FINDEX : Consolidated Financial Results_2022Q2_Findex

		Consolidated Financial Results [Japanese GAAP]
		for the Second Quarter of the Fiscal Year Ending December 31, 2022
FINDEX Inc				August 9th, 2022
Stock code:	3469	Stock Exchange Listing:	Tokyo
URL:		http://findex.co.jp/en/index.html	Telephone:	[phone]
Representative:		Teruo Aibara, President & CEO
For inquiries:		Atsushi Fujita, Director and Head of Administration
Scheduled date to submit statutory quarterly financial report:	August 9, 2022
Scheduled date of starting payment of dividend:		September 9,2022
Availability of supplementary explanatory material on quarterly results:	N/A
Quarterly results briefing:		Yes for analyst

1. Consolidated Financial Results for the Six Months Ended June 30, 2022 (From January 1, 2022, to June 30, 2022)

*Figures are rounded down to the nearest million yen, except share and per share data *" %" indicates year-on-year changes from the previous corresponding period

(1) Consolidated Operating Results（Cumulative）

								Net income
	Revenue		Operating income	Ordinary income	attributable to owners
		of the parent
								company
	(JPY MM)		%	(JPY MM)	%	(JPY MM)	%	(JPY MM)		%
FY2022 2Q	2,233		(7.1)	455	(6.8)	481	(4.7)	319		(6.1)
FY2021 2Q	2,405		6.4	488	(11.6)	505	(9.0)	340		(9.3)
(Note) Comprehensive income: FY2022 2Q: 321 million yen [(5.4%)], FY2021 2Q: 339 million yen [(9.5%)]
	Basic earnings	Diluted earnings
	per share	per share
FY2022 2Q	(JPY)		(JPY)
		12.49		-
FY2021 2Q			13.30		-

(Note) No statement is indicated above for the number of diluted EPS because there were not any financial instruments which has dilutive effect on common stocks outstanding.

(2) Consolidated Financial Position

	Total assets	Net assets	Net assets ratio	BPS（Book-value
	Per Share）
As of the end of	（JPY MM）	（JPY MM）	％	（JPY）
FY2022 2Q	4,628	3,706	79.9	144.31
FY2021 4Q	4,556	3,512	76.9	136.84

(Ref.) Equity amount: FY2022 2Q: 3,697 million yen, FY2021 4Q: 3,505 million yen.

2. Dividends

		Annual cash dividends per share
	1st quarter	2nd quarter	3rd quarter	Year-end	Total
FY2021 4Q	（JPY）	（JPY）	（JPY）	（JPY）	（JPY）
－	2.50	－	6.00	8.50
ended Dec. 31, 2021
FY2022 2Q	－	3.00
ended Dec. 31, 2022
FY2022 4Q
ending Dec. 31, 2022			－	6.50	9.50
(Forecast)

(Note) Revisions to the dividends forecast since the latest announcement: None

3. Forecast for the Fiscal Year Ending December 31, 2022 (From Jan. 1, 2022, to Dec.31, 2022)

• Figures are rounded down to the nearest million yen, except share and per share data
• " %" indicates year-on-year changes from the previous corresponding period

									Net income
	Revenue	Operating	Ordinary	attributable to	Basic Earnings
	Income		Income		owners of the	Per Share
									parent company
	(JPY MM)	%	(JPY MM)		%	(JPY MM)		%	(JPY MM)	%	(JPY)
FY2022 4Q	4,937	(0.6)	1,085		17.8	1,091		15.5	716	12.6	27.96
(Full year)
(Note) Revisions to the forecast since the latest announcement: None

• Notes;

(1) Changes in Significant Subsidiaries during the Current Quarter

Changes in specified subsidiaries that caused a change in the scope of consolidation: None Newly included companies: None

Newly excluded companies: None

1. Simplified Accounting Procedures and Specific Accounting Procedures: None
2. Changes in Accounting Policies and Accounting Estimates
3. 1. Changes in accounting policies as required by newly promulgated account pronouncement: Yes
   2. Changes other than (i) above: None
   3. Changes in accounting estimates: None

(iv) Restatement: None

(Note)For more detailed illustration, please refer to "2. Quarterly Consolidated Financial Statements and Notes (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 10 of the attached document.

(4) Number of Shares Outstanding (Ordinary Shares)

	FY2022 2Q	FY2021 4Q
	(As of Jun. 30, 2022)	(As of Dec.31, 2021)
Number of shares outstanding at the end of the	26,608,800	26,608,800
period (treasury shares included)
Number of treasury shares at the end of the	990,575	995,175
period
	FY2022 2Q	FY2021 2Q
	(From Jan.1, 2022,	(From Jan.1,2021,
	to Jun. 30, 2022)	to Jun. 30, 2021)
Average number of shares during 2Q	25,614,852	25,606,230

(Note) The number of treasury stock at the end of the period includes our shares held by Japan Custody Bank, Ltd. (Trust Account E). (164,200 shares for FY2022 2Q, 168,800 shares for FY2021 4Q)

Also, our shares held by Japan Custody Bank, Ltd. (Trust Account E) are included in the treasury stock deducted in the calculation of the average number of shares during the period. (167,573 shares for FY2022 2Q, 176,195 shares for FY2021 2Q)

• This quarterly financial results report is out scope of the quarterly review by a certified public accountant nor audit firm.
• Explanation on appropriate use of performance forecasts and other special notes.

The performance forecast described in this report are based on information that is available to the Group, as well as certain assumptions and estimates that are deemed to be reasonable, and we make no assurance that such descriptions prove to be correct. Actual figures may significantly differ due to various factors.

Table of Contents

1. Status of the Group
2. 1. Business Overview and Results for the Second Fiscal Quarter………………………………….…...... 2
   2. Explanation on the Financial Position …………………………………………………………………. 5
   3. Explanation on Future Performance Forecast …………………………………………………………. 5
3. Quarterly Financial Statements and Notes

(1) Quarterly Consolidated Balance Sheet …………………………………………………………………	6
(2) Quarterly Consolidated Statement of Income and Comprehensive Income
Quarterly Consolidated Statement of Income, Cumulative……………………………………………	7
Quarterly Consolidated Statement of Comprehensive Income, Cumulative ………………………….	8
(3) Quarterly Consolidated Cash Flows ……………………………………………………………………	9
(4) Notes to Quarterly Consolidated Financial Statement
Note on Going Concern ……………………………………………………………………………….	10
Note on Significant Change in Equity Capital ………………………………………………………... 10
Changes in Accounting Policies ……………………………………………………………………….	10
Application of Accounting Standard for Fair Value Measurement, etc..……………………………	10
Additional Information ………………………………………………………………………………..	10
Segment Information etc.……………………………………………………………………………… 11
Revenue Recognition …………………………………………………………………………………. 12
Significant Subsequent Event………………………………………………………………………….	12
3. Supplementary Information ……………………………………………………………………………….	13

- 1 -

1. Status of the Group

1. Business Overview and Results for the Second Fiscal Quarter

The Group addresses wide range of medical industry needs and develops the best-in-class and highly scalable integrated medical solutions, from comprehensive medical systems to medical equipment, and delivers to large hospitals and small- and medium-sized healthcare organizations nationwide. Also, leveraging our technologies and reputation, the Group also proposes and implements our office systems to ministries, local governments, and public corporations. Further, unlocking the future, the Group has already embarked on emerging area, such as health tech and medical cloud computing.

Due to the impact of the novel coronavirus and emerging variants (hereafter referred to as "COVID-19") pandemic, looking to the future, utilization of Information and Communication Technology (hereafter, referred to as "ICT")) and artificial intelligence (hereafter, referred to as "AI"), non-contact medical care has been more widespread than ever, including the online diagnoses and the medical robots.

We've witnessed incredible technological advances in medical industry and the solutions that support it, and as the Japanese government has designated 2022 as the first year of medical DX (Digital Transformation), announcing that industry, government, and academia will work together to make great strides in digitizing healthcare data and to promote the utilization of medical big data, initiatives are gaining momentum in this area toward, such as harnessing real-world evidence that accelerates the discovery and development of new therapies. Accordingly, the healthcare organizations are further encouraged and expected to adopt the state-of-the-art healthcare IT systems.

In this business environment, revenue was 2,233,641 thousand yen for the second quarter (January 1, 2022, to June 30, 2022), a decrease of 7.1% compared to the same period of previous fiscal year. Operating income decreased by6.8% to 455,696 thousand yen, ordinary income decreased by 4.7% to 481,236 thousand yen, and net income attributable to owners of the parent decreased by 6.1% to 319,996 thousand yen, respectively.

Compared to the annual forecast, the progress of second quarter was 45.2% for revenue, 42.0% for operating income, 44.1% for ordinary income, and 44.7% for net income attributable to shareholders of the parent company, respectively.

The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020.) has been applied from the first quarter of the current fiscal year and the impact of the on the quarterly consolidated financial statements was not material.

For more detailed illustration, please refer to "2. Quarterly Consolidated Financial Statements and Notes (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies) and (Segment Information) 2. Matters regarding the change in the reporting segments, etc."

The COVID-19 pandemic and efforts to control its spread have had a significant, ongoing adverse impact on economic activities and daily life as well as the Group's operations and the operations of the Group's healthcare clients. While demand for system upgrades remained stable, because our hospital and other healthcare provider clients have understandably prioritized their resources, capacity and staff as the COVID-19 outbreak continues to strain their organizations, the prolonged outbreak of COVID-19 is changing healthcare organizations' willingness to system investment and their acceptance of new systems.

If any changes in performance are expected, we will appropriately disclose them in a timely manner.

Effective on July 1, 2022, EMC Healthcare Co., Ltd (hereafter referred to as "EMCH"), formerly our consolidated subsidiary, has become an equity method affiliate of the Company because of the exercise of stock options (stock acquisition rights) by directors and employees of EMCH. Still, we are further committed to working with EMCH as its shareholder to enhance its corporate value.

The impact of this event on our performance for the fiscal year ending December 31, 2022, is expected to be minimal.

In the Group's efforts to foster ESG management, the Group conduct "as is" analysis, and discuss the "to be" ESG structure that we should aim for. As one of our initiatives, we actively respond to the Carbon Disclosure Project.

We will fulfill our social responsibility as a company that helps healthcare organizations advance the quality and efficiency of their healthcare and achieve people's healthier life. Built on our philosophy "as an R&D-driven company, continues to pursue new ideas and technologies, toward prosperous society", we will continuously take thorough measures to prevent infection throughout the Group and ensure the safety of our stakeholders.

- 2 -