Kurabo Industries : Consolidated Financial Results for the Three Months Ended June 30, 2022 (Under Japanese GAAP)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

August 9, 2022

Consolidated Financial Results

for the Three Months Ended June 30, 2022

(Under Japanese GAAP)

Company name:	Kurabo Industries Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	3106
URL:	https://www.kurabo.co.jp/
Representative:	Haruya Fujita, President
Inquiries:	Hiroshi Fujii, Director, Executive Officer, and Manager of Finance & Accounting Department
Telephone:	[phone]

Scheduled date to file quarterly securities report:	August 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results briefing:	None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Three months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
June 30, 2022	34,026		20.8	1,575	68.3	2,519	76.5	1,619	39.6
June 30, 2021	28,166		-	936	-	1,427	-	1,160	-

Note: Comprehensive income	For the three months ended June 30, 2022:	¥2,749 million	[495.7%]
		For the three months ended June 30, 2021:	¥461 million	[-%]
	Basic earnings	Diluted earnings
		per share	per share
Three months ended		Yen	Yen
June 30, 2022		82.21	-
June 30, 2021		56.99	-

(2) Consolidated financial position

		Total assets		Net assets	Equity-to-asset ratio
As of		Millions of yen		Millions of yen	%
June 30, 2022		168,694		98,303	57.4
March 31, 2022		167,285		97,415	57.4
Reference:	Equity
	As of June 30, 2022:	¥96,793 million
	As of March 31, 2022:	¥96,016 million

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end		Third quarter-end		Fiscal year-end	Total
	Yen	Yen		Yen		Yen	Yen
Fiscal year ended	-	0.00		-		70.00	70.00
March 31, 2022
Fiscal year ending	-
March 31, 2023
Fiscal year ending
March 31, 2023		35.00		-		35.00	70.00
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1,2022 to

March 31, 2023)						(Percentages indicate year-on-year changes.)
		Net sales	Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
		Millions	%	Millions	%	Millions	%	Millions	%	Yen
		of yen	of yen	of yen	of yen
Three months ending		68,000	13.3	2,100	(31.3)	2,600	(29.0)	1,600	(32.8)	81.46
September 30, 2022
Full year		145,000	9.7	7,000	(7.0)	7,600	(13.5)	5,300	(5.4)	270.38
Note: Revisions to the forecasts of financial results most recently announced: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes
   Note: For the details, please refer to "(Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements) in (3) Notes to quarterly consolidated financial statements in 2. Quarterly consolidated financial statements and significant notes thereto" on page 8 of the attached materials.
3. Changes in accounting policies, changes in accounting estimates, and restatement
4. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
5. Number of issued shares (common shares)
6. 1. Total number of issued shares at the end of the period (including treasury shares)

As of June 30, 2022	20,000,000 shares
As of March 31, 2022	20,756,228 shares

(ii) Number of treasury shares at the end of the period

As of June 30, 2022	443,795 shares
As of March 31, 2022	971,652 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Three months ended June 30, 2022	19,705,608 shares
Three months ended June 30, 2021	20,357,809 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements and others)
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, the statements herein do not constitute assurances regarding the Company's actual results. Actual financial and other results may differ substantially from the statements herein due to various factors. For matters regarding the above earnings forecasts, please refer to "(3) Explanation of consolidated financial forecasts and other forward-looking statements" of "1. Qualitative information regarding financial results for the three months ended June 30, 2022" on page 3 of the attached materials.

Attached Material
1. Qualitative information regarding financial results for the three months ended June 30, 2022..........................	2
(1)	Explanation of operating results ...................................................................................................................	2
(2)	Explanation of Financial Position.................................................................................................................	3
(3)	Explanation of consolidated financial forecasts and other forward-looking statements...............................	3
2. Quarterly consolidated financial statements and significant notes thereto..........................................................	4
(1)	Quarterly consolidated balance sheet............................................................................................................	4
(2)	Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive
	income ..........................................................................................................................................................	6
	Quarterly consolidated statement of income (cumulative) ...........................................................................	6
	Quarterly consolidated statement of comprehensive income (cumulative) ..................................................	7
(3)	Notes to quarterly consolidated financial statements....................................................................................	8
	(Notes on premise of going concern)............................................................................................................	8
	(Notes on significant changes in the amount of shareholders' equity) .........................................................	8
	(Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements)
	......................................................................................................................................................................	8
	(Additional information)...............................................................................................................................	8
	(Segment information)................................................................................................................................	10
	(Relationship to revenue recognition)..........................................................................................................	11

- 1 -

1. Qualitative information regarding financial results for the three months ended June 30, 2022

1. Explanation of operating results
   During the first three months of the fiscal year ending March 31, 2023 (from April 1, 2022 to June 30, 2022) the Japanese economy showed signs of picking up amidst normalization of socioeconomic activities with the gradual easing of the impact of COVID-19.
   On the other hand, the outlook remains uncertain due to higher prices of raw materials and cost increases due to the depreciation of the yen and disruption of the global supply chain from the impact of circumstances including the Shanghai lockdown.
   In this type of environment, the Group has strived to expand business operations of growth and priority businesses, and enhance the earning capability of core businesses based on the basic policy of "expand high- profit businesses and strengthen core businesses to achieve sustainable growth" in the new medium-term corporate business plan "Progress' 24" that came into effect in April 2022. We also focused on passing on the soaring costs of raw materials to selling prices.
   As a result, net sales for the period under review were ¥34.0 billion (up 20.8% YoY), operating profit was ¥1.57 billion (up 68.3% YoY), ordinary profit was ¥2.51 billion (up 76.5% YoY), and profit attributable to owners of parent was ¥1.61 billion (up 39.6% YoY).
   Results by segment are as follows. (Textiles)
   Yarns experienced increased revenue with recovery in orders from domestic and overseas subsidiaries,
   Fabrics experienced increased revenues due to recovery from large-scale decrease in orders of casual clothing materials caused by spread of the COVID-19 virus, as well as steady sales in uniform materials.
   Textile products (Sewn products, etc.) experienced increased revenue from increased orders of casual wear.
   As a result, net sales were ¥12.9 billion (up 42.4% YoY) with operating profit of ¥0.21 billion (operating loss of ¥0.29 billion in the same period of the previous fiscal year).
   (Chemical Products)
   Flexible polyurethane foam remained in a difficult environment in Japan due to production adjustments by automobile manufacturers affected by semiconductor shortages and difficulty in procuring parts due to the Shanghai lockdown, while overseas subsidiaries experienced increase in overall sales due to recovery from the effects of COVID-19.
   Functional resin products experienced increased revenue as high-performance plastic products for semiconductor production performed well against the backdrop of a booming semiconductor market, while sales of functional films for automobiles were sluggish.
   Housing construction products experienced increased revenue due to recovery of sales of products such as landscape materials.
   Nonwoven fabrics experienced decreased revenue due to sluggish sales of automotive and hygiene materials. As a result, net sales were ¥13.7 billion (up 16.9% YoY) with operating profit of ¥0.66 billion (up 5.5% YoY). (Advanced Technology)
   Electronics businesses experienced increased revenue with a large-scale project at a subsidiary for silicon wafer cleaning equipment, while sales of AFVI systems for HDI/Flex PCB and chemical concentration meters were sluggish due to the disrupted global supply chain caused by circumstances such as the Shanghai lockdown.
   Engineering businesses experienced decreased revenue with few large-scaleplant-related projects, even though there was an increase in chemical supply system for the semiconductor industry.
   Biomedical businesses experienced increased revenue due to favorable overseas sales of mixer / deaerator while machine tools experienced decreased revenue due to sluggish sales both domestically and in North America.
   As a result, net sales were ¥4.1 billion (down 7.7% YoY) with operating profit of ¥0.16 billion (up 4.5% YoY).
2. • 2 -