Post-Acquisition Earnings Shortfall and Goodwill Impairment Risk

「In the office equipment purchase and sales business, we reduced the carrying amount to its recoverable amount due to declining profitability and recognized the reduction, amounting to ¥164 million, as an impairment loss under extraordinary losses.」

「In the used office equipment purchase, repair, and sales services business, we recognized an impairment loss on goodwill whose recoverability was no longer considered likely due to declining profitability. The impairment loss recognized was ¥159 million for the nine-month period ended 31 December.」

「We believe that goodwill, intangible assets, and other assets acquired through M&A have been appropriately valued and reflect the future earnings potential of the acquired businesses. However, if unforeseen events occur or come to light after an M&A transaction, or if business conditions deteriorate and we determine that the expected earnings cannot be achieved and recognize an impairment loss, this could adversely affect our Group's business and operating results.」