Flash Report for 2nd quarter Ended June 30, 2024
(on a consolidated basis) [Japan GAAP]
Aug 9, 2024
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: +81-289-64-3380

Scheduled date to submit Securities Report: Aug 9, 2024
Scheduled date to begin dividend payments: Sep 17, 2024
Supplementary materials to quarterly financial statements: 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 2nd quarter period (January 1 to June 30, 2024)(1) Operating Results
Millions of yen
Net sales

EBITDA

Operating income

2nd quarter ended June 30, 2024

38,55736.4%

11,051

17.8%

8,287

3.1%

2nd quarter ended June 30, 2023

28,259

15.5%

9,379

3.4%

8,038

-1.1%

Millions of yen
Ordinary income

Income attributableto owners of parent

Earnings
per share(yen)

DilutedEPS (yen)

2nd quarter ended June 30, 2024

10,522

-4.7%

7,026

-11.9%

82.88

82.63

2nd quarter ended June 30, 2023

11,039

16.3%

7,972

18.1%

93.74

93.44

Notes:

1.

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

2.

3.

Comprehensive income for reporting period:
2nd quarter ended June 30, 2024

15,043 million (38.9%)

2nd quarter ended June 30, 2023

10,831 million (20.3%)

EBITDA (Operating income + Depreciation + Goodwill amortization)(2) Financial Position
Millions of yen
Total assets

Net assets

Equity ratio

As of June 30, 2024

156,758

124,035

78.9%

As of December 31, 2023

140,768

113,16480.1%

Note: Ownersʼ equity As of June 30, 2024
As of December 31, 2023

123,658 million
112,823 million－ 1 －2. Dividends
Cash dividends per share (yen)
1st quarter2nd quarter 3rd quarter

Year ending December 31, 2023

̶

24.00

Year ending December 31, 2024

̶

26.00

Year ending December 31, 2024
(forecast)
Notes:

1.

Year-end

Annual

̶

26.00

50.00

̶

26.00

52.00

Revisions to dividend payment forecasts during the period: Not applicable

3. Business Performance Forecasts for the Current Term (January 1 to December 31, 2024)
Millions of yen
IncomeNet sales
Full year

75,208Notes:

26.0

Operatingattributable toincomeOrdinary income owners of parent

13,427-5.8

14,635

-14.9

9,652

1.

Percentage figures represent year-on-year comparisons.

2.

Revisions to performance forecasts during the period: Applicable

Earnings per-57.7

share (yen)113.85

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
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 June 30, 2024:

93,418,200 shares

As of December 31, 2023:

94,259,400 shares

Number of shares of treasury stock at the end of the period
As of June 30, 2024:

8,961,050 shares

As of December 31, 2023:

8,964,612 shares

Average number of shares during the period
2nd quarter ended June 30, 2024: 84,784,694 shares
2nd quarter ended June 30, 2023: 85,045,065 shares* This quarterly flash report is out of scope of quarterly review.

－ 2 －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
Information
2. Consolidated Quarterly Financial Statements and Principal Notes

56(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

－ 3 －

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Results of Operations
In the world economy during 2nd quarter, in the USA, personal consumption keeps good but itʼsgetting clear that CPI is not going to down. In Europe, consumer mind is getting down so it leads tostop recovering consumption.
In Japanese economy, salary increase is expected but consumption is still weak. And there is shortageof manpower.
Under these circumstances, industrial sales decreased but all other segments sales increased. EBITDA
and operating income increased. But ordinary income and income attributable to owners of parent for
the quarter decreased.
As a result, the Group sales were ¥ 38,557,243 thousand (+36.4% year on year), EBITDA\ 11,051,843 thousand (+17.8%), operating income was ¥ 8,287,179 thousand (+3.1%), ordinary
income was \10,522,351 thousand (-4.7%) and income attributable to owners of parent for the quarterwas ¥ 7,026,596 thousand (-11.9%).
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 atthe changed segment.
（Dental segment）
In Dental segment, Domestic sales decreased but North America, Europe and Asia sales increased.
Total Dental segment sales increased. Segment EBITDA and segment operating income increased.
As a result, sales were \23,335,326 thousand (+3.9%), segment EBITDA was \10,237,831 thousand(+4.2%) and segment operating income was \9,235,018 thousand (2.0％).
（DCI segment）
In DCl segment, because the problem on cyber attack to a big dealer had been almost solved, sales
increased.
As a result, sales were \9,933,219 thousand, segment EBITDA was \1,585,360 thousand andsegment operating income was \400,517 thousand.
(Surgical segment)
In Surgical segment, Domestic, North America, Europe and Asia sales increased. Segment EBITDA andsegment operating income increased as well.
As a result, sales were \2,022,635 thousand (+13.7%), segment EBITDA was \1,106,459 thousand(+19.2%) and segment operating income was \1,051,914 thousand (+18.3％).
（Industrial segment）
In Industrial segment, Domestic, North America, Europe and Asia sales decreased. Segment EBITDA
and segment operating income decreased as well.
As a result, sales were \3,266,062 thousand (-19.0%), segment EBITDA was \703,212 thousand (24.5%) and segment operating income was \415,122 thousand (-38.1％).
(2) Explanation of Financial Position(Assets, liabilities and net asset)
Total assets at the end of 2nd quarter were \156,758,458 thousand and increased by \15,989,816
thousand compared with the end of the previous fiscal year. The main reasons were that Cash anddeposits increased by \7,606,855 thousand and Buildings and structures increased by \4,836,472.

－ 4 －Total liabilities were \32,722,694 thousand and increased by \5,118,875 thousand compared with theend of the previous fiscal year. The main reason was that Long-term borrowings, which includes
Current portion of long-term borrowings, increased by \2,770,044 thousand.
Net asset was \124,035,763 thousand and increased by \10,870,940 thousand compared with theend of the previous fiscal year. The main reasons were that Foreign currency translation adjustment
increased by ¥7,574,493 thousand and Retained earnings increased by ¥4,808,931 thousand.
(3) Explanation of Cash flows
The balance of cash and cash equivalents on a consolidated basis as of the end of 2nd quarter was¥30,132,742 thousand, up ¥4,159,934 thousand from the previous term-end.
Net cash provided by operating activities was ¥7,287,851 thousand, compared with ¥4,102,962
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 ¥10,476,847 thousand, which outweighed income taxes
paid of ¥2,815,742 thousand.
Net cash provided by investing activities was ¥-3,931,282 thousand, compared with ¥-2,290,437
thousand a year earlier. The main expenditure was Purchase of tangible fixed assets ¥2,425,079
thousand.
Net cash provided used in financing activities was ¥-1,447,882 thousand, compared with ¥-946,067
thousand a year earlier. The main income was Proceeds from long-term borrowings ¥3,000,000
thousand. The main expenditure were Cash dividends paid ¥2,217,037 thousand and Purchase oftreasury shares 1,999,859 thousand.
(4) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information
Our company will revise our business performance forecasts it released on February 13, 2024.
The following table shows our forecasts of business performance for the fiscal year 2024.
Full year
The amount

%

Sales

\75,208 million

26.0

EBITDA\19,013 million

7.4

Operating income\13,427 million-5.8

Ordinary profit\14,635 million-14.9\9,652 million-57.7

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

－ 5 －2. Consolidated Quarterly Financial Statements and Principal Notes(1) Consolidated Quarterly Balance Sheets(Thousands of yen)
As of December 31,
2023
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Construction in progress
Accumulated depreciation
Total property, plant andequipment
Intangible assets
Software
Software in progress
Goodwill
Customer-related intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries andassociates
Insurance funds
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－ 6 －As of June 30, 2024

31,718,041
136,882
8,321,641
927,272
12,300,232
5,916,190
5,800,362
3,135,290-82,478
68,173,435

39,324,896
117,813
9,295,975
1,305,778
13,350,309
6,561,415
6,354,149
2,830,411-95,831
79,044,919

19,053,960
11,090,021
7,449,848
2,594,819
3,679,576-20,767,549

23,890,432
11,230,492
7,824,822
2,742,574
543,445-21,308,834

23,100,677

24,922,933

684,030
299,212
21,378,868
8,189,652
7,839,135
38,390,899

719,300
312,487
23,352,859
8,965,602
8,541,456
41,891,706

6,520,238

6,919,454

449,419542,6111,750,896
2,780
948,549
1,433,243-1,497
11,103,629
72,595,206
140,768,641

628,905
2,804
758,246
2,103,653-56,777
10,898,898
77,713,538
156,758,458

(Thousands of yen)
As of December 31,
2023
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-termborrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive
incomeValuation difference on available-forsale securities
Foreign currency translation
adjustment
Total accumulated othercomprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets－ 7 －As of June 30, 2024

2,153,937
11,478,670

2,690,712
11,529,780

9,965

1,011,020

2,123,634
568,633
5,165,980
21,500,820

2,743,507
527,905
5,669,741
24,172,666

179,370
195,172
5,175,573
552,882
6,102,999
27,603,819

1,948,360
212,440
5,663,226
726,000
8,550,027
32,722,694

867,948
3,708,703
112,310,974-11,158,651
105,728,975

867,948
2,583,551
117,119,906-12,024,873
108,546,533

1,607,616

2,050,229

5,486,959

13,061,453

7,094,575

15,111,682

330,967
10,303
113,164,822
140,768,641

366,852
10,695
124,035,763
156,758,458

(2) Consolidated Quarterly Statements of Income and Comprehensive Income(Consolidated Quarterly Statements of Income)(Thousands of yen)Six months ended
June 30, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses
Operating profit
Non-operating income
Interest income
Dividend income
Surrender value of insurance policies
Subsidy income
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Loss on investments in money held in
trust
Commission expenses
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current
assetsExpense on scrapping fixed assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controllinginterests
Profit attributable to owners of parent－ 8 －Six months ended
June 30, 2024

28,259,425
10,466,207
17,793,218

38,557,243
15,693,454
22,863,789

9,754,354

14,576,609

8,038,863

8,287,179

103,861
37,14011,28540,201

281,492
41,206
134,495
53,218

162,535－

2,524,448
147,732
3,027,205

1,563,847
204,053
2,278,312

1,998

23,201

3,188

490

2,029
19,24926,466
11,039,601

2,345
17,10343,14010,522,351

5,269
5,269

－
－

195

2,277

2,936

19,954

100,100
103,231
10,941,639
2,869,987
97,761
2,967,748
7,973,890

23,27145,504
10,476,847
3,536,187-86,455
3,449,732
7,027,115

1,494

519

7,972,396

7,026,596

(Consolidated Quarterly Statements of Comprehensive Income)(Thousands of yen)Six months ended
June 30, 2023
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests－ 9 －Six months ended
June 30, 2024

7,973,890

7,027,115-130,614

442,6132,988,289
2,857,674
10,831,565

7,574,130
8,016,743
15,043,858

10,828,713

15,043,467

2,851

391

(3) Consolidated Statements of Cash Flows(Thousands of yen)Six months ended
June 30, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Expense on scrapping fixed assets
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit
liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted
for using equity method
Loss on retirement of non-current assets
Loss (gain) on sale of non-current assets
Loss on retirement of intangible assets
Gain (gain) on investments in money held in
trust
Surrender value of insurance policies
Subsidy income
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Foreign exchange losses (gains)
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Subsidies received
Net cash provided by (used in) operating
activities－ 10 －

Six months ended
June 30, 2024

10,941,639
1,239,938
100,614100,100

10,476,847
1,975,594
789,069
23,271-25,590

57,697-505,394-40,728

-229

1,910

-141,002
1,998-322,698
23,201-162,535－

2,936-5,074－

19,948
2,277
6

3,188

－

-11,285-40,201-942,713-1,339,952-190,391-2,272,826
48,0756,801,296
541,333-2,130-3,277,738
40,201-134,495-53,218-133,737-939,939-202,851-1,698,304-82,790
9,761,061
312,078-22,763-2,815,742
53,2184,102,962

7,287,851

(Thousands of yen)Six months ended
June 30, 2023
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Payments for scrapping fixed assets
Purchase of intangible assets
Proceeds from sale and redemption of
investment securities
Purchase of shares of subsidiaries andassociates
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of insurance funds
Proceeds from cancellation of insurance
funds
Proceeds from cancellation of money held in
trust
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Proceeds from short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Purchase of treasury shares
Proceeds from sale of treasury shares
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
Cash and cash equivalents at beginning of
periodIncrease in cash and cash equivalents resulting
from inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period－ 11 －

Six months ended
June 30, 2024

-2,989,215-2,425,079

5,306

15,368-100,100-116,915－-182,405

408,807456,832-16,876－-2,170,698
493,500-7,213-3,439,673
407,228-51,008

110,352

1,311,126

2,093,108－-493-23,669-2,290,437-3,931,282

2,000,000－-402,688-2,043,463-499,914－

10,5303,000,000-250,000-2,217,037-1,999,859
8,485-946,067-1,447,882

2,408,310

2,251,247

3,274,767

4,159,934

31,648,571

25,972,808

82,767－35,006,105

30,132,742

(4）Notes to Consolidated Quarterly Financial Statements(Notes to Going Concern Assumption)
Not applicable.
(Notes to Significant Changes in the Amount of Shareholdersʼ Equity)
Not applicable.
(Changes in the scope of consolidation during the period)
Not applicable.

－ 12 －

(Segment Information）【Segment Information】
2nd quarter ended June 30, 2023 (From January 1, 2023 to June 30, 2023)(Thousands of yen)
Per
Reconciling

Reportable segments

items

quarterly
consolidated financial
statements

DentalDCI

SurgicalIndustrial

Reportablesegment

segment

segment

segment

segments

22,448,932－

1,779,394

4,031,098

28,259,425－

28,259,425

－

－

－

－

－

－

－

22,448,932－

1,779,394

4,031,098

28,259,425－

28,259,425

9,057,119-5,448888,937

670,379

10,610,988-2,572,124

8,038,863

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

1.

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

2.

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

－ 13 －

2nd quarter ended June 30, 2024 (From January 1, 2024 to June 30, 2024)(Thousands of yen)
Per
Reconciling

Reportable segments

items

quarterly
consolidated financial
statements

DentalDCI

SurgicalIndustrial

Reportablesegment

segment

segment

segment

segments

23,335,326

9,933,219

2,022,635

3,266,062

38,557,243－

38,557,243－－

126,286-126,286－

Sales
Revenues
fromexternalcustomers
Transactions
with other126,286

segments
Net sales

23,461,613

9,933,219

2,022,635

3,266,062

38,683,530-126,286

38,557,243

9,235,018

400,517

1,051,914

415,122

11,102,573-2,815,394

8,287,179

Operatingprofit (loss)
Notes:

1.

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

2.

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

Change of segment
From 1st quarter of this year, DCI product segment is showing because the figures are big. DCI productsegment was included in dental products segment in the past.
Furthermore, about year-on-year, it is analyzed by the figures at the changed segment.

－ 14 －