CAR MATE MFG. CO., LTD.

Winter products (ski carriers, tire anti-slip devices, etc.) account for a high proportion of sales, and the structure remains weighted toward the second half of the fiscal year. In FY2026 (ending March 2026), this weighting is expanding, with the first half accounting for 42.5% and the second half for 57.5%, meaning that business results are directly affected by the amount of snowfall. As a countermeasure, the Company is working on the development of new products and services expected to sell throughout the year.

The two major customers, AUTOBACS SEVEN CO., LTD. (sales of ¥2,383,719 thousand in the current consolidated fiscal year, accounting for 16.4% of the total) and Yellow Hat Ltd. (sales of ¥1,455,635 thousand, accounting for 10.0% of the total), together account for approximately 26% of total sales. Changes in the ordering policies or inventory policies of these two companies could directly affect business results. To diversify this dependence, the Company is working to strengthen sales through EC channels, home centers, drugstores, and other outlets.

Approximately 45% of raw material and other procurement is sourced overseas, with the majority concentrated in China. If economic activity in a specific region is restricted for a prolonged period due to the spread of infectious diseases or other causes, procurement could be disrupted, potentially affecting business results and financial condition. As a countermeasure, the Company is working to establish a system for alternative procurement from existing domestic suppliers.

As the overseas procurement ratio has reached approximately 45%, sharp fluctuations in foreign exchange rates could raise procurement costs, potentially affecting business results and financial condition. As a risk mitigation measure, the Company utilizes hedging instruments such as forward exchange contracts as necessary.

Products are valued using the cost method based on the moving average method (with book value write-downs due to decreased profitability), and for products with prolonged turnover periods, a method of writing down a certain percentage of the book value is applied. There is uncertainty in future sales volume and price forecasts arising from the inventory levels and ordering policies of major customers, and if actual sales results deviate from estimates, this could materially affect the amount of valuation losses on products in the following consolidated fiscal year. The wide variety of product lineups further heightens this uncertainty.

The Company handles products related to user safety, such as child seats, roof carriers, tire chains, and electronic and electrical equipment, and defects, accidents, or recalls may occur due to issues in design, manufacturing, materials procurement, or usage conditions. If a serious quality problem occurs, in addition to repair, replacement, and compensation costs, there are also concerns about the impact on brand, reputation, and sales activities. The Company strengthens quality control at each stage from development and design through post-sale activities, and collects and analyzes quality and defect information from the market to implement measures to prevent recurrence.

The Company holds fixed assets necessary for the development, manufacturing, distribution, and sale of products in the Automotive-related Business and the Outdoor, Leisure & Sports-related Business. If the profitability of a specific business or asset group declines due to deterioration in the economic environment, sluggish personal consumption, intensified competition, or other factors, recognition of an impairment loss may become necessary. The recording of an impairment loss would affect business results and financial condition. The Company continuously monitors the profitability of each business and product group and the utilization status of fixed assets, and works to reduce risk through measures such as reviewing pricing policies and selecting cost reduction and capital investment initiatives.