Interim report
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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 . www Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31 , 2027 ( Based on Japanese GAAP ) FASF August 7 , 2026 Company name : Carlit Co. , Ltd. ( hereinafter “ the Company " ) Listed exchange : Prime Market , Tokyo Stock Exchange URL : https://www.carlit.co.jp Code number : 4275 Representative : Hirofumi Kaneko , Representative Director and President Akira Yamamoto , General Manager of Finance Department + 81-3-6893-7075 Inquiries : Telephone : Scheduled date to commence dividend payments : - Preparation of explanatory materials for financial results : Yes Holding of financial results briefing : No ( Amounts are rounded down to the nearest million yen ) 1. Consolidated financial results for the three months of the fiscal year ending March 31 , 2027 ( from April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated operating results ( cumulative ) ( Percentages indicate year - on - year changes ) Profit attributable to Net sales Operating profit Ordinary profit owners of parent Three months ended Millions of yen % Millions of yen % Jun . 30 , 2026 8,654 ( 0.0 ) 255 ( 42.7 ) Millions of yen 385 % Millions of yen % ( 33.7 ) 68 ( 77.0 ) Jun . 30 , 2025 8,655 ( 1.2 ) 445 17.7 581 8.9 299 ( 18.1 ) Note : Comprehensive income For the three months ended Jun . 30 , 2026 : ¥ 74 million [ ( 92.4 ) % ] For the three months ended Jun . 30 , 2025 : ¥ 981 million [ 3.9 % ] Basic earnings Diluted earnings per share per share Three months ended Yen Jun . 30 , 2026 3.10 Jun . 30 , 2025 12.79 ( 2 ) Consolidated financial position As of Jun . 30 , 2026 Yen Total assets Net assets Equity - to - asset ratio Net assets per share Millions of yen 57,527 57,674 Millions of yen % Yen 37,908 39,793 65.9 1,718.87 69.0 1,774.98 As of Jun . 30 , 2026 : ¥ 37,908 million As of Mar. 31 , 2026 : ¥ 39,793 million Mar. 31 , 2026 Reference : Shareholders ' equity
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2. Cash dividends Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended Mar. 31, 2026 – 0.00 – 42.00 42.00 Fiscal year ending Mar. 31, 2027 – Fiscal year ending Mar. 31, 2027 (Forecast) 0.00 – 42.00 42.00 Note: Revisions to the forecast of cash dividends most recently announced: None 3. Forecasts of consolidated financial results for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen 1st half 17,300 (2.6) 1,100 (26.9) 1,200 (27.6) 1,400 21.8 62.35 Full year 37,200 2.6 3,200 (7.5) 3,300 (12.1) 3,000 0.8 133.61 Note: Revisions to the forecasts of consolidated financial results most recently announced: None * Notes (1) Significant changes in the scope of consolidation during the period: Yes Excluded: One company (Minamisawa Construction Co., Ltd.) Note: For details, please refer to “2. Quarterly Consolidated Financial Statements, (3) Notes to Quarterly Consolidated Financial Statements, Significant Changes in the Scope of Consolidation” on page 14 of the attached document. (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes Note: For details, please refer to “2. Quarterly Consolidated Financial Statements, (3) Notes to Quarterly Consolidated Financial Statements, Adoption of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements” on page 11 of the attached document. (3) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accountin g standards and other regulations: Yes (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None Note: For details, please refer to “2. Quarterly Consolidated Financial Statements, (3) Notes to Quarterly Consolidated Financial Statements, Changes in Accounting Policies ” on page 11 of the attached document.
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(4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including t reasury shares) As of Jun. 30, 2026 22,940,600 shares As of Mar. 31, 2026 22,940,600 shares (ii) Number of treasury shares at the end of the period As of Jun. 30, 2026 886,463 shares As of Mar. 31, 2026 521,563 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Three months ended Jun. 30, 2026 22,175,771 shares Three months ended Jun. 30, 2025 23,377,141 shares * Review of the Japanese language originals of the attached quarter ly consolidated financial statements by certified public accountants or an audit corporation: Yes (voluntary) * Proper use of earnings forecasts, and other special matters (Notice concerning forward-looking statements) The forward-looking statements described in this document, such as business forecasts, are based on information available at the time of release of these materials and reasonable assumptions made by the Company, and do not represent a commitment from the Company that they will be achieved. Actual financial results, etc. may differ significantly from this forecast due to various factors. For assumptions used for earnings forecasts and notes on the use of earnings forecasts, please refer to “1. Overview of Business Results, (3) Explanation of Forward-Looking Statements Including Forecasts of Consolidated Financial Results” on page 6 of the attached document. (Other special matters) Not applicable
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1 Table of Contents 1. Overview of Business Results ........................................................................... ............................................. 2 (1) Overview of Business Results for the Three Months Ended June 30, 2026 ............................................ 2 (2) Overview of the Consolidated Balance Sheets as of June 30, 2026 .................................................. ....... 5 (3) Explanation of Forward-Looking Statements Including Forecasts of Consolidated Financial Results .. 6 2. Quarterly Consolidated Financial Statements ............................................................... ............................... 7 (1) Quarterly Consolidated Balance Sheets ...................................................................... ............................. 7 (2) Quarterly Consolidated Statements of Income and Comprehensive Income .......................................... 9 Quarterly Consolidated Statements of Income ...................................................................... ................. 9 Quarterly Consolidated Statements of Comprehensive Income ........................................................... 1 0 (3) Notes to Quarterly Consolidated Financial Statements ........................................................ ................ 11 Changes in Accounting Policies ........................................................................... .................................. 11 Adoption of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements .......................................... ................................................... ............................................... 11 Segment Information ..................................... ................................................... .................................... 12 Significant Changes in Amounts of Shareholders’ Equity .................................................. .................. 13 Going Concern Assumption .................................................................................. ................................. 13 Notes to Quarterly Consolidated Cash Flow Statement.............................................................. ......... 14 Significant changes in the scope of consolidation ............................................................... .................. 14 Business combinations ................................................................................... ....................................... 15 Subsequent Events ....................................................................................... ......................................... 16 Independent Auditor’s Interim Review Report on the Quarterly Consolidat ed Financial Statements (Translation) ....................................... ................................................... ................................................... ....... 17
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2 1. Overview of Business Results In our Medium-term Management Plan “Challenge 2027,” which started in the fiscal year 2025, we have categorized various businesses, including ammonium perchlorate, a solid propellant ingredient for space rockets and defense-related products, into priority area, focus area, development area, and base area, and are promoting management based on a new business portfolio. We have positioned the three-year period from fiscal year 2025 to fiscal year 2027 as the “Investment Promotion” stage and are actively carrying out capital investments. As major investment projects, the construction work to expand ammonium perchlorate production is scheduled to be completed in March 2027, the construction of manufacturing facilities for solid propellants for defense is expected to be completed in March 2028, and renovation work of the PET beverage production line in the Bottling segment is set to be completed in December 2026. All of these projects are progressing smoothly and expected to bring business growth and profit expansion. Under our management philosophy of “For Confidence and Infinite Challenges,” we aim to promote the growth of existing businesses and establish new businesses, while also promoting management that is conscious of the cost of capital and the share price in pursuing improvements in corporate value. ( 1) O verview of Business Results for the Three Months Ended June 30, 2026 (i) Explanation of operating results Turning to performance for the three months ended June 30, 2026, sales increased in both the Chemical Products segment and the Metal Working segment due to steady demand in each market. On the other hand, the Chemical Products segment experienced a decrease in profit due to rising raw material costs caused by the tense situat ion in the Middle East and China’s export restrictions, as well as the impact of increased management costs. In the Bottling segment, both sales and profit decreased due to the impact of renovation work of the PET beverage production line. However, the production and sales of the manufacturing lines that continue to operate are progressing steadily as planned. Consequently, on the whole, the results are as follows. (Millions of yen, unless otherwise noted) Three months ended Jun. 30, 2025 Three months ended Jun. 30, 2026 Amount of change Rate of change Net sales 8,655 8,654 (0) (0.0)% Operating profit 445 255 (190) (42.7)% Ordinary profit 581 385 (196) (33.7)% Profit attributable to owners of parent 299 68 (230) (77.0)% (ii) Explanations by business segment Our main products and services are as follows. Chemical Products segment Explosives sub-segment = net sales remained flat and profit decreased ࣭Industrial explosives experienced a decrease in sales and profit due to a decline in industrial demand, including limestone quarrying. ࣭Automotive emergency flares saw an increase in sales due to steady demand for vehicle inspections. However, profits decreased due to increased production costs. ࣭Signal flares for highway use saw no significant change in demand from the previous year, resulting in flat sales and profits. ࣭Raw materials for fireworks saw an increase in sales due to steady sales of fireworks components for fireworks festivals in various locations. However, profits decreased due to increased costs.
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3 Material assessment service sub-segment = decrease in sales and profit ࣭Despite some adjustments by certain customers, safety evaluation testing secured orders for safety evaluation of chemicals and large special tests, leading to an increase in sales and profit. ࣭Secondary batteries testing faced a decline in orders due to the slowdown in EV demand and adjustments by some customers. Additionally, increased depreciation costs from capital investments led to a decrease in sales and profit. Chemicals sub-segment = decrease in sales and profit ࣭Sodium chlorate experienced a decrease in sales and profit, despite steady demand in the paper pulp market, as sales volume declined due to overlapping regular maintenance by paper companies. ࣭Ammonium perchlorate (the raw material in propellants for rockets and defense missiles) experienced an increase in sales and profit due to steady demand for both space development and defense applications. ࣭Electrodes experienced a decrease in sales and profit as the replacement demand for large projects, which were concentrated in the previous fiscal year, was completed for both oxygen generation and chlorine generation applications. Additionally, the impact of customers holding back on purchases due to the soaring prices of precious metals, which are raw materials, contributed to the decline. ࣭Chlorate-based herbicides experienced increased sales due to a rise in sales volume following the exclusion from designation as hazardous substances for pharmaceutical use. However, profits remained flat due to increased production costs. Electronic materials sub-segment = increase in sales and profit ࣭Sales losses occurred due to the bottleneck of petrochemical-derived raw materials caused by the tense situation in the Middle East. On the other hand, there was continued strong sales of high-value-added capacitor materials for high-end servers, along with increased overseas demand for capacitor materials used in power converters and growing demand for antistatic chemicals used in trays and tapes for semiconductor production, leading to an increase in sales and profit. Ceramic materials sub-segment = sales increased and profit remained flat ࣭The demand for grinding abrasives for metal working applications remained steady, resulting in an increase in sales. Profits remained flat due to increased production costs. Silicon wafers sub-segment = decrease in sales and increase in profit ࣭Reduced sales impacted by excessive customer inventories and production adjustments led to a decrease in sales. On the other hand, the emergence of the effects of price adjustments to appropriate levels and cost reductions led to an increase in profit. Bottling segment ࣭Currently, among the three beverage production lines owned, the “Hot Pack Line” is undergoing renovation work. One of the PET beverage production lines is halted, resulting in a decrease in sales and profit. The renovation work period is expected to last from this first quarter to the third quarter, with the impact on performance anticipated to be as planned. Additionally, the production and sales status of the lines that continue to operate is steady. Metal Working segment ࣭The replacement demand for anchors for use inside heat-resistant furnaces and retainers for dust collectors remained steady, resulting in flat sales and profits compared to the previous year. ࣭Various metal springs and pressed products saw flat demand for automotive applications compared to the previous year, but increased demand for metal pressed products (such as washers) for construction machinery led to an increase in sales. Profits remained flat due to increased production costs. Engineering Services segment ࣭For engineering and construction work, both internal group construction projects and external orders decreased, resulting in a decrease in sales and profit. Additionally, Minamisawa Construction Co., Ltd. had its status as a
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4 consolidated subsidiary removed at the end of June, and from the second quarter onward, it will be excluded from the scope of consolidation. However, the impact on consolidated performance is expected to be minor at this stage. ࣭Sales of industrial paints increased due to preemptive demand for paint products caused by the tense situation in the Middle East. Furthermore, painting work also saw an increase in sales and profit due to increased production volume and the acquisition of new projects. ࣭Structural design experienced steady demand, particularly for seismic diagnosis and reinforcement design of water and sewage facilities, leading to an increase in sales and profit. These results are provided below. (Millions of yen) Business segments Net sales Operating profit Three months ended Three months ended Jun. 30, 2025 Jun. 30, 2026 Amount of change Jun. 30, 2025 Jun. 30, 2026 Amount of change Chemical Products 5,305 5,408 102 433 203 (229) Bottling 931 664 (267) (301) (367) (66) Metal Working 1,868 1,901 32 172 176 4 Engineering Services 1,200 1,036 (164) 158 205 46 Subtotal 9,306 9,011 (295) 463 218 (245) Eliminations (651) (356) 294 (18) 36 55 Total 8,655 8,654 (0) 445 255 (190)
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5 (2) O verview of the Consolidated Balance Sheets as of June 30, 2026 (Assets) Total assets was ¥57,527 million, a decrease of ¥147 million from the end of the previous fiscal year. The breakdown of major increases (decreases) in assets includes a decrease in notes and accounts receivable - trade, and contract assets of ¥614 million, an increase in property, plant and equipment of ¥348 million, and an increase in intangible assets of ¥75 million. (Liabilities) Liabilities was ¥19,619 million, an increase of ¥1,737 million from the end of the previous fiscal year. The breakdown of major increases (decreases) in liabilities includes an increase in interest-bearing liabilities of ¥737 million, an increase in provision for bonuses of ¥348 million and an increase in advances received included in other current liabilities of ¥268 million. (Net assets) Total net assets was ¥37,908 million, a decrease of ¥1,885 million from the end of the previous fiscal year. The breakdown of major increases (decreases) in net assets includes a decrease in purchase of treasury shares of ¥999 million and a decrease in retained earnings of ¥890 million most of which derived from the payment of dividends. As a result of the above, equity-to-asset ratio decreased from 69.0% to 65.9%.
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6 (3) E xplanation of Forward-Looking Statements Including Forecasts of Consolidated Financial Results The global economy is expected to maintain moderate growth overall, supported by resilient consumer spending and capital investment, despite a slowdown in the pace of growth. On the other hand, uncertainties persist due to sustained high energy prices and prolonged geopolitical risks. The Chinese economy is projected to continue its gradual slowdown, influenced by the sluggish real estate market and stagnant consumer spending. While exports may provide some support, weak domestic demand and rising trade frictions are expected to weigh on the economy. The Japanese economy is anticipated to maintain a moderate recovery trend, backed by improvements in employment and income conditions, as well as corporate capital investment. However, it will be necessary to continue to pay attention to the impact of rising prices and energy price trends on household budgets and consumer spending. In light of the economic environment mentioned above, our outlook for each business segment is as follows. The Chemical Products segment is expected to continue being supported by growth in Electronic materials sub-segment and ammonium perchlorate. However, in Material assessment service sub-segment, a temporary downturn is anticipated due to the slowdown in the pace of growth of the EV market. Regarding the increase in various costs that impacted performance in this first quarter, efforts such as negotiating appropriate prices will be continued with the aim of achieving the full-year plan. The Bottling segment is expected to continue experiencing a decline in sales and profit, albeit temporarily until the third quarter, due to the ongoing renovation work of the PET beverage production line. We expect the performance in the Metal Working segment and Engineering Services segment to remain solid, as in the previous fiscal year, in line with trends in the Japanese economy. Uncertainty regarding the future remains extremely high due to such risks as supply disruptions and rising costs stemming from conditions in the Middle East. Taking into consideration a comprehensive review of prevailing conditions, the consolidated earnings forecast for the fiscal year ending March 31, 2027 is as announced on May 15, 2026. (Percentages indicate year-on-year changes) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen 1st half 17,300 (2.6) 1,100 (26.9) 1,200 (27.6) 1,400 21.8 62.35 Full year 37,200 2.6 3,200 (7.5) 3,300 (12.1) 3,000 0.8 133.61
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7 2. Quarterly Consolidated Financial Statements (1) Q uarterly Consolidated Balance Sheets (Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 3,994 3,985 Notes and accounts receivable - trade, and contract assets 9,497 8,883 Merchandise and finished goods 3,453 3,414 Work in process 605 619 Raw materials and supplies 1,858 1,984 Other 2,122 2,068 Allowance for doubtful accounts (8) (12) Total current assets 21,524 20,942 Non -current assets Property, plant and equipment Buildings and structures, net 9,706 9,759 Machinery, equipment and vehicles, net 3,643 3,573 Land 5,751 5,377 Construction in progress 2,457 3,165 Other, net 1,076 1,108 Total property, plant and equipment 22,635 22,984 Intangible assets Other 910 986 Total intangible assets 910 986 Investments and other assets Investment securities 11,095 11,052 Retirement benefit asset 608 665 Other 905 900 Allowance for doubtful accounts (5) (5) Total investments and other assets 12,603 12,613 Total non-current assets 36,150 36,584 Total assets 57,674 57,527
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8 (Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 4,332 4,110 Short-term borrowings 3,500 1,200 Current portion of long -term borrowings 257 588 Income taxes payable 325 479 Provision for bonuses 816 1,164 Other 2,277 3,228 Total current liabilities 11,509 10,772 Non-current liabilities Long -term borrowings 348 3,088 Provision for share awards 57 61 Provision for share awards for directors (and other officers) 150 159 Retirement benefit liability 343 331 Other 5,472 5,207 Total non-current liabilities 6,372 8,847 Total liabilities 17,881 19,619 Net assets Shareholders’ equity Share capital 2,099 2,099 Retained earnings 31,148 30,257 Treasury shares (525) (1,524) Total shareholders’ equity 32,722 30,832 Accumulated other comprehensive income Valuation difference on available -for -sale securities 6,677 6,658 Deferred gains or losses on hedges 8 18 Foreign currency translation adjustment 217 237 Remeasurements of defined benefit plans 166 161 Total accumulated other comprehensive income 7,070 7,075 Total net assets 39,793 37,908 Total liabilities and net assets 57,674 57,527
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9 (2) Q uarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income (Millions of yen) For the t hree months ended June 30, 2025 For the three months ended June 30, 2026 Net sales 8,655 8,654 Cost of sales 6,744 6,671 Gross profit 1,911 1,983 Selling, general and administrative expenses 1,466 1,728 Operating profit 445 255 Non-operating income Dividend income 123 135 Share of profit of entities accounted for using equity method 6 7 Other 25 18 Total non-operating income 155 161 Non -operating expenses Interest expenses 8 29 Commission for purchase of treasury shares 4 0 Foreign exchange losses 6 – Other 0 1 Total non-operating expenses 19 31 Ordinary profit 581 385 Extraordinary income Gain on sale of non -current assets 0 0 Gain on sale of shares of subsidiaries and associates – 74 Total extraordinary income 0 74 Extraordinary losses Loss on retirement of non -current assets 22 11 Total extraordinary losses 22 11 Profit before income taxes 559 448 Income taxes 260 379 Profit 299 68 Profit attributable to owners of parent 299 68
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10 Quarterly Consolidated Statements of Comprehensive Income (Millions of yen) For the t hree months ended June 30, 2025 For the t hree months ended June 30, 2026 Profit 299 68 Other comprehensive income Valuation difference on available -for -sale securities 711 (18) Deferred gains or losses on hedges 3 9 Foreign currency translation adjustment (26) 19 Remeasurements of defined benefit plans, net of tax (5) (4) Total other comprehensive income 682 5 Comprehensive income 981 74 Comprehensive income attributable to Comprehensive income attributable to owners of parent 981 74
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11 (3) N otes to Quarterly Consolidated Financial Statements Changes in Accounting Policies Application of Accounting Standard for Interim Financial Reporting and related guidance The Company has applied the “Accounting Standard for Interim Financial Reporting” (ASBJ Statement No. 37, October 16, 2025) and “Implementation Guidance on Accounting Standard for Interim Financial Reporting” (AS BJ Implementation Guidance No. 34, October 16, 2025) from the beginning of the first quarter of the fiscal year ending March 31, 2027. Accordingly, regarding the method of writing down the book value concerning inventories removed from the operating cycle, the Company has changed from the previously adopted interim separation method to the interim reversal method. Additionally, the Company applies this change in accounting policies prospectively in accordance with the transitional provisions stipulated in paragraph (35) of the “Accounting Standard for Interim Financial Reporting.” This change in accounting policy had no effect on the consolidated financial statements for this first quarter. A doption of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements Calculation method of income tax expense Income tax expense is calculated by multiplying profit before income taxes by reasonably estimated effective tax rate after applying tax effect accounting for the fiscal year including this first quarter. Also, income taxes - deferred is included in income taxes.
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12 Segment Information (1) Three months of the fiscal year ended March 31, 2026 (April 1, 2025 to June 30, 2025) Amounts of net sales and profit or loss by reportable segment (Millions of yen) Reportable segment Adjust- ments (Note 1) Amount recorded on quarterly consolidated statements of income (Note 2) Chemical Products Bottling Metal Working Engineering Services Sub-total Net sales Outside customers 5,045 931 1,832 845 8,655 – 8,655 Inter-segment sales 259 – 35 355 651 (651) – Total 5,305 931 1,868 1,200 9,306 (651) 8,655 Segment profit (loss) 433 (301) 172 158 463 (18) 445 Notes: 1. Adjustments to segment profit of negative ¥18 million are mainly unrealized income eliminations. 2. Segment profit is adjusted to operating profit in the quarterly consolidated statement of income. ( 2) Three months of the fiscal year ending March 31, 2027 (April 1, 2026 to June 30, 2026) Amounts of net sales and profit or loss by reportable segment (Millions of yen) Reportable segment Adjust- ments (Note 1) Amount recorded on quarterly consolidated statements of income (Note 2) Chemical Products Bottling Metal Working Engineering Services Sub-total Net sales Outside customers 5,159 664 1,863 967 8,654 – 8,654 Inter-segment sales 249 – 37 69 356 (356) – Total 5,408 664 1,901 1,036 9,011 (356) 8,654 Segment profit (loss) 203 (367) 176 205 218 36 255 Notes: 1. Adjustments to segment profit of ¥36 million are mainly unrealized income eliminations. 2. Segment profit is adjusted to operating profit in the quarterly consolidated statement of income.
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13 Significant Changes in Amounts of Shareholders’ Equity Repurchase of treasury shares The Company, at the Board of Directors meeting held on May 15, 2026, resolved to repurchase treasury shares and determined the specific method of the repurchase pursuant to the provisions of Article 156 of the Companies Act, as applied by replacing the relevant terms pursuant to the provisions of Article 165, paragraph (3) of the said Act. On May 18, 2026, the Company acquired 364,900 treasury shares. As a result, during the three months ended June 30, 2026, treasury shares increased by ¥999 million and amounted to ¥1,524 million as of June 30, 2026. (Reference) Details of the resolution, etc. passed at the meeting of the Board of Directors held on May 15, 2026 1. Reason for repurchase of treasury shares Our Medium-term Management Plan “Challenge 2027” (from the fiscal year ended March 31, 2026 to the fiscal year ending March 31, 2028) announced in March 2025 sets out the Group’s financial policy of providing appropriate shareholder returns based on an optimal capital structure. Based on this policy, we have decided to repurchase treasury shares with the aim of providing flexible shareholder returns that are directed to improve capital efficiency. 2. Details of matters related to the repurchase (1) Class of shares to be repurchased Common shares of the Company (2) Total number of shares to be repurchased 364,900 shares (maximum) (1.6% of total number of issued shares (excluding treasury shares)) (3) Total amount of the repurchase of shares ¥1.0 billion (maximum) (4) Method of repurchase Repurchase of Treasury Shares Through Off-Auction Own Share Repurchase Trading System (ToSTNeT-3) of the Tokyo Stock Exchange 3. Result of repurchase (1) Class of shares repurchased Common shares of the Company (2) Total number of repurchased shares 364,900 shares (3) Total amount of the repurchase of shares ¥999,826,000 (4) Date of repurchase May 18, 2026 (5) Method of repurchase Repurchase of Treasury Shares Through Off-Auction Own Share Repurchase Trading System (ToSTNeT-3) of the Tokyo Stock Exchange G oing Concern Assumption Not applicable
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14 Notes to Quarterly Consolidated Cash Flow Statement There is no quarterly consolidated statement of cash flows for the thr ee months ended June 30, 2026. Depreciation (including amortization related to intangible assets ) for the three months ended June 30, 2026/2025 is as follows: (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Depreciation 420 471 S ignificant changes in the scope of consolidation During the three months ended June 30, 2026, the Company tra nsferred all its shares of Minamisawa Construction Co., Ltd., which was a consolidated subsidiary of t he Company, to Hokubu Co., Ltd., resulting in the transferred company’s exclusion from the scope of consolidation.
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15 Business combinations Business divestiture (transfer of subsidiary shares) At the Board of Directors meeting held on June 9, 2026, the Compan y resolved to transfer all its shares of Minamisawa Construction Co., Ltd., a consolidated subsidiary, to Hokubu Co., Ltd. On the same day, a share transfer agreement was signed, and the transfer was completed on Ju ne 30, 2026. Consequently, the transferred company has been excluded from the scope of consolidation. 1. Overview of business divestiture (1) Name of transferee company Hokubu Co., Ltd. (2) Details of divested business Building construction, construction design, construction work, civil engineering work, etc. (3) Main reason for conducting divestiture After considering the optimal allocation of business resources and r evision of the business portfolio, the Company judged that the business transfer would contribute to the enhancement of the corporate value of the Group and also the growth of the transferred company. (4) Date of business divestiture June 30, 2026 (5) Other details regarding the transaction, including legal form Share transfer with consideration received solely in the form of cash and other assets 2. Overview of accounting treatment applied (1) Amount of transfer gain/loss Gain on sale of shares of subsidiaries and associates ¥74 million (2) Appropriate book value of assets and liabilities related to the transferred business and main breakdown Current assets ¥723 million Non-current assets ¥172 million Total assets ¥895 million Current liabilities ¥159 million Non-current liabilities ¥11 million Total liabilities ¥170 million (3) Accounting treatment The difference between the sale price of the transferred shares and their con solidated book value is recorded as “Gain on sale of shares of subsidiaries and associates” under extraordinary income. 3. Name of the reportable segment in which the divested business wa s included Engineering Services business 4. Approximate amount of profit or loss related to the divested busines s recorded in the quarterly consolidated statement of income for the three months ended June 30, 2026 Net sales ¥155 million Operating profit ¥16 million
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16 Subsequent Events Repurchase of treasury shares The Company, at the Board of Directors meeting held on August 7, 2026, resolved the matters concerning the repurchase of treasury shares pursuant to the provisions of Article 156 of the Companies Act, as applied by replacing the relevant terms pursuant to the provisions of Article 165, paragraph (3) of the same Act. 1. Reason for repurchase of treasury shares Our current Medium-term Management Plan “Challenge 2027” (from the fiscal year ended March 31, 2026 to the fiscal year ending March 31, 2028) sets out the Group’s financial policy of providing appropriate shareholder returns based on an optimal capital structure. Based on this policy, we have decided to repurchase treasury shares with the aim of providing flexible sha reholder returns that are directed to improve capital efficiency. 2. Details of matters related to the repurchase (1) Class of shares to be repurchased Common shares of the Company (2) Total number of shares to be repurchased 700,000 shares (maximum) (3.1% of total number of issued shares (excluding treasury shares)) (3) Total amount of the repurchase of shares ¥1.0 billion (maximum) (4) Repurchase period August 10, 2026 to September 30, 2026 (5) Method of repurchase Market purchase on the Tokyo Stock Exchange
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17 Independent Auditor’s Interim Review Report on the Quarterly Consolidated Financial Statements (Translation) August 7, 2026 The Board of Directors Carlit Co., Ltd. Ernst & Young ShinNihon LLC Tokyo Office, Japan Eri Sekiguchi Designated Engagement Partner Certified Public Accountant Tetsuya Kawawaki Designated Engagement Partner Certified Public Accountant A uditor’s Conclusion We have conducted an interim review of the quarterly consolida ted financial statements, namely, the quarterly consolidated balance sheets, the quarterly consolidated s tatements of income and the quarterly consolidated statements of comprehensive income, and notes thereto, for th e first quarter ended June 30, 2026 (April 1, 2026 to June 30, 2026) and for the three month s ended June 30, 2026 (April 1, 2026 to June 30, 2026), which are included in the attached materials to t he Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2027 (April 1, 2026 to March 31, 2027) of Carlit Co., Ltd. In the interim review we conducted, we found no matter that would lead us to believe that the above quarterly consolidated financial statements have not been prepared in any material respect in accordance with Article 4, Paragraph 1 of the Standards for Preparation of Quarterly Finan cial Statements, etc. of Tokyo Stock Exchange, Inc. and the accounting principles applicable to in terim consolidated financial statements generally accepted in Japan (however, the omissions set forth in Article 4, Paragraph 2 of the Standards for Preparation of Quarterly Financial Statements, etc. have been applied). B asis for Auditor’s Conclusion We conducted our interim review in accordance with interim review standards generally accepted in Japan. Our responsibilities under the standards for interim reviews are described in “Auditor’s Responsibilities for Interim Review of Quarterly Consolidated Financial Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan (including the provisi ons applicable to audits of financial statements of entities with higher social impact), and we hav e fulfilled our other ethical responsibilities in accordance with these requirements. We believe that we have obtain ed evidence to form the basis for expressing a conclusion.
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18 Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for the Quarterly Consolidated Financial Statements Management is responsible for the preparation of the quarterly con solidated financial statements in accordance with Article 4, Paragraph 1 of the Standards for Preparation of Quarterly Financial Statements, etc. of Tokyo Stock Exchange, Inc. and the accounting principles applicable to interim consolidated financial statements generally accepted in Japan (however, the omissions set forth in Article 4, Paragraph 2 of the Standards for Preparation of Quarterly Financial Statements, etc. have been applied); this includes the maintenance and operation of such internal control as management determines is necessary to enable the preparation of quarterly consolidated financial statements that ar e free from material misstatement, whether due to fraud or error. In preparing the quarterly consolidated financial statements, ma nagement is responsible for assessing whether it is appropriate to prepare the quarterly consolidated financial statements with the assumption of the Group’s ability to continue as a going con cern and disclosing, as required in accordance with Article 4, Paragraph 1 of the Standards for Preparation of Quarterly Financial Statements, etc. of Tokyo Stock Exchange, Inc. and the accounting principles applicable to in terim consolidated financial statements generally accepted in Japan (however, the omissions set forth in Article 4, Paragraph 2 of the Standards for Preparation of Quarterly Financial Statements, etc. have been applied), matters related to going concern. Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors’ performance of duties within the maintenance and operation of the financial reporting process. A uditor’s Responsibilities for Interim Review of Quarterly Consolidated Financial Statements Our responsibility is to express a conclusion on the quarterly consolidated financial statements from an independent standpoint in the interim review report based on the interim review we conducted. In accordance with interim review standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the interim review. We also: Make inquiries, primarily of management and other persons responsible for financial and accounting matters, and perform analytical procedures and other interim review procedures. Interim review procedures are more limited in scope compared with an audit of annual financial statements conducted in accordance with auditing standards generally accepted in Japan. Determine whether there is significant uncertainty regarding events or circumstances that give rise to significant doubts regarding matters related to the going concern assumption. If significant uncertainty exists, we will make a conclusion, based on the evidence obtained, as to whether there are any matters that lead one to believe that the quarterly consolidated financial statements are not prepared in accordance with Article 4, Paragraph 1 of the Standards for Preparation of Quarterly Financial Statements, etc. of Tokyo Stock Exchange, Inc. and the accounting principles applicable to interim consolidated financial statements generally accepted in Japan (however, the omissions set forth in Article 4, Paragraph 2 of the Standards for Preparation of Quarterly Financial Statements, etc. have been applied). In addition, if significant uncertainties regarding the going concern assumption are recognized, the interim review report is required to draw attention to the notes to the quarterly consolidated financial statements, or, if the notes to the quarterly consolidated financial statements regarding significant uncertainties are not appropriate, to express a qualified or adverse conclusion on the quarterly consolidated financial statements. Although our conclusion is based on the evidence obtained up to the date of the interim review report, future events or circumstances may cause the Group to be unable to continue as a going concern.
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19 Evaluate whether there are any matters that lead one to believe that the presentation and notes of the quarterly consolidated financial statements have not been prepared in accordance with Article 4, Paragraph 1 of the Standards for Preparation of Quarterly Financial Statements, etc. of Tokyo Stock Exchange Inc. and the accounting principles applicable to interim consolidated financial statements generally accepted in Japan (however, the omissions set forth in Article 4, Paragraph 2 of the Standards for Preparation of Quarterly Financial Statements, etc. are applied). Obtain evidence regarding the financial information of the Company and its consolidated subsidiaries that forms the basis for expressing a conclusion on the quarterly consolidated financial statements. We are responsible for directing, supervising and inspecting the interim review of the quarterly consolidated financial statements. We remain solely responsible for our conclusion. We shall report to Audit & Supervisory Board Members and the Audit & Supervisory Board on the scope and timing of the planned interim review, and any significant findings from the interim review. We shall report to Audit & Supervisory Board Members and the Audit & Supervisory Board that we have complied with the provisions related to professional ethics in Japan regarding independence and any matters that could reasonably be considered to affect our independence, and any m easures taken to eliminate impediments or safeguards applied to reduce impediments to an acceptable level, if any. C onflicts of Interest Our firm and the designated engagement partners have no interest in the Company and its consolidated subsidiaries which should be disclosed in accordance with the Certified Public Accountants Act. (Notes) 1. The original copy of the above interim review report is kept separately by the Company (the company disclosing the quarterly financial statements). 2. XBRL data and HTML data are not included in the scope of the int erim review.