Mani : Summary of Consolidated Financial Results for FY2023 3Q

Summary of Consolidated Financial Results for the Nine Months Ended May 31, 2023 (Based on Japanese GAAP)

				July 13, 2023
Company name:	MANI, INC.
Stock exchange listing:	Tokyo
Stock code:	7730	URL https://www.mani.co.jp/
Representative:	Director, President & Representative Executive Officer	Masahiko Saito
Inquiries:	Director, Executive Vice President & Executive Officer	Kazuo Takahashi	TEL [phone]

Scheduled date to submit Quarterly Securities Report:

July 14, 2023

Scheduled date to commence dividend payments:

-

Preparation of supplementary material on quarterly financial results:

Yes

Holding of quarterly financial results meeting:

No

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the nine months ended May 31, 2023 (from September 1, 2022 to May 31, 2023)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes)

Net Sales

Operating income

Ordinary income

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Nine months ended May 31, 2023

18,521

24.9

5,427

19.5

5,778

4.7

4,205

10.9

Nine months ended May 31, 2022

14,830

14.6

4,543

6.4

5,521

19.5

3,790

8.9

Note:

Comprehensive income:

For the nine months ended May 31, 2023

¥4,586 million

[(22.2%)]

For the nine months ended May 31, 2022

¥5,895 million

[46.0%]

Earnings per share

Diluted earnings per

share

Yen

Yen

Nine months ended May 31, 2023

42.71

-

Nine months ended May 31, 2022

38.51

-

(2) Consolidated financial position

Total assets

Net assets

Equity capital ratio

Millions of yen

Millions of yen

%

As of May 31, 2023

51,579

46,991

91.1

As of August 31, 2022

50,113

45,414

90.6

Reference:

Equity

As of May 31, 2023

¥46,991 million

As of August 31, 2022

¥45,414 million

2. Cash dividends

Annual dividends per share

1Q-end

2Q-end

3Q-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Year ended August 31, 2022

-

12.00

-

18.00

30.00

Year ending August 31, 2023

-

14.00

-

Year ending August 31, 2023 (Forecast)

19.00

33.00

Note:

Revisions to the forecasts of dividends most recently announced: None

3. Forecast of consolidated financial results for the year ending August 31, 2023 (from September 1, 2022 to August 31, 2023)

(Percentages indicate year-on-year changes)

Net Sales

Operating income

Ordinary income

Profit attributable to

Earnings per share

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

23,400

14.6

7,100

15.2

7,100

(5.9)

5,000

(5.5)

50.80

Note:

Revisions to

earnings forecasts

most

recently announced:

None

• Notes

(1)	Changes in significant subsidiaries during the nine months ended May 31, 2023	No
	(changes in specified subsidiaries resulting in the change in scope of consolidation):
(2)	Application of special accounting methods for preparing quarterly consolidated financial statements:	No

(3) Changes in accounting policies, changes in accounting estimates, and retrospective restatements of prior period financial statements

(i) Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
(ii) Changes in accounting policies due to other reasons:	No
(iii) Changes in accounting estimates:	No
(iv) Restatement of prior period financial statements:	No

Note: Please refer to p.8 "Changes in accounting policies" of the Attached Materials Index for further details.

1. Number of issued shares (common shares)
2. 1. Total number of issued shares at the end of the period (including treasury shares)

As of May 31, 2023

106,973,352 shares

As of August 31, 2022

106,911,000 shares

(ii) Number of treasury shares at the end of the period

As of May 31, 2023

8,484,468 shares

As of August 31, 2022

8,484,468 shares

(iii) Average number of shares during the period (cumulative from the beginning of the fiscal year)

As of May 31, 2023

98,463,075 shares

As of May 31, 2022

98,426,536 shares

• Quarterly financial reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual business and other results may differ substantially due to various factors.

MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Third Quarter of the Fiscal Year Ending August 31, 2023

• Attached Materials Index

1. Overview of business results	2
(1)	Explanation of operating results	2
(2)	Explanation of financial position and cash flows	3
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements	3
2. Quarterly consolidated financial statements	4
(1)	Quarterly consolidated balance sheet	4
(2)	Quarterly consolidated income statements and quarterly consolidated comprehensive income statements	6
	Quarterly consolidated income statements
	For the nine months ended May 31, 2022 and May 31, 2023	6
	Quarterly consolidated comprehensive income statements
	For the nine months ended May 31, 2022 and May 31, 2023	7
(3)	Notes to quarterly consolidated financial statements	8
	(Notes on premise of going concern)	8
	(Notes on significant changes in the amount of shareholders' equity)	8
	(Changes in accounting policies)	8
	(Segment information, etc.)	9
	(Significant subsequent events of going concern)	9

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Third Quarter of the Fiscal Year Ending August 31, 2023

1. Overview of business results

(1) Explanation of operating results

During the third quarter of the fiscal year ending August 31, 2023, the global economy showed signs of a moderate economic recovery, as a result of further progress in coexistence of COVID-19 with socioeconomic activities in many regions worldwide including Japan. However, the current outlook remains uncertain due to factors such as the never-ending Russian invasion of Ukraine, continued soaring resource and energy prices, drastic rise in policy interest rates in Europe and the United States in response to inflationary risks, and rapid exchange rate fluctuations.

Under such circumstances, our Group aims to contribute to the well-being of people around the world by providing our products worldwide, based on our commitment "The Best Quality In The World, To The World". We are engaged in realizing our corporate philosophy by beginning our medium-term management plan in fiscal year ended August 31, 2022, and reforming the business model through globalization of sales, production and development functions with the aim of further growth. During this fiscal year, we are strengthening the construction of the mass production system and marketing activities aimed at expanding sales for the NiTi rotary file "JIZAI"1, which is one of our key products in our medium-term management plan. We are also promoting sales of the vitreous forceps "Mani Micro Forceps"2 in Japan and advancing sales of the new dental restoration material3 in Europe.

With the aim "to establish a global production system," at GDF, the construction of the new Head Office Factory is in progress, and is planned to be completed around August 2023, and we have begun preparations to construct the Smart Factory within Japan. In addition, as part of global marketing promotion, we established a new sales subsidiary in Malaysia in June 2023 with the aim of expanding marketing and sales within Southeast Asian countries.

We will continue to aim to increase corporate value through growth strategies based on our medium-term management plan.

(References)

1. A flexible nickel titanium dental endodontic instrument used to treat an infected dental root canal in an endodontic treatment, which is one of the treatments for the dental nervous system known as pulp.
2. An ophthalmic therapeutic instrument used to treat the fundus in a vitreous surgery, which is one of the surgeries that treats ophthalmic diseases such as retinal detachment and diabetic retinopathy.
3. An artificial resin material that is used for treatments to restore the shape of a tooth by filling the deficit portion (dental restoration treatment) and treatments to enhance dental aesthetics (aesthetic dental treatment).

Operating results for the third quarter of the fiscal year ending August 31, 2023

Compared to the same period of the previous fiscal year, which was affected by COVID-19, net sales were ¥18,521 million (up 24.9% year on year), due to high product demands mainly in Asia, Europe and South America. In particular, demand towards Eyeless Needle products have greatly increased. The increase in overseas sales caused by depreciation of yen have also contributed significantly to net sales. Cost of sales were ¥7,193 million (up 24.2% year on year) due to an increase in manufacturing costs at overseas subsidiaries and sales of products. Selling, general and administrative expenses were ¥5,899 million (up 31.3% year on year) due to an increase in expenses for enhancing our personnel structure at the Head Office. Despite there was an increase in cost of sales and selling, general and administrative expenses, our operating income was ¥5,427 million (up 19.5% year on year) because the increase in net sales have exceeded these negative factors substantially and led to an increase in operating income. Ordinary income was ¥5,778 million (up 4.7% year on year) mainly due to the recording of foreign exchange gains caused by depreciation of yen. Profit attributable to owners of parent was ¥4,205 million (up 10.9% year on year) due to an increase in operating income.

The following is an overview of financial results by segment. Segment sales figures are those from external customers.

					(Millions of yen)
	Net sales		Segment income (Operating income)
	Millions of yen		Year on year	Millions of yen	Year on year
Surgical products	5,045		15.0%	1,490	(2.7%)
Eyeless Needle products	6,451		47.9%	2,046	82.2%
Dental products	7,023		15.5%	1,890	0.1%
Consolidated	18,521		24.9%	5,427	19.5%

(Surgical products)

The segment's sales were ¥5,045 million (up 15.0% year on year) and segment income was ¥1,490 million (down 2.7% year on year). Sales have increased due to an increase in demand for ophthalmic knives, which are used in cataract surgery, mainly in Asia and Europe from the same period of the previous fiscal year. However, despite there was an increase in net sales, segment income has decreased due to a deterioration in cost of sales, which was caused by an increase in manufacturing costs.

(Eyeless Needle products)

The segment's sales were ¥6,451 million (up 47.9% year on year) and segment income was ¥2,046 million (up 82.2% year on year). Sales and segment income have increased greatly due to an increase in orders for eyeless needles, which was caused by growing demand in Asia, North America, Europe and South America since the previous fiscal year.

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Third Quarter of the Fiscal Year Ending August 31, 2023

(Dental products)

The segment's sales were ¥7,023 million (up 15.5% year on year), and segment income was ¥1,890 million (up 0.1% year on year). Sales have increased due to strong sales of GDF products in Europe and North America, and steady sales of dental endodontic instruments (reamers and files) and dental rotary and cutting instruments (dia-burs) in Asian countries, such as China and India. Furthermore, depreciation of yen also boosted the increase in sales. Segment income has slightly increased from the same period of the previous fiscal year despite there was an increase in selling, general and administrative expenses.

1. Explanation of financial position and cash flows Financial position

			(Millions of yen)
	End of previous consolidated	End of the third quarter of
	accounting period	the current fiscal year	Change
	(August 31, 2022)	(May 31, 2023)
Total assets	50,113	51,579	1,465
Current assets	32,503	32,528	25
Fixed assets	17,610	19,051	1,440
Liabilities	4,698	4,587	(111)
Net assets	45,414	46,991	1,577

Total assets as of the end of the third quarter (May 31, 2023) stood at ¥51,579 million, an increase of ¥1,465 million from the end of the previous consolidated accounting period. This was primarily due to an increase of ¥1,440 million in fixed assets (mainly an increase in construction in progress due to an increase in capital equipment for mainly GDF).

Total liabilities as of the end of the third quarter (May 31, 2023) stood at ¥4,587 million, a decrease of ¥111 million from the end of the previous consolidated accounting period. This was primarily due to a decrease of ¥151 million in current liabilities, which includes payments of income taxes payable and other accounts payable.

Total net assets as of the end of the third quarter (May 31, 2023) stood at ¥46,991 million, an increase of ¥1,577 million from the end of the previous consolidated accounting period. This was primarily due to an increase in retained earnings resulting from recordings of profit attributable to owners of parent and an increase in foreign currency translation adjustments related to overseas subsidiaries caused by depreciation of yen.

(3) Explanation of consolidated earnings forecasts and other forward-looking statements

Results for the third quarter of the fiscal year ending August 31, 2023 are as stated in "(1) Explanation of operating result." The consolidated earnings forecast for the full fiscal year remains unchanged from the figures announced in the "Summary of Consolidated Financial Results for the Fiscal Year Ended August 31, 2022" on October 11, 2022.

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