Review of the current period

The global economy becomes more uncertain, and this resulted in a downturn in capital investment by the apparel and fashion industry.

For the current period (the fiscal year ended March 2025), the global economy became more uncertain with the prolongation of the Russian invasion of Ukraine and tensions in the Middle East, a slowdown in the Chinese economy, where a recovery was expected, and the resurgence of trade friction between the United States and China—this resulted in a downturn in capital investment by the apparel and fashion industry. The postponement of capital investment was often seen mainly in the high-priced product market. The confusion caused by large-scale antigovernment demonstrations in Bangladesh after the middle of July 2024 also caused the stagnancy of the supply chain.
Amid such a business environment, the Company conducted global proposal activities to support the sustainable production of customers based on the medium-term management plan Ever Onward 2026.
In our core flat knitting machine segment, sales volume decreased for both WHOLEGARMENT® flat knitting machines and molding machines mainly because of weakness in the main Chinese market, a slowdown in the Italian market in Europe, and the impact of a warm winter; consequently, net sales decreased to JPY 23,229 million (down 10.3% YoY). In the design system segment, net sales amounted to JPY 2,817 million (down 18.7% YoY) because of the solidity of the software subscription service APEXFiz® and the decreased sales volume of the automated cutting machine P-CAM®. In the glove and sock knitting machine segment, net sales amounted to JPY 756 million (up 69.2% YoY) because of the growth in capital investments by overseas major users.
As a result of the above, the Company recorded consolidated net sales of JPY 32,520 million (down 9.4% YoY), an operating loss of JPY 11,914 million (operating income of JPY 430 million for the previous period), an ordinary loss of JPY 11,481 million (ordinary income of JPY 1,018 million for the previous period), and a net loss attributable to owners of the parent of JPY 14,275 million (net income attributable to owners of the parent of JPY 1,030 million for the previous period).

Prospects for the future

We will execute the specific strategy for increasing profitability and realizing continued growth.

Performance was disappointing for the current period, but the Company thinks that this is a year of the foundation for reform. We sought a conversion to speedy organizational management by advancing the review of the management system and the decision-making process while continuing to advance new businesses and DX, which may be the sprouts of medium- and long- term growth, and investing in human resources. We actually feel that the accumulation of these efforts will begin to sprout after the start of the fiscal year ending March 2026. In the flat knitting machine segment, we will execute specific strategies to increase profitability and achieve continued growth for the next period. We will accelerate the development of high value-added, multi-use products while aggressively offering cost-effective, basic molding knitting machines mainly in the Asian markets with strong demand to seek sales expansion and increases in the profitability ratio at the same time. Taking these two approaches, we will ensure the rebuilding of performance and restore earnings strength in the medium to long term. Additionally, WHOLEGARMENT® flat knitting machines, which are offered by the Company, are appreciated with respect to the fact that they require no downstream processes, including sewing, and can solve the structural issues of the apparel industry of the shortage of labor and increases in wages, and the expectation is that demand will increase again. In the European market with its higher awareness oif sustainability, there is an increase in the value of WHOLEGARMENT® technology from the viewpoints of resource efficiency and waste reduction, and it is expected that demand will expand.
In the design system segment, APEXFiz® has been further introduced and adopted by educational institutions of fashion, as well as being widely used as a creation tool for students. This leads to the building of the future customer base. It is not too much to say that our technology comprehensively supports the process from design to creation of production date through 3D simulation and thus leads DX in the apparel industry. We are now engaged in the development of a new AI-driven system, and APEXFiz® is continuously evolving into the next-generation platform so that users can make design proposals reflecting the brand concept of customers. These business activities are supported by the power of people, among others. The Company creates the corporate climate where willingness is appreciated regardless of age or position with the thinking that creativity is realized through the challenging spirit of each employee. We will evolve into a stronger and more flexible organization by nurturing young leaders and promotion of the succession of diverse human resources.

To shareholders

We will draw a shape of the next-generation manufacturing by thinking outside the box and combining technology with ideas.

We sincerely appreciate the exceptional support of shareholders. Creativity, which is the core characteristic for us, and the speed in forecasting the times and taking action, as well as the stance of co-creation combining these items as social value, are critical for the Company to achieve continued growth. Amid a drastically changing global situation and industrial structure, we will draw the shape of next-generation manufacturing by thinking outside the box and combining technology and ideas. In going forward into the future, the Company thinks of shareholders and investors as partners working together to explore the future. Even if the Company faces any difficulties, we will always continue to confront them and return the results to society as part of our clear enterprise value. We sincerely appreciate your continued understanding and unchanged support.