Japan Medical Dynamic Marketing : 〔Delayed〕Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 2023

Summary of Consolidated Financial Results for the First Quarter of the Fiscal

Year Ending March 2023 [Japanese GAAP]

						July 29, 2022
Company name	Japan Medical Dynamic Marketing, INC.	Listing	TSE
Securities code	7600			URL https://www.jmdm.co.jp/
Representative	(Title)	Representative Director and	(Name)	Masao Okawa
President
Contact person in charge	(Title)	General Manager, Investor	(Name)	Shinji Munechika	(TEL) 03-3341-6705
Relations Office
Scheduled date of submission of August 10, 2022	Scheduled date of commencement	-
the quarterly report			of dividend payment
Preparation of supplementary materials for the quarterly financial results :	None
Holding of quarterly financial results briefing		:	None

(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for First Quarter of the Fiscal Year Ending March 2023 (from April 1 to June 30, 2022)

(1) Consolidated Operating Results (year to date) (Percentages indicate changes from the same quarter of the previous year.)

										Net income
		Net sales		Operating profit	Ordinary profit	attributable to owners
										of parent
		Million yen		%	Million yen		%	Million yen	%	Million yen	%
Q1 of FYE March 2023		5,027		10.8	498		-10.1	483	-10.7	336	-7.4
Q1 of FYE March 2022		4,537		33.1	554		129.0	542	127.2	363	176.3
(Note) Comprehensive	Q1 of FYE March 2023 1,524 Million yen ( 321.1%) Q1 of FYE March 2022 362 Million yen (	376.0%)
income
		Net income per share	Diluted net income per
		share
				yen			Yen
Q1 of FYE March 2023				12.75			-
Q1 of FYE March 2022				13.78			-

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio
	Million yen	Million yen	%
Q1 of FYE March 2023	28,655	22,698	78.8
FYE March 2022	27,342	21,491	78.2

(Reference) Shareholders' Q1 of FYE March 2023 22,572Million yen	FYE March 2022 21,386 Million yen
equity

2. Dividends

			Annual dividends
	End of first	End of second	End of third		End of period	Total
	quarter	quarter		quarter
	yen	yen		yen		yen	yen
FYE March 2022	-	0.00		-		12.00	12.00
FYE March 2023	-
FYE March 2023 (Forecast)		0.00		-		13.00	13.00
(Note) Revisions to the most recently announced dividend forecast	: None

3. Consolidated Financial Forecasts for FYE March 2023 (from April 1, 2022 to March 31, 2023)

(Percentages indicate changes from the previous year for the full year, and from the same quarter of the previous year for the quarter.)

										Net income	Net income per
	Net sales		Operating profit		Ordinary profit		attributable to
				share
										owners of parent
	Million yen		%	Million yen	%		Million yen		%	Million yen	%	yen
Q2 (Cumulative)	10,200		15.1	1,100	3.9		1,050		0.7	700	-30.2	26.53
Full year	22,000		14.6	2,800	5.2		2,700		4.2	1,850	-13.4	70.12
(Note) Revisions to the most recently announced financial forecast	: None

*Notes

(1) Changes in significant subsidiaries during the first quarter under review: None

(Changes in specified subsidiaries resulting in changes in scope of consolidation)

Newly included - companies (Company name) - , Excluded - companies (company name) -

(2) Application of accounting treatment specific to the preparation of quarterly	:	Yes
consolidated financial statements
(3) Changes in accounting policies, accounting estimates, and retrospective restatement
1)	Changes in accounting policies based on revisions of accounting standard	:	None
2)	Changes in accounting policies other than 1)	:	None
3)	Changes in accounting estimates	:	None
4)	Retrospective restatement	:	None

1. Number of shares issued (common stock)
2. 1. Number of shares issued at the end of the period (including treasury shares)
   2. Number of treasury shares at the end of the period
   3. Average number of shares during the period (year to date)

Q1 of FYE March	26,475,880shares	FYE March 2022	26,475,880shares
2023
Q1 of FYE March	92,179shares	FYE March 2022	92,179shares
2023
Q1 of FYE March	26,383,701shares	Q1 of FYE March	26,383,824shares
2023	2022

• This summary of quarterly financial results is not subject to audit by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts and other special notes

These forward-looking statements such as financial forecasts contained in this report are based on information currently available to the Company and certain assumptions deemed to be reasonable by the Company, and do not mean that the Company promises to achieve them. Actual results and other future events may differ significantly due to various factors. Please refer to "(3) Explanation on Consolidated Financial Forecasts and Other Forward-looking Statements" on page 2 of the attached document for the assumptions underlying the forecasts, notes on using the forecasts, etc.

Japan Medical Dynamic Marketing, INC (7600) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 2023

• Table of Contents of Attachment

1. Qualitative Information on Quarterly Financial Results ........................................................................................................................	2
(1)	Explanation on Operating Results ....................................................................................................................................................	2
(2)	Explanation on Financial Position....................................................................................................................................................	2
(3)	Explanation on Consolidated Financial Forecasts and Other Forward-looking Statements .............................................................	2
2. Quarterly Consolidated Financial Statements and Main Notes ..............................................................................................................	3
(1)	Quarterly Consolidated Balance Sheet .............................................................................................................................................	3
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ..........................	5
(3)	Notes to Quarterly Consolidated Financial Statements ....................................................................................................................	7
(Note on Going Concern Assumption)...............................................................................................................................................	7
(Notes on Substantial Changes in the Amount of Shareholders' Equity) ...........................................................................................	7
(Application of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements) ......................	7
(Additional Information)....................................................................................................................................................................	7
(Segment Information, etc.) ...............................................................................................................................................................	7
3. Other ......................................................................................................................................................................................................	8
Sales.......................................................................................................................................................................................................	8

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Japan Medical Dynamic Marketing, INC (7600) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 2023

1. Qualitative Information on Quarterly Financial Results

(1) Explanation on Operating Results

During the first quarter of the fiscal year ending March 31, 2023 of the Group, net sales were ¥5,027 million (up ¥489 million, or 10.8% year on year), operating profit was ¥498 million (down ¥55 million, or 10.1% year on year), ordinary profit was ¥483 million (down ¥58 million, or 10.7% year on year), and net income attributable to owners of parent was ¥336 million (down ¥27 million, or 7.4% year on year).

In Japan, the number of cases improved compared with the same quarter a year ago, a quarter affected by COVID-19, and net sales were ¥2,933 million (up ¥210 million, or 7.7% year on year). On the other hand, in the United States, the number of cases increased due to a recovery in business activities as a result of the expansion of COVID-19 vaccinations and other factors in comparison with the same quarter a year ago when cases grew in number. However, net sales to external customers in the United States (in U.S. dollars) decreased 1.6% year on year due to a decline in case unit prices, but after translation into yen, net sales increased 15.4% to ¥2,093 million due to the impact of the yen's depreciation.

In the artificial joints category, combined total net sales in Japan and the United States increased 11.5% (4.8% in Japan and 15.5% in the United States) year on year to ¥3,222 million as sales in the United States grew substantially (after translation into Japanese yen) due to the yen's sharp depreciation. (Reference: The exchange rate for U.S. sales was 110.03 yen to the U.S. dollar in the same quarter a year ago and was 129.05 yen to the U.S. dollar in the quarter under review.)

In the category of osteosynthesis materials, net sales in Japan increased 10.7% year on year to ¥960 million, mainly due to steady sales of ASULOCK and Prima Hip Screw.

In the category of spinal fixation devices, sales of the KMC Kyphoplasty System continued to be steady in Japan and sales of Pisces Spinal System grew, resulting in a 10.2% increase in total net sales in Japan and the United States to ¥827 million.

As for cost of sales, the cost of sales ratio was 33.4% (32.0% in the same quarter a year ago) mainly due to the yen's depreciation and revision to redemption prices in Japan.

Selling, general and administrative expenses totaled ¥2,849 million (up 12.5% year on year), reflecting an increase in expenses (after translation into yen) in the United States as a result of the yen's depreciation. The ratio of selling, general and administrative expenses to net sales was 56.7% (55.8% in the same quarter a year ago).

Despite an increase in net sales, operating profit was ¥498 million (down 10.1% year on year) due to an increase in selling, general and administrative expenses in addition to an increase in the cost of sales ratio owing to the yen's depreciation.

Ordinary profit was ¥483 million (down 10.7% year on year) as a result of recording non-operating income of ¥35 million, including insurance claim income of ¥13 million, and recording non-operating expenses of ¥49 million, including foreign exchange losses of ¥30 million.

As for extraordinary income and losses, ¥6 million in reversal of provision for loss on business was recorded under extraordinary income and ¥12 million in loss on retirement of non-current assets such as medical tools was recorded under extraordinary loss.

As a result, net income attributable to owners of parent amounted to ¥336 million (down 7.4% from the previous fiscal year).

Segment results are as follows.

1. Japan
   Net sales were ¥2,933 million (up 7.7% year on year) and operating profit was ¥255 million (down 22.6% year on year).
2. United States
   Net sales were ¥2,949 million (up 12.3% year on year) and operating profit was ¥206 million (down 14.6% year on year).

1. Explanation on Financial Position

Total assets at the end of the quarter under review increased ¥1,312 million from the end of the previous fiscal year to ¥28,655 million. The main increases were in merchandise and finished goods by ¥915 million and raw materials and supplies by ¥422 million.

Total liabilities increased ¥105 million from the end of the previous fiscal year to ¥5,957 million. The main increase was in short- term borrowings by ¥219 million, and the main decreases were in provision for bonuses by ¥149 million and in long-term borrowings by ¥56 million.

Net interest-bearing debts, which are calculated by deducting cash and deposits from interest-bearing debts (the total amount of short-term borrowings, long-term borrowings, and lease liabilities), amounted to minus ¥707 million at the end of the quarter under review.

Total net assets increased ¥1,207 million from the end of the previous fiscal year to ¥22,698 million. The main increases were in foreign currency translation adjustment by ¥1,066 million and in deferred gains or losses on hedges by ¥96 million.

(3) Explanation on Consolidated Financial Forecasts and Other Forward-looking Statements

There is no change to the consolidated financial forecast for the current fiscal year announced on April 28, 2022.

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Japan Medical Dynamic Marketing, INC (7600) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 2023

2. Quarterly Consolidated Financial Statements and Main Notes

1. Quarterly Consolidated Balance Sheet

					(In thousand yen)
				Previous fiscal year	The quarter under review
				(March 31, 2022)	(June 30, 2022)
Assets
	Current assets
		Cash and deposits	2,590,849	2,711,659
		Notes and accounts receivable - trade, and contract	5,212,555	4,816,943
		assets
		Merchandise and finished goods	8,186,658	9,102,262
		Work in process	497,823	422,207
		Raw materials and supplies	1,410,927	1,833,797
		Other	149,211	374,383
		Allowance for doubtful accounts	-1,386	-1,229
		Total current assets	18,046,638	19,260,024
	Non-current assets
		Property, plant, and equipment
			Buildings and structures (net)	728,450	761,654
			Machinery, equipment, and vehicles (net)	350,978	366,033
			Tools, furniture, and fixtures (net)	4,691,605	4,723,255
			Land	1,953,479	1,957,063
			Other	48,173	62,533
			Total property, plant, and equipment	7,772,687	7,870,540
		Intangible assets	291,960	298,052
		Investments and other assets
			Investment securities	－	34,172
			Investments in capital of subsidiaries and	174,887	183,552
			associates
			Deferred tax assets	971,990	925,382
			Other	84,558	83,688
			Total investments and other assets	1,231,435	1,226,796
		Total non-current assets	9,296,083	9,395,388
	Total assets	27,342,722	28,655,413

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