Summary of Consolidated Financial Results for the Third Quarter of the Fiscal
Year Ending March 2024 [Japanese GAAP]
January 31, 2024
Company name: Japan Medical Dynamic Marketing, INC.
Stock exchange listing: Tokyo
Code number: 7600
URL: https://www.jmdm.co.jp/
Representative: Toshiyuki Hironaka
Representative Director and President
Contact: Shinji Munechika
General Manager, Investor Relations Office
Phone: +81-3-3341-6705
Scheduled date of filing quarterly securities report: February 14, 2024
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: No
Schedule of quarterly financial results briefing session: No(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2023 (April 1, 2023 to December 31, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Nine months ended
December 31, 2023
16,9938.8
1,183(21.7)
1,225(20.6)
732(35.6)
December 31, 2022
15,62411.8
1,510(24.1)
1,543(21.1)
1,138(30.3)(Note) Comprehensive income:Nine months ended December 31, 2023: ¥1,439 million [(27.0) %]Nine months ended December 31, 2022: ¥1,972 million [(0.2) %]
Basic earnings
per share
Nine months ended
December 31, 2023
December 31, 2022

Diluted earnings per
share
Yen

Yen

27.85
43.20

-

(2) Consolidated Financial Position
Total assets

Net assets

Millions of yen
As ofDecember 31, 2023
30,177
March 31, 2023
29,434(Reference) Equity: As of December 31, 2023:
As of March 31, 2023:

Capital adequacy ratio

Millions of yen¥¥%

24,35323,292
24,280 million
23,161 million

80.5
78.7

2. Dividends
Annual dividends
1stquarter-end

2ndquarter-end

3rdquarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2023

-

0.00

-

13.00

13.00

Fiscal year ending March 31, 2024

-

0.00

14.00

14.00

Year-end

Fiscal year ending March 31, 2024
(Forecast)(Note) Revision to the forecast for dividends announced most recently:

Total

No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024(April 1, 2023 to March 31, 2024)(% indicates changes from the previous corresponding period.)
Profit attributable to Basic earnings
Net sales
Operating profit
Ordinary profit
owners of parent
per share
Millions of yen% Millions of yen% Millions of yen

Full year
23,600 10.8
1,800 (11.1)(Note) Revision to the financial results forecast announced most recently:

1,850
No

% Millions of yen

(9.5)

1,150

%

(19.2)Yen

43.71

* Notes:(1) Changes in significant subsidiaries during the nine months ended December 31, 2023
(changes in specified subsidiaries resulting in changes in scope of consolidation):
No(Company name:New
Exclusion:(Company name:(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:

)
)
Yes

(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):December 31, 2023:
26,475,880 shares
March 31, 2023:
26,475,880 shares
2) Number of treasury shares at the end of the period:
December 31, 2023:
141,198 shares
March 31, 2023:
175,107 shares
3) Average number of shares outstanding during the period:
Nine months ended December 31, 2023:
Nine months ended December 31, 2022:

26,318,736 shares
26,367,107 shares* This summary of quarterly financial results is not subject to audit by certified public accountants or auditing firms.
* Explanation of appropriate use of earnings forecasts and other special notes
・

These forward-looking statements such as financial forecasts contained in this report are based on information currently available
to the Company and certain assumptions deemed to be reasonable by the Company, and do not mean that the Company promises
to achieve them. Actual results and other future events may differ significantly due to various factors. Please refer to “(3)Explanation on Consolidated Financial Forecasts and Other Forward-looking Statements” on page 3 of the attached document for
the assumptions underlying the forecasts, notes on using the forecasts, etc.

Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

〇 Table of Contents of Attachment
1. Qualitative Information on Quarterly Financial Results .................................................................................................. 2(1) Explanation of Operating Results .............................................................................................................................. 2(2) Explanation of Financial Position .............................................................................................................................. 3(3) Explanation of Consolidated Financial Forecasts and Other Forward-looking Statements ........................................ 3
2. Quarterly Consolidated Financial Statements and Main Notes ........................................................................................ 4(1) Quarterly Consolidated Balance Sheet ....................................................................................................................... 4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income .... 6
Quarterly Consolidated Statements of Income ........................................................................................................... 6(For the nine months) ................................................................................................................................................. 6
Quarterly Consolidated Statements of Comprehensive Income ................................................................................. 7(For the nine months) ................................................................................................................................................. 7(3) Notes to Quarterly Consolidated Financial Statements .............................................................................................. 8(Note on Going Concern Assumption)..................................................................................................................... 8(Notes on Substantial Changes in the Amount of Shareholders’ Equity) ................................................................... 8(Application of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial
Statements) ................................................................................................................................................................ 8(Segment Information, Etc.) ....................................................................................................................................... 9
3. Other .............................................................................................................................................................................. 10
Sales ............................................................................................................................................................................... 10-1-

Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the nine months of the fiscal year ending March 31, 2024,of the Group, net sales were ¥16,993 million (up ¥1,369 million,
or 8.8% year on year), operating profit came to ¥1,183 million (down ¥327 million, or 21.7% year on year), ordinary profit was¥1,225 million (down ¥317 million, or 20.6% year on year), and net income attributable to owners of parent amounted to ¥732
million (down ¥405 million, or 35.6% year on year). Net sales of our own products accounted for 80.3% of consolidated net sales(80.8% in the same nine months a year ago).
In Japan, net sales were ¥9,541 million (up ¥560 million, or up 6.2% year on year) (after partial deduction of promotional
expenses due to the application of Accounting Standard for Revenue Recognition) as a result of an increase in the number ofacquired cases, despite the impact of the lowering of reimbursement prices implemented in April 2023.
In the United States, the new customer base that we developed last year contributed to growth, and there was an increase in thenumber of cases of artificial knee joint products acquired. As a result, net sales to external customers in the United States increased
to $52.205 million (up $3.138 million or 6.4% year on year), and after translation into yen, net sales were ¥7,452 million (up ¥808
million, or 12.2% year on year) due to the impact of the yen’s depreciation. (Reference: The exchange rate for U.S. sales was 135.41
yen to the U.S. dollar in the same quarter a year ago and was 142.76 yen to the U.S. dollar in the quarter under review.)
For the artificial joint category in Japan, the number of acquired cases of artificial hip prosthesis product “Entrada Hip Stem”
with hydroxyapatite (HA) coating increased, and overall sales of hip replacement arthroplasty (THA) were strong. On the other
hand, in artificial head bone replacement operations (BHA), while the number of acquired cases of “Entrada Hip Stem” increased,
overall BHA sales only saw a slight increase due to the fall in the number of acquired cases of “Ovation Stem.” In addition, thenumber of acquired cases of artificial knee joint replacement for the artificial knee joint product BKS TriMax increased, resulting
in strong sales with double-digit growth. As a result, net sales in Japan for this category were ¥3,629 million (up 5.3% year on year).
For the artificial joint category in the United States, the number of acquired cases of artificial knee joint replacement for artificial
knee joint products such as BKS TriMax and BKS Revision Knee increased as the customer base expanded, resulting in strong sales
with double-digit growth. On the other hand, sales of hip replacement arthroplasty (THA) as a whole declined due to the shift ofsome customers from the Taper Wedge type Stem, such as the “Ovation Tribute Stem” to the Triple Taper type Stem, although salesof “Entrada Hip Stem” in artificial hip prosthesis products saw double-digit growth due to the expansion of the hydroxyapatite (HA)
coating market. As a result, net sales in the United States for this category were $51.991 million (up 6.5% year on year). (Aftertranslation into yen, net sales were ¥7,427 million (up 12.3% year on year) due to the impact of the yen’s depreciation.)In the category of Trauma, net sales in Japan were ¥3,315 million (up 7.1% year on year), mainly due to the continued steadysales of ASULOCK and Prima Hip Screw with double-digit growth.
In the spinal fixation devices category, sales of Vusion Ti 3D Cage, Lynx Plate and KMC Kyphoplasty System increased in Japan.
In particular, sales of the KMC Kyphoplasty System increased this quarter as a result of the measures taken to capture growth
opportunities arising from the expansion of the Balloon Kyphoplasty (BKP) market. As a result of these factors, total net sales inJapan and the United States were ¥2,497 million (up 4.6% year on year).
As for cost of sales, the cost of sales ratio was 36.0% (34.1% in the same quarter a year ago), mainly due to the use of externalvendors to avoid supply chain problems, rising procurement costs due to inflation, and the impact of the depreciation of the yen andlowering of reimbursement prices in Japan. For selling, general and administrative expenses, there were increases in commission
expenses (commissions and royalties) due to increased U.S. sales, research and development expenses, personnel expenses due towage increases, and promotion expenses of holding seminars hosted by our U.S. subsidiary every other year. In addition, selling,
general and administrative expenses totaled ¥9,694 million (up 10.4% year on year), reflecting an increase in expenses in the UnitedStates after translation into yen as a result of the yen’s depreciation. The ratio of selling, general and administrative expenses to net
sales was 57.0% (56.2% in the same quarter a year ago).
Despite an increase in net sales, operating profit was ¥1,183 million (down 21.7% year on year) as a result of an increase in
selling, general and administrative expenses in addition to a higher cost of sales ratio.
Ordinary profit was ¥1,225 million (down 20.6% year on year) as a result of recording non-operating income of ¥122 million,
including foreign exchange gains of ¥102 million, and recording non-operating expenses of ¥80 million, including a share of lossof entities accounted for using equity method of ¥44 million and interest expenses of ¥22 million.
As for extraordinary income and losses, ¥104 million was recorded under extraordinary losses, consisting of ¥29 million in loss
on retirement of non-current assets such as medical tools and ¥75 million in settlement-related expenses in the first quarter.
As a result, net income attributable to owners of parent amounted to ¥732 million (down 35.6% year on year).
Segment results are as follows.
1) JapanNet sales were ¥9,541 million (up 6.2% year on year) and operating profit was ¥833 million (up 1.1% year on year).
2) United States
Net sales were ¥10,510 million (up 11.8% year on year) and operating profit was ¥328 million (down 43.5% year on year).

-2-Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

(2) Explanation of Financial Position
Total assets at the end of the quarter under review increased ¥742 million from the end of the previous fiscal year to ¥30,177
million. The main factors for increases were an increase in merchandise and finished goods of ¥775 million, notes and accounts
receivable - trade, and contract assets of ¥390 million, and work in process of ¥211 million. The main factor for decreases was adecrease of cash and deposits of ¥780 million.
Total liabilities decreased ¥319 million from the end of the previous fiscal year to ¥5,823 million. The main decreases consistedof a decrease in long-term borrowings of ¥301 million, a decrease in income taxes payable of ¥291 million, a drop in provision forbonuses of ¥137 million, and a fall in deferred tax liabilities of ¥132 million, while the main increases were an increase in shortterm borrowings of ¥385 million and a rise in notes and accounts payable - trade of ¥161 million.
Total net assets increased ¥1,061 million from the end of the previous fiscal year to ¥24,353 million. The main factors forincreases were an increase in foreign currency translation adjustment of ¥688 million and an increase in retained earnings of ¥388
million.

(3) Explanation of Consolidated Financial Forecasts and Other Forward-looking Statements
There is no change to the full-year consolidated financial forecast for the current fiscal year announced on October 30, 2023.

-3-

Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

Quarterly Consolidated Financial Statements
Quarterly Consolidated Balance Sheets(Thousands of yen)
As of March 31, 2023

As of December 31, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsMerchandise and finished goods
Work in process

2,804,928

2,024,362

5,270,930

5,661,760

9,378,119
593,162

10,153,168
804,503

Raw materials and supplies
Other

1,634,044
295,253

1,711,762
216,523

Allowance for doubtful accounts(1,358)(1,394)

19,975,079

20,570,686

837,544855,038

Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net

306,786
4,600,008

314,651
4,659,210

Land
Other

1,956,171
44,246

1,958,250
178,325

Total property, plant and equipment

7,744,756

7,965,475

263,037

228,906

66,77070,910204,910

162,360

1,104,875
75,283

1,108,433
70,321

1,451,839

1,412,025

9,459,634

9,606,406

29,434,714

30,177,092

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net

Intangible assets
Investments and other assets
Investment securities
Investments in capital of subsidiaries andassociates
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets-4-Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

(Thousands of yen)
As of March 31, 2023

As of December 31, 2023

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

979,185
1,046,733

1,140,404
1,432,205

Lease liabilities
Income taxes payable

34,553
339,245

35,29047,712

Accrued expenses
Accounts payable - other511,861
193,732

620,863
199,071

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for loss on business
Provision for litigation settlement

196,606

59,51564,51023,124

2,546
100,000

1,993
-

Other
Total current liabilities

158,217

155,265

3,627,191

3,715,446

732,248
58,163

430,462
41,4801,208,511

1,267,854

103,51473,78629,4938,000

31,48520,000Non-current liabilities
Long-term borrowings
Lease liabilities
Retirement benefit liability
Provision for share awards for directors (and otherofficers)
Asset retirement obligations
Long-term deposits received
Deferred tax liabilities

375,495

242,905

2,515,427

2,107,974

6,142,618

5,823,421

Share capital
Capital surplus

3,001,929
2,587,029

3,001,929
2,587,237

Retained earnings
Treasury shares

15,656,266(202,730)

16,045,233(163,121)

Total shareholders' equity

21,042,494

21,471,278

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Deferred gains or losses on hedges

30,29423,080Foreign currency translation adjustment
Remeasurements of defined benefit plans

2,163,161(74,317)

2,851,863(65,669)

Total accumulated other comprehensive income

2,119,138

2,809,274

130,462

73,11823,292,095

24,353,671

29,434,714

30,177,092

Non-controlling interests
Total net assets
Total liabilities and net assets-5-Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the nine months)(Thousands of yen)
For the nine months
ended December 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Freight and packing costs
Promotion expenses
Advertising expenses
Salaries and allowances
Retirement benefit expenses
Legal welfare expenses
Welfare expenses
Provision of allowance for doubtful accounts
Travel and transportation expenses
Depreciation
Taxes and dues
Research and development expenses
Commission expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Foreign exchange gains
Commission income
Insurance claim income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodCommission for syndicated loans
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Reversal of provision for loss on business
Compensation income
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Settlement-related costs
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-6-

For the nine months
ended December 31, 2023

15,624,728
5,329,281
10,295,447

16,993,966
6,116,021
10,877,945

310,492
102,338
59,1352,748,456
74,973
238,829
194,683(87)
179,100
1,023,894
108,599458,538
2,234,312
1,051,400
8,784,668
1,510,779

318,131
172,272
48,9812,916,414
79,643
258,080
223,08036
217,395
1,012,227
109,378694,654
2,513,106
1,130,888
9,694,292
1,183,652

78
61,205
2,844
13,22027,117
104,46667
102,696
2,121
17,903
122,788

14,26322,47642,51044,8386,279
9,135
72,187
1,543,057

6,238
7,015
80,5691,225,871

19,11825,00044,118-47,14647,146
1,540,028
409,537(18,740)
390,797
1,149,231
10,283
1,138,947

29,65275,000104,652
1,121,219
526,484(161,031)
365,453755,765
22,812732,953

Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

Quarterly Consolidated Statements of Comprehensive Income (For the nine months)(Thousands of yen)
For the nine months
ended December 31, 2022
ProfitOther comprehensive income
Deferred gains or losses on hedges
Foreign currency translation adjustment

For the nine months
ended December 31, 2023

1,149,231

755,765

25,414786,935(7,214)
682,575

Remeasurements of defined benefit plans, net of tax

10,4598,647

Total other comprehensive income

822,809684,009

1,972,041

1,439,775

1,948,615

1,423,089

23,425

16,685Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests-7-

Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

(3) Notes to Quarterly Consolidated Financial Statements(Note on Going Concern Assumption)
Not applicable.
(Notes on Substantial Changes in the Amount of Shareholders’ Equity)
Not applicable.
(Application of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements)
Tax expenses were calculated by reasonably estimating an effective tax rate after application of tax effect accounting to profit
before income taxes for the fiscal year including the quarter under review and multiplying profit before income taxes by theestimated effective tax rate.

-8-Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

(Segment Information, Etc.)
I. Nine Months of the Fiscal Year Ended March 2023 (from April 1 to December 31, 2022)
1. Information on the amounts of sales and profits for each reportable segment and information on the breakdown of revenue(In thousand yen)Amountrecorded on
Reportable segment
Adjustment quarterly consolidated(Note 1)statement of income
Japan
United States
Total(Note 2)
Net sales
Revenue from contracts withcustomers

8,980,664

6,644,064

15,624,728-

15,624,728

Net sales to external customers

8,980,664

6,644,064

15,624,728-

15,624,728-

2,757,211

2,757,211(2,757,211)-

8,980,664

9,401,275

18,381,940(2,757,211)

15,624,728

824,611

581,461

1,406,073

104,705

1,510,779

Inter-segment net sales or transfers
Total
Segment profit

Notes: 1. Adjustments for segment profit include ¥104,705 thousand in elimination of inter-segment transactions.
2. Segment profit was adjusted with operating profit in the quarterly consolidated statement of income.
3. For revenue from contracts with customers in “Japan,” part of the promotion expenses is deducted by applying the
Accounting Standard for Revenue Recognition.
2. Information on impairment losses on non-current assets and goodwill by reportable segment
Not applicable.
II. Nine Months of the Fiscal Year Ending March 2024 (from April 1 to December 31, 2023)
1. Information on the amounts of sales and profits for each reportable segment and information on the breakdown of revenue(In thousand yen)Amount recorded on
Reportable segment
Adjustment quarterly consolidated(Note 1)statement of income
Japan
United States
Total(Note 2)
Net sales
Revenue from contracts withcustomers

9,541,156

7,452,809

16,993,966-

16,993,966

Net sales to external customers

9,541,156

7,452,809

16,993,966-

16,993,966-

3,057,840

3,057,840(3,057,840)-

9,541,156

10,510,650

20,051,807(3,057,840)

16,993,966

833,862

328,260

1,162,123

21,5291,183,652

Inter-segment net sales or transfers
Total
Segment profit

Notes: 1. Adjustments for segment profit include ¥21,529 thousand in elimination of inter-segment transactions.
2. Segment profit was adjusted with operating profit in the quarterly consolidated statement of income.
3. For revenue from contracts with customers in “Japan,” part of the promotion expenses is deducted by applying the
Accounting Standard for Revenue Recognition.
2. Information on impairment losses on non-current assets and goodwill by reportable segment
Not applicable.

-9-Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Third Quarter of the Fiscal Year Ending March 2024

3. Other
Sales
Sales for the nine-month period under review by segment are as follows.
Name and item of each segment

Nine-month period under review(From April 1
to December 31, 2023)

Compared with the ninemonths a year ago

Amount (in thousand yen)

(%)

Japan

Medical devices

9,541,156

106.2

Joint

3,629,073

105.3

Trauma3,315,998

107.1

Spine

2,472,587

104.9

Other

280,979

107.9

Subtotal

9,698,639

105.9

Sales deduction(157,482)-

United States

7,452,809

112.2

Joint

7,427,684

112.3

Spine

25,125

82.0

Total

16,993,966

108.8

Ratio (%)
Sales ratio of our own products

Change (%)
80.3

(0.5)

Notes: 1. Inter-segment transactions are offset and eliminated.
2. In Japan, a portion of sales promotion expenses are deducted from net sales due to the application of the “AccountingStandard for Revenue Recognition.”
3. Sales results by item in Japan are shown as a lump-sum amount of such sales deductions, as a reasonable proration ofsuch sales deductions is not possible.

-10-