Note: This document is a translation of the original Japanese version and provided for reference purposes only. In theevent of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results
for the Three Months Ended June 30, 2023 (Japanese GAAP)
August 8, 2023

Company name:
Stock code:

Medical System Network Co., Ltd.
4350

Listing: Tokyo Stock Exchange
URL: https://www.msnw.co.jp/eng/

Representative:
Contact:
Tel:

Inao Tajiri, President and Representative Director
Eiji Hirashima, Executive Officer, Director of Finance and Director+81-11-613-7750

Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:
Results briefing to be held:

August 10, 2023
－
Yes
None
(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Three Months Ended June 30, 2023
(April 1 to June 30, 2023)(1) Consolidated operating results
Net sales
Three months ended
June 30, 2023
Three months ended
June 30, 2022

EBITDA(Percentages indicate YoY change)
Profit attributable toOrdinary profit
owners of parent

Operating profit

Million yen%

Million yen% Million yen

27,656

5.2

1,202

13.3

26,2991.5

1,061(21.9)%

Million yen%

Million yen

%

451

29.4

410

4.6

148

62.8

348

(47.7)

392(58.1)

91(84.4)

Note: Comprehensive income for the three months ended June 30, 2023 was 162 million yen (57.5% YoY), and comprehensive income for thethree months ended June 30, 2022 was 103 million yen ( (84.8)YoY).
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

Earnings per share
Three months ended
June 30, 2023
Three months ended
June 30, 2022

Diluted earnings
per share

Yen

Yen

4.92

－

3.02

－

Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of earnings per share calculations.

(2) Consolidated financial position
Total assets
As ofJune 30, 2023
As ofMarch 31, 2023

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

67,932

14,46721.2

478.07

66,223

14,48821.8

478.86

Reference: Shareholders’ equity amounted to 14,427 million yen as of June 30, 2023 and 14,451 million as of March 31, 2023.
Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of shareholders’ equity, equity ratio, and net
assets per share calculations.

2. Dividends
Dividends per share
End of Q1
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024
Fiscal year ending
March 31, 2024 (forecast)End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－

6.00

－

6.00

12.00

5.00

－

5.00

10.00

－

Note: Revisions to the Company’s most recently announced dividend forecast: No

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024
(April 1, 2023 to March 31, 2024)
Net sales

EBITDA

Operating profit

Million yen%

Million yen%

Million yen%

First half

54,6702.5

2,250(11.3)

800 (27.3)

Full-year

112,500

2.7

5,600

(8.5)

2,600 (17.8)(Percentages indicate YoY change)
Profit attributable
Earnings
Ordinary profit
to owners ofper share
parentMillion yen%

Yen

750 (39.7)

250 (50.2)

8.28

2,550 (24.0)

1,000 (37.9)

33.14

Note: Revisions to the Company’s most recently announced consolidated earnings forecast: No
Note: EBITDA = (operating profit + depreciation + goodwill amortization)%

Million yen

*Notes(1) Changes in significant subsidiaries during the period under review: None
(Transfers of specified subsidiaries associated with changes in the Company’s scope of consolidation)
Newly added:
None
Excluded:None(2) Distinctive accounting methods applied when preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective restatements
1. Accounting policy changes due to accounting standard revisions, etc.:
None
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None(4) Number of shares outstanding (common stock)
1. Shares outstanding(including treasury
As of June 30, 2023
stock)

30,642,600

As of March 31, 2023

30,642,600

2. Treasury shares
outstanding

As of June 30, 2023

464,055

As of March 31, 2023

464,055

3. Period-average shares
outstanding (cumulative
quarterly figures)

Three months ended
June 30, 2023

30,178,545

Three months ended
June 30, 2022

30,178,545

Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of calculation method regarding period-end
treasury stock numbers and period-average shares outstanding (cumulative quarterly figures).

*The financial information in this quarterly report is not subject to review by certified public accountants or auditing firms.
*Appropriate use of earnings forecast and other special notes
1. The earnings forecasts and other forward-looking statements contained in this document are based on information
currently available to the Company, and certain assumptions it considers reasonable, but are not intended to be a promisethat the Company will achieve. Actual results may vary materially from forecasts due to a variety of factors. For mattersconcerning earnings forecasts, please refer to page 3 of the attached materials “1. Qualitative Information on Quarterly
Financial Performance (3) Explanation of Consolidated Earnings Forecasts and Other Projections.”
2. In the quarterly consolidated balance sheets, the Company's shares held as trust assets of the Board Benefit Trust (BBT)
are recorded as treasury stock. They are included in treasury stock in calculations of earnings per share, equity ratio, net
assets per share, shareholders’ equity, period-end treasury stock numbers, and period-average shares outstanding(cumulative quarterly figures).

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

Accompanying Materials – Contents
1. Qualitative Information on Quarterly Financial Performance ......................................................................................... 2(1) Explanation of Operating Results ................................................................................................................................. 2(2) Explanation of Financial Position.................................................................................................................................. 3(3) Explanation of Consolidated Earnings Forecasts and Other Projections ..................................................................... 3
2. Quarterly Consolidated Financial Statements and Primary Notes ................................................................................. 4(1) Consolidated Balance Sheet ........................................................................................................................................ 4(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ...................................... 6(3) Notes to Quarterly Consolidated Financial Statements ................................................................................................ 8(Notes to going concern assumptions) ........................................................................................................................... 8(Notes in the event of significant changes in shareholders’ equity) ................................................................................ 8(Segment information) .................................................................................................................................................... 8

1

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
In the three months ended June 30, 2023, the prescription unit price fell in the Community Pharmacy Business dueto the impact of off-year National Health Insurance (NHI) drug price revisions and the end of the transitional measuresfor community support system premiums, but the number of prescriptions filled increased, as consumers felt more atease with seeking medical consultations following the downgrading of COVID-19 to a Class 5 infectious disease. Further,in the Pharmaceutical Network Business, the number of new network affiliates grew steadily. As a result, in the threemonth period under review, net sales amounted to 27,656 million yen (+5.2% YoY), operating profit 451 million yen(+29.4% YoY), ordinary profit 410 million yen (+4.6% YoY), and profit attributable to owners of parent 148 million yen(+62.8% YoY).
Results by segment were as follows. Net sales for individual segments include intersegment sales.
Starting from the three-month period under review, the costs of the business development division, which werepreviously allocated to the Leasing and Facility-related Segment, have been transferred to the Community Pharmacy
Network Segment due to the decision to focus on pharmacy development (the amount transferred in the three months
ended June 30, 2023 was 46 million yen).
1) Community Pharmacy Network Segment
In the Community Pharmacy Business, the prescription unit price fell due to the impact of off-year NHI drug pricerevisions and the end of the transitional measures for community support system premiums. Meanwhile, the numberof prescriptions filled increased as consumers felt more at ease with seeking medical consultations following thedowngrading of COVID-19 to a Class 5 infectious disease. Further, in the three months ended June 30, 2023, theGroup opened two new community pharmacies, including one in a medical mall. As of June 30, 2023, the Group had
430 community pharmacies, one care plan center, and nine drug/cosmetics stores.
In the Pharmaceutical Network Business, the business environment was characterized by pharmacies demanding
further efficiency improvements, including measures to optimize the distribution of drugs and responses to dispensing
fee revisions. Under such an environment, the Group’s initiatives to improve drug distribution and its management
support services attracted much attention, leading to a steady increase in new network affiliates. As of June 30, 2023,
the number of pharmaceutical network affiliates totaled 9,172 (up 260 compared with March 31, 2023), consisting of
430 Group pharmacies and 8,742 general network affiliates.
In the Manufacture and Market Pharmaceuticals Business, the Group provided 96 products (46 ingredients). While
the Group suspended accepting orders for some products due to shipment adjustments, the number of new partner
pharmacies increased 345 in the three-month period under review, bringing the total number of partner pharmacies
as of June 30, 2023 to 3,642, up 727 YoY.
In the Digital Shift Business, the number of pharmacies that have adopted the Group’s services as of June 30,2023 totaled 3,797 (up 406 compared with March 31, 2023).
As a result, segment sales for the three months ended June 30, 2023 were 26,356 million yen (+5.2% YoY), andoperating profit was 1,077 million yen (+6.2% YoY).
2) Leasing and Facility-related Segment
In the Leasing and Facility-related Segment, sales grew 0.7% YoY to 800 million yen, on the back of a steadyincrease in management fee income from managed properties. In terms of profit, the costs of the businessdevelopment division previously allocated to this segment were transferred to the Community Pharmacy Network
Segment due to the decision to focus on pharmacy development. In addition, the absence of one-time advertisingexpenses for the Wisteria serviced residence for the elderly booked in the previous fiscal year impacted the results.
As a result, operating profit amounted to 22 million yen (versus an operating loss of 43 million yen in the same periodof the previous year). In addition, the absence of one-time advertising expenses for the Wisteria serviced residence
for the elderly booked in the previous fiscal year impacted the results. As a result, operating profit amounted to 22
million yen (versus an operating loss of 43 million yen in the same period of the previous year).

2Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

As of June 30, 2023, Wisteria Senri-Chuo had an occupancy rate of 68.3% (56 out of 82 units occupied), andWisteria Minami-Ichijo an occupancy rate of 67.2% (78 out of 116 units occupied). The overall occupancy rate at thefive serviced residences for the elderly stood at 80.6%.The Group will focus on meeting the changing needs ofresidents and cultivate new sales routes, and continue to conduct aggressive sales activities.
3) Meal Catering Segment
In the Meal Catering Segment, while sales grew owing to a revision of the contract unit price, the gross profit margin
declined due to soaring purchase prices. As a result, segment sales were 590 million yen (+3.0% YoY) and theoperating loss was 14 million yen (versus an operating loss of 11 million yen in the same period of the previous fiscal
year).
4) Other Segment
The Other Segment provides home-visit nursing care. Segment sales were 78 million yen (+1.6% YoY), and theoperating loss was 8 million yen (operating loss of 2 million yen in the same period of the previous fiscal year).

(2) Explanation of Financial Position
As of June 30, 2023, total assets amounted to 67,932 million yen, up 1,708 million yen from March 31, 2023.
Current assets amounted to 21,445 million yen, up 1,180 million yen from March 31, 2023, mainly reflecting increases
in cash and deposits and merchandise.
Non-current assets were 46,486 million yen, up 528 million yen from March 31, 2023.
Total liabilities were 53,465 million yen, up 1,729 million yen from March 31, 2023. Current liabilities totaled 23,348
million yen, up 1,998 million yen from March 31, 2023, mainly reflecting an increase in accounts payable-trade. Noncurrent liabilities were 30,117 million yen, down 268 million yen from March 31, 2023.
Net assets were 14,467 million yen, down 21 million yen from March 31, 2023.

(3) Explanation of Consolidated Earnings Forecasts and Other Projections
The Company has made no changes to its first half and full-year earnings forecasts for the financial year ending
March 31, 2024, which were announced on May 9, 2023.

3

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet
Fiscal year ended
March 31, 2023
(as of March 31, 2023)
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Unearned revenue from sale of accounts
receivable
Purchased receivables - dispensing fees
Merchandise
Raw materials
Work in process
Supplies
Other
Allowance for doubtful accounts
Total current assets(Millions of yen)Three months ended
June 30, 2023
(as of June 30, 2023)

8,141
3,437

9,751
2,717

1,039

1,060

463
5,160
17
2
74
1,939
(11)

413
5,862
16
10
77
1,546
(10)

20,26521,445

13,164
8,916
165
4,814

13,187
8,986
144
5,692

27,06028,011

11,183548
74

10,905568
73

11,807

11,547

159
3,222
2,926
802
(19)

167
3,208
2,766
806
(19)

7,090

6,928

45,95846,486

66,22367,932

Non-current assets
Property, plant and equipment
Buildings and structures, net
LandConstruction in progress
Other
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

(Millions of yen)Three months ended
June 30, 2023
(as of June 30, 2023)

Fiscal year ended
March 31, 2023
(as of March 31, 2023)
Liabilities
Current liabilities
Accounts payable – trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors(and other officers)
Provision for share awards for directors (andother officers)
Retirement benefit liability
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
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

5

9,937
1,016
5,152
600
1,569

11,721
1,664
5,039
68
837

2

8

3,071

4,009

21,34923,34820,22619,003

637

647

243

251

4,157
5,121

4,232
5,981

30,38530,11751,73553,4652,128
1,182
11,606
(326)

2,128
1,182
11,571(326)

14,59014,555

(2)

3

2
(139)

1
(133)

(139)

(128)

37

40

14,488

14,467

66,22367,932

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income

Net sales
Cost of sales

Three months ended
June 30, 2022
(from April 1, 2022
to June 30, 2022)
26,29915,236(Millions of yen)Three months ended
June 30, 2023
(from April 1, 2023
to June 30, 2023)
27,656
16,223Gross profit

11,062

11,433

Selling, general and administrative expenses

10,713

10,981

Operating profit

348

451

Non-operating income
Interest and dividend income
Outsourcing service income
Rental income from facilities
Subsidy income
Miscellaneous income

2
19
32
60
21

2
16
30
6
18

Total non-operating income

136

74

Loss on sale of receivables
Interest expenses
Miscellaneous losses

14
70
8

14
93
7

Total non-operating expenses

93

115

392

410

6
0
－

0
1
0

6

2

Profit before income taxes

385

407

Income taxes - current
Income taxes - deferred

74
213

102
154

Total income taxes

287

256

Profit97

151

Non-operating expenses

Ordinary profit
Extraordinary losses
Loss on retirement of non-current assets
Loss on store closings
Other
Total extraordinary losses

Profit (loss) attributable to non-controlling interests

62

Profit (loss) attributable to owners of parent

91

148

6

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

Consolidated Statement of Comprehensive Income

97(Millions of yen)Three months ended
June 30, 2023
(from April 1, 2023
to June 30, 2023)
151

(0)

6

1

(1)

4

6

5

11

Comprehensive income

103

162

(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

96

159

6

2

Three months ended
June 30, 2022
(from April 1, 2022
to June 30, 2022)
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net oftax
Total other comprehensive income7Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Three Months Ended June 30, 2023

(3) Notes to Quarterly Consolidated Financial Statements(Notes to going concern assumptions)None to be reported.
(Notes in the event of significant changes in shareholders’ equity)
None to be reported.
(Segment information)
I. Three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)
Information on sales and profit (loss) by reporting segment
Reporting segment
Community Leasing andFacilityPharmacy
relatedNetwork

Meal
Catering

Other

Total

(Millions of yen)Amounts on
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

25,043

605

572

77

26,299－26,299

1

189

0

－

190

(190)

－

Total

25,045

794

573

77

26,489(190)

26,299Segment profit (loss)

1,014

(43)

(11)

(2)

957

(608)

348

Notes: 1. The negative 608 million yen adjustment to segment profit (loss) includes 62 million yen in elimination ofintersegment transactions and 671 million yen in companywide expenses not allocated to reporting segments.
Companywide expenses mainly refer to general expenses that do not belong to reporting segments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the quarterly consolidated statement of income.
II. Three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)
1. Information on sales and profit (loss) by reporting segment
Reporting segment
Community Leasing andFacilityPharmacy
relatedNetwork

Meal
Catering

Other

Total

(Millions of yen)Amounts on
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

26,343

644

590

78

27,656－27,656

12

155

0

－

168

(168)

－

Total

26,356

800

590

78

27,825(168)

27,656

Segment profit (loss)

1,077

22

(14)

(8)

1,077

(626)

451

Notes: 1. The negative 626 million yen adjustment to segment profit (loss) includes 62 million yen in elimination ofintersegment transactions and 688 million yen in companywide expenses not allocated to reporting segments.
Companywide expenses mainly refer to general expenses that do not belong to reporting segments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the quarterly consolidated statement of income.
2. Starting from the three-month period under review, the costs of the business development division, which werepreviously allocated to the Leasing and Facility-related Segment, have been transferred to the Community Pharmacy
Network Segment due to the decision to focus on pharmacy development (the amount transferred in the three months
ended June 30, 2023 was 46 million yen).

8