Kurabo Industries : Consolidated Financial Results for theThree Months Ended June 30, 2023(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, 2023

	Consolidated Financial Results
	for the Three Months Ended June 30, 2023
	(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:	Kiyoshi Hamaguchi, Manager of Finance & Accounting Department
Telephone:	[phone]

Scheduled date to file quarterly securities report:	August 10, 2023
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, 2023 (from April 1, 2023 to June 30, 2023)

(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, 2023	33,338		(2.0)	975	(38.1)	1,550	(38.5)	957	(40.9)
June 30, 2022	34,026		20.8	1,575	68.3	2,519	76.5	1,619	39.6

Note: Comprehensive income	For the three months ended June 30, 2023:	¥4,668 million	[69.8%]
		For the three months ended June 30, 2022:	¥2,749 million	[495.7%]
	Basic earnings	Diluted earnings
		per share	per share
Three months ended		Yen	Yen
June 30, 2023		50.89	-
June 30, 2022		82.21	-

(2) Consolidated financial position

		Total assets	Net assets
As of		Millions of yen	Millions of yen
June 30, 2023		176,413	106,889
March 31, 2023		174,086	102,907
Reference:	Equity
	As of June 30, 2023:	¥105,325 million
	As of March 31, 2023:	¥101,334 million

Equity-to-asset ratio

%

59.7

58.2

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	-	35.00		-			35.00		70.00
March 31, 2023
Fiscal year ending	-
March 31, 2024
Fiscal year ending
March 31, 2024		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 fiscal year ending March 31, 2024 (from April 1, 2023

to March 31, 2024)						(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
Six months ending	68,500		(4.9)	1,900	(44.2)	2,300		(50.5)	1,400	(57.1)	74.41
September 30, 2023
Full year	154,000		0.3	7,900	(8.9)	8,500		(15.2)	5,800	5.1	308.29
Note: Revisions to the forecast 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, 2023

As of March 31, 2023

20,000,000 shares

20,000,000 shares

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

As of June 30, 2023

As of March 31, 2023

1,186,463 shares

1,186,212 shares

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

Three months ended June 30, 2023

Three months ended June 30, 2022

18,813,685 shares

19,705,608 shares

Note: The Company has introduced the Board Benefit Trust, a share-based compensation plan for directors, etc. using a trust, and the Company's shares held by the trust account are included in the number of treasury 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, 2023" on page 3 of the attached materials.

Attached Material
1. Qualitative information regarding financial results for the three months ended June 30, 2023	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 quarterly consolidated balance sheet)	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)	9
	(Relationship to revenue recognition)	10

- 1 -

1. Qualitative information regarding financial results for the three months ended June 30, 2023

1. Explanation of operating results
   During the first three months of the fiscal year ending March 31, 2024 (from April 1, 2023 to June 30, 2023), the Japanese economy remained on a moderate recovery trend amidst normalization of socioeconomic activities as restrictions on activities due to COVID-19 were lifted.
   On the other hand, amid concerns regarding geopolitical risks, such as the prolongation of the situation surrounding Russia and Ukraine, not being eradicated, the outlook continued to remain uncertain mainly due to the impact of increased commodity price and concerns about a global economic recession caused by the monetary policies of Europe and the U.S.
   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 medium-term corporate business plan "Progress' 24" that came into effect in April 2022.
   For the results for the three months ended June 30, 2023, net sales were ¥33.3 billion (down 2.0% YoY), operating profit was ¥0.97 billion (down 38.1% YoY), ordinary profit was ¥1.55 billion (down 38.5% YoY), and profit attributable to owners of parent was ¥0.95 billion (down 40.9% YoY).
   Results by segment are as follows. (Textiles)
   Yarns experienced decreased revenue from decreased orders at overseas subsidiaries due to the impact of inventory adjustments by customers despite steady sales of high-performance products that we produce with our unique technologies.
   Fabrics experienced increased revenue due to recovery in orders of casual clothing materials.
   Textile products (sewn products, etc.) experienced decreased revenue from decreased orders due to inventory adjustments by customers.
   As a result, net sales were ¥11.6 billion (down 9.7% YoY) with operating loss of ¥0.37 billion (operating profit of ¥0.21 billion in the same period of the previous fiscal year) due in part to increased costs.
   (Chemical Products)
   Flexible polyurethane foam for automotive interior experienced increased revenue due to steady orders at domestic and Brazilian subsidiaries, despite the sluggish sales at Chinese subsidiaries.
   Functional resin products experienced increased revenue due to recovery in orders of functional films for solar cells and automobiles, despite a decrease in orders for high-performance plastic products for semiconductor production in line with a slowdown in semiconductor demand.
   Housing construction products experienced increased revenue due to strong sales of heat-insulating materials. Nonwoven fabrics and functional materials experienced revenue at around the same level year on year.
   As a result, net sales were ¥14.1 billion (up 2.4% YoY) with operating profit of ¥0.7 billion (up 4.8% YoY). (Advanced Technology)
   Electronics businesses experienced decreased revenue as there was a decrease in the amount of orders at a subsidiary for silicon wafer cleaning equipment, despite strong sales for film thickness meters and chemical concentration meters.
   Engineering businesses experienced increased revenue due to steady performance by chemical supply systems for the semiconductor industry, and steady construction of industrial equipment at a subsidiary.
   Biomedical businesses experienced increased revenue mainly due to steady overseas sales of mixer/deaerator and machine tools experienced increased revenue due to solid performance in North America and China.
   As a result, net sales were ¥4.4 billion (up 6.5% YoY) with operating profit of ¥0.18 billion (up 12.4% YoY).
2. • 2 -