Consolidated Financial Results for the Three Months Ended June 30, 2025

July 31, 2025

Company name: Japan Lifeline Co., Ltd. Listing: Tokyo Stock Exchange Securities code: 7575

URL: https://www.japanlifeline.com/ Representative: Keisuke Suzuki, President and CEO

Inquiries: Takeyoshi Egawa, Director, Executive Officer, and Chief Financial Officer Telephone: +81-3-6711-5200

Scheduled date to commence dividend payments: -

Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: Yes (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2025 (April 1, 2025-June 30, 2025)
   1. Consolidated operating results (Percentages indicate year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Net income attributable to owners of the parent
      Three months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      June 30, 2025	14,616	4.3	3,272	2.4	3,223	0.3	2,302	(1.6)
      June 30, 2024	14,010	8.2	3,194	0.6	3,215	(0.9)	2,340	0.4

      Note: Comprehensive income Three months ended June 30, 2025: ¥2,119 million [(15.9)%]

      Three months ended June 30, 2024: ¥2,519 million [3.4%]

      	Basic earnings per share	Diluted earnings per share
      Three months ended	Yen	Yen
      June 30, 2025	32.85	-
      June 30, 2024	31.95	-

   2. Consolidated financial position

   	Total assets	Total net assets	Equity ratio
   As of	Millions of yen	Millions of yen	%
   June 30, 2025	71,169	58,346	82.0
   March 31, 2025	75,123	59,914	79.8

   Reference: Equity (Shareholders' equity + Accumulated other comprehensive income)

   As of June 30, 2025: ¥58,346 million As of March 31, 2025: ¥59,914 million

2. Dividends

   	Annual dividends per share
   	Q1-end	Q2-end	Q3-end	Year-end	Total
   Fiscal year ended March 31, 2025 Fiscal year ending March 31, 2026	Yen	Yen	Yen	Yen	Yen
   	- -	0.00	-	53.00	53.00
   Fiscal year ending March 31, 2026 (forecast)		0.00	-	54.00	54.00

   Note: Revisions to the most recently announced dividends forecast: None

3. Consolidated earnings forecast for the fiscal year ending March 31, 2026 (April 1, 2025-March 31, 2026)

   (Percentages indicate year-on-year changes.)

   	Net sales		Operating profit		Ordinary profit		Net income attributable to owners of the parent		Basic earnings per share
   	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
   First half	29,300	4.7	6,300	0.6	6,300	2.1	4,500	1.5	64.17
   Full year	59,300	4.8	12,900	4.7	13,000	5.4	9,350	0.3	133.30

   Note: Revisions to the most recently announced earnings forecast: None

   • Notes

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

     2. Application of accounting treatment specific to the preparation of quarterly consolidated financial statements: None

     3. Changes in accounting policies, changes in accounting estimates, and restatement

        1. Changes in accounting policies due to revisions to accounting standards and other pronouncements: None

        2. Changes in accounting policies due to reasons other than (i): None

        3. Changes in accounting estimates: None

        4. Restatement: None

     4. Number of shares issued (common stock)

        1. Total number of shares issued at the end of the period (including treasury stock)

           As of June 30, 2025	71,300,000 shares
           As of March 31, 2025	75,758,470 shares

        2. Number of shares of treasury stock at the end of the period

           As of June 30, 2025	1,185,555 shares
           As of March 31, 2025	5,661,667 shares

        3. Average number of shares outstanding during the period

           Three months ended June 30, 2025	70,102,342 shares
           Three months ended June 30, 2024	73,265,877 shares

           Note: The Company has adopted a Board Incentive Plan (BIP) trust, assuming the Company's shares held by the trust are shares of treasury stock in "(4) Number of shares issued (common stock)."

   • Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit firm: None

   • Proper use of earnings forecast, and other special matters

The forward-looking statements including earnings forecasts contained in this document are based on information currently available to the Company and certain assumptions that are deemed to be reasonable. Accordingly, the Company does not guarantee the achievement of the forecast, and actual results may differ significantly from the forecast due to various factors. For the assumptions for earnings forecasts and cautions concerning the use thereof, please refer to "1. Overview of Financial Performance, (3) Consolidated financial guidance" on page 6 of the attached materials.

Contents of Attached Materials

1. Overview of Financial Performance ..................................................................................................................................... 2

   1. Operating results ............................................................................................................................................................. 2

   2. Financial position............................................................................................................................................................ 6

   3. Consolidated financial guidance ..................................................................................................................................... 6

2. Quarterly Consolidated Financial Statements and Major Notes ........................................................................................... 7

   1. Quarterly consolidated balance sheets ............................................................................................................................ 7

   2. Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income ........... 8

   3. Notes to quarterly consolidated financial statements ...................................................................................................... 9

      Going concern assumption ........................................................................................................................................... 9

      Significant changes in shareholders' equity ................................................................................................................. 9

      Quarterly consolidated statements of cash flows.......................................................................................................... 9

      Segment information, etc. ............................................................................................................................................. 9

      Significant subsequent events ....................................................................................................................................... 9

3. Other..................................................................................................................................................................................... 10

Status of production, orders received and sales .................................................................................................................... 10

1. Overview of Financial Performance

   1. Operating results

      Forward-looking statements below are based on our judgment as of June 30, 2025.

      Business environment

      Japan Lifeline operates in the medical device sector, primarily focusing on cardiac devices for general hospitals in Japan. As Japan's population ages, the demand for medical care is rising, a trend expected to persist. However, the medical care supply is under strain, raising concerns about the sustainability of various medical services. To address this, the government is promoting working-style reform for doctors to reduce the chronic long working hours faced by medical professionals.

      In this competitive environment, it's crucial for us not only to offer effective medical devices but also to help solve broader healthcare sustainability issues. We have been tackling these challenges by leveraging its dual role as both manufacturer and distributor to build a flexible and robust product portfolio.

      Status of business

      For the three months ended June 30, 2025, we saw varied year-over-year performance across key financial metrics. Net sales increased by 4.3%, gross profit rose by 2.2%, operating profit grew by 2.4%, while net income attributable to owners of the parent decreased by 1.6%. The revision of reimbursement prices in June 2024 and the rapid adoption of Pulsed Field Ablation ("PFA"), a new treatment for arrhythmia advanced by our competitors, have led to substantial changes in the business environment surrounding us. However, we remained focused on continuously introducing competitive products and expanding new therapeutic areas, key initiatives in the medium-term management plan (from the fiscal year ended March 31, 2024 to the fiscal year ending March 31, 2028). As a result, business performance progressed largely in line with the initial guidance, delivering higher sales and increased operating profit.

      As for sales highlights, our core business largely performed steadily. Specifically, EP/Ablation recorded a 2.5% year-over-year increase in sales, supported by steady growth in case volume and strong performance of core products including intracardiac defibrillation catheters and hemostatic devices for femoral vein. Cardiovascular recorded an 8.1% year-over-year increase in sales due to market expansion of our core proprietary product Frozen Elephant Trunk (FET).

      Ongoing momentum in new therapeutic areas within high-growth businesses, combined with a broader product lineup, contributed to strong results, with Neurovascular sales up 61.9% and Gastrointestinal up 23.9%*1year-over-year.

      Cardiac Rhythm Management, positioned as a stable business, posted a 2.4% year-over-year decrease in sales, partly due to sluggish pacemaker demand.

      Selling, general and administrative expenses increased by 108 million yen year-over-year due to factors including higher personnel and research and development expenses. Nevertheless, steady sales absorbed the impact of the increased expenses. As a result, operating profit for the period under review increased 77 million yen, with the operating margin of 22.4%.

      Volatility in foreign currency exchange rates had a limited impact on our business model. This is because our third-party product purchases made in yen accounted for approximately 75% of all transactions. Additionally, we use the moving-average method for cost of sales, which smooths out the impact of any temporary increases in procurement costs over time.

      Furthermore, the tariff measures implemented by the Trump administration in the United States had minimal impact on our results, given our limited export exposure to the U.S. market.

      *1 Sales of Gastrointestinal included those from the terminated coronary intervention business; without this business, sales would have increased 29.0% year-over-year.

      Business Performance

      The earnings for the three months ended June 30, 2025 were as follows:

      (Millions of yen, unless otherwise noted)

      Product Category	Three months ended June 30, 2024		Three months ended June 30, 2025		YoY increase/ (decrease)	YoY % increase/ (decrease)
      	Amount	% of net sales	Amount	% of net sales
      (i) Net sales	14,010	100.0	14,616	100.0	605	4.3
      (ii) Gross profit	8,583	61.3	8,769	60.0	186	2.2
      (iii) Operating profit	3,194	22.8	3,272	22.4	77	2.4
      (iv) Ordinary profit	3,215	23.0	3,223	22.1	8	0.3
      (v) Net income attributable to owners of the parent	2,340	16.7	2,302	15.8	(37)	(1.6)

      1. Net sales

         Net sales were 14,616 million yen, an increase of 4.3% year-over-year. For more details, please refer to the "Sales by product" section later in this report.

      2. Gross profit

         Gross profit was 8,769 million yen, up 2.2% year-over-year. While the decline in sales prices-stemming from the revisions to the reimbursement prices in June 2024-affected results for two months, increased sales volume offset the impact.

         The gross margin reached 60.0%, a decrease of 130 bps year-over-year. In addition to the decline in sales prices noted above, the proprietary sales mix fell to 55.6%, a decrease of 260 bps year-over-year, which also affected the product mix. While sales of our proprietary esophageal temperature monitoring catheters weakened, third-party products such as Neurovascular-related items and hemostatic devices for femoral vein continued to perform well.

      3. Operating profit

         We reported operating profit of 3,272 million yen, an increase of 2.4% year-over-year, and operating margin of 22.4% (a decrease of 40 bps year-over-year). Selling, general and administrative expenses increased by 108 million yen year-over-year. The main reasons for the increase are as follows:

         • A one-time provision of allowance for doubtful accounts recorded for the same period a year ago

         • Higher personnel expenses from salary increases

         • An increase in research and development expenses related to the development of PFA systems

         • An increase in sales-related expenses due to higher business activity

      4. Ordinary profit

         Ordinary profit was 3,223 million yen, up 0.3% year-over-year. Non-operating income totaled 28 million yen, including interest income and dividend income. Non-operating expenses of 77 million yen included foreign exchange losses and interest expenses.

      5. Net income attributable to owners of the parent

Net income attributable to owners of the parent was 2,302 million yen, marking a 1.6% decrease year-over-year. The income tax burden was 28.0%, up 60 bps.