BML : Consolidated Earnings Report for the Third Quarter of Fiscal 2022

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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.

February 10, 2023

CONSOLIDATED EARNINGS REPORT
FOR THE THIRD QUARTER OF FISCAL 2022
	[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, Director and Senior Managing Executive Officer
	Tel: [phone]
Scheduled Date for Filing of Quarterly Report:	February 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 Third Quarter of Fiscal 2022 (April 1, 2022-December 31, 2022)

(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	%
3Q of FY2022	123,935		(9.3)	20,430	(42.5)	20,583	(44.0)	13,341	(44.5)
3Q of FY2021	136,710		39.1	35,517	178.7	36,788	178.3	24,054	178.1

(Note) Comprehensive income: 3Q of FY2022 ¥13,603 million / (44.8)%	3Q of FY2021 ¥24,640 million / 179.2 %
		Basic earnings per share		Diluted earnings per share
		Yen		Yen
	3Q of FY2022	338.51		338.31
	3Q of FY2021	592.29		591.84

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(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	¥ million	¥ million	%
As of December 31, 2022	167,286	125,796	72.7
As of March 31, 2022	179,200	121,684	64.8

(Reference) Equity capital: As of December 31, 2022 ¥121,558 million As of March 31, 2022 ¥116,163 million

2. Dividends

					Dividends per share
		First quarter-	Second quarter-	Third quarter-		Year-end		Full year
		end		end	end
		Yen		Yen	Yen		Yen		Yen
	FY2021	―	35.00	―		85.00	120.00
	FY2022	―	40.00	―
	FY2022						60.00	100.00
	(forecast)
(Note) Revision of dividend projection from recently announced figures: Yes

3. Consolidated Cumulative Earnings Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022-March 31, 2023)

						(%	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	154,000	(17.2)	22,000	(55.0)	22,500	(55.9)	14,500	(57.0)	368.19

(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
3. 1. Changes in accounting policies in conjunction with revisions to accounting standards: Yes
   2. Other changes: None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of outstanding shares (common shares)
   a. Number of outstanding shares at the end of the period (treasury shares included)

	As of December 31, 2022	42,613,626	As of March 31, 2022	43,514,726
b. Number of treasury shares at the end of the period
	As of December 31, 2022	3,333,964	As of March 31, 2022	3,586,202
c. Average number of shares during the period
	3Q ended December 31, 2022	39,412,158	3Q ended December 31, 2021	40,613,111

• 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 nine months of the consolidated fiscal year under review, the Japanese economy showed signs of a gradual recovery on the back of various policy measures under the "new normal." However, the outlook remained uncertain, requiring careful monitoring of the effect of factors such as a downturn in overseas economies against the backdrop of monetary policy tightening around the world, price inflation, supply-side restrictions, and movements in financial and capital markets.

Under these economic conditions, the operating environment remained challenging for the contract clinical testing business, which was faced with a lackluster trend in the number of people who sought medical care, in addition to the impact of a revision of medical service fees, while competition with peer companies continued.

In these conditions, net sales for the first nine months of the fiscal year under review were ¥123,935 million, a decrease of 9.3% year on year, and operating profit was ¥20,430 million, a decrease of 42.5% year on year. Ordinary profit was ¥20,583 million, a decrease of 44.0% year on year, and profit attributable to owners of parent was ¥13,341 million, a decrease of 44.5 % year on year. Although testing numbers within existing testing increased for the BML Group, both net sales and profit decreased due to a reduction in medical service fees for testing related to COVID-19.

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 reduction in medical service fees for testing related to COVID-19, net sales in the clinical testing business declined 10.3% year on year.

In the food hygiene business, areas including food consulting and microbe testing grew due to the relaxation of restrictions on socioeconomic activity and lifting of restrictions on storefront activities in the restaurant industry and elsewhere. As a result, net sales increased by 6.4% year on year.

As a result of the above, net sales in the testing business overall decreased by 9.9%.

In the medical informatics business, net sales increased by 8.5% year on year. This reflected progress made generally as planned in sales of the cloud-based electronic patient chart system, which was released in April 2022, combined with strong orders received for the online health insurance qualification check function. Maintenance sales were also solid, due to an increase in the number of units installed.

In other businesses, the dispensing pharmacy business was affected by a revision of medical service fees (reduction in drug prices), and net sales recorded a decrease of 0.2% year on year.

1. Financial position
   Assets, Liabilities and Net Assets
   At the end of the third quarter of the consolidated fiscal year under review, total assets amounted to ¥167,286 million, an ¥11,914 million decrease over the end of the previous fiscal year, net assets

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totaled ¥125,796 million, up ¥4,112 million over the end of the previous fiscal year, and the equity ratio was 72.7%, a 7.8 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, cash and deposits decreased by ¥7,195 million and notes and accounts receivable-trade decreased by ¥6,140 million. In the liabilities section, under current liabilities, income taxes payable decreased by ¥12,397 million. In the net assets section, retained earnings increased by ¥5,683 million.

1. Consolidated earnings forecasts and others

1. Full-yearconsolidated earnings forecasts

The Company has not revised its forecasts announced on November 11, 2022.

2) Revisions to dividend forecasts

Revision of figures in dividend forecasts for the year ending March 31, 2023

		Dividends per share
	Second quarter-end	Year-end	Full year
	Yen	Yen	Yen
Previous forecast	40.00	40.00	80.00
(announced on May 13,
2022)
Revised forecast	―	60.00	100.00
(Ordinary dividend: 40.00)	(Ordinary dividend: 80.00)
		(Special dividend: 20.00)	(Special dividend: 20.00)
Current fiscal year results	40.00	―	―
(Reference) Previous fiscal	35.00	85.00	120.00
year results (Year ended	(Ordinary dividend: 35.00)	(Ordinary dividend: 70.00)
March 31, 2022)		(Special dividend: 50.00)	(Special dividend: 50.00)

Reasons for revision of the dividend forecasts

The Company regards the appropriate return of profits to shareholders as a key management issue, and upholds the basic policy of maintaining and continuing stable dividends.

The Company has reviewed the year-end dividend based on the Company's consolidated results and progress during the first nine months of the consolidated fiscal year, and has determined to revise the dividend forecasts to reflect an ordinary dividend of 40.00 yen and an additional special dividend of 20.00 yen, for a total year-end dividend of 60.00 yen per share.

• The above forecasts are based on judgments made in light of information available as of the date of publication of this document. Actual results may differ from the expected figures due to a variety of factors in the future.

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