Consolidated Financial Results for FY2024

Summary of Consolidated Financial Results for the Fiscal Year Ended August 31, 2024 (Based on Japanese GAAP)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the fiscal year ended August 31, 2024 (from September 1, 2023 to August 31, 2024)

(3) Consolidated cash flows

MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

• Attached Materials Index

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

1. Overview of business results

(1) Explanation of operating results

The recent global situation remained uncertain against the backdrop of prolonged geopolitical issues in Ukraine and the Middle East. In terms of financial conditions, interest rates were lowered in the United States and Europe due to calming inflation and concerns about economic recession, while in Japan, movements to normalize financial conditions, such as lifting the negative interest rate policy, affected stock markets and foreign exchange rates. In the real economy, although there are concerns particularly about the slowdown in China, expectations remain high for economic growth in India and ASEAN countries. While the healthcare and medical device industry, which our Group is a part of, are being affected by these external conditions, expectations for high- quality medical care are rising due to factors such as the aging population and development of IT technology. In the medium-tolong-term, we expect business opportunities to increase and the competitive environment to intensify.

Under such circumstances, the Group aims to contribute to the well-being of people around the world by providing our products worldwide, based on our commitment "The Best Quality in the World, to the World." To achieve further growth, we have started our medium-term management plan from the fiscal year ended August 31, 2022, and are engaged in realizing our corporate philosophy and evolve to "a true global company" by dramatically evolving and transforming our platforms in sales, production, and development functions.

The following is a summary of important measures and initiatives in line with the medium-term management plan that are worthy of special mention.

Global business expansion

MANI MEDICAL DEVICE MALAYSIA SDN. BHD., which is a sales subsidiary established in Malaysia as our new base, began full-scale marketing activities in November 2023. The Company will actively conduct marketing activities for Dental products and Surgical products in emerging countries, mainly in the Southeast Asia region. In September 2024, a new sales subsidiary, MANI MEDICAL AMERICA, INC., has been established in North America, and preparations are underway for the start of full-scale marketing activities. We will promote regional-oriented sales activities in medically advanced countries and expand our business in the North American market. In addition, our German subsidiary MANI MEDICAL GERMANY GmbH (hereinafter referred to as MMG), relocated to the new Head Office Factory in September 2023, and production activities have begun. Going forward, MMG will continue to increase manufacturing capacity of dental restoration materials1 and promote sales expansion in Europe, North America and Asia.

Product development to compete globally

With regard to product development with key opinion leaders (KOLs) around the world, we have launched our three key development products in the fiscal year ended August 31, 2023. The key development products are JIZAI2, a NiTi rotary file for dental root canal treatment, MANI EG Composite, a dental restoration material, and MANI Micro Forceps3, a vitreous forceps for ophthalmic surgery. In the fiscal year ended August 2024, we expanded the JIZAI product lineup to meet KOL's needs to expand the quality and breadth of dental root canal treatment. On the other hand, we have also been developing products in the direction of applying existing products and technologies, such as developing an eyeless needle using our proprietary stainless steel material "MANI hard-fiber stainless steel" in a form suitable for robotic surgery.

Enhance the global production system with our Smart Factory4

With the aim "to establish a global production system," the construction of the Smart Factory in Japan has begun in October 2023. The Smart Factory is positioned as the first "pilot factory" for future overseas expansion of mass production technology of our new products and next-generation automated production lines for mainstay existing products. With this Smart Factory, we will aim to expand sales globally while saving labor in manufacturing and lowering the cost of products. In particular, we are preparing for the mass production of one of our key products, "JIZAI," a NiTi rotary file for dental root canal treatment, and ophthalmic knives for cataract surgery. Furthermore, we will expand our existing factory in Vietnam to increase production capacity and strengthen BCP (business continuity plan).

Initiatives for future growth

In addition to the progress of the measures stated above, considering the changes in the business environment surrounding our Group from a more medium- to long-term perspective, we recognize the need to further accelerate the platform reforms in the development, production, and sales functions that we have built up to now. Therefore, we have set "management platform reform," which means the strengthening and transformation of our organizational structure and business operations, as a key issue and will begin activities from the fiscal year ending August 31, 2025. In addition to implementing company-wide organizational reform, we will aim to steadily implement our medium-term management plan with a new management team under the leadership of Masaya Watanabe, currently an outside director, as President and Representative Executive Officer starting from November 2024. For details, please refer to the notice "Notice Regarding Change of President and Representative Executive Officer," which was released on July 11, 2024.

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

We will continue to aim to enhance corporate value through growth strategies based on our medium-term management plan

(References)

1. An artificial resin material that is used for treatments to restore the shape of a tooth by filling the deficit portion (dental restoration treatment) and treatments to enhance dental aesthetics (aesthetic dental treatment).
2. A flexible nickel titanium dental endodontic instrument used to treat an infected dental root canal in an endodontic treatment, which is one of the treatments for the dental nervous system known as pulp.
3. An ophthalmic surgical instrument that is used to treat the fundus in vitrectomy, one of the treatment methods for ocular diseases, such as retinal detachment and diabetic proliferative retinopathy.
4. Total investment for the Smart Factory will be ¥10.5 billion (breakdown: ¥8.4 billion for building construction, ¥1.1 billion for the "JIZAI" mass production line, and ¥1.0 billion for the ophthalmic knife mass production line).

Operating results for the fiscal year ended August 31, 2024

Net sales were ¥28,513 million (up 16.4% year on year), due to increase in sales mainly in Asia, North America and Europe. The increase in overseas sales caused by yen depreciation have also contributed significantly to net sales. Cost of sales were ¥10,616 million (up 17.1% year on year) due to an increase in manufacturing costs at overseas subsidiaries. Selling, general and administrative expenses were ¥9,505 million (up 16.2% year on year) due to an increase in sales promotion costs resulting from enhanced marketing activities and higher personnel costs at the Head Office in Japan. Despite there was an increase in cost of sales and selling, general and administrative expenses, our operating income was ¥8,392 million (up 15.8% year on year) due to sales growth. Ordinary income was ¥8,464 million (up 5.9% year on year) and profit attributable to owners of parent was ¥6,276 million (up 5.4% year on year) due to an increase in operating income and foreign exchange gains.

The following is an overview of financial results by segment. Segment sales figures are those from external customers.

(Surgical products)

The segment sales were ¥8,152 million (up 20.2% year on year) and segment income was ¥2,640 million (up 24.5% year on year). Segment sales and income have increased due to an increase in demand for ophthalmic knives, which are used in cataract surgery, mainly in Asia, particularly in China, Europe and North America from the previous fiscal year.

(Eyeless Needle products)

The segment sales were ¥10,222 million (up 19.2% year on year) and segment income was ¥3,872 million (up 35.2% year on year). Segment sales and income have continued to increase due to an increase in orders for eyeless needles, which was caused by growing demand in Asia, particularly in China, and North America. Furthermore, from the fiscal year ended August 31, 2024, the Group has changed the method of calculating selling, general and administrative expenses by segment. As a result of this change, selling, general and administrative expenses decreased by ¥325 million. For further details, please refer to "Supplement: Change in method of calculating segment income" stated below.

(Dental products)

The segment sales were ¥10,139 million (up 11.1% year on year), and segment income was ¥1,878 million (down 16.8% year on year). Segment sales in overseas were boosted significantly by yen depreciation. In terms of sales by products, sales of dental rotary and cutting instruments (dia-burs) and dental endodontic instruments (reamers/files) were strong in Asia, particularly in China and India. On the other hand, sales of MMG products, which are mainly dental restoration materials, were weak. Segment income has decreased due to an increase in selling, general and administrative expenses resulting from active marketing activities in India and Southeast Asia. Furthermore, from the fiscal year ended August 31, 2024, the Group has changed the method of calculating selling, general and administrative expenses by segment. As a result of this change, selling, general and administrative expenses increased by ¥297 million. For further details, please refer to "Supplement: Change in method of calculating segment income" stated below.

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

1. Explanation of financial position and cash flows i). Financial position

Total assets as of the fiscal year ended August 31, 2024 stood at ¥57,177 million, an increase of ¥2,200 million from the end of the previous consolidated accounting period. This was primarily due to an increase of ¥5,252 million in non-current assets (mainly an increase in investments related to the Smart Factory of ¥5,592 million) and a decrease of ¥3,052 million in current assets (mainly a decrease in cash and deposits of ¥3,783 million due to capital expenditures related to the Smart Factory and dividend payments, while accounts receivable increased ¥636 million).

Total liabilities as of the fiscal year ended August 31, 2024 stood at ¥4,846 million, a decrease of ¥302 million from the end of the previous consolidated accounting period. This was primarily due to a decrease in current liabilities such as provision for bonuses and income taxes payable.

Total net assets as of the fiscal year ended August 31, 2024 stood at ¥52,330 million, an increase of ¥2,503 million from the end of the previous consolidated accounting period. This was primarily due to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.

ii). Cash flows

During the fiscal year ended August 31, 2024, the cash flows and factors contributing to those amounts are as follows.

(Cash flows from operating activities)

Cash inflows from operating activities were ¥7,810 million (down 2.7% year on year). This was primarily due to an increase in operating cash inflow increased profit before income taxes, despite there was an increase in cash outflow due to increased trade receivables.

(Cash flows from investing activities)

Cash outflows from investing activities were ¥6,642 million (up 65.4% year on year). This was primarily due to a cash outflow from increased purchases of property, plant and equipment related to the Smart Factory.

(Cash flows from financing activities)

Cash outflows from financing activities were ¥3,703 million (up 13.9% year on year). This was primarily due to a cash outflow from increased dividend payments.

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

(3) Future outlook

The medical instrument market is considered to be a growing market where product demand is expected to increase worldwide, backed by social conditions such as the continuing market growth in emerging countries, as well as the declining birthrate and aging population in developed countries and the increasing demand for advanced medical care such as minimally invasive medical care. On the other hand, the competitive environment is expected to intensify with the entry of new health-tech companies into the market.

In this environment, our Group will promote efforts to further enhance corporate value by integrating development, production, and sales functions for every product and product feature under our Group's basic policy of providing "The Best Quality in the World, to the World." In particular, for the fiscal year ending August 31, 2025, we recognize the aforementioned "management platform reform" as our most important task, and we will do our utmost to accomplish this task.

Assumed exchange rates

The assumed exchange rate is set at a strong yen level in consideration of the exchange rate fluctuation risks expected in 2024. (1 USD = 136.00 JPY, 1 EUR = 147.00 JPY, 1 CNY = 19.00 JPY, 1 INR = 1.60 JPY, 1 MYR = 30.00 JPY)

Our Group's overseas sales ratio is approximately 85% (as of the fiscal year ended August 31, 2024), and the appreciation of the yen is considered to be a risk for a decline in sales. On the other hand, our Group has transferred most of its manufacturing processes to Vietnam and other Southeast Asian countries. When overseas sales subsidiaries are also taken into account, cost of sales and selling, general and administrative expenses denominated in foreign currencies will decrease when the yen appreciates. As a result, we are able to mitigate the impact of exchange rate fluctuations on our business performance on the basis of gross profit and operating income. We have established a business model that can generate stable business profits.

Net sales: ¥30.2 billion (up 5.9% year on year)

Surgical products: Sales of ophthalmic knives, which are used in cataract surgery, will increase mainly in Europe, Asia and North America.

Eyeless Needle products: Sales of eyeless needles will gradually increase mainly in Asia, North America, and Europe.

Dental products: Sales of reamers/files and dia-burs will increase due to sales expansion activities in emerging markets in Asia, particularly in India. Sales of MMG products, which are mainly dental restoration materials, will increase in the European and North American markets. On the other hand, we will continue to closely monitor the risk of economic slowdown in China and its impact on medical institutions.

Cost of sales: ¥10.5 billion (down 1.1% year on year)

The cost of sales ratio will decrease due to the effects of productivity improvement initiatives, despite there will be an increase in personnel costs at overseas production subsidiaries and manufacturing costs for the Smart Factory construction.

Selling, general and administrative expenses: ¥10.8 billion (up 13.6% year on year)

Selling, general and administrative expenses will increase significantly due to an increase in expenses at overseas sales subsidiaries for the purpose of developing the Southeast Asian and North American markets, which we position as upfront investments, an increase in personnel costs associated with the strengthening of our personnel structure, and an increase in costs for strengthening research and development.

Operating income: ¥8.9 billion (up 6.1% year on year)

As described above, we expect operating income to increase at the same level as net sales.

Forecast of Consolidated Business Results

MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

(4) Basic policy on profit distribution and dividends for the current and next fiscal years

We will continue to actively return profits to shareholders by securing the internal reserves necessary for future business development and strengthening of our management structure, while promoting growth strategies that effectively utilize these reserves. Internal reserve funds will be used to invest in the Smart Factory, construction of MHC's new factory building, research and development, production facilities, and to strengthen sales and marketing activities.

Based on the consolidated results and the aforementioned policy taken into consideration, we will pay the annual dividend of ¥39 per share (interim dividend of ¥16 and year-end dividend of ¥23) for the current fiscal year.

In order to maintain the current dividend payout ratio (61.1% as of August 31, 2024) and to allocate funds to investment activities focused on future growth, we plan to pay a dividend of ¥39 per share (interim dividend of ¥16 and year-end dividend of ¥23), which is the same amount as the current fiscal year, for the next fiscal year.

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MANI, INC. (TOKYO 7730) Consolidated Financial Results of the Fiscal Year Ended August 31, 2024

2. Basic policy regarding selection of accounting standards

Our Group policy is to prepare its consolidated financial statements in accordance with Japanese GAAP for the time being, considering the comparability of the consolidated financial statements between periods and between companies.

Our Group's policy on applying International Financial Reporting Standards (IFRS) is to respond appropriately based on considerations of various conditions in Japan and overseas.

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