Financial Summary for the First Quarter of the Fiscal Year Ending August 2026 [Japanese GAAP] (Consolidated)

Overview of Business Results

In the first quarter of the fiscal year ending August 2026, net sales amounted to 7,828 million yen (2.3% year-over-year increase), operating income was 2,255 million yen (7.0% increase), ordinary income was 2,686 million yen (16.9% increase), and net income attributable to owners of parent for the quarter was 1,896 million yen (18.6% increase), achieving both higher revenues and profits. Key factors included increased sales of Aireless Needle-related products mainly in Asia, centered on China and Thailand; stable sales of surgical-related products in Europe and Japan; resumption of sales of diamond burs in China; and increased orders from major customers of the German subsidiary MMG. Selling, general and administrative expenses rose only 0.3% year-over-year, contributing to the increase in operating income.

Performance by Business Segment

Sales of surgical-related products were 2,446 million yen (0.2% year-over-year increase), with segment income of 827 million yen (1.4% decrease). While sales of ophthalmic knives remained stable in Europe and Japan, some inventory adjustments occurred due to medical cost policies in China. Aireless Needle-related products posted 3,006 million yen in sales (5.7% increase) and segment income of 1,106 million yen (5.8% increase), driven by large orders mainly from China and Thailand, achieving growth in both revenue and profit. Dental-related products recorded sales of 2,375 million yen (0.3% increase) and segment income of 322 million yen (44.7% increase), with profit recovering significantly mainly due to the restart of diamond bur sales in China and resolution of settlement bonus effects.

Overview of Financial Position

Total assets increased by 1,591 million yen from the previous consolidated fiscal year-end to 59,579 million yen, and net assets rose by 1,127 million yen to 54,689 million yen. The increase was mainly due to higher current assets, primarily cash and deposits. Liabilities increased by 463 million yen to 4,889 million yen. The equity ratio remained at a high level of 91.8%.

Outlook

The consolidated earnings forecast for the fiscal year ending August 2026 anticipates net sales of 32,800 million yen (9.4% year-over-year increase), operating income of 9,200 million yen (12.3% increase), ordinary income of 8,950 million yen (8.2% increase), and net income attributable to owners of parent of 6,450 million yen (38.9% increase). There are no revisions based on the first quarter results. The plan factors in recovery of diamond bur products in China and expansion in the European market.