company recorded ¥102 million in approved government subsidies as a special gain and ¥19 million in demolition costs for the old plant as a special loss. As a result, quarterly net income increased 190.6% year on year to ¥27 million.」

「The main items were ¥1,968 million in buildings, building fixtures and structures related to the completed first phase of construction of the integrated assembly plant, and ¥204 million in internal equipment such as machinery and equipment. Including these items, total capital expenditures for the current fiscal year were ¥2,374 million.」

「Total assets at the end of the cumulative third quarter period were ¥9,304 million, an increase of ¥779 million from the previous fiscal year-end. This was mainly due to increases of ¥229 million in work in process and ¥1,708 million in property, plant and equipment resulting from the partial completion of the head-office integrated assembly plant, despite decreases of ¥299 million in cash and deposits, ¥385 million in notes receivable and ¥550 million in accounts receivable and contract assets (accounts receivable in the previous fiscal year).」

「The total planned investment is ¥2,500 million, of which ¥2,220 million has already been paid, and completion is scheduled for July 2022. The second phase of construction of trial-operation facilities for medium- and small-sized compressors is not complete, but the first phase of construction of trial-operation facilities for large compressors was completed in July 2021 and began operating that same month.」

「At a board meeting held on 30 July 2021, the company resolved to borrow the funds described below.」

「During the period of the 2020 Medium-Term Management Plan, the company has been constructing a new integrated assembly plant to expand production capacity and improve production efficiency. Part of the assembly line is scheduled to begin operating in mid-fiscal 2021, and the entire plant is scheduled for completion during fiscal 2022, the final year of the plan.」

「The main factors were an increase of ¥670 million in property, plant and equipment and an increase of ¥505 million in work in process, offset by decreases of ¥500 million in deposits, ¥428 million in cash and deposits, ¥232 million in notes receivable and ¥180 million in accounts receivable. In connection with construction of the new head-office integrated assembly plant, ¥40.899 million in plant demolition costs related to rebuilding part of a plant was recorded as a special loss under plant restructuring costs.」

「Funds decreased by ¥95 million as a result of investing activities, compared with a decrease of ¥3 million in the same period of the previous year. This was mainly due to ¥76 million in payments for the acquisition of property, plant and equipment and ¥28 million in payments for the acquisition of intangible assets.」

「As in the previous fiscal year, ¥40 million in plant demolition costs related to rebuilding part of a plant in connection with construction of the new head-office integrated assembly plant was recorded as a special loss under plant restructuring costs,」

「The company is implementing a large-scale capital investment plan. It is installing a turning center, a large machine tool, in August 2020, with ¥200 million remaining to be paid, and is also constructing an integrated assembly plant targeted for completion in July 2022, with ¥2,459 million remaining to be paid. Most of these payments are expected to be funded by surplus funds and other internal resources, although the company will borrow from financial institutions as necessary.」

「Total R&D expenses for the cumulative third quarter period were ¥166 million. There were no material changes in the status of the company's R&D activities during the cumulative third quarter period.」

「Total R&D expenses for the cumulative first quarter period were ¥32 million. There were no material changes in the status of the company's R&D activities during the cumulative first quarter period.」

「Over the 4-year plan period, we will invest ¥2 billion in capital expenditures to renew production facilities and ¥500 million in R&D investment.」

「Total R&D expenses for the cumulative third quarter period were ¥48 million. There were no material changes in the status of the company's R&D activities during the cumulative third quarter period.」

「Total R&D expenses for the cumulative second quarter period were ¥32 million. There were no material changes in the status of the company's R&D activities during the cumulative second quarter period.」

「Total R&D expenses for the cumulative first quarter period were ¥13 million. There were no material changes in the status of the company's R&D activities during the cumulative first quarter period.」

「Over the 4-year plan period, we will invest ¥2 billion in capital expenditures to renew production facilities and ¥500 million in R&D investment.」

「Total R&D expenses for the cumulative third quarter period were ¥94 million. There were no material changes in the status of the company's R&D activities during the cumulative third quarter period.」

「Total R&D expenses for the cumulative second quarter period were ¥66 million. There were no material changes in the status of the company's R&D activities during the cumulative second quarter period.」

「In addition to the decrease in gross profit, selling, general and administrative expenses increased by ¥38 million year on year due to higher costs for estimates aimed at strengthening sales promotion and increased expenses from stronger R&D, among other factors. Total R&D expenses for the cumulative first quarter period were ¥19 million.」

「Over the 4-year plan period, we will invest ¥2 billion in capital expenditures to renew production facilities and ¥500 million in R&D investment.」

「Total R&D expenses for the cumulative third quarter period were ¥25 million. There were no material changes in the status of the company's R&D activities during the cumulative third quarter period.」

「Total R&D expenses for the cumulative second quarter period were ¥18 million. There were no material changes in the status of the company's R&D activities during the cumulative second quarter period.」

「Total R&D expenses for the cumulative first quarter were ¥11 million. There were no material changes in the status of the Company’s R&D activities during the cumulative first quarter.」

「We will invest ¥600 million in capital expenditures and ¥300 million in R&D as investments to improve productivity and efficiency and provide products with competitive quality, technology and pricing in growth markets.」