BML,INC. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥75.63B
• Operating Income: ¥5.92B
• Net Income: ¥3.56B
• EPS: ¥109.38

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

BML (4694) delivered a solid FY2026 Q2 performance with revenue of ¥75.6bn, up 6.0% YoY, and operating income of ¥5.92bn, up 14.4% YoY, indicating positive operating leverage. Gross profit was ¥23.7bn, implying a gross margin of 31.3%, supporting a healthy margin structure for a clinical testing/services model. Ordinary income reached ¥6.12bn, exceeding operating income by ¥0.20bn, reflecting net non-operating gains despite ¥57m in interest expense. Net income grew 23.1% YoY to ¥4.22bn, pushing net margin to 5.58%. EBITDA was ¥9.29bn (12.3% EBITDA margin), offering ample coverage for non-cash charges (¥3.37bn in depreciation and amortization). DuPont analysis shows net margin of 5.58%, asset turnover of 0.435x, and financial leverage of 1.34x, resulting in ROE of 3.25%, which is modest given the strong balance sheet. The operating margin of 7.82% (¥5.915bn/¥75.628bn) indicates improvement versus revenue growth, suggesting disciplined cost management and/or favorable mix. Liquidity is strong: current assets of ¥102.3bn vs current liabilities of ¥37.6bn deliver a current ratio of 272% and quick ratio of 271%, underpinned by low inventories (¥0.25bn). The capital structure is conservative with total liabilities of ¥43.7bn against equity of ¥130.0bn (liabilities-to-equity 0.34x), implying an equity ratio around the high 70% range based on disclosed assets and equity. Operating cash flow was robust at ¥9.39bn, 2.22x net income, pointing to high earnings quality and good cash conversion. Investing cash flow is shown as ¥0 and cash & equivalents are shown as ¥0; per instruction, zeros represent non-disclosure rather than actual zero balances, so cash and capex levels cannot be precisely assessed from this dataset. Financing cash flow was an outflow of ¥2.58bn, consistent with balance sheet conservatism (e.g., debt reduction, dividends, or share-related payments), though exact components are not disclosed. EPS was ¥109.38; share count and BVPS were not disclosed in this dataset, so per-share valuation and capital efficiency cannot be cross-checked. The effective tax burden, based on net income and disclosed income taxes, is approximately 29–30%, even though the “Effective Tax Rate” metric field shows 0.0% due to non-disclosure formatting. Overall, BML’s Q2 shows resilient top-line growth, margin expansion, strong liquidity, and high cash conversion, offset by modest ROE reflective of a large equity base. Data limitations around cash, investing cash flows, and per-share equity metrics constrain depth of dividend and FCF conclusions, but underlying fundamentals appear solid.

Profitability Analysis

ROE_decomposition: DuPont: Net margin 5.58% × Asset turnover 0.435 × Financial leverage 1.34 = ROE 3.25% (matches reported). Modest ROE is driven more by conservative leverage than by weak profitability. margin_quality: Gross margin 31.3% (¥23.7bn/¥75.6bn) supports a stable service margin profile. Operating margin 7.82% (¥5.915bn/¥75.628bn) and net margin 5.58% (¥4.219bn/¥75.628bn) indicate disciplined opex and manageable non-operating items. Ordinary income exceeds operating income by ~¥0.20bn, suggesting positive non-operating balance (e.g., financial income or other gains) even after ¥57m interest expense. operating_leverage: Revenue grew 6.0% YoY while operating income rose 14.4% YoY, evidencing positive operating leverage (margin expansion). EBITDA margin at 12.3% vs operating margin at 7.8% shows a ~450bp D&A gap, consistent with a capital-intensive lab network but still providing ample buffer for reinvestment.

Growth Assessment

revenue_sustainability: Top-line growth of 6.0% YoY appears steady for a mature diagnostics/services franchise, likely driven by test volume growth and/or mix improvements. With inventories immaterial (¥0.25bn), revenue is not inventory-led, supporting quality of reported sales. profit_quality: Net income rose 23.1% YoY to ¥4.22bn, outpacing revenue, implying improved mix and operating efficiency. Ordinary income (¥6.12bn) benefitted modestly from non-operating items; core profitability remains the main driver. outlook: If current demand trends persist and price/mix holds, operating leverage could continue to support earnings growth. Key swing factors include reimbursement revisions, personnel cost inflation, and the normalization of any post-pandemic testing mix.

Financial Health

liquidity: Current assets ¥102.3bn vs current liabilities ¥37.6bn → current ratio 272%; quick ratio 271% given minimal inventories. Working capital stands at ¥64.7bn, indicating ample headroom for operations and payables cycles. solvency: Total liabilities ¥43.7bn against equity ¥130.0bn implies low leverage (liabilities/equity 0.34x). Based on disclosed totals, equity ratio approximates 74.8% (¥130.0bn/¥173.8bn), despite the reported field showing 0.0% due to non-disclosure formatting. capital_structure: Interest expense was only ¥57m, and interest coverage using operating income is 103.8x, confirming negligible financial risk. Financing cash outflows of ¥2.58bn point to balance sheet prudence (de-leveraging or shareholder returns), though the components are not itemized.

Cash Flow Quality

earnings_quality: OCF of ¥9.39bn is 2.22x net income, indicating strong cash conversion and limited accrual risk in the period. FCF_analysis: Investing CF is shown as ¥0 (non-disclosed), so statutory FCF cannot be derived from this dataset. As a sensitivity, if maintenance capex approximated D&A (¥3.37bn), an indicative FCF proxy could be OCF minus assumed capex ≈ ¥6.0bn, but this is assumption-based and not a substitute for disclosed capex. working_capital: High OCF relative to net income suggests favorable working capital movements or disciplined receivables collection. With current assets of ¥102.3bn and minimal inventories, receivables and other current assets likely dominate WC dynamics (detailed breakdown not disclosed).

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio show as 0.00; per instruction, treat zeros as non-disclosed. With EPS of ¥109.38 and strong OCF, capacity for distributions exists, but actual policy cannot be inferred from this dataset. FCF_coverage: FCF is not determinable due to non-disclosed investing cash flows. On an illustrative basis only (if capex ≈ D&A), OCF would cover such capex with a comfortable buffer; however, this is not a reported figure. policy_outlook: Given low leverage and robust liquidity, dividend capacity appears strong, but without disclosed DPS history or capex plans, sustainability and trajectory cannot be assessed conclusively.

Risk Assessment

Business Risks:

• Reimbursement price cuts and periodic fee schedule revisions affecting test pricing
• Volume fluctuations due to epidemiology (e.g., post-pandemic normalization of infectious disease testing)
• Personnel cost inflation and technician shortages impacting margins and capacity
• Technology and equipment obsolescence requiring ongoing capex
• Customer concentration in hospital/clinic networks and competitive tendering pressures
• Regulatory compliance and quality control risks in clinical testing operations
• Data security and patient information protection risks

Financial Risks:

• Potential increases in capex not visible in the current dataset (investing CF not disclosed)
• Reimbursement delays impacting receivables and cash conversion cycles
• Exposure to interest rate changes is limited but not zero (albeit interest expense is small at ¥57m)
• Tax rate variability around ~30% affecting net income sensitivity

Key Concerns:

• Modest ROE (3.25%) relative to a large equity base, even with good profitability
• Lack of visibility on capex and cash balance constrains FCF and dividend analysis
• Sensitivity to reimbursement and wage inflation on operating margin (7.8%)

Investment Implications

Key Takeaways:

• Top-line up 6.0% YoY with operating income up 14.4% indicates healthy operating leverage
• Margins are solid: gross 31.3%, operating 7.8%, EBITDA 12.3%
• Earnings quality strong with OCF/NI at 2.22x
• Balance sheet conservative: liabilities/equity 0.34x, interest coverage 103.8x
• ROE at 3.25% is modest due to low leverage and sizable equity base
• Limited visibility on cash and capex due to non-disclosed items; FCF cannot be confirmed

Metrics to Watch:

• Test volume trends and price/mix changes impacting revenue growth
• Operating margin progression and personnel cost ratio
• OCF/NI and days sales outstanding to monitor cash conversion
• Capex disclosures and investing cash flows to refine FCF view
• Non-operating income/expense volatility affecting ordinary income
• Policy disclosures on dividends and capital allocation

Relative Positioning: Within Japan’s clinical testing/services peer set, the company exhibits strong liquidity, very low leverage, high interest coverage, and an operating margin in the high single digits, positioning it as financially conservative with stable profitability but modest ROE.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis