Hello, everyone. Thank you for joining Japan Lifeline's Q1 financial results briefing for the quarter ended June 30, 2025. I am Takeyoshi Egawa, CFO and Head of Corporate Management Group. Before diving into our quarterly results, I want to recognize the outstanding efforts of our team members across all divisions. The solid performance we're presenting today demonstrates their continued dedication and expertise. In a dynamic healthcare environment, they have maintained their focus on delivering exceptional value to our customers and stakeholders. Their commitment remains the foundation of our success. Now, let's review our first quarter performance. Please turn to page four. Our first quarter of fiscal year 2026 achieved revenue growth and operating profit growth. Net sales reached JPY 14.61 billion, up 4.3% year-over-year. Operating profit was JPY 3.27 billion, up 2.4%. Quarterly net profit was JPY 2.30 billion, down 1.6%. We have organized the factors into external and internal components.
External factors include three key points. First, the positive factor is the increase in atrial fibrillation case volume. Our analysis shows a 5%-6% increase compared to the prior year quarter. This level appears somewhat lower compared to recent trends, but this is significantly influenced by conference scheduling. The major arrhythmia conference organized by Japan Heart Rhythm Society was held in May 2025, during which case volumes typically decline as arrhythmia specialists from across the country participate. The conference before last was held in November 2024, so it had an impact on year-over-year comparison this time. Excluding this conference impact, we estimate the underlying growth was a strong 8%-9% in line with initial guidance. We also experienced pulsed field ablation, or PFA, impact.
PFA is a new treatment method for arrhythmia that has a lower risk of complications compared to conventional treatments, and it has been rapidly spreading in Japan since the latter half of 2024. PFA adoption proceeded at a somewhat faster pace than anticipated, affecting certain products. Additionally, we had the impact of reimbursement price revisions. The revision implemented in June 2024 created a negative pricing impact for April and May in our year-over-year comparison. Internal factors include three key points. The first positive factor is that our core product group performed well overall, with all four products contributing to revenue growth. Our new business areas, consisting of neurovascular and gastrointestinal segments, also performed very well with 47% growth year-over-year. The negative factor was increased expenses, including higher R&D costs, personnel expenses, and sales-related costs. Please turn to page five. This shows our consolidated P/E overview.
We achieved revenue growth and operating profit growth, while quarterly net profit declined. I'll skip the highlights already covered and comment on other areas. Gross profit margin decreased from 61.3% in the prior year quarter to 60% this quarter, a decline of 130 basis points. This was due to price revisions and a decrease in our proprietary sales mix. Our proprietary sales mix declined from 58.2% in the prior year quarter to 55.6% this quarter, a decrease of 260 basis points. While in-house products like esophageal catheters decreased due to PFA impact, procured products like neurovascular and hemostasis devices grew significantly. This product mix change reduced our proprietary sales mix. Operating profit margin declined from 22.8% in the prior year to 22.4% this quarter, a milder decline of 40 basis points compared to the gross margin decrease.
While we had expense increases, the prior year quarter included a one-time allowance for doubtful accounts, which was absent this quarter, helping to moderate the expense impact. Quarterly net profit was negative due to foreign exchange losses in non-operating expenses and fixed asset disposal costs in extraordinary items, resulting in a 1.6% year-over-year decline. Regarding other metrics, international sales mix reached 2.4%, an increase of 40 basis points from the prior year quarter. Earnings per share was JPY 32.85, an increase of JPY 0.90 year-over-year. While quarterly net profit was negative, our share buyback in the previous period reduced the average share count, resulting in a year-over-year increase in per-share terms. Please turn to page six. This shows our operating profit variance analysis. Operating profit increased from JPY 3.19 billion in the prior year quarter to JPY 3.27 billion this quarter, JPY 77 million, or 2.4% growth.
Breaking down the components, sales and cost factors contributed JPY + 1.86 billion, while SG&A factors resulted in a JPY - 108 million. Sales volume factors are shown in the three leftmost bars. Core products performed very well, contributing a JPY + 454 million. In order of contribution, these were femoral vein hemostasis devices, frozen elephant trunk, and defibrillation catheters. New therapeutic areas contributed JPY + 157 million, with growth in both neurovascular and gastrointestinal segments. Other products had a significant negative contribution of JPY 294 million. This was primarily due to pulsed field ablation (PFA) impact, with esophageal monitoring catheter declines accounting for JPY 253 million. Price revision impact for the two-month period was approximately JPY 90 million in profit impact. Regarding SG&A, excluding one-time factors, SG&A increased by JPY 336 million, negatively impacting profit. The breakdown includes personnel costs of JPY 147 million, R&D of JPY 123 million, and sales-related expenses of JPY 122 million.
As a one-time factor, the prior year quarter included allowance for doubtful accounts due to a customer bankruptcy, creating a JPY 228 million variance that helped moderate the SG&A increase impact. Please turn to page seven. This shows our Q1 progress against full-year guidance. Both sales and profits are progressing roughly in line with expectations. For Q1, sales achieved 24.6%, operating profit 25.4%, and net profit 24.6% of full-year guidance. Please turn to page 10. This shows our sales variance analysis. Sales increased from JPY 14.01 billion in the prior year quarter to JPY 14.61 billion this quarter, representing growth of JPY 605 million, or 4.3%. Only cardiac rhythm management declined, while all other segments were positive, showing overall favorable trends. Existing business areas contributed JPY 317 million, with cardiovascular products performing particularly well and driving growth in existing areas.
New therapeutic areas contributed JPY 294 million, with neurovascular growth exceeding initial expectations and contributing JPY 215 million. I'll explain each business segment in detail on the following pages. Please turn to page 11. In CRM, our core product S-ICD) performed very well, but pacemaker struggled, resulting in a slight 2.4% revenue decline. S-ICD achieved 20.5% revenue growth. The background includes market expansion driven by industry-wide adoption of primary prevention, preventive implantation before life-threatening arrhythmias occur. This trend drove approximately 9% case growth year-over-year. While we experienced some impact from competitors' new ICD product launches, our facility development efforts from previous periods proved successful, resulting in this significant revenue growth. Pacemakers experienced a significant decline of 24%. Competitor leadless pacemaker penetration is strong, with competitor products used in approximately 30% of the new implant market.
Reimbursement prices for pacemakers were reduced by 14%, with two months of impact in our comparison. Additionally, the prior year quarter had temporary increases from device replacement demand, which was absent this quarter. We began selling lead management products in Q1, contributing new revenue. Please turn to page 12. This introduces our lead management device products. These are Philips products for which we began exclusive distribution in May. These devices are used when extracting leads connected to implanted devices from within the heart. By handling these products, we can provide value-added support for the complete workflow from cardiac implantation to extraction. With our nationwide sales network, we expect to further expand our market share beyond our current top position of over 60%. The current market size is approximately 1,000 cases annually, but we believe the potential market is 2x-3x larger.
Lead extraction surgery is very high-risk, so many cases that should undergo extraction remain untreated. By promoting appropriate lead management and extraction, we believe the potential market could be 2x-3 x current levels. We estimate the future market size at JPY 2.0-2.5 billion. Please turn to page 13. EP ablation grew 2.5% year-over-year. Our core products, defibrillation catheters, and hemostasis devices performed very well. While PFA had negative impacts, we achieved growth by offsetting these effects. As for market conditions, atrial fibrillation case volumes increased approximately 5%-6% year-over-year. As explained earlier, this includes conference impact, so the underlying growth excluding this factor was likely 8%-9%. In such environment, defibrillation catheters grew 3.6%. Our estimated market share as of June was 96%, maintaining our dominant position.
The 3.6% growth appears modest relative to case growth due to slight share decline and the impact of bulk sales at the prior period end, which represented some advanced demand fulfillment. Hemostasis devices grew significantly to 2.5x prior year sales. This resulted from new adoptions at high-volume facilities and penetration into smaller facilities. Regarding negative PFA impact, PFA has now penetrated approximately 55% of total AF cases. Our initial expectation was 40-50% by March 2026, but lower complication concerns and intense competition among three competitor manufacturers led to faster-than-expected adoption, reaching 55%. However, PFA has reached most facilities capable of adoption, so we expect penetration to stabilize around 60% by March 2026. Due to PFA penetration, esophageal temperature monitoring catheters were most impacted, declining 47.5% as they are unnecessary in PFA procedures. EP catheters declined 6.8% as fewer are used in PFA procedures. Please turn to page 14.
Cardiovascular products achieved strong 8.1% growth year-over-year. Frozen elephant trunk product was a star performer with double-digit growth driving this performance. Fed grew 12.9%. The market continues expanding with approximately 10% case growth year-over-year. We primarily sell two products, separate type and the newer four-branch integrated artificial graft. Growth in the higher-priced four-branch integrated type drove revenue growth beyond volume growth. We previously had shortages in certain sizes of our four-branch integrated type, creating competitive disadvantages, but size fulfillment is now complete. We're entering a phase of competitive recovery. Vascular grafts also performed very well despite competition, with case growth driving 8.6% revenue increase. This was partly influenced by competitor withdrawal from certain product lines. Abdominal stent grafts, which represent a large portion of sales composition, remained essentially flat with 1.3% decline. Please turn to page 15. Neurovascular achieved very strong 61.9% growth year-over-year.
Embolic coils grew 28.1%, led by fine diameter models. We also introduced new models for radiology departments, expanding sales beyond neurovascular to radiology. Aspiration catheters achieved very strong 1.9x growth year-over-year. We added even finer models in Q1. These very thin models address approximately 30% of the market in smaller vessels that are peripheral cases, and gaining access to this market contributed significantly to revenue growth and enhanced customer appeal. Our estimated market share for aspiration catheters overall is approximately 20%, advancing us to third place in the industry. Stent retrievers represent pure incremental growth as they weren't available in the prior year. We're steadily increasing facility counts and expect continued growth. Please turn to page 16. Gastrointestinal includes the unrelated discontinued coronary intervention business as a segment, but this chart shows pure gastrointestinal sales excluding that business. We achieved 29% growth year-over-year.
Bile duct tube stents, our mainstay product, grew 23.6%. We previously sold only straight types, but introduced pigtail types with different configurations, strengthening customer appeal and contributing to revenue growth. ERCP guide wires are our only procured product in GI, but achieved 3.7x growth year-over-year following full launch from the prior period end. GI stents achieved significant 36.6% growth. The prior period had underperformance due to voluntary recall of gastroduodenal stents, affecting comparison levels. Liver cancer ablation needles declined 21.4%. We began sales partnership with Terumo this period, reducing our selling prices and creating this negative impact. Please turn to page 17. This is our final slide. To enhance commitment to our medium-term plan numerical targets, we are introducing performance-linked paid stock options. These are designed with performance achievement as exercise conditions.
Our medium-term plan targets consolidated sales of JPY 70 billion for fiscal year ending March 2028, and these options become exercisable upon exceeding this target. We would issue 705,000 new shares if all the options are to be exercised, representing 1.05% of total issued shares. These will be granted to 16 individuals, including Directors and Executive Officers. This concludes my presentation. Thank you for listening.