BML : Consolidated Earnings Report for the First Quarter of Fiscal 2023

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Disclaimer: This is a Japanese-English translation of the summary of financial statements of the Company produced for your convenience. Since no auditor audited this report, officially only the Japanese version is assumed to be the summary of financial statements of the Company. This summary does not constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on these statements. Should there be any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct.

August 10, 2023

CONSOLIDATED EARNINGS REPORT
FOR THE FIRST QUARTER OF FISCAL 2023
	[Japanese GAAP]
Company Name:	BML, Inc.
Stock Listing:	Tokyo Stock Exchange
Stock Code:	4694
URL:	https://www.bml.co.jp/
Representative:	Kensuke Kondo, President and Representative Director
Contact:	Norihisa Takebe,
	Representative Director and Senior Managing Executive Officer
	Tel: [phone]
Scheduled Date for Filing of Quarterly Report:	August 14, 2023
Scheduled Date for Payment of Dividends:	-
Creation of Supplementary Explanatory Materials:	None
Holding of Explanatory Meeting:		None

(Rounded down to nearest million yen)

1. Results for the First Quarter of Fiscal 2023 (April 1, 2023-June 30, 2023)

(1) Consolidated business results

					(% indicates year-on-year changes)
	Net sales	Operating profit	Ordinary profit	Profit attributable to
	owners of parent
	¥ million	%	¥ million	%	¥ million	%	¥ million	%
1Q of FY2023	35,272	(12.9)	2,667	(61.1)	2,766	(59.9)	1,796	(62.0)
1Q of FY2022	40,478	(14.0)	6,852	(51.2)	6,893	(53.6)	4,722	(52.5)

(Note) Comprehensive income: 1Q of FY2023	¥1,813 million / (61.6)% 1Q of FY2022 ¥4,719 million / (53.3)%
		Basic earnings per share	Diluted earnings per share
			Yen	Yen
	1Q of FY2023		46.10	46.08
	1Q of FY2022		119.20	119.12

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(2) Consolidated financial position

	Total assets	Net assets
	¥ million	¥ million
As of June 30, 2023	167,033	125,823
As of March 31, 2023	168,943	126,751

Equity ratio

%

72.9

72.5

(Reference) Equity capital: As of June 30, 2023 ¥121,687 million	As of March 31, 2023	¥122,467 million
2. Dividends
					Dividends per share
		First quarter-	Second quarter-		Third quarter-		Year-end		Full year
		end		end		end
		Yen		Yen			Yen		Yen		Yen
	FY2022	―	40.00			―		60.00	100.00
	FY2023	―
	FY2023		40.00			―		40.00	80.00
	(forecast)
(Note) Revision of dividend projection from recently announced figures: None

3. Consolidated Cumulative Earnings Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023-March 31, 2024)

						(%	indicates	year-on-year changes)
									Profit
							Profit attributable	attributable to
	Net Sales	Operating profit	Ordinary profit	to owners of	owners of
							parent	parent per
									share
	¥ million	%	¥ million	%	¥ million	%	¥ million	%	Yen
Full year	135,000	(15.3)	11,500	(52.0)	11,800	(51.2)	7,600	(51.2)	194.78

(Note) Revision from recently projected results: None

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* Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries due to changes in the scope of consolidation): None

Increases: -

Decreases: -

1. Adoption of specific accounting methods in preparing quarterly financial statements: None
2. Changes in accounting policies and changes or revisions in accounting estimates

1. Changes in accounting policies in conjunction with revisions to accounting standards: None
2. Other changes: None
3. Changes in accounting estimates: None
4. Restatements: None

1. Number of outstanding shares (common shares)
   a. Number of outstanding shares at the end of the period (treasury shares included)

	As of June 30, 2023	42,294,426	As of March 31, 2023	42,613,626
b. Number of treasury shares at the end of the period
	As of June 30, 2023	3,332,564	As of March 31, 2023	3,594,264
c. Average number of shares during the period
	1Q ended June 30, 2023	38,976,237	1Q ended June 30, 2022	39,617,274

• The quarterly financial results are not subject to quarterly review by a certified public accountant or an audit firm.
• Disclaimer regarding appropriate use of forecasts and related points of note

Earnings forecasts contained in these materials are based on certain assumptions judged to be reasonable, and on the information available when the forecasts were made. However, the Company makes no guarantee that these forecasts will be achieved. Actual results may differ significantly from the forecasts due to a variety of factors. Please refer to "(3) Consolidated earnings forecasts and others" under "1. Qualitative information on operating results for quarter under review" on page 5 of this earnings report concerning financial forecasts such as the assumptions used for financial forecasts, factors that could cause these assumptions to change, and cautionary notes.

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1. Qualitative information on operating results for quarter under review

1. Operating results

In the first three months of the consolidated fiscal year under review, the Japanese economy was on a mild recovery trend led by personal consumption as economic and social activities were returning to normal amid gradual relaxation of various COVID-19-related restrictions. However, downside risks in overseas economies are increasing as central banks in the United States, Europe, and many other countries continue with monetary tightening in order to cope with global inflation caused by rising prices of natural resources and raw materials.

Under these economic conditions, the contract clinical testing business remained in a challenging environment due to continuing competition among companies, although the fiscal year under review is not a designated year for the biennial revision of medical service fees under the national health insurance (NHI) system and there are no reductions in NHI points used to set fees for clinical testing.

In these conditions, net sales for the first three months of the fiscal year under review were ¥35,272 million, a decrease of 12.9% year on year, and operating profit was ¥2,667 million, a decrease of 61.1% year on year. Ordinary profit was ¥2,766 million, a decrease of 59.9% year on year, and profit attributable to owners of parent was ¥1,796 million, a decrease of 62.0% year on year. Testing numbers and net sales within existing testing increased for the Group, but both net sales and profit decreased due to a decrease in COVID-19-related testing numbers.

Conditions by business segment are described below.

In the clinical testing business, the BML Group made efforts to acquire new customers and also to enhance business performance by implementing activities to further develop sales to existing customers of such items as new testing items, unique testing items, and priority testing items. However, due to the considerable impact of the decrease in COVID-19-related testing numbers, net sales in the clinical testing business declined 14.3% year on year.

In the food hygiene business, the pre-COVID-19 environment has been returning with relaxation of restrictions on social and economic activities. Against this background, net sales in the food hygiene business, including food consulting and microbe testing, remained firm. As a result, net sales increased by 3.5% year on year.

As a result of the above, net sales in the testing business overall decreased by 13.8%.

In the medical informatics business, net sales increased by 10.7% year on year reflecting progress made generally as planned in sales of the Company's cloud-based electronic patient chart system, as well as implementation of an online health insurance qualification check function which continued from the previous year. Maintenance sales were also solid, due to an increase in the number of units installed.

With respect to net sales in other businesses, although a revision of medical service fees (reduction in drug prices) had an impact on the dispensing pharmacy business, there was an increase in the number of prescriptions reflecting an increase in the number of pediatric patients due to spread of various infectious diseases. As a result, net sales recorded an increase of 9.1% year on year.

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(2) Financial position

Assets, Liabilities and Net Assets

At the end of the first quarter of the consolidated fiscal year under review, total assets amounted to ¥167,033 million, a ¥1,910 million decrease over the end of the previous fiscal year, net assets totaled ¥125,823 million, down ¥927 million over the end of the previous fiscal year, and the equity ratio was 72.9%, a 0.4 percentage point increase over the end of the previous fiscal year.

As for the main items contributing to an increase or decrease, in the assets section, under current assets, and total property, plant and equipment increased by ¥4,391 million whereas cash and deposits decreased by ¥6,496 million. In the liabilities section, under current liabilities, notes and accounts payable - trade decreased by ¥778 million and provision for bonuses decreased by ¥691 million. In net assets, treasury shares increased by ¥617 million, but retained earnings decreased by ¥1,337 million.

(3) Consolidated earnings forecasts and others

The Company has not changed its forecasts for consolidated results for the full year announced in the beginning of the fiscal year under review.

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