BML : Consolidated Earnings Report for the Third Quarter of Fiscal 2021

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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 9, 2022

CONSOLIDATED EARNINGS REPORT

FOR THE THIRD QUARTER OF FISCAL 2021

[Japanese GAAP]

Company Name:	BML, Inc.
Stock Listing:	Tokyo Stock Exchange
Stock Code:	4694
URL:	http://www.bml.co.jp
Representative:	Kensuke Kondo, President and Representative Director
Contact:	Norihisa Takebe, Managing Executive Officer
	Tel: [phone]

Scheduled Date for Filing of Quarterly Report:	February 14, 2022
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 2021 (April 1, 2021-December 31, 2021)

(1) Consolidated Business Results

(% indicates year-on-year changes)

Net sales Operating income Ordinary income Profit attributable to owners of parent

	¥ million	%	¥ million		%	¥ million	%	¥ million	%
3Q of FY2021	136,710	39.1	35,517		178.7	36,788	178.3	24,054	178.1
3Q of FY2020	98,288	5.8	12,745		42.5	13,217	43.1	8,650	48.8
(Note) Comprehensive income: 3Q	of FY2021 ¥24,640 million / 179.2% 3Q of FY2020 ¥8,826 million / 40.1%
	Profit attributable to		Profit attributable to
	owners of parent per share	owners of parent per share (diluted)
			Yen				Yen
3Q of FY2021			592.29				591.84
3Q of FY2020			212.90				212.67

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(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

(¥ million)

(¥ million)

(%)

As of December 31, 2021

163,440

113,106

66.0

As of March 31, 2021

139,174

93,123

63.5

Reference: Equity capital: As of

December 31, 2021 ¥ 107,863 million As of March 31, 2021

¥88,377 million

2. Dividends

Dividends per share

First

Second

Third

Year-end

Full year

quarter-end

quarter-end

quarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal 2020

―

20.00

―

50.00

70.00

Fiscal 2021

―

35.00

―

Fiscal 2021

35.00

70.00

(forecast)

(Note) Revision

of dividend projection from recently announced figures: None

3. Consolidated cumulative earnings forecast for the fiscal year ending March 31, 2022 (April 1, 2021-March 31, 2022)

(% indicates year-on-year changes)

										Profit
							Profit		attributable to
	Net Sales	Operating income	Ordinary income	attributable to	owners of
							owners of parent	parent per
										share
	¥ million	%	¥ million	%	¥ million	%	¥ million		%	Yen
Full year	177,000	27.7	42,500	113.2	44,000	111.5	28,000		104.2	691.14
(Note) Revision from recently projected results: Yes

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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, accounting estimates and restatements

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

1. Number of outstanding stocks (common stock)
   a. Number of outstanding stocks at the end of the fiscal year (treasury shares included)

	As of December 31, 2021	44,014,726	As of March 31, 2021	44,014,726
b. Number of treasury shares at the end of period
	As of December 31, 2021		3,652,102	As of March 31, 2021	3,367,662
c. Average number of shares during the period
	3Q ended December 31, 2021		40,613,111	3Q ended December 31, 2020	40,631,343

• 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 third quarter of the consolidated fiscal year under review, the Japanese economy showed signs of recovery in some sectors amid the lingering impact of COVID-19, with gradual resumption of economic activity that was supported in part by progress in vaccinations and the effects of various government policies. The outlook, however, remains unclear given the resurgence of COVID-19 cases caused by the emergence of a new variant.

Under these circumstances, the contract clinical testing business was confronted with a lackluster trend in the number of patients due to the spread of COVID-19 but also saw an expanding market amid growth in demand for novel coronavirus-related testing. Still, the business environment remained challenging as competition with peer companies continued.

Under these conditions, both net sales and profit for the third quarter of the fiscal year under review increased significantly. Net sales were ¥136,710 million, an increase of 39.1% year on year, and operating income was ¥35,517 million, an increase of 178.7% year on year. Ordinary income increased 178.3% year on year to ¥36,788 million, and profit attributable to owners of parent increased 178.1% to ¥24,054 million.

Conditions by business segment are described below.

In the clinical testing business, the BML Group made efforts in new customer acquisition, and sought to enhance business performance by implementing marketing activities to further cultivate sales of new testing items, unique testing items, priority testing items, and others. With a solid trend in coronavirus-related testing, net sales in the clinical testing business increased by 41.5% year on year. Regarding testing for the novel coronavirus, the Group will continue to reinforce its testing system in order to be able to respond to various changes in the situation, although it is predicted that waves of COVID-19 will continue with surges in new cases followed by declines.

In the food hygiene business, net sales increased by 6.4% year on year, reflecting a recent recovery notably in the areas of food consulting and norovirus testing. The business environment, however, remains severe given the probability of a global spread of COVID-19 with the emergence of a new variant that may have such consequences as postponement or cancellation of store inspections.

As a result of the above, net sales in the testing business overall increased by 40.3% year on year. In the medical informatics business, despite restrictions on sales activities targeting new clients,

sales improved 14.1% year on year thanks to an increase in the number of requests for online certification checks and solid maintenance sales attributable to the greater number of facilities at which systems are installed. With respect to the cloud-based electronic patient chart system, release is scheduled for April 2022.

In other businesses, the dispensing pharmacy business was affected by a revision of medical service fees (reduction in drug prices), but net sales recorded an increase of 4.3% year on year reflecting a rebound in the number of outpatient visits from last year's decline caused by the spread of COVID-19.

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(2) Financial position

(a) Assets, liabilities and net assets

At the end of the third quarter of the consolidated fiscal period under review, total assets amounted to ¥163,440 million, a ¥24,265 million increase over the end of the previous fiscal year. Net assets totaled ¥113,106 million, up ¥19,982 million over the end of the previous fiscal year, and the equity ratio was 66.0%, a 2.5% increase over the end of the previous fiscal year.

Regarding the main items contributing to increases or decreases, in the assets section, under current assets, cash and deposits increased by ¥20,372 million and notes and accounts receivable-trade increased by ¥1,376 million. In the liabilities section, under current liabilities, notes and accounts payable-trade increased by ¥426 million and income taxes payable increased by ¥1,968 million. In the net assets section, retained earnings increased by ¥20,599 million.

1. Consolidated earnings forecast and others Revision of the financial results forecast
   Revision of the consolidated financial results forecast for the fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022)

					Operating		Ordinary		Profit		Net income
		Net sales			attributable to
			income		income		owners of		per share
											parent
		¥ million		¥ million		¥ million		¥ million		Yen
Previous forecast (A)	154,000		32,000		33,100		20,900		514.07
(announced on August
11, 2021)
Revised forecast (B)		177,000			42,500			44,000			28,000			691.14
Change (B-A)	23,000		10,500	10,900	7,100		―
Change (%)	14.9		32.8	32.9	34.0			―
(Reference)	138,571		19,936		20,803		13,711		337.44
Results for the fiscal year
ended March 31, 2021

Reasons for the revision of the full-year consolidated financial results forecast

With respect to consolidated earnings forecasts for the fiscal year ending March 31, 2022, we expect our consolidated performance to exceed the forecasts announced on August 11, 2021, and have thus revised the forecasts as presented above, which take into consideration the latest situation and are based on information available as of the date of publication of this document.

In the third quarter of the consolidated fiscal year under review, orders for novel coronavirus testing exceeded our projection. Looking ahead, although the number of new COVID-19 cases is expected to decline as a result of the implementation of quasi-state of emergency measures and progress in booster vaccinations, we anticipate that there will continue to be a certain level of demand for novel coronavirus testing. In light of the situation as described above, we have revised the earnings forecasts published on August 11, 2021.

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