Net sales increased 2.6% year on year to 101.038 billion yen due mainly to the M&A activities in the Elderly Care Business in FY2022 and FY2023.

Operating profit decreased by 17.6% to 4.06 billion yen due to several factors including the increase in personnel expenses resulting from an improvement in compensation, which was planned to be higher than usual, and start-up costs for new contracts in the Medical Outsourcing Business.

EBITDA decreased by 10.1% year on year to 6.539 billion yen.

Ordinary profit decreased by 22.0% year on year to 4.081 billion yen.

Quarterly net income increased 64.7% to 4.406 billion yen. This was due to the recording of a gain on negative goodwill of 2.828 billion yen associated with the consolidation of subsidiaries, Solasto Care Co.,Ltd. and Solasto Care Network in Q1, which offset the extraordinary losses from impairment losses on non-current assets due to a consolidation of offices, and business restructuring expenses arising from the restructuring of the Smart Hospital and Education Businesses and other costs related to reorganization within the Company.

Sales in the Medical Outsourcing Business decreased 2.3% to 52.836 billion yen. Despite the favorable growth by new contracts in the contracted services and worker dispatching services, there was a decline in the sales of COVID-19 related services after the classification of COVID-19 infectious diseases has shifted to the fifth class in May 2023.
Operating profit decreased 7.7% year on year to 6.129 billion yen despite the increased profit from the sales growth in the contracted service and worker dispatching service. This was due to several factors including the decrease in profit from the declined sales in COVID-19 related services, the increase in personnel expenses resulting from the improvement of compensation which was higher than usual, start-up costs of new contracts, and an increase in the cost arising from sales supporting system associated with initiatives to shift to the next-generation operations.

In the Elderly Care Business, sales increased by 10.5% on a year on year to 40.357 billion yen due to the contributions of M&A activities and newly opened business centers in FY2022 and FY2023 including consolidation of Solasto Care and Solasto Care Network in June 2023 and Kabushikigaisha Medical Lifecare and Possible Medical Science, Ltd. in July 2023, as subsidiaries, as well as improvements have started to be seen in the number of users of day services, which were affected from the prolonged COVID-19 pandemic.
Operating profit increased 3.6% to 2.252 billion yen due mainly to the absence of the negative impact of the accounting treatment related to the Wage Improvement Support Subsidy for elderly care workers last year, although there were negative factors such as increased personnel costs following the improvement of compensation, due diligence and brokerage commission expenses associated with M&A activities, and the outbreak of seasonal influenza in addition to the COVID-19 infection situation during the third quarter.

Despite the opening of two new licensed centers in April 2023, net sales in the Children's Business decreased 0.5% year on year to 7.373 billion yen. This was mainly due to the change in fiscal year-end of Cocoro Care Plan Corporation which became a subsidiary in February 2022. Due to the change of the fiscal year-end occurred in the last fiscal year, Q1 FY2022 recorded the financial results of 5 months from February to June 2022 of the subsidiary.
Operating profit decreased 24.8% year on year to 240 million yen due to the effect of accounting treatment of fiscal year change and increased personnel expenses related to the opening of two new licensed child care centers.

At the end of the third quarter of the fiscal year under review, compared with the end of the previous fiscal year, for the Assets, total assets increased by 8.118 billion yen mainly due to an increase in property, plant and equipment such as land following M&A activities, as well as an increase in cash and deposits and accounts receivable.

For Liabilities, total liabilities increased by 6.889 billion yen due to an increase in long-term and short-term borrowings and an increase in accounts-payable and deposits-received because of social-insurance payments being carried-over to the fourth quarter due to bank holidays.

For Net Assets, net assets increased by 1.229 billion yen. Despite the payment of dividends of 1.887 million yen and buy-back of its shares of 1.318 billion yen, quarterly net income of 4.406 billion yen was recorded due mainly to a gain on negative goodwill of 2.828 billion yen associated with M&A activity.

Net cash provided by operating activities amounted to 4.555 billion yen as a result of income before income taxes and minority interests of 6.124 billion yen, reversal of non-cash items such as gain on negative goodwill, increase in accounts-payable and deposits-received because of social-insurance payments being carried-over due to bank holidays and income taxes paid. Net cash provided by operating activities was 7.788 billion yen for the same period of the previous fiscal year.

Net cash used in investing activities amounted to 2.346 billion yen due to M&A activities and purchase of non-current assets. Net cash used in investing activities was 1.552 billion yen in the same period of the previous fiscal year.

Net cash used in financing activities amounted to 173 million yen, reflecting a net inflow of 3.336 billion yen from bank loans newly borrowed and repayment of bank loans offset by cash dividends paid of 1.885 billion yen and stock-buyback of the company shares of 1.327 billion yen. Net cash used in investing activities was 3.165 billion yen in the same period of the previous fiscal year.

As a result, the balance of cash and cash equivalents at the end of the quarter was 13.892 billion yen, an increase of 2.035 billion yen from the end of the previous fiscal year.