Enhancing product competitiveness and profit margins in the medical imaging business

「For the current interim accounting period, the Healthcare Solutions business reported revenue of ¥479.464 million, up 78.6% year on year, and segment profit of ¥5.416 million, compared with a loss of ¥56.624 million in the same period of the previous year.」

「For the current fiscal year, the Healthcare Solutions business reported revenue of ¥481.803 million, down 64.1% from the previous fiscal year, and a segment loss of ¥444.236 million, compared with a segment loss of ¥265.072 million in the previous fiscal year.」

「For the cumulative second quarter of the current consolidated fiscal year, the Healthcare Solutions business reported revenue of ¥268.454 million, down 71.5% year on year, and a segment loss of ¥56.659 million, compared with a loss of ¥5.160 million in the same period of the previous year.」

「For the cumulative first quarter of the current consolidated fiscal year, the Healthcare Solutions business reported revenue of ¥145.541 million, down 75.6% year on year, and a segment loss of ¥39.778 million, compared with segment profit of ¥26.106 million in the same period of the previous year.」

「For the current consolidated fiscal year, the Healthcare Solutions business reported revenue of ¥1,341.545 million, down 51.5% year on year, and a segment loss of ¥265.188 million, compared with segment profit of ¥162.331 million in the previous fiscal year.」

「For the cumulative third quarter of the current consolidated fiscal year, the Healthcare Solutions business reported revenue of ¥1,157.253 million, down 10.8% year on year, and a segment loss of ¥30.514 million, compared with segment profit of ¥52.962 million in the same period of the previous year.」

「To continue the electronic medical records business with a focus on profitability, the Company decided to transfer part of the i-HIS business assets, including development and installation work, to 株式会社ヴェリタス, hereinafter Veritas. For the future development of the electronic medical records business, the Company plans to focus exclusively on sales activities and change its commercial model so that it receives part of the order value from Veritas as a customer referral fee when a project is won.」

「For the cumulative first quarter of the current consolidated fiscal year, the Healthcare Solutions business reported revenue of ¥596.162 million and segment profit of ¥23.602 million.」

「For the cumulative second quarter of the current fiscal year, the Healthcare Solutions business reported revenue of ¥729.159 million, up 14.8% year on year, and segment profit of ¥48.681 million, up 22.9%.」

「For the cumulative first quarter of the current fiscal year, the Healthcare Solutions business reported revenue of ¥138.930 million, up 10.7% year on year, and a segment loss of ¥40.414 million, compared with a loss of ¥59.667 million in the same period of the previous year.」

「For the current fiscal year, the Healthcare Solutions business reported revenue of ¥983.654 million, up 49.7% year on year, and a segment loss of ¥91.633 million, compared with a loss of ¥58.847 million in the previous fiscal year.」

「For the cumulative third quarter of the current fiscal year, the Healthcare Solutions business reported revenue of ¥789 million, up 107.6% year on year, and a segment loss of ¥20 million, compared with a loss of ¥73 million in the same period of the previous year. Conditions in the segment improved as the impact of COVID-19 on sales activities targeting its main customers, medical institutions, eased. Revenue from i-HIS, a cloud-based electronic medical records system ordered in the previous fiscal year and the first and second quarters, has also begun to be recognized following completion of customer acceptance. Although the segment remains loss-making, the current order backlog is ¥308 million, which is expected to contribute to future revenue and profit.」

「For the six-month period ended 30 September, the Healthcare Solutions Business posted net sales of ¥634 million, up 115.9% year on year, and segment profit of ¥39 million, compared with a loss of ¥23 million in the same period of the previous year. The impact of COVID-19 on sales activities with medical institutions, our main customers, had eased, and i-HIS (cloud-based electronic medical records) orders received in the previous fiscal year and the first quarter began to generate recognized sales as acceptance inspections were completed. As a result, the segment was able to secure a profit.」

「For the three-month period ended 30 June, the Healthcare Solutions Business posted net sales of ¥125 million, up 18.5% year on year, and a segment loss of ¥59 million, compared with a loss of ¥27 million in the same period of the previous year. Although the business has emerged from the situation in the previous fiscal year, when sales activities with medical institutions were not possible due to COVID-19, i-HIS (cloud-based electronic medical records) requires several months from order placement to delivery, when sales are recognized. Consequently, sales had not yet been recognized during the three-month period ended 30 June, and expenses were not being covered.」

「The factors behind the segment's decline in sales and loss included the inability to conduct sales activities with medical institutions, its main customers, due to the spread of COVID-19, as well as a succession of events including postponements of PACS replacement projects and freezes on negotiations for i-HIS, a cloud-based electronic medical record system. Net sales fell 48.8% year on year, while fixed costs increased due to the addition of personnel dedicated to i-HIS, resulting in performance not previously seen.」

「“i・His,” which enables hospitals to reduce workloads, shorten service delivery times and implement systems at low cost, has seen increases in both inquiries and orders. In addition, inquiries for the new PACS product “CLEVINO” have increased because of its advanced functions and strong cost performance. We are actively working to expand the business.」

「PACS, our core product, is a medical image management system with a high penetration rate, and the market is now primarily a replacement market. As a result, the segment recorded lower sales and a loss. The decline in sales was attributable to the postponement of scheduled PACS replacement projects and other factors. The segment loss was caused in part by higher personnel expenses and other costs due to upfront investment in the cloud-based electronic medical record system “i・HIS,” although the number of inquiries and orders has been increasing.」

「The VNA market is expanding and product awareness is gradually spreading as a result of the sales-enhancement measures pursued to date. However, the penetration rate of our core medical imaging system products is high and the market is now primarily a replacement market. In addition, because there were no large projects comparable to those in the previous fiscal year, the segment recorded lower sales and a loss.」

「We are focusing on improving the profitability of the Healthcare Solutions Business by shifting from sales centered on PACS, whose hospital penetration rate has already reached approximately 85% and which faces intense price competition, to a product strategy that adds cloud-based electronic medical records and a nuclear medicine dose management system.」

「First, we aim to provide high-value-added services through business restructuring based on selection and concentration in the existing healthcare business fields and synergies with new businesses. The transfer of the duranta business in the Healthcare Solutions Business is also part of this business restructuring.」

「The value of our products as a VNA (Vendor Neutral Archive) is gaining market recognition as a result of the sales-enhancement measures pursued to date, and the benefits of collaboration with modality manufacturers and medical information system manufacturers are beginning to emerge. The increase in segment net sales was attributable in part to the recognition of sales from a large PACS (medical image archiving, distribution and viewing system) project ordered in the previous fiscal year. However, price competition for medical imaging system products continues to intensify, resulting in lower segment profit.」

「In particular, for our PACS products, the value of the products as a VNA (Vendor Neutral Archive) is gaining recognition in the market as a result of sales-enhancement measures pursued since the previous fiscal year. Sales have grown as the benefits of collaboration with modality manufacturers and medical information system manufacturers have begun to emerge, and the effects of streamlining system implementation processes have also contributed to substantial earnings improvement.」

「For the nine-month period ended 31 December, the Healthcare Solutions Business posted net sales of ¥852 million, up 16.3% year on year, and operating income of ¥101 million, up 930.1%. Although price competition for medical imaging system products continues to intensify, sales grew as the benefits of collaboration with modality manufacturers and medical information system manufacturers, initiatives pursued since the previous fiscal year, began to emerge. Together with the effects of streamlining system implementation processes, this led to substantial earnings improvement.」

「For the six-month period ended 30 September, the Healthcare Solutions Business posted net sales of ¥690 million, up 30.6% year on year, and operating income of ¥83 million, up 311.3%. Although price competition for medical imaging system products continues to intensify, sales grew as the benefits of collaboration with modality manufacturers, an initiative pursued since the previous fiscal year, began to emerge. Together with the effects of streamlining system implementation processes, this led to substantial earnings improvement.」

「In the Healthcare Solutions Business segment, our group's core business, orders and sales negotiations scheduled to generate sales in the current fiscal year for PACS (medical image archiving, distribution and viewing system), ConnectioRIS (radiology information system) and other products are generally progressing in line with plan, reflecting progress in measures to strengthen our sales organization that we have pursued since the beginning of the previous fiscal year.」

「While continuing to place primary emphasis on sales and product enhancement for our core “medical imaging systems”」

「Across the medical imaging business, we continued cost-reduction measures, including reviewing the procurement product mix, an initiative begun in the previous fiscal year, and worked to streamline system implementation processes. We also worked to enhance the functions of internally developed systems, including ConnectioRIS (radiology information system), to strengthen the medical imaging systems product lineup.」

「To strengthen the product lineup of medical imaging systems, we worked to enhance the functions of internally developed systems, including ConnectioRIS (radiology information system).」

「To strengthen the product lineup of medical imaging systems, we began development to enhance the functions of internally developed systems, including ConnectioRIS (radiology information system).」

「While focusing on strengthening sales of core products and services, including PACS (medical image archiving, distribution and viewing system), ConnectioRIS, ConnectioMeD and remote image diagnosis services, we worked to reduce costs by reviewing procurement for each product. For the fiscal year under review, the medical imaging business posted net sales of ¥1,331 million, up 16.7% year on year, and operating income of ¥169 million, up 180.3%.」

「Enhancing product competitiveness in the medical imaging business」