Flash Report for Fiscal year Ended December 31, 2020
(on a consolidated basis) [Japan GAAP]
February 12, 2021
Name: Nakanishi Inc.

Stock listing: Tokyo Stock Exchange : JASDAQ

Code Number: 7716

URL: http://www.nsk-nakanishi.co.jp

Representative: Eiichi Nakanishi, President and Group CEO
Inquiries: Yoshihisa Shinada, General Manager of Corporate Planning Office, Finance and Accounting
Department

Tel: +81-289-64-3380

Scheduled date to submit Securities Report: March 30, 2021
Scheduled date to begin dividend payments: March 31, 2021
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, 2020)(1) Operating Results
Millions of yen
Net sales

Operating income

Ordinary income

Fiscal year ended December 31, 2020

33,055

-6.7%

8,542

-8.1%

8,627

-12.3%

Fiscal year ended December 31, 201935,418

-3.1%

9,299

-4.3%

9,841

-7.8%

Incomeattributable toowners of parent

Earnings per share(yen)

Diluted EPS (yen)Fiscal year ended December 31, 2020

6,455

-9.1%

74.49

74.34

Fiscal year ended December 31, 2019

7,102

-6.4%

81.97

81.80

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:
Fiscal year ended December 31, 2020

6,459 million (-20.3%)

Fiscal year ended December 31, 2019

8,108 million (25.4%)(2) Financial Position
Millions of yen
Total assets

Net assets

Equity ratio

As of December 31, 2020

82,47076,272

92.3%

As of December 31, 201977,53672,49993.2%

Note: Ownersʼ equity As of December 31, 2020

76,080 million

As of December 31, 201972,289 million－ 1 －2. Dividends
Cash dividends per share (yen)
1st quarter2nd quarter 3rd quarter

Year-end

AnnualYear ended December 31, 2019

̶

14.00

̶

16.00

30.00

Year ended December 31, 2020

̶

15.00

̶

15.00

30.00

15.00

̶

15.00

30.00

Year ending December 31, 2021
(forecast)

3. Business Performance Forecasts for the Current Term (January 1 to December 31, 2020)
Millions of yen
IncomeNet sales

Operatingattributable toincomeOrdinary income owners of parent

Earnings per
share (yen)First-half period

17,119

25.1%

4,114

71.9%

4,235

70.1%

3,081

65.8%

35.56

Full year

35,100

6.2%

8,546

0.1%

8,879

2.9%

6,450

-0.1%

74.45

Notes:

1.

Percentage figures represent year-on-year comparisons.

4. Others(1) Changes in the scope of consolidation during the period
Inclusion: NSK America Holdings inc.
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
1. Changes in accounting principles due to revision of accounting standards, etc.: Not applicable
2. Changes in accounting principles other than 1: Not applicable
3. Changes in accounting estimates: Not applicable
4. Restatement: Not applicable(4) Number of ordinary shares outstanding at the end of the period (including treasury stock)
As of December 31, 2020:

94,259,400 shares

As of December 31, 2019:94,259,400 shares

Number of shares of treasury stock at the end of the period
As of December 31, 2020:

7,602,642 shares

As of December 31, 2019:

7,614,570 shares

Average number of shares during the period
Fiscal year ended December 31, 2020: 86,653,772 sharesFiscal year ended December 31, 2019: 86,644,825 shares* This flash report is out of scope of audit.

－ 2 －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)10(3) Consolidated Statements of Changes in Net Assets

11(4) Consolidated Statements of Cash Flows

13(5) Notes to Consolidated Financial Statements

15(Notes to Going Concern Assumption)

15(Segment Information）

16

－ 3 －

1. Qualitative Information on Financial Results(1) Explanation of Results of Operations
In the world economy during this fiscal year, economy all over the world is going down dramatically
due to the lockdown by coronavirus pandemic from April to June. The economy recovered just a little
from July to September. However there was some lockdown in some countries and areas from October
to December. The uncertainty for future is increasing.
In Japanese economy, the economy recovered temporary but economic activities were very low,
especially food service industry and travel industry due to increasing the number of the cases.
About our main customers, clinics and hospitals, they started operations from July to September but
there were some restrictions about sales activities like visiting in person. About industrial customers,
the demand for investment kept decreasing at the end of this fiscal year.
Under these circumstances, our company tried to recover the decrease of sales from April to June.
About from October and December, Sales, Operating income, Ordinary profit and Profit attributable toowners of parent increased. But total sales and all profit decreased compared with last year.
As a result, the Group sales were ¥33,055,477 thousand (-6.7% year on year), operating income was¥8,542,150 thousand (-8.1%), ordinary income was \8,627,762 thousand (-12.3%) and income
attributable to owners of parent for the quarter was ¥6,455,054 thousand (-9.1%).
The following is a breakdown of business performance by segment.
（Dental Products）
In Dental Products, domestic sales increased thanks to subsidy from government etc., but Europe,
North America and Asia sales decreased because of lockdown, postponement and cancel of exhibitions,closure of dental clinics and slowdown of economic activities by coronavirus pandemic etc. Total dental
sales decreased. Segment income decreased as well.
As a result, sales were \29,025,567 thousand (-5.2%), and segment income was\11,422,197thousand (-6.7%).
（Industrial Products）
In Industrial Products, Domestic, Europe, North America and Asia, almost all areas, sales decreased
because of lockdown and slowdown of economic activities by coronavirus pandemic. Total industrial
sales deceased. Segment income decreased as well.
As a result, sales were \2,740,679 thousand (-19.0%), and segment income was \971,027 thousand(-22.9%).
(Other Businesses)
In Other Businesses, which are repair services, sales were \1,289,230 thousand (-8.9%), andsegment income was \121,538 thousand (-10.9%).
(2) Explanation of Financial Position(Assets, liabilities and net asset)
Total assets at the end of Fiscal year were \82,470,741 thousand and increased by \4,933,851
thousand compared with the end of the previous fiscal year. The main increases were Cash and deposits¥3,806,102 thousand and Shares of subsidiaries and associates ¥ 2,870,068 thousand.
Total liabilities were \6,198,665 thousand and increased by \1,161,045 thousand compared with theend of the previous fiscal year. The main increase was Income taxes payable \1,187,615 thousand.
Net asset was \76,272,075 thousand and increased by \3,772,806 compared with the end of theprevious fiscal year. The main increases was Retained earnings ¥3,768,886 thousand.

－ 4 －(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¥30,044,771 thousand, up ¥5,374,970 thousand from the previous term-end.
Net cash provided by operating activities was ¥9,183,986 thousand, compared with ¥7,021,964
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 ¥9,062,851 thousand, which outweighed income taxes
paid of ¥1,713,792 thousand.
Net cash provided by investing activities was ¥-1,380,698 thousand, compared with ¥ -4,321,986
thousand a year earlier. The main expenditure were Purchase of shares of subsidiaries and associates\2,666,750 thousand and Purchase of tangible fixed assets ¥862,775 thousand. The main proceed wasProceeds from sales and redemption of investment securities ¥1,235,495 thousand.
Net cash provided used in financing activities was ¥-2,685,794 thousand, compared with¥-2,772,322 thousand a year earlier. The main expenditure was Cash dividends paid ¥2,685,736
thousand.
(4) Future Outlook
Regarding the future outlook, it is expected that unclear business circumstances will continue becauseof low economy activities by the impact about lockdown etc.
Under such severe business environment, our group will promote comprehensive efforts to enhancethe organizational structure which enables us to survive fierce global competition, keeping a close lookon the conditions of the global economy and markets.
For fiscal year 2021, we have assumed an exchange rate of \100 to U.S. dollar and \120 to Euro.
The following table shows our forecasts of business performance for the fiscal year 2021.
The amount

%

Sales

\35,100 million

6.2

Operating income\8,546 million

0.1

Ordinary profit\8,879 million

2.9\6,450 million-0.1

Net income attributable toowners of parent(Note) Percentage figures represent year-on-year comparisons.

－ 5 －2. Consolidated Financial Statements and Principal Notes(1) Consolidated Balance Sheets(Thousands of yen)
As of December 31, 2019

As of December 31, 2020

Cash and deposits

28,432,235

32,238,337

Notes and accounts receivable-trade

5,184,673

5,158,047

942,853

1,433,277

Money held in trust

4,003,802

4,129,321

Merchandise and finished goods

4,549,919

4,487,638

Work in process

3,585,640

3,506,289

Raw materials and supplies

2,402,554

2,610,225

Other

1,085,808

870,939-88,340-90,537

50,099,147

54,343,539

Buildings and structures

15,188,340

15,302,136

Machinery, equipment and vehicles

6,142,198

6,681,859

Tools, furniture and fixtures

4,682,643

4,970,635

Land

1,994,942

1,989,815

Construction in progress

384,891

219,356

Accumulated depreciation-12,729,714-14,273,115

Property, plant and equipment

15,663,301

14,890,687

Software395,800

346,531

Software in progress

135,128

373,414Goodwill

200,031

161,259

Other

235,203

224,275

Intangible assets

966,163

1,105,481

8,297,337

6,292,232

64,1282,870,068

2,157,386

2,179,870

AssetsCurrent assets

Securities

Allowance for doubtful accounts
Current assets
Non-current assets
Property, plant and equipment

Intangible assets

Investments and other assets
Investment securities
Shares of subsidiaries and associates
Insurance funds
Retirement benefit asset

14

0

Deferred tax assets

125,665

145,102

Other

387,453

645,150

Allowance for doubtful accounts-223,709-1,393

Investments and other assets

10,808,276

12,131,032

27,437,741

28,127,201

77,536,889

82,470,741

Non-current assets
Assets－ 6 －(Thousands of yen)
As of December 31, 2019

As of December 31, 2020

Accounts payable-trade762,096806,981

Short-term borrowings

100,000

100,000

Income taxes payable

475,483

1,663,099

Provision for bonuses

368,900

385,000

Other

2,408,061

2,458,292

Current liabilities

4,114,541

5,413,373

Retirement benefit liability

311,383

313,704

Deferred tax liabilities

405,866

273,079

Other

205,828

198,508

Non-current liabilities

923,078785,292

5,037,620

6,198,665

Share capital

867,948867,948

Capital surplus

1,171,507

1,180,482

Retained earnings

73,666,853

77,435,739

Treasury shares-5,602,470-5,593,711

Shareholders' equity

70,103,839

73,890,460

2,600,239

2,284,166-414,731-94,595

2,185,508

2,189,571

Share acquisition rights

207,481

189,688

Non-controlling interests

2,440

2,355

72,499,269

76,272,075

77,536,889

82,470,741

Liabilities
Current liabilities

Non-current liabilities

Liabilities
Net assets
Shareholders' equity

Valuation and translation adjustments
Valuation difference on available-forsale securities
Foreign currency translation
adjustment
Valuation and translation adjustments

Net assets
Liabilities and net assets－ 7 －(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Thousands of yen)
Fiscal year ended

Fiscal year ended

December 31, 2019

December 31, 2020

Net sales

35,418,516

33,055,477

Cost of sales

13,655,688

13,324,152

Gross profit (loss)

21,762,827

19,731,324

Selling, general and administrative expenses

12,463,649

11,189,174

Operating profit (loss)

9,299,178

8,542,150

Interest income

263,863

87,272

Dividend income

45,19545,453283,357

57,85456,017

83,503

1,512

1,256

Miscellaneous income

162,376

172,912

Non-operating income

812,323

448,252

Interest expenses

8,700

3,814

Commission expenses

3,425

3,467

－

17,745

Foreign exchange losses

193,382

293,478

Miscellaneous loss

64,744

44,134Non-operating income

Gain on investments in money held in

trust
Subsidy income
Reversal of allowance for doubtful

accounts

Non-operating expenses

Share of loss of entities accounted forusing equity method

Non-operating expenses

270,253

362,640

9,841,247

8,627,762

－

1,867

Gain on sales of investment securities

40,184

503,821Extraordinary income

40,184505,688606

444

16,0393,405－

66,75016,64670,600

Profit (loss) before income taxes

9,864,785

9,062,851

Income taxes-current

2,478,508

2,841,160

Income taxes-deferred

283,071-233,961

Income taxes

2,761,580

2,607,199

Profit (loss)

7,103,205

6,455,652

652

597

Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets

Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current

assetsLoss on valuation of investment securities
Extraordinary losses

Profit (loss) attributable to non-controlling－ 8 －interests
Profit (loss) attributable to owners of parent

7,102,553－ 9 －6,455,054

(Consolidated Statements of Comprehensive Income)(Thousands of yen)
Fiscal year ended

Fiscal year ended

December 31, 2019

December 31, 2020

Profit (loss)

7,103,205

6,455,652

1,451,282-316,072-445,511

319,453

1,005,770

3,380

8,108,975

6,459,032

8,108,435

6,459,118

539

-85

Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation

adjustment
Other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests－ 10 －

(3) Consolidated Statements of Changes in Net Assets
Fiscal year ended December 31, 2019
(Thousands of yen)
Shareholders' equity
Capital stock

Capital surplus

867,948

1,171,507

Net assets

Retained

Treasury sharesearnings
69,336,935-5,602,392

Shareholders'equity65,773,998

Changes of items during
periodDividends of surplus-2,772,634-2,772,634

7,102,553

7,102,553

Profit (loss)
attributable to ownersof parent
Disposal of treasury
shares-77-77

Net changes in items
other thanshareholders' equity
Total changes during－－4,329,918-77

4,329,840

867,948

1,171,507

73,666,853-5,602,470

70,103,839

periodNet assets

Accumulated other comprehensive income
Valuationdifferenceon

Foreigncurrency

available-translation

for-saleadjustment

securities
Net assets

1,148,957

30,668Valuationandtranslation
adjustment

Share

Non-

acquisition

controllingrightsinterests

Net assets

s1,179,625

172,757

1,816

67,128,197

Changes of items during
periodDividends of surplus-2,772,634

Profit (loss)
attributable to owners

7,102,553

of parent
Disposal of treasury-77

sharesNet changes in items
other than

1,451,282-445,399

1,005,882

34,723624

1,041,230

1,451,282-445,399

1,005,882

34,723624

5,371,071

2,600,239-414,731

2,185,508

207,4812,440

72,499,269

shareholders' equity
Total changes during
periodNet assets－ 11 －

Fiscal year ended December 31, 2020
(Thousands of yen)
Shareholders' equity
Capital stock

Capital surplus

867,948

1,171,507

Net assets

Retainedearnings
73,666,853

Treasury shares-5,602,470

Shareholders'equity70,103,839

Changes of items during
periodDividends of surplus-2,686,168-2,686,168

6,455,054

6,455,054

Profit (loss)
attributable to ownersof parent
Purchase of treasury
shares
Disposal of treasury

8,975

shares

-69

-69

8,829

17,804

Net changes of items
other thanshareholders' equity
Total changes of items

－

8,975

3,768,886

8,759

3,786,620

867,948

1,180,482

77,435,739-5,593,711

73,890,460

during period
Net assets

Accumulated other comprehensive income
Valuationdifferenceon

Foreigncurrency

available-translation

for-saleadjustment

securities
Net assets

2,600,239-414,731

Valuationandtranslation
adjustment

Share

Non-

acquisition

controllingrightsinterests

Net assets

s2,185,508

207,4812,440

72,499,269

Changes of items during
periodDividends of surplus-2,686,168

Profit (loss)
attributable to owners

6,455,054

of parent
Purchase of treasury-69

shares
Disposal of treasury

17,804

sharesNet changes of items
other than-316,072

320,136

4,063-17,792-85-13,814-316,072

320,136

4,063-17,792-85

3,772,806

2,284,166-94,595

2,189,571

189,688

2,355

76,272,075

shareholders' equity
Total changes of items
during period
Net assets－ 12 －

(4) Consolidated Statements of Cash Flows(Thousands of yen)
Fiscal year ended

Fiscal year ended

December 31, 2019

December 31, 2020

Cash flows from operating activities
Profit (loss) before income taxes

9,864,785

9,062,851

Depreciation

1,684,387

1,759,152

67,87349,624-10,998

3,145-72,100

16,10046,705-1,648-309,059-132,725

8,700

3,814

－

17,745-283,357-57,854-40,184-503,821－

66,750606-1,422

16,0393,405-56,017-83,503-207,923

40,057-1,141,903-104,446

Increase (decrease) in trade payables-118,971

29,041

Foreign exchange losses (gains)-87,932

180,723

Other

745,430

346,270

10,106,082

10,693,259

307,561

124,828-8,702-3,812

Income taxes paid

-3,438,993-1,713,792

Subsidies received

56,017

83,503

7,021,964

9,183,986

Amortization of goodwill
Increase (decrease) in allowance for

doubtful accounts
Increase (decrease) in provision forbonuses
Increase (decrease) in retirement benefit

liability
Interest and dividend income

Interest expenses
Share of loss (profit) of entities accounted
for using equity method
Loss (gain) on investments in money

held in trust
Loss (gain) on sales of investment
securities
Loss (gain) on valuation of investment
securities
Loss (gain) on sales of property, plant andequipment
Loss on retirement of property, plant andequipment
Subsidy income
Decrease (increase) in tradereceivables
Decrease (increase) in inventories

SubtotalInterest and dividends received
Interest paid

Net cash provided by (used in) operating
activities－ 13 －

(Thousands of yen)
Fiscal year ended

Fiscal year ended

December 31, 2019

December 31, 2020

Cash flows from investing activities-187,326－

111,000

180,190-1,185,014-862,775

1,075

1,563

-267,686-328,962-1,959,840－

107,790

1,235,495－-2,666,750－-10,013

Payments into time deposits-13,575,514-5,023,724

Proceeds from withdrawal of time deposits

12,649,608

6,566,625

Purchase of insurance funds-32,600-20,828

Other

16,523-451,518-4,321,986-1,380,698

－

12

-77

-69

-2,772,245-2,685,736-2,772,322-2,685,794-177,704

257,476-250,049

5,374,970

Cash and cash equivalents

24,919,850

24,669,800

Cash and cash equivalents

24,669,800

30,044,771

Purchase of securities
Proceeds from sales and redemption of

securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemption of

investment securities
Purchase of shares of Affiliated company
Purchase of investments in nonconsolidated subsidiary

Net cash provided by (used in) investing
activities
Cash flows from financing activities
Proceeds from exercise of subscription
rights to shares
Purchase of treasury shares
Dividends paid
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents－ 14 －

(5）Notes to Consolidated Financial Statements(Notes to Going Concern Assumption)
Not applicable.

－ 15 －

(Segment Information）【Segment Information】
Fiscal year ended December 31, 2019 (From January 1, 2019 to December 31, 2019)(Thousands of yen)Per

Reportable segments
Reportable

Reconcilingconsolidate

items

d financial

DentalIndustrial

products

products

30,622,270

3,381,568

1,414,677

35,418,516－

35,418,516

－

－

－

－

－

－

30,622,270

3,381,568

1,414,677

35,418,516－

35,418,516

12,246,659

1,258,787

136,350

13,641,797-4,342,619

9,299,178

Otherssegments

statements

Sales
Revenues
fromexternalcustomers
Transactions
with othersegments
Net sales
Operatingprofit (loss)

Notes:

1.

Adjustments to segment income chiefly comprise general administrative and testing/researchexpenses not attributable to reportable segments.

2.

Segment income is reconciled with operating income as recorded in the consolidated
statements of income.

－ 16 －

Fiscal year ended December 31, 2020 (From January 1, 2020 to December 31, 2020)(Thousands of yen)Per

Reportable segments
Reportable

Reconcilingconsolidate

items

d financial

DentalIndustrial

products

products

29,025,567

2,740,679

1,289,230

33,055,477－

33,055,477

－

－

－

－

－

－

29,025,567

2,740,679

1,289,230

33,055,477－

33,055,477

11,422,197

971,027

121,538

12,514,763-3,972,612

8,542,150

Otherssegments

statements

Sales
Revenues
fromexternalcustomers
Transactions
with othersegments
Net sales
Operatingprofit (loss)
Notes:

1.

Adjustments to segment income chiefly comprise general administrative and testing/researchexpenses not attributable to reportable segments.

2.

Segment income is reconciled with operating income as recorded in the consolidated
statements of income.

－ 17 －