To all KIMOTO fans
We have completed the second quarter, and unfortunately, we ended the first half of the year with results below the revised forecast in July, leading to the second downward revision of this fiscal year.
We sincerely apologize for causing concern to all KIMOTO fans.
We deeply apologize from the heart.
The main reason is that KTI (KIMOTO TECH, INC.), our local subsidiary in North America, recorded a special loss (654 million yen) due to the impairment of fixed assets, following a review based on changes in the business environment and future performance outlook.
As a result, we recorded a loss on the valuation of shares of affiliated companies (extraordinary loss: 746 million yen) in the non-consolidated (Japan) financial results, but since it will be erased in theConsolidatedfinancial results, there will be no impact onConsolidatedbusiness results.
In preparation for KTI's future activities, we will implement a debt-equity swap (debt conversion into equity), capital increase, and capital reduction in November as measures to improve our financial structure.
Currently, many of the unique product development projects for the future, including new fields and new technologies that we are developing, originate from the U.S. market. We ask for your understanding regarding this investment in KTI, which is central to KIMOTO Group's technology.
Based on the KIMOTO spirit inherited from our founder, 'Receiving ideas from the world's largest market and developing and manufacturing products that can contribute to the world,' we will continue our challenges in the U.S.
Regarding the newly launched Digital Twin business this term, we are pleased to report that results are beginning to emerge step by step, and there is significant growth potential.
The entire KIMOTO Group will work together to recover performance, and we will continue to strive to develop and provide attractive and high-quality products and services that are recognized worldwide. We kindly ask for your warm support.
October 30, 2019
KIMOTO Co., Ltd.
President and Representative Director Kazunobu Kimoto