Nakanishi : Flash Report for 2nd quarter Ended Jun. 30, 2022

Flash Report for 2nd quarter Ended June 30, 2022

(on a consolidated basis) [Japan GAAP]

August 9, 2022

Name: Nakanishi Inc. Stock listing: Tokyo Stock Exchange : Standard Market

Code Number: 7716 URL: http://www.nsk-nakanishi.co.jp

Representative: Eiichi Nakanishi, President and Group CEO

Inquiries: Daisuke Suzuki, Corporate Vice President, Finance & Accounting Tel: [phone]

Scheduled date to submit Securities Report: August 10, 2022

Scheduled date to begin dividend payments: September 30, 2022

Supplementary materials to quarterly financial statements: Not applicable

Quarterly earnings results briefing: Applicable (for institutional investors and securities analysts)

(All amounts are rounded down to the nearest million yen.)

1. Consolidated financial results for 1st quarter period (January 1 to June 30, 2022)

(1) Operating Results

			Millions of yen
	Net sales	Operating income	Ordinary income
2nd quarter ended June 30, 2022	24,462	6.3%	8,129	6.3%	9,490	27.8%
2nd quarter ended June 30, 2021	23,014	68.1%	7,646	219.6%	7,423	198.1%
	Income	Earnings per share
	attributable to	Diluted EPS (yen)
	(yen)
	owners of parent
2nd quarter ended June 30, 2022	6,750	25.8%		78.52		78.33
2nd quarter ended June 30, 2021	5,366	188.7%		61.93		61.80

Notes: 1. Percentage figures for net sales, operating income, ordinary income and net income represent year-on-year comparisons.

2. Comprehensive income for reporting period:

2nd quarter ended June 30, 2022	9,000 million (45.4%)
2nd quarter ended June 30, 2021	6,191 million (366.0%)
(2) Financial Position
			Millions of yen
		Total assets	Net assets	Equity ratio
As of June 30, 2022	98,914	89,165		89.9%
As of December 31, 2021	94,460	82,919		87.5%
Note: Ownersʼ equity As of June 30, 2022		88,880 million
As of December 31, 2021	82,683 million

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2. Dividends

		Cash dividends per share (yen)
	1st quarter	2nd quarter	3rd quarter	Year-end	Annual
Year ended December 31, 2021	̶	17.00	̶	20.00		37.00
Year ending December 31, 2022	̶	22.00
Year ending December 31, 2022			̶	22.00		44.00
(forecast)

Notes: 1. Revisions to dividend payment forecasts during the period: Applicable

3. Business Performance Forecasts for the Current Term (January 1 to December 31, 2022) Millions of yen

					Income	Earnings per
			Operating		attributable to
				share (yen)
	Net sales	income	Ordinary income	owners of parent
Full year	45,788	2.1%	12,606 -8.3% 13,587 -2.6%	9,621 -4.8%	111.66
Notes: 1.	Percentage figures represent year-on-year comparisons.

2. Revisions to performance forecasts during the period: Not applicable

4. Others

1. Changes in the scope of consolidation during the period Inclusion: None
   Exclusion: None
2. Application of special accounting methods in the preparation of quarterly consolidated financial statements: Not applicable
3. Changes in accounting principles, accounting estimates, and restatement
4. 1. Changes in accounting principles due to revision of accounting standards, etc.: Applicable
   2. Changes in accounting principles other than 1: Not applicable
   3. Changes in accounting estimates: Not applicable
   4. Restatement: Not applicable
5. Number of ordinary shares outstanding at the end of the period (including treasury stock)

As of June 30, 2022:	94,259,400 shares
As of December 31, 2021:	94,259,400 shares

Number of shares of treasury stock at the end of the period

As of June 30, 2022:	8,573,808 shares
As of December 31, 2021:	8,094,386 shares

Average number of shares during the period

2nd quarter ended June 30, 2022: 85,980,048 shares

2nd quarter ended June 30, 2021: 86,656,728 shares

* This quarterly flash report is out of scope of quarterly review.

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Table of Contents
1. Qualitative Information on Quarterly Financial Results	4
(1)	Explanation of Results of Operations	4
(2)	Explanation of Financial Position	4
(3)	Explanation of Cash flows	5
(4)	Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking	5
Information
2. Consolidated Quarterly Financial Statements and Principal Notes	6
(1)	Consolidated Quarterly Balance Sheets	6
(2)	Consolidated Quarterly Statements of Income and Comprehensive Income	8
	(Consolidated Quarterly Statements of Income)	8
	(Consolidated Quarterly Statements of Comprehensive Income)	9
(3)	Consolidated Statements of Cash Flows	10
(4)	Notes to Consolidated Quarterly Financial Statements	12
	(Notes to Going Concern Assumption)	12
	(Notes to Significant Changes in the Amount of Shareholdersʼ Equity)	12
	(Changes in the scope of consolidation during the period)	12
	(Segment Information）	13

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1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Results of Operations

In the world economy during 2nd quarter, CPI has increased thanks to demand increases by prompt economic recover after pandemic. Unease of energy supply has increased due to the Russian invasion of Ukraine. So uncertainty for future was increasing.

In Japanese economy, economic activities were very low because raw material prices increased and to procure components was difficult.

Under these circumstances, all 3 segments sales increased. Operating income increased as well.

As a result, the Group sales were ¥24,462,214 thousand (+6.3% year on year), operating income was ¥8,129,454 thousand (+6.3%), ordinary income was 9,490,143 thousand (+27.8%) and income attributable to owners of parent for the quarter was ¥6,750,816 thousand (+25.8%).

The following is a breakdown of business performance by segment.

By the way, our company has changed segment. About year-on-year, it is analyzed by the figures at the changed segment.

（Dental segment）

In Dental segment, Domestic sales decreased because the reaction that clinics received subsidy from government last year and Asia sales decreased as well.

However North America sales increased dramatically and Europe sales increased as well. Total dental sales increased. Segment profit was almost the same.

As a result, sales were 20,530,662 thousand (+3.3%) and segment profit was 8,669,769 thousand (+2.6%).

(Surgical segment)

In Surgical segment, Asia sales decreased but Domestic, North America and Europe sales increased. Total sales increased. Segment profit increased as well.

As a result, sales were 1,681,197 thousand (+24.4%) and segment profit was 885,149 thousand (+35.2%).

（Industrial segment）

In Industrial segment, Asia sales decreased but Domestic, North America and Europe sales increased. Total sales increased. Segment profit increased as well.

As a result, sales were 2,250,354 thousand (+25.7%) and segment profit was 774,127 thousand (+17.3%).

1. Explanation of Financial Position (Assets, liabilities and net asset)
   Total assets at the end of 2nd quarter were 98,914,335 thousand and increased by 4,453,416 thousand compared with the end of the previous fiscal year. The main reasons were that Notes and accounts receivable - trade by 936,130 thousand, Raw materials and supplies by 926,809 thousand and Construction in progress by ¥844,692 thousand.
   Total liabilities were 9,748,950 thousand and decreased by 1,792,495 thousand compared with the end of the previous fiscal year. The main reason was Other in current liabilities decreased by ¥1,747,561 thousand.
   Net asset was 89,165,385 thousand and increased by 6,245,912 compared with the end of the previous fiscal year. The main reasons were that Retained earnings increased by ¥5,027,516 thousand and Foreign currency translation adjustment by ¥2,687,050 thousand.
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(3) Explanation of Cash flows

The balance of cash and cash equivalents on a consolidated basis as of the end of 2nd quarter was ¥33,894,220 thousand, down ¥993,595 thousand from the previous term-end.

Net cash provided by operating activities was ¥2,805,211 thousand, compared with ¥7,108,837 thousand a year earlier. The main factor here was an increase of cash due to the recording of income before income taxes and minority interests of ¥9,522,712 thousand, which outweighed income taxes paid of ¥2,900,252 thousand.

Net cash provided by investing activities was ¥-3,363,793 thousand, compared with ¥-626,001 thousand a year earlier. The main expenditure Purchase of shares of subsidiaries and associates ¥1,568,387 thousand and were Purchase of tangible fixed assets ¥1,457,281 thousand.

Net cash provided used in financing activities was ¥-2,800,225 thousand, compared with ¥

-1,300,166 thousand a year earlier. The main expenditure were Cash dividends paid ¥1,722,570 thousand and Purchase of treasury shares ¥1,077,655 thousand.

1. Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information Currently we will not change the forecast announced on May 12, 2022

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