Akebono Brake Industry : Announcement Regarding End of Production and Closure of Facility at US Subsidiary

(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 Japanese original shall prevail.

Date: October 20, 2023

Company Name: Akebono Brake Industry Co., Ltd.

Representative: Yasuhiro Miyaji, President & CEO

(Securities Code: 7238; TSE Prime Market)

Announcement Regarding End of Production and Closure of Facility

at US Subsidiary

Akebono Brake Industry Co., Ltd. (hereinafter the "Company") hereby announces that the Board of Directors meeting resolved on October 20, 2023 to reduce the business of its US subsidiary, Akebono Brake Corporation, and end production at and close one (Akebono Brake, Elizabethtown Plant in Kentucky) of the two manufacturing facilities.

1. Reasons for End of Production and Closure

As disclosed in the "Re: Submission of "Business Turnaround Plan" to Tokyo Stock Exchange, Inc.," on September 18, 2019, the Company has been implementing measures for business structural reforms in accordance with the Business Turnaround Plan agreed by creditors under Business Turnaround ADR proceedings.

The Company disclosed the decision to end production and close two plants, Akebono Brake, Clarksville Plant in Tennessee and Akebono Brake, Columbia Plant in South Carolina in order to establish a production structure that would optimize overall North American operations in the "Re: Notice Regarding End of Production and Closure of Facilities at US Subsidiary" on December 19, 2019. The closure was completed by the end of September 2020 as planned.

Thereafter, as the final step of measures for business structural reforms in North America, consideration of shifting to a one-plant structure in the U.S. has been continued, and the Company has resolved to end production at and close Akebono Brake, Elizabethtown Plant in Kentucky in order to establish a one-plant structure in the U.S.

Regarding fixed assets of the plant, such as land and buildings, after necessary facilities and equipment have been transferred to other production locations, the Company will study any possibility to sell or dispose of the remaining business, facilities and equipment.

2. Outline of the Plant to be Closed

Akebono Brake, Elizabethtown Plant (hereafter ABE)

1. Location: 300 Ring Road, Elizabethtown, KY 42701, U.S.A.
2. Business outline: Manufacture and sales of disc brakes, drum brakes and high performance disc brakes
3. Number of employees: 629 (as of the end of September 2023)
4. Net sales (North American business): 41.9 billion yen (fiscal year ended March 31, 2023)

1. Operating Profit (North American business): -3.7 billion yen (fiscal year ended March 31, 2023)
   As net sales and operating profit for this plant on a non-consolidated basis are not available, net sales and operating profit of the North American business are shown here for reference.
   3. Closure Timing

December 2025 (provisional)

4. Impact on Financial Performance

The impact of this business structural reform on net sales and operating profit is still under evaluation, and the Company will promptly announce any events that should be disclosed. In addition, the Company will announce the amount of extraordinary loss related to this business contraction as soon as it is available.