Flash Report for 2nd quarter Ended June 30, 2023
(on a consolidated basis) [Japan GAAP]
Aug 7, 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: Aug 8, 2023
Scheduled date to begin dividend payments: Sep 14, 2023
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, 2023)(1) Operating Results
Millions of yen
Net sales

EBITDA

Operating income

2nd quarter ended June 30, 2023

28,259

15.5%

9,595

5.7%

8,247

1.4%

2nd quarter ended June 30, 2022

24,462

6.3%

9,075

－

8,129

6.3%

Millions of yen
Income attributable

Ordinary income

to owners of parent

Earnings
per share(yen)

DilutedEPS (yen)

2nd quarter ended June 30, 2023

11,247

18.5%

8,103

20.0%

95.28

94.97

2nd quarter ended June 30, 2022

9,490

27.8%

6,750

25.8%

78.52

78.33

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, 2023

10,971 million (21.9%)

2nd quarter ended June 30, 2022

9,000 million (45.4%)

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

Net assets

Equity ratio

As of June 30, 2023

111,560

99,47788.9%

As of December 31, 2022

102,154

91,02288.8%

Note: Ownersʼ equity As of June 30, 2023
As of December 31, 2022

99,137 million
90,737 million－ 1 －2. Dividends
Cash dividends per share (yen)
1st quarter2nd quarter 3rd quarter

Year ending December 31, 2022

̶

22.00

Year ending December 31, 2023

̶

24.00

Year ending December 31, 2023
(forecast)
Notes:

1.

Year-end

Annual

̶

24.00

46.00

̶

26.00

50.00

Revisions to dividend payment forecasts during the period: Applicable

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

56,638Notes:

16.4

Operatingattributable toincomeOrdinary income owners of parent

15,972

3.8

19,506

10.5

13,842

1.

Percentage figures represent year-on-year comparisons.

2.

Revisions to performance forecasts during the period: Applicable

Earnings per

11.0

share (yen)162.77

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, 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 June 30, 2023:

9,282,284 shares

As of December 31, 2022:

9,105,053 shares

Average number of shares during the period
2nd quarter ended June 30, 2023: 85,045,065 shares
2nd quarter ended June 30, 2022: 85,980,048 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, inflation is almost getting to the peak but CPI is still high.
There are some uneasy due to the bankrupt of Silicon Valley Bank and the acquisition of Credit Suisse.
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. EBITDA increased as well.
As a result, the Group sales were ¥28,259,425 thousand (+15.5% year on year), EBITDA \9,595,521
thousand (+5.7%), operating income was ¥8,247,200 thousand (+1.4%), ordinary income was\11,247,938 thousand (+18.5%) and income attributable to owners of parent for the quarter was¥8,103,010 thousand (+20.0%).
The following is a breakdown of business performance by segment.
（Dental segment）
In Dental segment, North America sales decreased but Domestic, Europe and Asia sales increased.
Segment EBITDA and segment operating income increased as well.
As a result, sales were \22,448,932 thousand (+9.3%), segment EBITDA was \9,820,469 thousand(+5.5%) and segment operating income was \9,051,671 thousand (+4.4％).
(Surgical segment)
In Surgical segment, North America and Europe sales decreased but Domestic and Asia sales
increased. Total sales increased. Segment EBITDA and segment operating income were almost thesame of year on year.
As a result, sales were \1,779,394 thousand (+5.8%), segment EBITDA was \928,439 thousand(+0.8%) and segment operating income was \ 888,937 thousand (+0.4％).
（Industrial segment）
In Industrial segment, Europe sales increased by 5 times because our company acquired Alfred Jäger
GmbH shares at the end of 2022. And Asia sales increased as well but Domestic and North America
sales were flat. Total sales increased. Segment EBITDA and segment operating income increased aswell.
As a result, sales were \4,031,098 thousand (+79.1%), segment EBITDA was \ 1,147,705 thousand(+35.9%) and segment operating income was \878,716 thousand (+13.5％)(2) Explanation of Financial Position(Assets, liabilities and net asset)
Total assets at the end of 2nd quarter were \111,560,527 thousand and increased by \ 9,406,067
thousand compared with the end of the previous fiscal year. The main reasons were that Cash anddeposits increased by \5,267,163 thousand and Construction in progress increased by \2,179,438
thousand.
Total liabilities were \ 12,082,919 thousand and increased by \ 951,115 thousand compared with theend of the previous fiscal year. The main reason was that Short-term borrowings increased by\2,000,000 thousand.
Net asset was \99,477,607 thousand and increased by \ 8,454,951 thousand compared with the endof the previous fiscal year. The main reasons were that Retained earnings increased by ¥ 6,025,138
thousand and Foreign currency translation adjustment by ¥ 2,996,341 thousand.
－ 4 －(3) Explanation of Cash flows
The balance of cash and cash equivalents on a consolidated basis as of the end of 2nd quarter was¥35,006,105 thousand, up ¥3,274,767 thousand from the previous term-end.
Net cash provided by operating activities was ¥4,102,962 thousand, compared with ¥2,805,211
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 ¥11,149,976 thousand, which outweighed income taxes
paid of ¥3,277,738 thousand.
Net cash provided by investing activities was ¥-2,290,437 thousand, compared with ¥-3,363,793
thousand a year earlier. The main expenditure was Purchase of tangible fixed assets ¥2,989,215
thousand.
Net cash provided used in financing activities was ¥-946,067 thousand, compared with ¥-2,800,225
thousand a year earlier. The main expenditure was Cash dividends paid ¥2,043,463 thousand. The mainincome was Proceeds from short-term borrowings ¥2,000,000 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 9, 2023.
The following table shows our forecasts of business performance for the fiscal year 2023.
Full year
The amount

%

Sales

\56,638 million

16.4

EBITDA\18,616 million

6.4

Operating income\15,972 million

3.8

Ordinary profit\19,506 million

10.5\13,842 million

11.0

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, 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 and equipment
Intangible assets
Software
Software in progress
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
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, 2023

34,992,939
89,402
6,017,059
1,186,445
2,014,230
7,167,378
4,799,134
4,317,667
2,056,477-91,139
62,549,596

40,260,103
97,9257,479,889
1,522,935－
8,205,268
5,150,120
5,297,672
1,736,443-72,364
69,677,994

18,111,280
9,359,239
5,707,895
2,205,232
720,395-18,475,536
17,628,506

17,494,960
9,906,969
6,155,649
2,311,787
2,899,833-18,750,792
20,018,407

704,589
273,378
2,696,223
398,977
4,073,168

703,856
227,150
2,842,245
369,995
4,143,248

6,853,855
6,055,110
1,843,468
7,152
1,923,315
1,221,819-1,532
17,903,188
39,604,863
102,154,460

6,507,031
6,252,959
1,753,812
2,245
1,939,973
1,266,503-1,65017,720,876
41,882,533
111,560,527

(Thousands of yen)
As of December 31, 2022
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
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 income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets－ 7 －As of June 30, 2023

1,535,530
100,000
21,8432,764,786
983,394
4,441,744
9,847,300

1,891,273
2,100,000－
2,671,879
478,000
3,896,511
11,037,665

358,957
162,065579,708
183,772
1,284,503
11,131,804－
172,511
690,392
182,350
1,045,254
12,082,919

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

867,948
1,185,764
99,653,629-9,790,273
91,917,068

1,403,982

1,273,368

2,950,583

5,946,924

4,354,565

7,220,292

278,685
6,427
91,022,656
102,154,460

330,967
9,279
99,477,607
111,560,527

(2) Consolidated Quarterly Statements of Income and Comprehensive Income(Consolidated Quarterly Statements of Income)(Thousands of yen)Six months ended
June 30, 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 for using
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
Share of loss of entities accounted for using
equity method
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 assets
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-controlling interests
Profit attributable to owners of parent－ 8 －Six months ended
June 30, 2023

24,462,214
8,978,925
15,483,288
7,353,834
8,129,454

28,259,425
10,250,102
18,009,322
9,762,122
8,247,200

35,19332,097－35,927

103,861
37,14011,28540,201－

162,535

1,480,792
110,914
1,694,925

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

774
248,058
5,417

1,998
3,188
2,029

58,746－

21,239334,236
9,490,143

19,24926,466
11,247,938

65,88865,888

5,269
5,269

31,826
1,492－
33,3199,522,712
2,741,843
28,7072,770,550
6,752,161
1,345
6,750,816

195
2,936
100,100
103,231
11,149,976
2,869,987
175,483
3,045,471
8,104,505
1,494
8,103,010

(Consolidated Quarterly Statements of Comprehensive Income)(Thousands of yen)Six months ended
June 30, 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 to noncontrolling interests－ 9 －Six months ended
June 30, 2023

6,752,161

8,104,505-439,585-130,614

2,688,159
2,248,573
9,000,735

2,997,698
2,867,083
10,971,588

8,998,281

10,968,736

2,454

2,851

(3) Consolidated Statements of Cash Flows(Thousands of yen)Six months ended
June 30, 2022
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
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, 2023

9,522,712
918,40727,302－

11,149,976
1,182,661
165,659
100,100

12,254-25,590-471,948-505,394

487

-229

-67,290774-141,002
1,998

58,746-162,535

1,492-34,061

2,936-5,074

248,058

3,188－-35,927-465,159-807,590-54,308-2,605,381-720,974
5,527,595
142,747-804-2,900,252
35,927-11,285-40,201-942,713-1,556,057-190,391-2,272,826
48,0756,801,296
541,333-2,130-3,277,738
40,2012,805,211

4,102,962

(Thousands of yen)Six months ended
June 30, 2022
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
Repayments of long-term borrowings
Dividends paid
Purchase 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, 2023

-1,457,281-2,989,215

61,8205,306－-284,504-100,100-116,915

726,707408,807-1,568,387-16,876-3,006,312
2,167,067-6,741-2,170,698
493,500-7,213－110,352－

2,093,108

3,838

-493

-3,363,793-2,290,437－－-1,722,570-1,077,655

2,000,000-402,688-2,043,463-499,914-2,800,225-946,067

2,365,212

2,408,310-993,595

3,274,767

34,887,816

31,648,571－

82,76733,894,220

35,006,105

(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, 2022 (From January 1, 2022 to June 30, 2022)(Thousands of yen)Per

Reportable segments
DentalSurgicalIndustrial

Reportablesegment

segment

segment

segments

Reconciling
items

quarterly
consolidated financial
statements

Sales
Revenues
fromexternal

20,530,662

1,681,197

2,250,354

24,462,214－

24,462,214

－

－

－

－

－

－

20,530,662

1,681,197

2,250,354

24,462,214－

24,462,214

8,669,769

885,149

774,127

10,329,046-2,199,591

8,129,454

customers
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, 2023 (From January 1, 2023 to June 30, 2023)(Thousands of yen)Per

Reportable segments
DentalSurgicalIndustrial

Reportablesegment

segment

segment

segments

Reconciling
items

quarterly
consolidated financial
statements

Sales
Revenues
fromexternal

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

9,051,671

888,937

878,716

10,819,325-2,572,124

8,247,200

customers
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.

－ 14 －