Cost structure reform and substantial reduction in inventories

「For the fiscal year, selling, general and administrative expenses increased due to the development of IP-compatible broadcasting system products and research and development aimed at acquiring next-generation core technologies. However, operating income, ordinary income, and net income attributable to owners of the parent all increased year on year, supported by higher revenue and a substantial increase in gross profit resulting from an improved gross profit margin.」

「In addition to higher revenue, an improvement in the gross profit margin led to a substantial increase in gross profit, resulting in operating income of ¥407 million, up ¥152 million year on year, compared with ¥254 million in the same period of the previous year.」

「For the six-month period, operating income or loss, ordinary income or loss, and net income or loss all improved year on year due to higher gross profit and an improved gross profit margin accompanying the increase in revenue.」

「For the next fiscal year, amid expectations that an uncertain environment affected by geopolitical risks in global affairs and volatility in financial and capital markets will continue, we will focus on maintaining the supply of high-quality products on a stable basis, while reducing the cash burden through optimized inventory levels and pursuing cost reductions from a long-term perspective.」

「For the nine-month period ended 31 December, operating income or loss, ordinary income or loss, and net income or loss all improved substantially year on year, as revenue increased and gross profit improved significantly, helped by continued results from the second quarter of reviewing and revising selling prices in response to soaring raw material prices.」

「For the six-month period ended 30 September, operating income or loss, ordinary income or loss, and net income or loss all improved substantially year on year, as revenue increased and gross profit improved significantly, helped by continued progress from the first quarter in reviewing and revising selling prices in response to soaring raw material prices.」

「For the three-month period ended 30 June, operating income or loss, ordinary income or loss, and net income or loss all improved substantially year on year, as revenue increased and the gross profit margin improved year on year due to the results of measures to minimize the impact of volatile raw material markets on cost of sales.」

「For the nine-month period ended 31 December, although results were affected by soaring prices for various components and increased expenses to strengthen sales activities, including expanded advertising and promotional expenses associated with resuming participation in trade shows that had been suspended due to COVID-19, operating income or loss, ordinary income or loss, and net income or loss all improved year on year, supported by higher revenue and the results of measures to minimize the impact of supply chain disruptions.」

「For the first six months of the current fiscal year, profit and loss were below the levels recorded in the same period of the previous year. This reflected the impact of a higher cost-of-sales ratio due to surging component prices, increased costs for strengthening sales activities, including expanded advertising and promotional expenses as exhibitions resumed after being voluntarily suspended due to COVID-19, and investment in human capital to strengthen personnel capabilities for future growth. Operating income, ordinary income and net income all declined from the same period of the previous year.」

「For the three-month period ended 30 June, although results were affected by lower revenue and increased selling, general and administrative expenses from expanded advertising and promotional activities, including the resumption of participation in trade shows that had been suspended due to COVID-19, the results of measures to minimize the impact of supply chain disruptions, including a review of component selection, diversification of suppliers, and reviews and revisions of transaction prices, kept operating income or loss, ordinary income or loss, and net income or loss broadly in line with the same period of the previous year.」

「For the nine-month period ended 31 December, operating income or loss, ordinary income or loss, and net income or loss all fell below the same period of the previous year due to lower revenue and the impact of soaring raw material prices.」

「For the fiscal year, although results benefited from more efficient sales activities using the web and expense control, operating income declined year on year due to lower profit margins amid intensifying competition associated with restrained capital investment during the COVID-19 pandemic, as well as lower revenue resulting from delays and extensions in local delivery work caused by declarations of a state of emergency and lockdowns in Japan and overseas.」

「For the six-month period ended 30 September, although results benefited from more efficient sales activities through the use of the web and expense control, operating income or loss, ordinary income or loss, and net income or loss all declined year on year as the economic slowdown caused by the spread of COVID-19 affected revenue.」

「Results were slightly above the initial forecast of operating income of ¥700 million due to improved production efficiency and the suppression of expenses in the fourth quarter.」

「For the third-quarter cumulative consolidated period, there were results from cost reductions through improved production efficiency and improvements in the gross profit margin. However, owing to the impact of the decline in net sales, operating, ordinary and net income all decreased year on year.」

「For the six-month period ended 30 September, although results benefited from lower costs due to improved production efficiency and more efficient selling expenses, operating income or loss and ordinary income or loss declined year on year due to the impact of lower revenue.」

「For the first-quarter cumulative consolidated period, in addition to the increase in net sales, improvements in the gross profit margin and production efficiency, among other factors, resulted in substantial year-on-year improvements in operating, ordinary and net losses.」

「For the cumulative third quarter of the current fiscal year, revenue was approximately flat year on year, but improvements in the gross profit margin and production efficiency, among other factors, substantially improved operating, ordinary and net losses compared with the same period of the previous year.」

「For the cumulative second quarter of the current fiscal year, operating income, ordinary income and net income all showed substantial improvements in losses year on year, owing to improved production efficiency, higher profitability in overseas operations, and the acceleration into the second quarter of sales from high-margin projects originally scheduled for the third quarter onward.」

「Assuming that competition in the market will continue, our group will continue to implement measures to improve the cost of sales ratio, develop products capable of prevailing in the competition, and provide solutions that create new value, thereby seeking to improve earnings.」

「For the consolidated fiscal year, in addition to the increase in net sales, improvements in the cost structure that had been implemented continuously progressed. The results of these improvements were also reflected in major domestic projects, and operating income exceeded the initial forecast of ¥600 million.」

「In terms of earnings, in addition to the increase in net sales, the process of correcting factors related to high-cost projects that had worsened the cost of sales ratio in the same period of the previous year continued to produce some results in the second quarter, substantially improving the cost of sales ratio. As a result, operating income improved by ¥1,488 million year on year, resulting in an operating loss of ¥638 million (operating loss of ¥2,126 million in the same period of the previous year).」

「The process of correcting the factors related to high-cost projects that had worsened the cost of sales ratio in the same period of the previous year continued to produce results in the first quarter. As a result, the cost of sales ratio improved substantially, and operating income improved by ¥726 million year on year, resulting in an operating loss of ¥725 million, compared with an operating loss of ¥1,451 million in the same period of the previous year.」

「In terms of earnings, although net sales declined substantially, the process of correcting factors related to high-cost projects that had worsened the cost of sales ratio in the same period of the previous year produced some results. As a result, the cost of sales ratio improved substantially, and operating income improved by ¥68 million year on year, resulting in an operating loss of ¥743 million (operating loss of ¥812 million in the same period of the previous year).」

「To prepare for expected growth in demand for next-generation broadcasting equipment and increase the flexibility of business operations from the next fiscal year onward, the Company recognized an inventory write-down in cost of sales as part of its cost structure reform, resulting from a substantial reduction in inventories.」