Flash Report for Fiscal year Ended December 31, 2023
(on a consolidated basis) [Japan GAAP]
February 13, 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: +81-289-64-3380

Scheduled date to submit Securities Report: March 29, 2024
Scheduled date to begin dividend payments: March 29, 2024
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, 2023)(1) Operating Results
Millions of yen
Operating income

Ordinary income

Fiscal year ended December 31, 2023

59,692

Net sales
22.6%

14,296-7.1%

17,238-2.3%

Fiscal year ended December 31, 2022

48,671

8.5%

15,38911.9%

17,646

26.5%

Incomeattributable toowners of parent

Earnings per share(yen)

Diluted EPS (yen)Fiscal year ended December 31, 2023

22,83583.1%

268.04267.29Fiscal year ended December 31, 2022

12,47123.4%

145.48145.11

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, 2023

25,579 million (80.6%)

Fiscal year ended December 31, 2022

14,165 million (33.9%)(2) Financial Position
Millions of yen
Total assets

Net assets

Equity ratio

As of December 31, 2023

140,713113,200

80.2%

As of December 31, 2022

102,636

91,02288.4%

Note: Ownersʼ equity As of December 31, 2023

112,859 million

As of December 31, 2022

90,737 million－ 1 －2. Dividends
Cash dividends per share (yen)
1st quarter2nd quarter 3rd quarter

Year-end

AnnualYear ended December 31, 2022

̶

22.00

̶

24.00

46.00

Year ending December 31, 2023

̶

24.00

̶

26.00

50.00

̶

26.00

̶

26.00

52.00

Year ending December 31, 2024
(forecast)

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

Operatingattributable toincomeOrdinary income owners of parent

Earnings per
share (yen)First-half period

35,53425.7

5,854 -29.0

6,096 -45.8

4,111 -49.3

48.20

Full year

74,432

24.7

12,652 -11.5

13,088 -24.1

8,894 -61.1

104.28Notes:

1.

Percentage figures represent year-on-year comparisons.

4. Others(1) Changes in the scope of consolidation during the period
Inclusion: 1 company, DCI International, LLC
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, 2023:

94,259,400 shares

As of December 31, 2022:

94,259,400 shares

Number of shares of treasury stock at the end of the period
As of December 31, 2023:

8,964,612 shares

As of December 31, 2022:

9,105,053 shares

Average number of shares during the period
Fiscal year ended December 31, 2023: 85,195,980 sharesFiscal year ended December 31, 2022: 85,729,735 shares* This flash report is out of scope of quarterly review.

－ 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)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

－ 3 －

1. Qualitative Information on Financial Results(1) Explanation of Results of Operations
In the world economy during the fiscal year, inflation is almost getting to the peak but CPI is still high.
Big investments are decreasing due to high interest rates. So uncertainty for the future is increasing.
In Japanese economy, capital investments keep steady about manufacturing industry. About nonmanufacturing industry, demands on outdoor business are increasing thanks to recovery from COVID19 pandemic. However, there is shortage of manpower.
Under these circumstances, all 3 segments sales increased. However, Operating income decreased
because Selling, general and administrative expenses including Amortization of goodwill increased.
As a result, the Group sales were ¥59,692,369 thousand (+22.6% year on year), EBITDA \17,775,316
thousand (+1.6%), operating income was ¥14,296,545 thousand (-7.1%), ordinary income was\17,238,331 thousand (-2.3%) and income attributable to owners of parent for the quarter was¥22,835,745 thousand (+83.1%).
The following is a breakdown of business performance by segment.
（Dental segment）
In Dental segment, sales in Domestic, North America, Europe and Asia increased because the impacts
our company acquired DCI International, LLC and Guilin Refine Medical Instrument Co., Ltd shares in
2023. Segment EBITDA increased but segment operating income decreased.
As a result, sales were \48,340,709 thousand (+18.1%), segment EBITDA was \18,966,393 thousand(+2.8%) and segment operating income was \16,693,993 thousand (-1.9％).
(Surgical segment)
In Surgical segment, Europe sales decreased but Domestic, North America and Asia sales increased.
Total sales increased. Segment EBITDA and segment operating income increased as well.
As a result, sales were \3,770,645 thousand (+19.3%), segment EBITDA was \2,018,786 thousand(+22.3%) and segment operating income was \1,922,720 thousand (+22.3％).
（Industrial segment）
In Industrial segment, Europe sales increased by 5 times because our company acquired Nakanishi
Jaeger GmbH shares at the end of 2022. And North America and Asia sales increased as well but
Domestic decreased. Total sales increased. Segment EBITDA and segment operating income decreased.
As a result, sales were \7,581,013 thousand (+65.4%), segment EBITDA was \1,726,413 thousand(-6.4%) and segment operating income was \1,175,158 thousand (-30.2％).
(2) Explanation of Financial Position(Assets, liabilities and net asset)
Total assets at the end of Fiscal year were \140,713,091 thousand and increased by \38,076,619
thousand compared with the end of the previous fiscal year. The main reasons were that Goodwill
increased by \20,452,011 thousand and Merchandise and finished goods increased by \4,976,718
thousand.
Total liabilities were \27,512,094 thousand and increased by \15,898,279 thousand compared withthe end of the previous fiscal year. The main reasons were that Short-term borrowings increased by\11,378,670 thousand and Deferred tax liabilities increase by \4,022,128 thousand.
Net asset was \113,200,996 thousand and increased by \22,178,340 thousand compared with theend of the previous fiscal year. The main reasons were that Retained earnings increased by¥18,718,422 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¥25,972,808 thousand, down ¥5,758,529 thousand from the previous term-end.
Cash flows from operating activities was ¥8,549,399 thousand, compared with ¥7,764,417 thousand ayear earlier. The main factor here was an increase of cash due to the recording of Profit before income
taxes of ¥28,808,295 thousand, which outweighed Income taxes paid of ¥-5,990,914 thousand.
Cash flows from investing activities was ¥-19,149,217 thousand, compared with ¥-6,314,202
thousand a year earlier. The main expenditure were Purchase of shares of subsidiaries resulting inchange in scope of consolidation ¥-15,107,810 thousand and Purchase of property, plant andequipment ¥-5,626,303 thousand.
Cash flows from financing activities was ¥3,406,227 thousand, compared with ¥6,107,521 thousand ayear earlier. The main reason cash income was Proceeds from short-term borrowings \11,100,000
thousand. The main expenditure were Dividends paid ¥-4,082,674 thousand and Purchase of treasury
shares ¥-2,999,804 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 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 2024, we have assumed an exchange rate of \135 to U.S. dollar and \150 to Euro.
The following table shows our forecasts of business performance for the fiscal year 2024.
The amount

%

Sales

\74,432 million

24.7

EBITDA\17,770 million-0.0Operating income\12,652 million-11.5

Ordinary profit\13,088 million-24.1\8,894 million-61.1

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,
2022
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Securities
Money held in trust
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 December 31,
2023

34,992,939
89,402
6,017,059
1,186,445
2,014,230
7,287,062
4,922,072
4,317,667
2,056,477-91,139
62,792,217

31,718,041
136,882
8,321,641
927,272－
12,263,780
5,916,190
5,804,338
3,135,290-82,478
68,140,959

18,650,677
9,451,774
5,749,530
2,232,281
720,395-18,475,536

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

18,329,122

23,100,677

704,589
273,378
1,482,801－
1,151,173
3,611,943

684,030
299,212
21,934,813
7,908,707
7,541,060
38,367,825

6,853,855

6,520,238

6,055,110

449,419

1,843,468
7,152
1,923,315
1,221,819-1,532
17,903,188
39,844,254
102,636,471

1,750,896
2,780
948,549
1,433,243-1,497
11,103,629
72,572,132
140,713,091

(Thousands of yen)
As of December 31,
2022
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 December 31,
2023

1,535,530
100,000

2,153,937
11,478,670

21,843

9,965

2,764,786
983,394
4,441,744
9,847,300

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

358,957
162,065
1,061,720
183,772
1,766,515
11,613,815

179,370
195,172
5,083,849
552,882
6,011,274
27,512,094

867,948
1,180,482
93,628,490-9,293,944
86,382,977

867,948
3,708,703
112,346,913-11,158,651
105,764,913

1,403,982

1,607,616

2,950,583

5,487,195

4,354,565

7,094,811

278,685
6,427
91,022,656
102,636,471

330,967
10,303
113,200,996
140,713,091

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Thousands of yen)
Fiscal year ended
December 31, 2022
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
Provision of allowance for doubtful
accounts
Share of loss of entities accounted forusing equity method
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on step acquisitions
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current
assetsImpairment losses
Expense 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 －Fiscal year ended
December 31, 2023

48,671,452
17,449,753
31,221,698

59,692,369
23,567,952
36,124,416

15,832,469

21,827,871

15,389,229

14,296,545

102,448
638,780
226,120
35,927591,000
65,498
11,28560,225

812,454－

610,939
202,941
2,629,610

2,088,030
305,122
3,121,162

2,761

13,268282,091

2,611

13,7576,250－

31,538－100,684

73,667372,277
17,646,562

25,022
179,377
17,238,331

70,157－－
70,157

1,174
201,947
11,497,835
11,700,958

40,653

2,453

4,189

28,440374,668－
419,511
17,297,208
5,494,590-670,669
4,823,920
12,473,287－
100,100
130,993
28,808,295
5,130,589
839,175
5,969,765
22,838,530

1,747

2,785

12,471,540

22,835,745

(Consolidated Statements of Comprehensive Income)(Thousands of yen)
Fiscal year ended
December 31, 2022
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 －Fiscal year ended
December 31, 2023

12,473,287

22,838,530-439,991

203,633

2,132,278
1,692,286
14,165,574

2,537,703
2,741,336
25,579,867

14,162,934

25,575,990

2,640

3,876

(3) Consolidated Statements of Changes in Net Assets
Fiscal year ended December 31, 2022
(Thousands of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodCapital surplus

867,948

Retained earnings

Treasury shares

Total shareholders'equity84,765,333-6,793,803

80,019,961

1,180,482

Changes during period
Dividends of surplus-3,608,383-3,608,383

Profit attributable toowners of parent

12,471,540

12,471,540

Purchase of treasury
shares-2,500,140-2,500,140

Net changes in items
other than shareholders'equity－－8,863,157-2,500,140

6,363,016

867,948

1,180,482

93,628,490-9,293,944

86,382,977

Total changes during period
Balance at end of period

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of
period

1,843,974

Total
accumulated
othercomprehensiv
e income

Foreigncurrencytranslation
adjustment
819,197

2,663,172

Shareacquisitionrights232,552

Non-controlling
Total net assetsinterests

3,786

82,919,473

Changes during period
Dividends of surplus-3,608,383

Profit attributable toowners of parent

12,471,540

Purchase of treasury
shares-2,500,140

Net changes in items
other than shareholders'equity-439,991

2,131,385

1,691,393

46,1322,640

1,740,165

Total changes during period-439,991

2,131,385

1,691,393

46,1322,640

8,103,182

Balance at end of period

1,403,982

2,950,583

4,354,565

278,685

6,427

91,022,656－ 10 －

Fiscal year ended December 31, 2023
(Thousands of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodCapital surplus

867,948

Retained earnings

Treasury shares

Total shareholders'equity93,628,490-9,293,944

86,382,977

1,180,482

Changes during period
Dividends of surplus-4,083,155-4,083,155

Profit attributable toowners of parent

22,835,745

22,835,745

Purchase of treasury
shares
Disposal of treasury
shares2,528,220

Change in scope of
consolidation-2,999,804-2,999,804

1,135,096

3,663,317-34,167-34,167

Net changes in items
other than shareholders'equity－2,528,220

18,718,422-1,864,707

19,381,935

867,948

3,708,703

112,346,913-11,158,651

105,764,913

Total changes during period
Balance at end of period

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of
period

1,403,982

Total
accumulated
othercomprehensiv
e income

Foreigncurrencytranslation
adjustment
2,950,583

4,354,565

Shareacquisitionrights278,685

Non-controlling
Total net assetsinterests

6,427

91,022,656

Changes during period
Dividends of surplus-4,083,155

Profit attributable toowners of parent

22,835,745

Purchase of treasury
shares-2,999,804

Disposal of treasury
shares3,663,317

Change in scope of
consolidation-34,167

Net changes in items
other than shareholders'equity203,633

2,536,612

2,740,245

52,282

3,876

2,796,404

Total changes during period

203,633

2,536,612

2,740,245

52,282

3,876

22,178,340

1,607,616

5,487,195

7,094,811

330,967

10,303

113,200,996

Balance at end of period－ 11 －

(4) Consolidated Statements of Cash Flows(Thousands of yen)
Fiscal year ended
December 31, 2022
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Expense on scrapping fixed assets
Amortization of goodwill
Loss (gain) on step acquisitions
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 sale of investment
securities
Loss (gain) on sale of property, plantand equipment
Loss on retirement of property, plantand equipment
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－ 12 －

Fiscal year ended
December 31, 2023

17,297,208
2,049,311
374,668－
55,115－28,808,295
2,929,725－
100,100
549,045-11,497,835

22,810-11,797

73,798-414,761-197,708

22,460-741,228
2,761-656,499
13,268-812,454

100,684

282,091

2,611－-201,947-29,504

1,278

4,189

28,440-35,927-89,177-3,665,855
134,345-1,626,574-1,326,730
11,771,140
1,289,065-2,761-5,328,953
35,927-60,225-484,616-3,535,038-569,466-1,370,381-318,069
13,435,271
1,059,052-14,235-5,990,914
60,225

7,764,417

8,549,399

(Thousands of yen)
Fiscal year ended
December 31, 2022
Cash flows from investing activities
Purchase of property, plant andequipment
Proceeds from sale of property, plantand equipment
Purchase of intangible assets
Proceeds from sale and redemption of
investment securities
Purchase of shares of subsidiaries
resulting in change in scope of
consolidation
Purchase of shares of subsidiaries andassociates
Payments into time deposits
Proceeds from withdrawal of time
deposits
Purchase of insurance funds
Proceeds from cancellation of insurancefundsLong-term loan advances
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
Repayments of short-term borrowings
Net increase (decrease) in short-termborrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash
and cash 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－ 13 －

Fiscal year ended
December 31, 2023

-3,469,529-5,626,303

69,035－-514,712-326,437

2,461,769

1,398,437-3,606,745-15,107,810-1,662,206－-7,593,927-2,866,722

5,376,039

1,224,715-14,233-9,920523,136

116,037-96,900－

2,212,410

2,165,388

1,660-116,601-6,314,202-19,149,217－－

11,100,000-100,000－-101,421－-2,500,140-3,607,380-409,872-2,999,804-4,082,674-6,107,521

3,406,227

1,418,061

1,435,060-3,239,245-5,758,529

34,887,816

31,648,571－

82,76731,648,571

25,972,808

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

－ 14 －

(Segment Information）【Segment Information】
Fiscal year ended December 31, 2022 (From January 1, 2022 to December 31, 2022)(Thousands of yen)
Reportable segments

Reconcilingconsolidated
financial

DentalSurgicalIndustrial

Reportablesegment

segment

segment

segments

40,926,711

3,160,058

4,584,682

48,671,452－

48,671,452

－

－

－

－

－

－

40,926,711

3,160,058

4,584,682

48,671,452－

48,671,452

17,024,344

1,571,575

1,683,337

20,279,257-4,890,028

15,389,229

items

statements

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.

－ 15 －

Fiscal year ended December 31, 2023 (From January 1, 2023 to December 31, 2023)(Thousands of yen)
Reportable segments

Reconcilingconsolidated
financial

DentalSurgicalIndustrial

Reportablesegment

segment

segment

segments

48,340,709

3,770,645

7,581,013

59,692,369－

59,692,369

－

－

－

－

－

－

48,340,709

3,770,645

7,581,013

59,692,369－

59,692,369

16,693,993

1,922,720

1,175,158

19,791,871-5,495,326

14,296,545

items

statements

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.

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