Summary of Consolidated Financial Results for the Second Quarter of the Fiscal
Year Ending March 2024 [Japanese GAAP]
October 30, 2023
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: November 14, 2023
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: Yes(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023 to September 30, 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%
Six months ended
September 30, 2023
10,952
9.6
617(33.4)
632(31.0)
359(50.1)
September 30, 2022
9,989
12.8
927
(12.4)
916(12.1)
721(28.1)(Note) Comprehensive income:Six months ended September 30, 2023:¥
1,732 million [(32.3) %]Six months ended September 30, 2022:¥
2,558 million [130.2%]
Basic earnings
per share
Six months ended
September 30, 2023
September 30, 2022

Diluted earnings per
share
Yen

Yen

13.67
27.35

-

(2) Consolidated Financial Position
Total assets

Net assets

Millions of yen
As ofSeptember 30, 2023
30,440March 31, 2023
29,434(Reference) Equity: As of September 30, 2023:
As of March 31, 2023:

Capital adequacy ratio

Millions of yen¥¥%

24,71723,292
24,575 million
23,161 million

80.7
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

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

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
23,60010.8
1,800 (11.1)(Note) Revision to the financial results forecast announced most recently:% Millions of yen

1,850 (9.5)
Yes%

1,150 (19.2)* Notes:(1) Changes in significant subsidiaries during the six months ended September 30, 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:

Yen

43.71

)
)
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):
September 30, 2023:
26,475,880 shares
March 31, 2023:
26,475,880 shares
2) Number of treasury shares at the end of the period:
September 30, 2023:
141,197 shares
March 31, 2023:
175,107 shares
3) Average number of shares outstanding during the period:
Six months ended September 30, 2023:
Six months ended September 30, 2022:

26,311,902 shares
26,383,693 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 notmean 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 theforecasts, etc.

・ The Company will hold a financial results briefing for institutional investors and analysts on November 10, 2023.
Financial results briefing materials to be used on the day of the briefing will be posted on the Company’s website on
the day of the briefing.

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

 Table of Contents of Attachment

1. Qualitative Information on Quarterly Financial Results ................................................................................................ 2(1) Explanation on Operating Results ......................................................................................................................... 2(2) Explanation on Financial Position ....................................................................................................................... 3(3) Explanation on 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 ofComprehensive Income ....................................................................................................................................... 6(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 Second Quarter of the Fiscal Year Ending March 2024

1. Qualitative Information on Quarterly Financial Results(1) Explanation on Operating Results

During the first half of the fiscal year ending March 31, 2024, for the Group, net sales were ¥10,952 million (up ¥962 million, or
9.6% year on year), operating profit came to ¥617 million (down ¥309 million, or 33.4% year on year), ordinary profit was ¥632
million (down ¥283 million, or 31.0% year on year), and net income attributable to owners of parent amounted to ¥359 million(down ¥361 million, or 50.1% year on year). Net sales of our own products accounted for 80.1% of consolidated net sales (80.3%
in the same half a year ago).
In Japan, net sales were ¥6,129 million (up ¥324 million, or up 5.6% 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 the number of cases of artificial
knee joint products acquired. As a result, net sales to external customers in the United States increased to $34 million (up $2 million
or 8.9% year on year), and after translation into yen, net sales were ¥4,823 million (up ¥638 million, or 15.3% year on year) due tothe impact of the yen’s depreciation. (Reference: The exchange rate for U.S. sales was 133.47 yen to the U.S. dollar in the same
half a year ago and was 141.31 yen to the U.S. dollar in the half under review.)
For the artificial joint category in Japan, the number of cases has increased since the change of COVID-19 to a Category 5 disease.
Sales were strong with double-digit growth, as the number of acquired cases of hip replacement arthroplasty (THA, BHA) for theartificial hip prosthesis product “Entrada Hip Stem” with hydroxyapatite (HA) coating increased, in particular. On the other hand,overall BHA sales only saw single-digit growth due to a decrease in the number of acquired cases of artificial head bone replacement
operations (BHA) for “Ovation Stem.” In addition, the number 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 thiscategory were ¥2,361 million (up 6.1% 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, resulting in strong sales with double-digit growth. On
the other hand, sales of artificial hip prosthesis products decreased, as sales of “Ovation Tribute Stem” and other products declined
and the number of acquired cases of hip replacement arthroplasty (THA) as a whole declined, although sales of “Entrada Hip Stem”
saw double-digit growth. As a result, net sales in the United States for this category were $34 million (up 8.9% year on year). (Aftertranslation into yen, net sales were ¥4,806 million (up 15.3% year on year) due to the impact of the yen’s depreciation.)In the category of Trauma, net sales in Japan were ¥2,059 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.
While the number of acquired cases of the KMC Kyphoplasty System decreased in the second half of last fiscal year due to theentry of competitors into the Balloon Kyphoplasty (BKP) market last fiscal year, the number of acquired cases has turned to anincreasing trend as a result of measures taken this fiscal year to capture growth opportunities arising from the expansion of the BKP
market. As a result of these factors, total net sales in Japan and the United States were ¥1,652 million (up 2.4% year on year).
As for cost of sales, the cost of sales ratio was 35.9% (33.7% in the same half a year ago), mainly due to expanded 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 ¥6,405 million (up 12.5% year on year), reflecting an increase in expenses after
translation into yen in the United States as a result of the yen’s depreciation. The ratio of selling, general and administrative expenses
to net sales was 58.5% (57.0% in the same half a year ago).
Despite an increase in net sales, operating profit was ¥617 million (down 33.4% year on year) due to an increase in selling,
general and administrative expenses in addition to a higher cost of sales ratio mainly owing to the impact of the yen’s depreciation.
Ordinary profit was ¥632 million (down 31.0% year on year) as a result of recording non-operating income of ¥69 million,
including foreign exchange gains of ¥59 million, and recording non-operating expenses of ¥55 million, including share of loss ofentities accounted for using the equity method of ¥31 million.
As for extraordinary income and losses, ¥93 million was recorded under extraordinary losses, consisting of ¥18 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 ¥359 million (down 50.1% year on year).
Segment results are as follows.
1) JapanNet sales were ¥6,129 million (up 5.6% year on year) and operating profit was ¥466 million (up 0.7% year on year).
2) United States
Net sales were ¥6,644 million (up 12.8% year on year) and operating profit was ¥92 million (down 76.4% year on year).

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

(2) Explanation on Financial Position
Total assets at the end of the quarter under review increased ¥1,005 million from the end of the previous fiscal year to ¥30,440
million. The main factors for increases were an increase in merchandise and finished goods of ¥1,161 million and tools, furnitureand fixtures of ¥211 million. The main factor for decreases was a decrease of cash and deposits of ¥660 million.
Total liabilities decreased ¥419 million from the end of the previous fiscal year to ¥5,722 million. The main decreases consistedof a decrease in long-term borrowings of ¥224 million, a decrease in income taxes payable of ¥167 million, a decrease in provision
for litigation settlement of ¥100 million, and a decrease in deferred tax liabilities of ¥119 million, while the main increase was anincrease in notes and accounts payable - trade of ¥200 million.
Total net assets increased ¥1,425 million from the end of the previous fiscal year to ¥24,717 million. The main factor for increases
was an increase in foreign currency translation adjustment of ¥1,280 million.

(3) Explanation on Consolidated Financial Forecasts and Other Forward-looking Statements
The consolidated financial forecasts for the fiscal year ending March 2024 announced on April 28, 2023 have been revised. For
details, please refer to the "Notice Concerning Difference between Consolidated Financial Forecasts and Financial Results for theSecond Quarter of the Fiscal Year Ending March 2024 and Revision of Consolidated Financial Forecasts for the Fiscal Year Ending
March 2024" announced today (October 30, 2023).

-3-

Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Second 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 September 30, 2023

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

2,804,928

2,144,451

5,270,930

5,263,591

9,378,119
593,162

10,539,679
535,377

Raw materials and supplies
Other

1,634,044
295,253

1,710,042
490,440

Allowance for doubtful accounts(1,358)(1,277)

19,975,079

20,682,306

837,544903,209

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

306,786
4,600,008

349,395
4,811,022

Land
Other

1,956,171
44,246

1,960,197
91,419Total property, plant and equipment

7,744,756

8,115,245

263,037

240,744

66,77074,790204,910

185,987

1,104,875
75,283

1,069,436
71,986

1,451,839

1,402,200

9,459,634

9,758,189

29,434,714

30,440,495

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 Second Quarter of the Fiscal Year Ending March 2024

(Thousands of yen)
As of March 31, 2023

As of September 30, 2023

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

979,185
1,046,733

1,179,487
1,040,531

Lease liabilities
Income taxes payable

34,553
339,245

36,994
171,750

Accrued expenses
Accounts payable - other511,861
193,732

580,504
186,873

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

196,606

186,786

64,51015,552

2,546
100,000

2,180
-

Other
Total current liabilities

158,217

134,741

3,627,191

3,535,401

732,248
58,163507,262
52,824

1,208,511

1,249,345

103,514

71,341

29,4938,000

31,40919,000Non-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

256,197

2,515,427

2,187,379

6,142,618

5,722,781

Share capital
Capital surplus

3,001,929
2,587,029

3,001,929
2,587,029

Retained earnings
Treasury shares

15,656,266(202,730)

15,672,004(165,465)

Total shareholders' equity

21,042,494

21,095,496

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

Accumulated other comprehensive income
Deferred gains or losses on hedges

30,294

104,375

Foreign currency translation adjustment
Remeasurements of defined benefit plans

2,163,161(74,317)

3,443,705(68,552)

Total accumulated other comprehensive income

2,119,138

3,479,528

130,462

142,690

23,292,095

24,717,714

29,434,714

30,440,495

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

Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the six months)

Net sales
Cost of sales

For the six months
ended September 30, 2022
9,989,631
3,370,648(Thousands of yen)
For the six months
ended September 30, 2023
10,952,436
3,928,813

Gross profit

6,618,983

7,023,623

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

208,687
53,80035,726
1,796,693
49,982
161,265
133,433(221)
110,550
682,900
71,407
293,237
1,409,215
685,253

228,349
116,477
30,774
1,924,345
53,095
174,166
144,586(80)
144,675
671,71371,572
466,417
1,641,014
738,720

5,691,934

6,405,828

Operating profit

927,049

617,795

Non-operating income
Interest income
Foreign exchange gains
Commission income
Insurance claim income
Other
Total non-operating income

49
2,844
13,22023,17439,28944
59,236
10,70369,985

10,318980

13,708-26,14531,438

4,161
8,106

4,134
5,765

49,71255,047

Ordinary profit

916,626

632,732

Extraordinary income
Reversal of provision for loss on business
Compensation income

12,79725,000-37,797-Extraordinary losses
Loss on retirement of non-current assets
Settlement-related costs

21,824-

18,66775,000Total extraordinary losses
Profit before income taxes

21,824
932,599

93,667539,064

Income taxes - current
Income taxes - deferred

228,757(25,129)

338,832(155,057)

Total income taxes

203,627

183,775

Profit728,971355,289

Total selling, general and administrative expenses

Non-operating expenses
Interest expenses
Foreign exchange losses
Share of loss of entities accounted for using equity
methodCommission for syndicated loans
Other
Total non-operating expenses

Total extraordinary income

Profit attributable to non-controlling interests
Profit attributable to owners of parent
-6-

7,492

(4,434)

721,479

359,723

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

Quarterly Consolidated Statements of Comprehensive Income (For the six months)(Thousands of yen)
For the six months
ended September 30, 2022
ProfitOther comprehensive income
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

For the six months
ended September 30, 2023

728,971355,289

132,578
1,689,496

74,0801,297,205

6,972

5,765

1,829,047

1,377,051

Comprehensive income

2,558,019

1,732,340

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

2,522,312

1,720,113

35,706

12,227

Total other comprehensive income-7-Japan Medical Dynamic Marketing, INC. (7600)Summary of Financial Results for the Second 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 net
income before income taxes and others for the fiscal year including the quarter under review and multiplying net income before
income taxes and others by the estimated effective tax rate.

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

(Segment Information, Etc.)
I. First Half of the Fiscal Year Ended March 2023 (from April 1 to September 30, 2022)
1. Information on the amounts of sales and profits for each reportable segment and information on the breakdown of revenue(In thousand yen)
Reportable segment
Japan

United States

Total

Amount recorded on
Adjustment quarterly consolidated
statement of income(Note 1)
(Note 2)

Net sales
Revenue from contracts with customers

5,805,241

4,184,390

9,989,631-

9,989,631

Net sales to external customers

5,805,241

4,184,390

9,989,631-

9,989,631-

1,704,983

1,704,983(1,704,983)-

5,805,241

5,889,373

11,694,614(1,704,983)

9,989,631

463,447

389,418

852,866

74,183927,049

Inter-segment net sales or transfers
Total
Segment profit

Notes: 1. Adjustments for segment profit include ¥74,183,000 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. First Half of the Fiscal Year Ending March 2024 (from April 1 to September 30, 2023)
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 with customers

6,129,249

4,823,187

10,952,436-

10,952,436

Net sales to external customers

6,129,249

4,823,187

10,952,436-

10,952,436-

1,821,198

1,821,198(1,821,198)-

6,129,249

6,644,385

12,773,635(1,821,198)

10,952,436

466,550

92,064

558,615

59,179617,795

Inter-segment net sales or transfers
Total
Segment profit

Notes: 1. Adjustments for segment profit include ¥59,179,000 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 Second Quarter of the Fiscal Year Ending March 2024

3. Other
Sales
Sales for the first half under review by segment are as follows.
Name and item of each segment

The first half under review(From April 1, 2023
to September 30, 2023)

Compared with thesame quarter a year ago

Amount (in thousand yen)

(%)

Japan

Medical devices

6,129,249

105.6

Joint

2,361,320

106.1

Trauma2,059,708

107.1

Spine

1,635,801

102.4

Other

183,407

103.9

Subtotal

6,240,238

105.4

Sales deduction(110,988)-

United States

4,823,187

115.3

Joint

4,806,541

115.3

Spine

16,645

97.0

Total

10,952,436

109.6

Ratio (%)
Sales ratio of our own products
Notes:

Change (%)
80.1

(0.2)

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-