I would like to explain the results from FY2013 third-quarter.

First, let me go over the highlights from the third quarter results.
First, our overall company results: We achieved both increased sales and profit,
partially due to favorable currency conversion with a weaker yen. However,progress on growing our operating income was slightly slower than the forecast of70 billion yen. Quarter-by-quarter, our operating margin continued to improve.
Now by business: In Cardiac and Vascular,
Vascular Interventional Systems maintained
strong domestic growth from the first half, led by our peripheral stent, MISAGO.
Our U.S. Interventional Systems also performed strongly, centered on TRI, with
11% growth. Our growth in Europe had been in the double-digits, but slowed
slightly this quarter due to distribution systems issues. We plan to get back todouble digits. In neurovascular intervention, the launch of new pipeline products
contributed to steady growth. Our quality management system improvement
efforts at U.S. subsidiary are progressing steadily and have reached the finalstage.
stage
Next, in Blood Management, we were able to sustain steady performance,despite a challenging market environment where blood transfusion usage in theUnited States and Europe is declining. However, we expect the market to groweven more difficult.
In General Hospital, our domestic sales slowed due to delay in new products
sales expansion, falling prices, and tougher competition.

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Now I will explain the overall results.
The yen has weakened compared to the previous year, with the average rate up to the
3rd quarter at 99 yen to the dollar and 132 yen to the euro. This currency tailwind
contributed to 17% growth in sales year on year, for 345.3 billion yen. This revenue
number includes 41.2 billion yen gained from currency exchange rates.
Compared to the same period of the previous year, in which productivity contributed
greatly, gross margin rate fell 0.2 points due to such factors as less productivity, falling
prices, and the U.S. Medical Device Tax. Partially due to currency rates, SG&A expenses
increased 18% from the previous period, and R&D expenses grew 16% similarly. As aresult, operating income was 48.3 billion yen, or double‐digit growth of 13% year onyear. This operating income number includes 10.4 billion yen in currency gains.
Ordinary income grew 23% to 49.9 billion yen thanks to the weak yen. Net income forthe period grew 49% over the previous period due to factors including corporate taxes,
for a total of 36.9 billion yen.

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This chart shows sales and growth by business segment and region. The growth shown
inside parentheses excludes foreign exchange impact and the home therapy businessthat was transferred in February 2013. Please look at the growth rate shown on thebottom right. As I explained on the previous slide, total sales grew 17%, and excluding
the factors of foreign exchange and transferred businesses, our growth was 4%. That
breaks down to 2% domestically and 5% overseas, so markets outside Japan continue todrive our growth.
In General Hospital, overall growth was 1%. Domestically, growth was unfortunately 0%
because platform devices and infusion‐related products slowed. Overseas, growth was4%. In Europe and North America, impacts such as the phasing out of low‐margin
business contributed to an overall low level of growth for General Hospital.
g y expandedpdomestic sales due to factors includingg
In Cardiac & Vascular, we strongly
Misago, our peripheral stent, which we have emphasized in our mid‐term plan.
Overseas, our interventional business has been steady, with double‐digit growth of 10%.
The spread of TRI has expanded sales due to its related products, and interventional andCV have combined for 6% growth in our Cardiac & Vascular business.
In Blood Management business, European financial woes have led to reducediinvestmenttt iin blood
bl d centers,twhilehil theth Affordable
Aff d bl CCare Act
A t ini theth United
U it d States
St t has
haccelerated the reduction in demand for blood transfusion and put pressure on prices.
Nevertheless, the Blood Management business has performed steadily, with 4% growth.

4Now I will explain SG&A expenses.
This slide shows results without foreign exchange. General administrative expenses
increased 2% over the same period of the previous year and R&D expenses increased
4%, for a total growth of 3%. We were thus able to control SG&A expenses to keep it
within our sales growth of 4%, excluding foreign exchange.

5Here is the operating income variance analysis.
Foreign exchange accounted for an increase of 10.4 billion yen, and increased sales had
a 5.6 billion yen positive impact on gross profit. The increase in costs due to new productlaunches and the depreciation of new equipment were negative factors. As a result, ourthird‐quarter operating income was 48.3 billion yen, compared to 42.6 billion yen fromthe previous year. We will strive to continue improving this by keeping expenses within
the rate of sales expansion and growth.
growth6

This shows quarterly profit movement over the past year. We have made steady
improvement since the 4th quarter of last fiscal year. The 3rd quarter result is a slight
improvement over the 2nd quarter, with 17.8 billion yen, though it shows a slower rateof growth.

7I will now explain the progress of profit margin improvement, excluding foreignexchange.
Gross margin improved steadily in the first and second quarters, but lost 0.5 points inthe third with the impact of slowing domestic sales in General Hospital. However,
because we succeeded in controlling expenses to remain within sales growth, our third‐
quarter operating margin improved to 14.9%. The improvement rate was slightly lessthan forecast,forecast but we will continue to strive for further improvement in the fourth
quarter and the next fiscal year.

8I will now speak about our progress compared to forecast.
Sales are at 75% of forecast, and therefore just about on schedule. Operating income isslightly behind at 69%. In the fourth quarter, however, Smart Pumps and other ME
products in General Hospital will see an expansion in sales prior to the consumption tax
increase, and interventional products in Cardiac & Vascular, including new releases, willalso contribute. In addition, we will strive to control cost of goods and other expenses toincrease profit.
profit9

Operating cash flow remains essentially as projected. There is no change in our policy ofproperly balancing growth investment, debt repayment, and dividends.

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I’ll now speak about company efforts. First, the progress of pipeline product launchesfrom the mid‐term plan.
In the third quarter, in Cardiac & Vascular, we launched the new PTCA balloon “HiryuPlus” in Japan. In Blood Management, we also released the data management system“TOMEs” in Europe. Further, in General Hospital, we performed a limited launch of theneedleless system “SurePlug AD” in Japanese facilities, while launching the Smart Pumpin Asia.
Asia
Launches scheduled for the fourth quarter include a below‐the‐knee peripheral balloon
catheter in Europe for Cardiac & Vascular; coil assist stent “LVIS” in China forneurovascular intervention, and the TRI “Glidesheath Slender” in Japan for Access. InBlood Management, we also plan to launch the plasma application on the “Trima”
systemyin Japan.
p11

New drug‐eluting stent “Ultimaster” received the CE mark in Europe. In Europe, Centraland South America, and Asia, we will begin launching in June. Our goal for the product is
15 billion yen in sales globally in fiscal year 2016.
“Ultimaster”, like “Nobori”, employs a bioresorbable polymer and abluminal coating,which aims to reduce the incidence of very late stent thrombosis.
With this platform’s cobalt chromium alloy and ingenious stent design, the productachieves
hfl b l to travell throughflexibility
hh tortuous bloodbl d vessels,l in addition
ddto beingbmore
conformable to be placed in vessel curvature. This improvement is intended to reducestress on blood vessels and increase prognosis.

12New products in neurovascular intervention have led to greatly expanded sales.
First, the “Scepter” occlusion balloon that was launched in the first half in Japan: It has
accounted for 10 million dollars globally as of the third quarter, and has expanded its
world share to an estimated 30%. The coil assist stent “LVIS”, which was launched last
fiscal year, and flow diverting stent “FRED”, which was launched in the first half of thisyear, have each contributed 5 million dollars in sales expansion through the thirdquarter Clinical trials to bring these to new markets are also progressing wellquarter.
well, so there ismore expansion to come. In the final fiscal year of this mid‐term plan, 2016, the above
three products are expected to represent 8 billion yen in sales.

13Now for our results forecast for this period. We project average foreign exchange ratesof 102 yen to the dollar and 139 yen to the euro in the fourth quarter. We will adjust ourannual projected rate to 100 yen to the dollar, and 134 yen to the euro. However, there
is no change to our projections of 460 billion yen in sales and 70 billion yen in operating
income for this fiscal year. We believe that adjusting foreign exchange rate projections
will in effect be downward correction.

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Here is the final slide.
At a meeting of our Board of Directors held February 4, it was decided to conduct a stock
split. The purpose of this is to reduce the per‐share price, thereby facilitating access toinvestors and improving stock liquidity. This will also fulfill the Tokyo Stock Exchange’s
request that stocks sell in units of 500,000 yen or less.
The stock split will be performed two‐for‐one for share of common stock. The record
date will be March 31, 2014, and the effective date will be April 1, 2014.
This concludes my explanation of fiscal year 2013 third‐quarter results.
Thank you for your kind attention.

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