Nakanishi : Flash Report for Fiscal year Ended Dec. 31, 2022

Flash Report for Fiscal year Ended December 31, 2022

(on a consolidated basis) [Japan GAAP]

February 9, 2023

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: March 30, 2023

Scheduled date to begin dividend payments: March 31, 2023

Supplementary materials to financial statements: Not available

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 Fiscal year period (January 1 to December 31, 2022)

(1) Operating Results

			Millions of yen
	Net sales	Operating income	Ordinary income
Fiscal year ended December 31, 2022	48,671	8.5%	15,389	11.9%	17,646	26.5%
Fiscal year ended December 31, 2021	44,857	35.7%	13,750	61.0%	13,951	61.7%
	Income	Earnings per share
	attributable to	Diluted EPS (yen)
	(yen)
	owners of parent
Fiscal year ended December 31, 2022	12,471	23.4%	145.48	145.11
Fiscal year ended December 31, 2021	10,102	56.5%	116.73	116.47

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:

Fiscal year ended December 31, 2022	14,165 million (33.9%)
Fiscal year ended December 31, 2021	10,577 million (63.8%)

(2) Financial Position

		Millions of yen
	Total assets	Net assets
As of December 31, 2022	102,154	91,022
As of December 31, 2021	94,460	82,919
Note: Ownersʼ equity As of December 31, 2022	90,737 million
As of December 31, 2021	82,683 million

Equity ratio 88.8% 87.5%

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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	̶	24.00	46.00
Year ending December 31, 2023	̶	24.00	̶	24.00	48.00
(forecast)

3. Business Performance Forecasts for the Current Term (January 1 to December 31, 2023) Millions of yen

							Income	Earnings per
			Operating			attributable to
					share (yen)
	Net sales	income	Ordinary income	owners of parent
First-half period	25,556	4.5	7,616	-6.3	7,892	-16.8	5,461	-19.1	64.14
Full year	52,272	7.4	15,070	-2.1	15,836	-10.3	10,976	-12.0	128.91

Notes: 1. Percentage figures represent year-on-year comparisons.

4. Others

1. Changes in the scope of consolidation during the period Inclusion: 1 company, Nakanishi GmbH Exclusion: None
2. Application of special accounting methods in the preparation of 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 December 31, 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 December 31, 2022:	9,105,053 shares
As of December 31, 2021:	8,094,386 shares

Average number of shares during the period

Fiscal year ended December 31, 2022: 85,729,735 shares

Fiscal year ended December 31, 2021: 86,546,716 shares * This flash report is out of scope of quarterly review.

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Table of Contents
1. Qualitative Information on Financial Results	4
(1)	Explanation of Results of Operations	4
(2)	Explanation of Financial Position	4
(3)	Explanation of Cash flows	5
(4)	Future Outlook	5
2. Consolidated Financial Statements and Principal Notes	6
(1)	Consolidated Balance Sheets	6
(2)	Consolidated Statements of Income and Comprehensive Income	8
(Consolidated Statements of Income)	8
(Consolidated Statements of Comprehensive Income)	9
(3)	Consolidated Statements of Changes in Net Assets	10
(4)	Consolidated Statements of Cash Flows	12
(5)	Notes to Consolidated Financial Statements	14
(Notes to Going Concern Assumption)	14
(Segment Information）	15

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1. Qualitative Information on Financial Results

(1) Explanation of Results of Operations

In the world economy during the fiscal year, 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 ¥48,671,452 thousand (+8.5% year on year), operating income was ¥15,389,229 thousand (+11.9%), ordinary income was 17,646,562 thousand (+26.5%) and income attributable to owners of parent for the quarter was ¥12,471,540 thousand (+23.4%).

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 was almost the same as last year.

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

As a result, sales were 40,926,711 thousand (+7.0%) and segment profit was 17,024,344 thousand (+9.4%).

(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 3,160,058 thousand (+14.4%) and segment profit was 1,571,575 thousand (+20.6%).

（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 4,584,682 thousand (+19.4%) and segment profit was 1,683,337 thousand (+22.2%).

1. Explanation of Financial Position (Assets, liabilities and net asset)
   Total assets at the end of Fiscal year were 102,154,460 thousand and increased by 7,693,540 thousand compared with the end of the previous fiscal year. The main reasons were that Buildings and structures increased by 2,680,039 thousand and Goodwill increased by 2,587,780 thousand.
   Total liabilities were 11,131,804 thousand and decreased by 409,642 thousand compared with the end of the previous fiscal year. The main reason was Other in current liabilities decreased by ¥1,604,109 thousand but Accounts payable - trade increased by ¥526,217 thousand.
   Net asset was 91,022,656 thousand and increased by 8,103,182 thousand compared with the end of the previous fiscal year. The main reasons were that Retained earnings increased by ¥8,863,157 thousand and Treasury shares increased by ¥2,500,140 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 the fiscal year was ¥31,648,571 thousand, down ¥3,239,245 thousand from the previous term-end.

Cash flows from operating activities was ¥7,764,417 thousand, compared with ¥11,970,529 thousand a year earlier. The main factor here was an increase of cash due to the recording of Profit before income taxes of ¥17,297,208 thousand, which outweighed Income taxes paid of ¥-5,328,953 thousand.

Cash flows from investing activities was ¥-6,314,202 thousand, compared with ¥-4,146,968 thousand a year earlier. The main expenditure were Purchase of shares of subsidiaries resulting in change in scope of consolidation ¥-3,606,745 thousand and Purchase of property, plant and equipment ¥- 3,469,529 thousand.

Cash flows from financing activities was ¥-6,107,521 thousand, compared with ¥-3,973,487 thousand a year earlier. The main expenditure were Dividends paid ¥-3,607,380 thousand and Purchase of treasury shares ¥-2,500,140 thousand.

(4) Future Outlook

Regarding the future outlook, it is expected that unclear business circumstances will continue because CPI is rising and semiconductor materials are lacking.

Under such severe business environment, our group will promote comprehensive efforts to enhance the organizational structure which enables us to survive fierce global competition, keeping a close look on the conditions of the global economy and markets.

For fiscal year 2023, we have assumed an exchange rate of 125 to U.S. dollar and 135 to Euro. The following table shows our forecasts of business performance for the fiscal year 2023.

	The amount	%
Sales	52,272 million	7.4
Operating income	15,070 million	-2.1
Ordinary profit	15,836 million	-10.3
Net income attributable to	10,976 million	-12.0
owners of parent

(Note) Percentage figures represent year-on-year comparisons.

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