TOKYO, Aug. 7, 2012 (GLOBE NEWSWIRE) -- Internet Initiative
Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774) today announced its
consolidated financial results for the first three months of the
fiscal year ending March 31, 2013 (1Q12).1
|
Highlights of 1st
Quarter FY2012 Financial Results |
|
|
Revenues |
JPY24,841 million ($311 million, up 6.3%
YoY) |
Operating Income |
JPY1,374 million ($17 million, up 50.2%
YoY) |
Net Income attributable to IIJ |
JPY897 million ($11 million, up 75.0%
YoY) |
|
|
-- 1Q12 revenues increased by
6.3%. Revenues for network services, system integration, and ATM
operation business each grew YoY. |
-- 1Q12 operating income
increased by 50.2% mainly because gross margin of network services
and ATM operation business increased while SG&A stayed around
the same level as 1Q11. |
|
Overview of 1st Quarter FY2012 Financial Results
and Business Outlook
"We had a very encouraging start for FY2012 as we carried out
our business developments as planned during this 1st quarter,
and our 1Q12 revenues and operating income grew by 6.3% and 50.2%
YoY," said Koichi Suzuki, President and CEO of IIJ.
"Demands for broader bandwidth have been rising continuously and
our Internet connectivity services for corporate use continued to
show good growth. Another good news is that consumer Internet
connectivity revenues increased compared to the previous quarter as
our new LTE service has been attracting and accumulating many
users," continued Suzuki.
"Regarding IIJ GIO, our cloud computing services, business scale
has been expanding consistently. We are focused on elaborating
service line-ups and the reliability of our services to accelerate
a cloud shift for Japanese entities' internal IT systems.
Currently, we are preparing to launch new service line-ups called
VWseries in August. VWseries deliver VMware hypervisor functions to
users and these services are very much expected to encourage
Japanese clients to adopt hybrid cloud usage, a combination of
on-premise systems and cloud services."
"As for our overseas business, we are also making satisfying
progress as expected. The overseas business revenue reached around
JPY 1.0 billion. We had large server construction projects in the
U.S. for a prominent SNS game client. Also, our cloud services in
the U.S. are starting up well and we are currently expanding our
server facilities in order to meet prospective orders."
"We are now engaged in software development of SDN (Software
Defined Network) platform aiming to take initiative over network
virtualization technologies. We plan to release our SDN software
products in 2H12."
"Lastly, we are pleased to announce that operating income of our
ATM operation business turned positive in this quarter. Along with
placements of additional ATMs, we anticipate this business to grow
continuously and expect high profitability in the future."
1st Quarter FY2012 Financial Results
Summary
Operating Results Summary |
|
1Q11 |
1Q12 |
YoY %
Change |
|
JPY millions |
JPY millions |
|
Total Revenues |
23,362 |
24,841 |
6.3 |
Network
Services |
15,521 |
16,091 |
3.7 |
SI |
7,221 |
7,952 |
10.1 |
Equipment
Sales |
376 |
330 |
(12.0) |
ATM Operation
Business |
244 |
468 |
92.1 |
Total Costs |
18,860 |
20,022 |
6.2 |
Network
Services |
12,440 |
12,764 |
2.6 |
SI |
5,770 |
6,564 |
13.8 |
Equipment
Sales |
339 |
273 |
(19.5) |
ATM Operation
Business |
311 |
421 |
35.2 |
SG&A Expenses
and R&D |
3,587 |
3,445 |
(4.0) |
Operating Income |
915 |
1,374 |
50.2 |
Income before Income Tax
Expense |
865 |
1,373 |
58.7 |
Net income attributable to
IIJ |
512 |
897 |
75.0 |
|
Segment Summary |
|
1Q11 |
1Q12 |
|
JPY millions |
JPY millions |
Net Revenues |
23,362 |
24,841 |
Network services
and SI business |
23,239 |
24,510 |
ATM operation
business |
244 |
468 |
Elimination |
121 |
137 |
Operating Income
(Loss) |
915 |
1,374 |
Network service
and SI business |
1,047 |
1,393 |
ATM operation
business |
(111) |
16 |
Elimination |
21 |
35 |
We have omitted segment analysis because most of our revenues
are dominated by Network services and SI business.
1st Quarter FY2012 Results of Operation
Revenues
Our 1Q12 total revenues were JPY24,841 million, up 6.3% YoY.
Network Services revenue were JPY16,091 million, up 3.7%
YoY.
Revenues for Internet connectivity services for corporate use
were JPY3,865 million, up 7.9% YoY mainly due to demands for
broader bandwidth from network operators.
Revenues for Internet connectivity services for home use were
JPY1,429 million, down 3.8% YoY. There were effects from the
cancellations of old type connectivity services, however, our new
LTE mobile data communication service for home use, which was
introduced in February 2012, has started to contribute to
revenue.
WAN Services revenue were JPY6,312 million, stayed around the
same level YoY, while there were some downward effects in revenues
due to the renewal of contracts which commonly occur at the
beginning of fiscal year.
Outsourcing services revenue were JPY4,485 million, up 8.2% YoY.
Data center-related, web security-related and "IIJ GIO hosting
package service" continuously grew, respectively.
Number of Contracts for Connectivity Services |
|
as of June 30, 2011 |
as of June
30, 2012 |
YoY Change |
Internet Connectivity Services
(Corporate Use) |
88,569 |
95,342 |
6,773 |
IP Service
(-99Mbps) |
924 |
930 |
6 |
IP Service
(100Mbps-999Mbps) |
324 |
353 |
29 |
IP Service
(1Gbps--) |
131 |
142 |
11 |
IIJ Data
Center Connectivity Service |
302 |
318 |
16 |
IIJ
FiberAccess/F and IIJ DSL/F |
42,266 |
44,847 |
2,581 |
IIJ Mobile
Service2 |
43,334 |
47,442 |
4,108 |
Others |
1,288 |
1,310 |
22 |
Internet Connectivity Services
(Home Use) |
379,674 |
415,360 |
35,686 |
Under IIJ
Brand |
40,147 |
55,424 |
15,277 |
hi-ho |
151,828 |
153,612 |
1,784 |
OEM |
187,699 |
206,324 |
18,625 |
Total Contracted
Bandwidth |
791.0Gbps |
918.8Gbps |
127.8Gbps |
|
|
|
|
Network Services Revenues Breakdown |
|
1Q11 |
1Q12 |
YoY %
change |
|
JPY millions |
JPY millions |
|
Internet Connectivity Service
(Corporate Use) |
3,580 |
3,865 |
7.9 |
IP
Service3 |
2,270 |
2,439 |
7.4 |
IIJ
FiberAccess/F and IIJ DSL/F |
783 |
802 |
2.5 |
IIJ Mobile
Service4 |
466 |
564 |
21.2 |
Others |
61 |
60 |
(3.7) |
Internet Connectivity Service
(Home Use) |
1,485 |
1,429 |
(3.8) |
Under IIJ
Brand |
227 |
318 |
40.0 |
hi-ho |
1,116 |
959 |
(14.0) |
OEM |
142 |
152 |
6.9 |
WAN Services |
6,310 |
6,312 |
0.0 |
Outsourcing
Services |
4,146 |
4,485 |
8.2 |
Total Network
Services |
15,521 |
16,091 |
3.7 |
SI revenues were JPY7,952 million, up 10.1%
YoY.
Systems construction revenue, a one-time revenue,
increased by 9.7% to JPY2,760 million mainly due to the
accumulation of mid- to small sized construction projects and
overseas construction projects. Systems operation and maintenance
revenue, a recurring revenue, increased by 10.4% to JPY5,192
million. The increase was mainly due to the continuous accumulation
of revenue from our "IIJ GIO component service"
The order backlog for systems construction and
equipment sales was JPY4,494 million, down 4.6% YoY. The order
backlog for systems operation and maintenance was JPY14,230
million, up 8.7% YoY.
Equipment sales revenues were JPY330 million, down 12.0%
YoY.
ATM Operation Business revenues were JPY468 million, up 92.1%
YoY, along with the increase in the numbers of ATMs newly
placed. As of August 7, 2012, 540 ATMs are placed.
Cost and expense
Cost of revenues was JPY20,022 million, up 6.2% YoY.
Cost of Network Services revenue was JPY12,764
million, up 2.6% YoY mainly due to the increase in
outsourcing-related costs, personnel-related costs and network
operation-related costs. Gross margin for network services was
JPY3,328 million, up 8.0% YoY and gross margin ratio was 20.7%, up
0.8 points YoY.
Cost of SI revenues was JPY6,564 million, up 13.8%
YoY. There were the increase in purchasing costs in relation to the
increase in systems construction revenues, and the increase in
network operation- related costs and outsourcing-related costs
mainly for our cloud computing service. Gross margin for SI was
JPY1,388 million, down 4.4% YoY and gross margin ratio was
17.5%.
Cost of Equipment Sales revenues was JPY273 million, down 19.5%
YoY. Gross margin was JPY58 million and gross margin ratio was
17.4%.
Cost of ATM Operation Business revenues was JPY421 million, up
35.2% YoY mainly due to the increase in the number of newly placed
ATMs. Gross margin for ATM operation business was JPY46 million
compared to gross loss of JPY68 million for 1Q11 due to the
increase in revenues.
SG&A and R&D Expenses
SG&A and R&D expenses were JPY3,445 million, down 4.0%
YoY.
Sales and marketing expenses were JPY1,930 million,
down 1.3% YoY. While there were many advertising and marketing
activities such as seminars in 1Q11, we had less of such activities
in 1Q12. Amortization expenses of customer relationship related to
IIJ Global Solutions Inc. ("IIJ-Global") slightly decreased to
JPY92 million from JPY106 million in 1Q11.
General and administrative expenses were JPY1,411
million, down 9.1% YoY. There were one-time relocation-related
expenses in 1Q11 as IIJ-Global and some departments of IIJ moved
its offices into the same building as IIJ.
Research and development expenses were JPY104 million, up 32.3%
YoY.
Operating income
Operating income was JPY1,374 million, up 50.2% YoY
mainly due to the increase in gross margin of network services and
ATM operation business and the decrease in SG&A expenses.
Other income (expenses)
Other income (expenses) was an expense of JPY1 million (An
expense of JPY49 million for 1Q11).
Income before income tax expenses
Income before income tax expenses was JPY1,373 million, up 58.7%
YoY (JPY865 million for 1Q11).
Net Income
Income tax expense was JPY515 million (JPY425
million for 1Q11). Deferred income tax expenses was JPY152
million (JPY306 million in 1Q11).
Equity in net income of equity method investees was JPY33
million (JPY40 million for 1Q11) mainly due to net income of
Internet Revolution, Inc. and Internet Multifeed Co.
As a result of the above, net income was JPY891 million, up
85.4% YoY (JPY481 million for 1Q11).
Net income attributable to IIJ
Net loss attributable to noncontrolling interests was JPY6
million (JPY31 million for 1Q11) mainly related to Trust Networks
Inc.
Net income attributable to IIJ was JPY897 million, up 75.0% YoY
(JPY512million for 1Q11).
1st Quarter FY2012 Financial Condition
Balance Sheets
As of June 30, 2012, the balance of total assets
was JPY73,507 million, increased by JPY14 million from the balance
as of March 31, 2012.
For current assets as of June 30, 2012, as compared
to the respective balances as of March 31, 2012, cash and cash
equivalents decreased by JPY2,067 million mainly due to the payment
of income tax, prepaid expenses increased by JPY1,571 million and
accounts receivable decreased by JPY1,318 million. As for
noncurrent assets, as compared to the respective balances as of
March 31, 2012, property and equipment increased by JPY1,093
million, resulting from the investment in servers and network
equipments for cloud computing service and others. As for current
liabilities, as compared to the respective balance as of March 31,
2012, income tax payable decreased by JPY2,039 million. As for the
balances of capital lease obligations, as compared to the
respective balances as of March 31, 2012, capital lease
obligations-current portion increased by JPY228 million to JPY3,225
million and capital lease obligations-noncurrent increased by
JPY535 million to JPY5,276 million, respectively.
As of June 30, 2012, the balance of other
investments was JPY3,234 million. The breakdown of other
investments were JPY2,053 million in nonmarketable equity
securities, JPY828 million in available-for-sale securities and
JPY353 million in other.
As of June 30, 2012, the balance of non-amortized
intangible assets (excluding telephone rights) such as goodwill was
JPY6,128 million, and the breakdown of non-amortized intangible
assets were JPY5,973 million in goodwill and JPY155 million in
trademark. As of June 30, 2012, the balance of amortized intangible
assets, which was customer relationships, was JPY5,083 million.
Total IIJ shareholders' equity as of June 30, 2012
was JPY33,247 million, an increase of JPY559 million from the
balance as of March 31, 2012. IIJ Shareholders' equity ratio (total
IIJ shareholders' equity/total assets) as of June 30, 2012 was
45.2%.
Cash Flows
Cash and cash equivalents as of June 30, 2012 were JPY11,471
million compared to JPY11,435 million as of June 30, 2011.
Net cash provided by operating activities for 1Q12 was JPY1,424
million compared to net cash provided by operating activities of
JPY1,323 million for 1Q11. While operating income increased YoY
mainly due to the increase in gross margin for network services and
ATM operation business, there were payments for income taxes,
operation and maintenance services and purchased equipments for
systems integration projects.
Net cash used in investing activities for 1Q12 was
JPY2,131 million compared to net cash used in investing activities
of JPY2,069 million for 1Q11, mainly due to payments for purchase
of property and equipments of JPY1,658 million (JPY2,078 million
for 1Q11).
Net cash used in financing activities for 1Q12 was
JPY1,332 million compared to net cash used in financing activities
of JPY1,107 million for 1Q11, mainly due to principal payments
under capital leases of JPY877 million (JPY803 million for 1Q11)
and payments for FY2011 year-end dividends of JPY355 million
(JPY304 million for 1Q11).
FY2012 Financial Targets (announced on May 15,
2012)
Our financial targets for FY2012 are as
follows:
|
|
|
|
(JPY in millions) |
|
Revenues |
Operating Income |
Income before Income Tax Expense
(Benefit) |
Net Income attributable to IIJ |
1H FY2012 |
50,500 |
2,700 |
2,500 |
1,400 |
Full FY2012 |
107,000 |
7,500 |
6,900 |
4,000 |
Our quarter financial results tend to be weak in
the first quarter and strong in the fourth quarter of every fiscal
year due to seasonal factors. 1Q12 income was slightly higher than
we expected, however, first quarter contribution to full year
results are not very large. Therefore, we have not changed our
FY2012 financial targets announced on May 15, 2012.
Reconciliation of Non-GAAP Financial
Measures
The following table summarizes the reconciliation of adjusted
EBITDA to net income attributable to IIJ in our consolidated
statements of income that are prepared in accordance with U.S.
GAAP.
Adjusted EBITDA |
|
1Q11 |
1Q12 |
|
JPY millions |
JPY millions |
Adjusted EBITDA |
2,579 |
3,172 |
Depreciation and Amortization
5 |
1,664 |
1,798 |
Operating Income |
915 |
1,374 |
Other Income
(Expense) |
(49) |
(1) |
Income Tax
Expense |
425 |
515 |
Equity in Net Income of
Equity Method Investees |
40 |
33 |
Net income |
481 |
891 |
Net loss attributable
to noncontrolling interests |
31 |
6 |
Net Income attributable to
IIJ |
512 |
897 |
|
CAPEX |
|
1Q11 |
1Q12 |
|
JPY millions |
JPY millions |
CAPEX, including capital
leases |
2,878 |
3,298 |
Acquisition of
Assets by Entering into Capital
Leases |
800 |
1,640 |
Purchase of
Property and Equipment |
2,078 |
1,658 |
Presentation
Presentation Materials will be posted on our web site
(http://www.iij.ad.jp/en/ir/) on August 7, 2012.
About Internet Initiative Japan Inc.
Founded in 1992, IIJ is one of Japan's leading Internet-access
and comprehensive network solutions providers. IIJ and its group of
companies provide total network solutions that mainly cater to
high-end corporate customers. IIJ's services include high-quality
systems integration and security services, Internet access,
hosting/housing, and content design. Moreover, IIJ has built one of
the largest Internet backbone networks in Japan, and between Japan
and the United States. IIJ listed on the U.S. NASDAQ Stock Market
in 1999 and on the First Section of the Tokyo Stock Exchange in
2006.
The Internet Initiative Japan Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4613
For inquiries, contact:
IIJ Investor Relations
Tel: +81-3-5259-6500 E-mail: ir@iij.ad.jp URL:
http://www.iij.ad.jp/en/ir
Statements made in this press release regarding IIJ's or
management's intentions, beliefs, expectations, or predictions for
the future are forward-looking statements that are based on IIJ's
and managements' current expectations, assumptions, estimates and
projections about its business and the industry. These
forward-looking statements, such as statements regarding FY2012
revenues and operating and net profitability, are subject to
various risks, uncertainties and other factors that could cause
IIJ's actual results to differ materially from those contained in
any forward-looking statement. These risks, uncertainties and other
factors include: IIJ's ability to maintain and increase revenues
from higher-margin services such as systems integration and
outsourcing services; the possibility that revenues from
connectivity services may decline substantially as a result of
competition and other factors; the ability to compete in a rapidly
evolving and competitive marketplace; the impact on IIJ's profits
of fluctuations in costs such as backbone costs and subcontractor
costs; the impact on IIJ's profits of fluctuations in the price of
available-for-sale securities; the impact of technological changes
in its industry; IIJ's ability to raise additional capital to cover
its indebtedness; the possibility that NTT, IIJ's largest
shareholder, may decide to exercise substantial influence over IIJ;
and other risks referred to from time to time in IIJ's filings on
Form 20-F of its annual report and other filings with the United
States Securities and Exchange Commission.
1 Unless otherwise stated, all financial figures discussed in
this announcement are prepared in accordance with U.S. GAAP. All
financial figures are unaudited and consolidated. The translation
of Japanese yen into U.S. dollars is solely for the convenience of
readers outside of Japan. The rate used for the translation was
JPY79.81 per US$1.00, which was the noon buying rate on June 29,
2012.
2 Contracts of IIJ Mobile Service are of mobile data
communication service for corporate use.
3 IP Service revenues include revenues from the Data Center
Connectivity Service.
4 Revenue from mobile data communication service for home use is
included in Internet Connectivity service (home use).
5 Depreciation and amortization includes impairment loss on
other intangible assets. (See IIJ's consolidated financial
statements for details).
Internet
Initiative Japan Inc. |
Quarterly
Consolidated Balance Sheets (Unaudited) |
(As of March 31, 2012
and June 30, 2012) |
|
|
|
|
|
|
As of March 31, 2012 |
As of June 30, 2012 |
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
13,536,824 |
143,717 |
11,470,092 |
Accounts receivable, net of allowance for
doubtful accounts of JPY 107,919 thousand and JPY
106,912 thousand at March 31, 2012 and June 30, 2012,
respectively |
15,722,135 |
180,479 |
14,404,007 |
Inventories |
752,075 |
11,133 |
888,497 |
Prepaid expenses |
1,848,344 |
42,845 |
3,419,457 |
Deferred tax assets -Current |
939,370 |
10,239 |
817,179 |
Other current assets, net of allowance
for doubtful accounts of JPY 10,732 thousand and JPY
10,733 thousand at March 31, 2012 and June 30, 2012,
respectively |
891,560 |
14,688 |
1,172,292 |
Total current assets |
33,690,308 |
403,101 |
32,171,524 |
INVESTMENTS IN EQUITY METHOD INVESTEES |
1,406,634 |
19,480 |
1,554,707 |
OTHER INVESTMENTS |
2,938,146 |
40,528 |
3,234,558 |
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization of JPY 25,693,163
thousand and JPY 26,610,841 thousand at March 31, 2012
and June 30, 2012, respectively |
19,735,546 |
260,973 |
20,828,270 |
GOODWILL |
5,788,333 |
74,844 |
5,973,287 |
OTHER INTANGIBLE ASSETS -Net |
5,396,469 |
65,872 |
5,257,205 |
GUARANTEE DEPOSITS |
1,899,815 |
23,751 |
1,895,583 |
DEFERRED TAX ASSETS -Noncurrent |
24,760 |
320 |
25,533 |
NET INVESTMENT IN SALES-TYPE
LEASES —Noncurrent |
935,446 |
11,181 |
892,396 |
Prepaid expenses —Noncurrent |
1,536,932 |
19,415 |
1,549,496 |
OTHER ASSETS, net of allowance for doubtful
accounts of JPY86,388 thousand and JPY85,987 thousand
at March 31, 2012 and June 30, 2012, respectively |
140,857 |
1,565 |
124,872 |
TOTAL |
73,493,246 |
921,030 |
73,507,431 |
|
|
|
|
|
As of March 31, 2012 |
As of June 30, 2012 |
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Short-term borrowings |
9,000,000 |
111,515 |
8,900,000 |
Long-term borrowings —current
portion |
1,010,000 |
12,655 |
1,010,000 |
Capital lease obligations—current
portion |
2,997,292 |
40,408 |
3,225,000 |
Accounts payable —trade |
9,093,657 |
115,817 |
9,243,394 |
Accounts payable —other |
659,266 |
3,588 |
286,352 |
Income taxes payable |
2,210,089 |
2,140 |
170,818 |
Accrued expenses |
2,277,307 |
28,901 |
2,306,596 |
Deferred income―current |
1,495,468 |
23,666 |
1,888,755 |
Other current liabilities |
717,342 |
15,919 |
1,270,487 |
Total current liabilities |
29,460,421 |
354,609 |
28,301,402 |
LONG-TERM BORROWINGS |
1,990,000 |
24,934 |
1,990,000 |
CAPITAL LEASE OBLIGATIONS -Noncurrent |
4,741,241 |
66,104 |
5,275,749 |
ACCRUED RETIREMENT AND PENSION COSTS
-Noncurrent |
1,805,683 |
23,285 |
1,858,401 |
DEFERRED TAX LIABILITIES -Noncurrent |
652,280 |
8,290 |
661,593 |
DEFERRED INCOME -Noncurrent |
1,547,159 |
19,445 |
1,551,870 |
OTHER NONCURRENT LIABILITIES |
600,215 |
7,751 |
618,626 |
Total Liabilities |
40,796,999 |
504,418 |
40,257,641 |
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
Common-stock—authorized, 377,600 shares;
issued and outstanding, 206,478 shares at March 31,
2012 and June 30, 2012 |
16,833,847 |
210,924 |
16,833,847 |
Additional paid-in capital |
27,260,318 |
341,677 |
27,269,265 |
Accumulated deficit |
(10,990,348) |
(130,915) |
(10,448,338) |
Accumulated other comprehensive loss |
(23,533) |
(200) |
(15,947) |
Treasury stock—3,794 shares held by the
company at March 31, 2012 and June 30, 2012,
respectively |
(392,079) |
(4,912) |
(392,079) |
Total Internet Initiative Japan Inc.
shareholders' equity |
32,688,205 |
416,574 |
33,246,748 |
NONCONTROLLING INTERESTS |
8,042 |
38 |
3,042 |
Total equity |
32,696,247 |
416,612 |
33,249,790 |
TOTAL |
73,493,246 |
921,030 |
73,507,431 |
|
|
|
|
|
(Note) The U.S. dollar amounts
have been translated from yen, for convenience only, at the rate of
JPY79.81 per 1 U.S. dollar which was the noon buying rate in
New York City for cable transfers in foreign currencies as of June
29, 2012. |
|
|
Internet
Initiative Japan Inc. |
Quarterly
Consolidated Statements of Income and Quarterly Consolidated
Statements of Other comprehensive income (Unaudited) |
(For The Three Months
Ended June 30, 2011 and June 30, 2012) |
|
|
|
|
Quarterly
Consolidated Statements of Income |
|
Three Months Ended June 30, 2011 |
Three Months Ended June
30, 2012 |
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
REVENUES: |
|
|
|
Network services: |
|
|
|
Internet connectivity services (corporate
use) |
3,580,165 |
48,425 |
3,864,767 |
Internet connectivity services (home
use) |
1,485,170 |
17,907 |
1,429,150 |
WAN services |
6,310,246 |
79,093 |
6,312,421 |
Outsourcing services |
4,145,520 |
56,198 |
4,485,194 |
Total |
15,521,101 |
201,623 |
16,091,532 |
Systems integration: |
|
|
|
Systems construction |
2,516,864 |
34,581 |
2,759,896 |
Systems operation and maintenance |
4,704,498 |
65,050 |
5,191,690 |
Total |
7,221,362 |
99,631 |
7,951,586 |
Equipment sales |
375,901 |
4,143 |
330,635 |
ATM operation business |
243,413 |
5,858 |
467,510 |
Total revenues |
23,361,777 |
311,255 |
24,841,263 |
COST AND EXPENSES: |
|
|
|
Cost of network services |
12,440,055 |
159,930 |
12,764,006 |
Cost of systems integration |
5,769,645 |
82,243 |
6,563,825 |
Cost of equipment sales |
338,984 |
3,421 |
273,039 |
Cost of ATM operation business |
311,521 |
5,276 |
421,087 |
Total cost |
18,860,205 |
250,870 |
20,021,957 |
Sales and marketing |
1,955,506 |
24,186 |
1,930,291 |
General and administrative |
1,552,904 |
17,680 |
1,411,052 |
Research and development |
78,592 |
1,303 |
103,940 |
Total cost and expenses |
22,447,207 |
294,039 |
23,467,240 |
OPERATING INCOME |
914,570 |
17,216 |
1,374,023 |
OTHER INCOME (EXPENSE): |
|
|
|
Interest income |
7,298 |
103 |
8,193 |
Interest expense |
(79,568) |
(895) |
(71,437) |
Foreign exchange gains (losses) |
16 |
(256) |
(20,418) |
Net gains on sales of other investments
-net |
-- |
0 |
2 |
Losses on write-down of other
investments |
-- |
(25) |
(1,963) |
Other -net |
23,121 |
1,064 |
84,880 |
Other income (expense) -net |
(49,133) |
(9) |
(743) |
INCOME FROM OPERATIONS BEFORE INCOME
TAX EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD
INVESTEES |
865,437 |
17,207 |
1,373,280 |
INCOME TAX EXPENSE |
424,547 |
6,450 |
514,760 |
EQUITY IN NET INCOME OF EQUITY METHOD
INVESTEES |
40,027 |
412 |
32,887 |
NET INCOME |
480,917 |
11,169 |
891,407 |
LESS: NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS |
31,348 |
67 |
5,300 |
NET INCOME ATTRIBUTABLE TO INTERNET
INITIATIVE JAPAN INC. |
512,265 |
11,236 |
896,707 |
|
|
|
|
Three Months Ended June 30, 2011 |
Three Months Ended June
30, 2012 |
NET INCOME PER SHARE |
|
|
|
BASIC WEIGHTED-AVERAGE NUMBER OF
SHARES (shares) |
202,684 |
|
202,684 |
DILUTED WEIGHTED-AVERAGE NUMBER OF
SHARES (shares) |
202,684 |
|
202,803 |
BASIC WEIGHTED-AVERAGE NUMBER OF
ADS EQUIVALENTS (ADSs) |
81,073,600 |
|
81,073,600 |
DILUTED WEIGHTED-AVERAGE NUMBER OF
ADS EQUIVALENTS (ADSs) |
81,073,600 |
|
81,121,200 |
BASIC NET INCOME PER SHARE (JPY /
U.S. Dollars / JPY) |
2,527.41 |
55.43 |
4,424.16 |
DILUTED NET INCOME PER SHARE (JPY /
U.S. Dollars / JPY) |
2,527.41 |
55.40 |
4,421.57 |
BASIC NET INCOME PER ADS
EQUIVALENT (JPY / U.S. Dollars / JPY) |
6.32 |
0.14 |
11.06 |
DILUTED NET INCOME PER
ADS EQUIVALENT (JPY / U.S. Dollars / JPY) |
6.32 |
0.14 |
11.05 |
|
|
|
|
(Note) The U.S. dollar amounts
have been translated from yen, for convenience only, at the rate of
JPY79.81 per 1 U.S. dollar which was the noon buying rate in
New York City for cable transfers in foreign currencies as of June
29, 2012. |
|
|
|
|
|
Quarterly
Consolidated Statements of Other comprehensive income |
|
Three Months Ended June 30, 2011 |
Three Months Ended June
30, 2012 |
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
NET INCOME |
480,917 |
11,169 |
891,407 |
Comprehensive income (loss): |
|
|
|
Foreign currency translation
adjustments |
15,528 |
463 |
36,958 |
Unrealized holding gain on
securities |
(13,213) |
(369) |
(29,432) |
Defined benefit pension plans |
664 |
1 |
59 |
Total comprehensive income (loss) |
483,896 |
11,264 |
898,992 |
Less: Comprehensive income (loss)
attributable to noncontrolling interests |
31,348 |
67 |
5,300 |
Comprehensive income attributable to
Internet Initiative Japan Inc. |
515,244 |
11,331 |
904,292 |
|
|
|
|
(Note) The U.S. dollar amounts
have been translated from yen, for convenience only, at the rate of
JPY79.81 per 1 U.S. dollar which was the noon buying rate in
New York City for cable transfers in foreign currencies as of June
29, 2012. |
|
|
Internet
Initiative Japan Inc. |
Quarterly
Consolidated Statements of Cash Flows (Unaudited) |
(For the three months
ended June 30, 2011 and June 30, 2012) |
|
|
|
|
|
Three Months Ended June 30, 2011 |
Three Months Ended June
30, 2012 |
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
OPERATING ACTIVITIES: |
|
|
|
Net income |
480,917 |
11,169 |
891,407 |
Adjustments to reconcile net income to
net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
1,663,891 |
22,532 |
1,798,295 |
Provision for retirement and pension
costs, less payments |
56,959 |
662 |
52,811 |
Provision for (reversal of) allowance for
doubtful accounts |
23,805 |
(1) |
(59) |
Loss on disposal of property and
equipment |
16,601 |
13 |
1,044 |
Net gains on sales of other
investments |
-- |
(0) |
(2) |
Impairment of other investments |
-- |
24 |
1,963 |
Foreign exchange losses, net |
30,127 |
424 |
33,845 |
Equity in net income of equity method
investees |
(40,027) |
(412) |
(32,887) |
Deferred income tax expense |
305,785 |
1,900 |
151,609 |
Others |
10,054 |
(274) |
(21,851) |
Changes in operating assets and
liabilities net of effects from acquisition of business and a
company: |
|
|
|
Decrease in accounts receivable |
2,345,551 |
17,785 |
1,419,385 |
Decrease in net investment in sales-type
lease―noncurrent |
96,397 |
539 |
43,050 |
Increase in inventories, prepaid expenses
and other current and noncurrent assets |
(1,998,906) |
(24,341) |
(1,942,652) |
Increase (decrease) in accounts
payable |
(2,550,608) |
1,574 |
125,608 |
Decrease in income taxes payable |
(279,168) |
(25,624) |
(2,045,009) |
Increase in deferred
income-noncurrent |
384,374 |
63 |
5,010 |
Increase in accrued
expenses and other current and noncurrent
liabilities |
776,816 |
11,813 |
942,756 |
Net cash provided by
operating activities |
1,322,568 |
17,846 |
1,424,323 |
INVESTING ACTIVITIES: |
|
|
|
Purchase of property and equipment |
(2,077,881) |
(20,778) |
(1,658,341) |
Proceeds from sales of property and
equipment |
116,595 |
2,057 |
164,206 |
Purchase of available-for-sale
securities |
(77,825) |
(202) |
(16,103) |
Purchase of other investments |
(50,000) |
(3,938) |
(314,310) |
Investment in an equity method
investee |
-- |
(1,253) |
(100,000) |
Proceeds from sales of other
investments |
8,943 |
252 |
20,121 |
Payments of guarantee deposits |
(2,207) |
(10) |
(765) |
Refund of guarantee deposits |
19,695 |
122 |
9,751 |
Payments for refundable insurance
policies |
(5,826) |
(2) |
(181) |
Acquisition of a newly controlled
company, net of cash acquired |
-- |
(2,954) |
(235,771) |
Other |
(36) |
-- |
-- |
Net cash used in
investing activities |
(2,068,542) |
(26,706) |
(2,131,393) |
|
|
|
|
Three Months Ended June 30,
2011 |
Three Months Ended
June 30, 2012 |
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
FINANCING ACTIVITIES: |
|
|
|
Proceeds from issuance of short-term
borrowings with initial maturities over three months and
long-term borrowings |
200,000 |
-- |
-- |
Principal payments under capital
leases |
(802,758) |
(10,992) |
(877,214) |
Net decrease in short-term borrowings
with initial maturities less than three months |
(200,000) |
(1,253) |
(100,000) |
Dividends paid |
(304,026) |
(4,444) |
(354,697) |
Net cash used in
financing activities |
(1,106,784) |
(16,689) |
(1,331,911) |
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS |
(25,961) |
(348) |
(27,751) |
|
|
|
|
NET DECREASE IN CASH AND CASH
EQUIVALENTS |
(1,878,719) |
(25,897) |
(2,066,732) |
CASH AND CASH
EQUIVALENTS, BEGINNING OF THE PERIOD |
13,313,615 |
169,614 |
13,536,824 |
CASH AND CASH
EQUIVALENTS, END OF THE PERIOD |
11,434,896 |
143,717 |
11,470,092 |
|
|
|
|
ADDITIONAL CASH FLOW INFORMATION: |
|
|
|
Interest paid |
78,545 |
896 |
71,524 |
Income taxes paid |
314,282 |
28,678 |
2,288,808 |
|
|
|
|
NONCASH INVESTING AND FINANCING
ACTIVITIES: |
|
|
|
Acquisition of assets by entering into
capital leases |
799,715 |
20,542 |
1,639,432 |
Facilities purchase liabilities |
554,869 |
3,588 |
286,352 |
Asset retirement obligation |
42,273 |
-- |
-- |
Acquisition of a company: |
|
|
|
Assets acquired |
-- |
4,988 |
398,069 |
Cash paid |
-- |
(3,755) |
(299,700) |
Liabilities assumed |
-- |
1,233 |
98,369 |
|
|
|
|
|
|
|
|
(Note) The U.S. dollar amounts
have been translated from yen, for convenience only, at the rate of
JPY79.81 per 1 U.S. dollar which was the noon buying rate in
New York City for cable transfers in foreign currencies as of June
29, 2012. |
|
|
Going Concern Assumption
(Unaudited) |
Nothing to be reported. |
|
|
|
Segment Information
(Unaudited) |
Business
Segments: |
|
Revenues: |
|
Three Months Ended June 30, 2011 |
Three Months Ended June 30, 2012 |
|
Thousands of JPY |
Thousands of JPY |
Network service and
systems integration business |
23,239,377 |
24,510,419 |
Customers |
23,118,364 |
24,373,753 |
Intersegment |
121,013 |
136,666 |
ATM operation
business |
243,413 |
467,510 |
Customers |
243,413 |
467,510 |
Intersegment |
- |
- |
Elimination |
121,013 |
136,666 |
Consolidated total |
23,361,777 |
24,841,263 |
Segment profit or
loss: |
|
|
|
|
|
Three Months Ended June 30, 2011 |
Three Months Ended June 30, 2012 |
|
Thousands of JPY |
Thousands of JPY |
Network service and
systems integration business |
1,047,487 |
1,393,241 |
ATM operation
business |
(111,350) |
16,327 |
Elimination |
21,567 |
35,545 |
Consolidated operating
income |
914,570 |
1,374,023 |
|
|
|
Substantially all revenues
are from customers operating in Japan. Geographic information is
not presented due to immateriality of revenue attributable to
international operations. |
|
|
|
Material Changes In
Shareholders' Equity (Unaudited) |
Nothing to be reported. |
|
|
|
Subsequent Events
(Unaudited) |
Nothing to be reported. |
Note: The following information is provided to
disclose Internet Initiative Japan Inc. ("IIJ") financial results
(unaudited) for the Three Months Ended June 30, 2012 ("FY2012 1Q")
in the form defined by the Tokyo Stock Exchange.
Consolidated Financial Results for
the Three Months Ended June 30, 2012 |
|
[Under accounting principles
generally accepted in the United States ("U.S.
GAAP")] |
|
|
August 7, 2012 |
|
|
Company name: Internet Initiative Japan
Inc. |
Exchange listed: Tokyo Stock Exchange First
Section |
Stock code number: 3774 |
URL: http://www.iij.ad.jp/ |
Representative: Koichi Suzuki, President
and Representative Director |
|
Contact: Akihisa Watai, Managing Director and
CFO |
TEL: (03) 5259-6500 |
Filing of quarterly report
(Shihanki-houkokusho) to the regulatory organization in
Japan: Scheduled on August 14, 2012 |
Payment of dividend: -- |
|
Supplemental material on this Quarterly
Results: Yes |
|
Presentation on this Quarterly
Results: Yes (for institutional investors and analysts) |
|
(Amounts of less than JPY one million are rounded) |
1.
Consolidated Financial Results for the Three Months Ended June 30,
2012 (April 1, 2012 to June 30,
2012) |
(1)
Consolidated Results of
Operations
(% shown is YoY change) |
|
Total Revenues |
Operating Income |
Income before Income Tax
Expense |
Net Income attributable
to IIJ |
|
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
Three Months Ended June 30, 2012 |
24,841 |
6.3 |
1,374 |
50.2 |
1,373 |
58.7 |
897 |
75.0 |
Three Months Ended June 30, 2011 |
23,362 |
47.7 |
915 |
244.2 |
865 |
210.0 |
512 |
107.4 |
(Note1) Total comprehensive income attributable to IIJ
Three Months Ended June 30, 2012: JPY904 million (up 75.5%
YoY)
Three Months Ended June 30, 2011: JPY515 million (up 132.2%
YoY)
(Note2) Income before income tax expense represents income from
operations before income tax expense and equity in net income in
equity method investees, respectively, in IIJ's consolidated
financial statements.
|
|
Basic Net Income attributable to IIJ
per Share |
Diluted Net Income attributable to
IIJ per Share |
|
JPY |
JPY |
Three Months Ended June 30, 2012 |
4,424.16 |
4,421.57 |
Three Months Ended June 30, 2011 |
2,527.41 |
2,527.41 |
|
(2)
Consolidated Financial Position |
|
Total Assets |
Total Equity |
Total IIJ Shareholders' Equity |
Total IIJ Shareholders' Equity to
Total Assets |
|
JPY millions |
JPY millions |
JPY millions |
% |
As of June 30, 2012 |
73,507 |
33,250 |
33,247 |
45.2 |
As of March 31, 2012 |
73,493 |
32,696 |
32,688 |
44.5 |
|
2.
Dividends |
|
Dividend per Shares |
|
1Q-end |
2Q-end |
3Q-end |
Year-end |
Total |
|
JPY |
JPY |
JPY |
JPY |
JPY |
Fiscal Year Ended March 31, 2012 |
-- |
1,500.00 |
-- |
1,750.00 |
3,250.00 |
Fiscal Year Ending March 31, 2013 |
-- |
|
|
|
|
Fiscal Year Ending March 31, 2013
(Target) |
|
1,750.00 |
-- |
1,750.00 |
3,500.00 |
3. Target of
Consolidated Financial Results for the Fiscal Year Ending March 31,
2013 (April 1, 2012 through March 31,
2013) |
(% shown is YoY change) |
|
Total Revenues |
Operating Income |
Income before Income Tax
Expense (Benefit) |
Net Income
Attributable to IIJ |
Basic Net Income attributable to IIJ
per Share |
|
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY |
Interim Period Ending September 30, 2012 |
50,500 |
7.0 |
2,700 |
10.3 |
2,500 |
9.1 |
1,400 |
2.8 |
6,907.30 |
Fiscal Year Ending March 31, 2013 |
107,000 |
10.0 |
7,500 |
18.0 |
6,900 |
15.5 |
4,000 |
9.9 |
19,735.15 |
4. Others
(1) Changes in Significant Subsidiaries for the
Three Months Ended June 30, 2012
(Changes in significant subsidiaries for the Three
Months Ended June 30, 2012 which resulted in changes in scope of
consolidation): None
(2) Changes in Significant Accounting and Reporting
Policies for the Quarterly Consolidated Financial Statements
- Changes due to the revision of accounting standards: Yes
- Others: No
(3) Number of Shares Outstanding (Shares of Common
Stock)
1) The number of shares
outstanding (inclusive of treasury stock): |
As of June 30, 2012: |
206,478 shares |
As of March 31, 2012: |
206,478 shares |
|
|
2) The number of treasury
stock: |
As of June 30, 2012: |
3,794 shares |
As of March 31, 2012: |
3,794
shares |
|
|
3) The weighted average
number of shares outstanding: |
For the Three Months Ended June 30,
2012: |
202,684 shares |
For the Three Months Ended June 30,
2011: |
202,684 shares |
CONTACT: Internet Initiative Japan Inc.
E-mail: ir@iij.ad.jp
Tel: +81-3-5259-6500
URL: http://www.iij.ad.jp/en/ir
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