TOKYO, Feb. 08, 2018 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ")(NASDAQ:IIJI) (TSE:3774) today announced its nine months consolidated financial results for the fiscal year ending March 31, 2018 (“3Q17” from April 1, 2017 to December 31, 2017).1
Highlights of Financial Results for 3Q17
Revenues
JPY127.6 billion (up 12.3% YoY)
Operating Income
JPY3.8 billion (up 19.7% YoY)
Income before Income Tax Expense
JPY4.3 billion (up 26.1% YoY)
Net Income attributable to IIJ
JPY2.7 billion (up 40.7% YoY)
Financial Targets for FY2017
Revenues
JPY176.0 billion (up 11.5% YoY)
Operating Income
JPY6.5 billion (up 26.6% YoY)
Income before Income Tax Expense JPY6.5 billion (up 19.8% YoY)
Net Income attributable to IIJ
JPY4.0 billion (up 26.3% YoY)
Overview of 3Q17 Financial Results and Business Outlook
“To launch cryptocurrency exchange and settlement business, we established an equity method investee by partnering with prominent Japanese companies from various industries: Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation, Daiwa Securities Group, Nomura Holdings, Dai-ichi Life Insurance Company, Nippon Life Insurance Company, Mitsui Sumitomo Insurance Company, Sompo Holdings, Tokio Marine & Nichido Fire Insurance Company, East Japan Railway Company, ITOCHU Corporation, ITOCHU Techno-Solutions Corporation, K-Opticom Corporation, QTnet, Bic Camera, DENTSU, Mitsui Fudosan, and Yamato Holdings. DeCurret, IIJ’s 35% equity method investee with capital of JPY5.23 billion,2 will offer BtoC cryptocurrency exchange services from the latter half of FY2018 and BtoBtoC and BtoC cryptocurrency settlement services from FY2019. Based on our existing ASP FX trading system, which has been used by thirteen major Japanese financial institutions, DeCurret should be able to develop highly reliable and scalable cryptocurrency exchange system and services, incorporating Anti-Money Laundering (AML) and Know Your Customer (KYC) and other necessary and critical security requirements.3 We see a great growth opportunity in settlement business as conventional financial infrastructure needs to be changed dramatically, especially in Japan where cash is a predominantly major payment method.4 We’re very excited about working together with so many outstanding Japanese companies to create a new standard for cryptocurrency settlements which is thought to be a new social infrastructure,” said Koichi Suzuki, Founder, CEO and Chairman of IIJ. “As for the three months financial results, revenue and operating income increased year over year by 13.0% and 20.9% respectively. Network services, especially security-related services, which was supported by the strong demands, and mobile services, led the revenue growth. Accordingly with our mobile business growth strategy, our enterprise mobile revenue strongly grew by 45.2% year over year as MVNE and IoT/M2M transactions continued to expand. SI revenue increased by 8.6% YoY as we continued to accumulate projects. Operating income grew as gross margin of both network services and SI expanded by 13.6% and 13.0% year over year,” said Eijiro Katsu, COO and President of IIJ. “We decided to build our own data center and we’ve acquired the land of approximately 40 thousand m2.5 The main purpose is to integrate our racks that are currently spread out in the metropolitan area’s data centers for more effective operation. The new data center, which ultimately can accommodate up to 6,000 racks, allows gradual expansion of capacity as we’ll place system module-based data centers developed from our container-based data center technology accumulated from our Matsue Data Center Park since 2011. We estimate the future data center facility cost should be approximately 20% lower by having our own data center than continuously expanding leasing space. We’ll also ensure business expansion scalability for the future by having this new data center,” concluded Katsu. “We continuously enhance our existing business such as cloud, mobile, security and SI, and we’re also making further business developments like FinTech project this time. Our invisible yet very essential business assets such as Internet technology, network and system infrastructure, SI expertise, brand of reliability, and long-term relationship with prominent Japanese blue-chips let us develop and expand our business foundation. We shall continue to pursue these strategies going forward,” concluded Katsu.
__________________________
1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with U.S. GAAP, unaudited and consolidated. 2 The capital is JPY5.23 billion as of the mid-February when all the capital partners make payments. 3 The service, IIJ Raptor Service, was launched in 2010 and its customers include Nomura Scurities and Sony Bank. 4 According to the Ministry of Economy, Trade and Industry who published a report in May 2017, as for 2015, 19% of settlement was through non-cash in Japan compared to 41% in the U.S.A. and 55% in China. 5 The new data center will be located in Chiba prefecture, just east of Tokyo. As of December 2017, there are 21 data centers operated by IIJ in Japan. 20 of them are leased by data center owners and 1 data center owned by IIJ in Shimane prefecture.
3Q17 Financial Results Summary
Operating Results Summary
3Q16
3Q17
YoY Change
JPY millions
JPY millions
%
Total revenues
113,602
127,612
12.3
Network services
68,481
80,000
16.8
Systems integration (SI)
39,858
42,301
6.1
Equipment sales
2,207
2,275
3.1
ATM operation business
3,056
3,036
(0.6
)
Total costs
95,772
107,856
12.6
Network services
56,274
66,109
17.5
Systems integration (SI)
35,644
37,898
6.3
Equipment sales
2,024
2,053
1.4
ATM operation business
1,830
1,796
(1.9
)
Total gross margin
17,830
19,756
10.8
Network services
12,207
13,891
13.8
Systems integration (SI)
4,214
4,403
4.5
Equipment sales
183
222
21.0
ATM operation business
1,226
1,240
1.2
SG&A expenses and R&D
14,675
15,980
8.9
Operating income
3,155
3,776
19.7
Income before income tax expense
3,433
4,329
26.1
Net income attributable to IIJ
1,910
2,688
40.7
Segment Results Summary
3Q16
3Q17
JPY millions
JPY millions
Total revenues
113,602
127,612
Network services and SI business
110,831
124,835
ATM operation business
3,056
3,036
Elimination
(285
)
(259
)
Operating income
3,155
3,776
Network service and SI business
2,178
2,782
ATM operation business
1,088
1,123
Elimination
(111
)
(129
)
We have omitted segment analysis because most of our revenues are dominated by network services and systems integration (SI) business.
3Q17 Revenues and Income
Revenues
Total revenues were JPY127,612 million, up 12.3% YoY (JPY113,602 million for 3Q16).
Network services revenue was JPY80,000 million, up 16.8% YoY (JPY68,481 million for 3Q16).
Revenues for Internet connectivity services for enterprise were JPY20,418 million, up 24.0% YoY from JPY16,461 million for 3Q16, mainly due to an increase in mobile-related services revenues along with an expansion of MVNE business clients’ transactions.
Revenues for Internet connectivity services for consumers were JPY18,707 million, up 17.6% YoY from JPY15,903 million for 3Q16, mainly due to the revenue growth of “IIJmio Mobile Service,” consumer mobile services which offer inexpensive data communication and voice services with SIM cards.
Revenues for WAN services were JPY21,676 million, up 9.2% YoY compared to JPY19,848 million for 3Q16.
Revenues for Outsourcing services were JPY19,199 million, up 18.0% YoY from JPY16,269 million for 3Q16, mainly due to an increase in security-related services revenues.
Network Services Revenues Breakdown
3Q16
3Q17
YoY Change
JPY millions
JPY millions
%
Internet connectivity services (Enterprise)
16,461
20,418
24.0
IP service*
7,331
7,553
3.0
IIJ FiberAccess/F and IIJ DSL/F
2,279
2,262
(0.8
)
IIJ Mobile service (Enterprise)
6,680
10,436
56.2
IIJ Mobile MVNO Platform Service
4,358
7,742
77.7
Others
171
167
(2.7
)
Internet connectivity services (Consumer)
15,903
18,707
17.6
IIJ
14,290
17,394
21.7
IIJmio Mobile Service
12,437
15,342
23.4
hi-ho
1,613
1,313
(18.6
)
WAN services
19,848
21,676
9.2
Outsourcing services
16,269
19,199
18.0
Total network services
68,481
80,000
16.8
* IP service revenues include revenues from the data center connectivity service.
Number of Contracts and Subscription for Connectivity Services*1
as of December 31, 2016
as of December 31, 2017
YoY Change
Internet connectivity services (Enterprise)
824,546
1,246,898
422,352
IP service (1Gbps-)
413
461
48
IP service (100Mbps-999Mbps)
577
643
66
IP service (-99Mbps)
622
627
5
IIJ Data center connectivity service
258
243
(15
)
IIJ FiberAccess/F and IIJ DSL/F
72,132
70,778
(1,354
)
IIJ Mobile service (Enterprise)
749,484
1,173,563
424,079
IIJ Mobile MVNO Platform Service*2
501,374
744,332
242,958
Others
1,060
583
(477
)
Internet connectivity services (Consumer)
1,377,529
1,349,664
(27,865
)
IIJ*2
1,241,399
1,349,664
108,265
IIJmio Mobile Service
912,394
986,767
74,373
hi-ho*2
136,130
-
(136,130
)
Total contracted bandwidth*3
2,636.7Gbps
3,085.3Gbps
448.6Gbps
*1. Numbers in the table above show number of contracts except for “IIJ Mobile service (Enterprise),” “IIJ” and “hi-ho” which show number of subscriptions.
*2. On December 31, 2017, IIJ sold all the shares of common stock of hi-ho which was IIJ’s wholly owned subsidiary. Accordingly, hi-ho’s subscription for “Internet connectivity services (Consumer)” decreased to zero, hi-ho’s mobile service subscription of 14,735 was reclassed to “IIJ Mobile MVNO Platform Service” and a part of hi-ho’s subscription other than mobile service subscription of 47,683 is included in IIJ’s subscrfiption for “Internet connectivity services (Consumer).”
*3. Regarding IP service, data center connectivity service and IIJ FiberAccess/F and IIJ DSL/F of Internet connectivity services (Enterprise), total contracted bandwidths are calculated by multiplying number of contracts by contracted bandwidths respectively.
SI revenues were JPY42,301 million, up 6.1% YoY (JPY39,858 million for 3Q16).
Systems construction revenue, a one-time revenue, was JPY14,530 million, up 4.0% YoY (JPY13,973 million for 3Q16). Systems operation and maintenance revenue, a recurring revenue, was JPY27,771 million, up 7.3% YoY (JPY25,885 million for 3Q16), mainly due to continued accumulation of the orders and an increase in private cloud services’ revenues.
Orders received for SI and equipment sales totaled JPY48,228 million, down 6.8% YoY (JPY51,730 million for 3Q16); orders received for systems construction and equipment sales were JPY19,201 million, down 8.7% YoY (JPY21,031 million for 3Q16) and orders received for systems operation and maintenance were JPY29,027 million, down 5.4% YoY (JPY30,699 million for 3Q16).
Order backlog for SI and equipment sales as of December 31, 2017 amounted to JPY45,153 million, up 4.3% YoY (JPY43,309 million as of December 31, 2016); order backlog for systems construction and equipment sales was JPY9,574 million, down 12.4% YoY (JPY10,928 million as of December 31, 2016) and order backlog for systems operation and maintenance was JPY35,579 million, up 9.9% YoY (JPY32,381 million as of December 31, 2016).
Equipment sales revenues were JPY2,275 million, up 3.1% YoY (JPY2,207 million for 3Q16).
ATM operation business revenues were JPY3,036 million, down 0.6% YoY (JPY3,056 million for 3Q16). As of December 31, 2017, 1,101 ATMs have been placed.
Cost and expense
Total cost of revenues was JPY107,856 million, up 12.6% YoY (JPY95,772 million for 3Q16).
Cost of network services revenue was JPY66,109 million, up 17.5% YoY (JPY56,274 million for 3Q16). There were an increase in outsourcing-related costs due to our mobile services and an increase in circuit-related costs. Gross margin was JPY13,891 million, up 13.8% YoY (JPY12,207 million for 3Q16) and gross margin ratio was 17.4% compared to 17.8% in 3Q16.
Cost of SI revenues was JPY37,898 million, up 6.3% YoY (JPY35,644 million for 3Q16). There were an increase in outsourcing-related costs along with our SI revenue increase. Gross margin was JPY4,403 million, up 4.5% YoY (JPY4,214 million for 3Q16) and gross margin ratio was 10.4% compared to 10.6% in 3Q16.
Cost of equipment sales revenues was JPY2,053 million, up 1.4% YoY (JPY2,024 million for 3Q16). Gross margin was JPY222 million (JPY183 million for 3Q16) and gross margin ratio was 9.8% compared to 8.3% in 3Q16.
Cost of ATM operation business revenues was JPY1,796 million, down 1.9% YoY (JPY1,830 million for 3Q16). Gross margin was JPY1,240 million (JPY1,226 million for 3Q16) and gross margin ratio was 40.8% compared to 40.1% in 16.
SG&A and R&D expenses
SG&A and R&D expenses in total were JPY15,980 million, up 8.9% YoY (JPY14,675 million for 3Q16).
Sales and marketing expenses were JPY9,551 million, up 13.8% YoY (JPY8,392 million for 3Q16) mainly due to increases in advertising expenses, sales commission expenses, and personnel-related expenses.
General and administrative expenses were JPY6,070 million, up 2.4% YoY (JPY5,928 million for 3Q16) mainly due to increases in personnel-related expenses.
Research and development expenses were JPY359 million, up 1.3% YoY (JPY355 million for 3Q16).
Operating income
Operating income was JPY3,776 million, up 19.7% YoY (JPY3,155 million for 3Q16).
Other income (expenses)
Other income (expenses) was an income of JPY553 million (an income of JPY278 million for 3Q16), mainly because of net gain on sales of other investments, including available-for-sale securities, of JPY373 million (JPY214 million for 3Q16), distribution from fund investment of JPY196 million (included in other-net of JPY173 million, JPY208 million for 3Q16), interest expense of JPY276 million (JPY218 million for 3Q16), dividend income of JPY231 million (JP106 million for 3Q16), and foreign exchange gains of JPY29 million (foreign exchange losses of JPY23 million for 3Q16).
Income before income tax expenses
Income before income tax expenses was JPY4,329 million, up 26.1% YoY (JPY3,433 million for 3Q16).
Net income
Income tax expense was JPY1,614 million (JPY1,466 million for 3Q16).
Equity in net income of equity method investees was JPY101 million (JPY69 million for 3Q16) mainly due to net income of Internet Multifeed Co.
As a result of the above, net income was JPY2,816 million, up 38.3% YoY (JPY2,036 million for 3Q16).
Net income attributable to IIJ
Net income attributable to non-controlling interests was JPY128 million (JPY126 million for 3Q16) mainly related to net income of Trust Networks Inc.
Net income attributable to IIJ was JPY2,688 million, up 40.7% YoY (JPY1,910 million for 3Q16).
3Q17 Balance Sheets
Balance sheets
As of December 31, 2017, the balance of total assets was JPY150,273 million, increased by JPY12,877 million from the balance as of March 31, 2017 of JPY137,395 million.
As of December 31, 2017, the balance of current assets was JPY68,061 million, increased by JPY4,340 million from the balance as of March 31, 2017 of JPY63,722 million. The major breakdown of current assets was an increase in inventories by JPY1,531 million to JPY4,329 million, an increase in prepaid expenses by JPY1,343 million to JPY8,954 million and an increase in cash and cash equivalents by JPY1,086 million to JPY23,044 million. As of December 31, 2017, the balance of noncurrent assets was JPY82,211 million, increased by JPY8,538 million from the balance as of March 31, 2017 of JPY73,673 million. The major breakdown of noncurrent assets was property and equipment of JPY45,125 million, increased by JPY5,349 million, including JPY1,205 million by purchase of land, from the balance as of March 31, 2017, and other investments of JPY10,933 million,increased by JPY3,008 million mainly due to an increase in the fair value of available-for-sale securities. Other investments as of December 31, 2017, consisted of JPY8,786 million in available-for-sale securities, JPY1,124 million in nonmarketable equity securities and JPY1,023 million in investments in funds, including some through a trust. As of December 31, 2017, the balance of non-amortized intangible assets was JPY6,118 million, decreased by JPY102 million from the balance as of March 31, 2017 of JPY6,220 million. The major breakdown of non-amortized intangible assets was JPY6,082 million in goodwill. The balance of amortized intangible assets, which was customer relationships, was JPY2,762 million, decreased by JPY274 million from the balance as of March 31, 2017 of JPY3,036 million.
As of December 31, 2017, the balance of current liabilities was JPY41,555 million, increased by JPY1,572 million from the balance as of March 31, 2017 of JPY39,983 million. The major breakdown of current liabilities was an increase in capital lease obligations-current portion by JPY672 million to JPY5,491 million and an increase in accounts payable (trade and other) by JPY462 million to JPY17,424 million. As of December 31, 2017, the balance of noncurrent liabilities was JPY37,672 million, increased by JPY7,640 million from the balance as of March 31, 2017 of JPY30,032 million. The major breakdown of noncurrent liabilities was an increase in long-term borrowings by JPY7,000 million to JPY15,500 million and an increase in capital lease obligations-noncurrent by JPY710 million to JPY11,095 million.
As of December 31, 2017, the balance of total IIJ shareholders’ equity was JPY70,381 million, increased by JPY3,639 million from the balance as of March 31, 2017 and IIJ shareholders’ equity ratio (total IIJ shareholders’ equity divided by total assets) as of December 31, 2017 was 46.8%.
3Q17 Cash Flows
Cash flows
Cash and cash equivalents as of December 31, 2017 were JPY23,044 million (JPY21,266 million as of December 31, 2016).
Net cash provided by operating activities for 3Q17 was JPY8,296 million (net cash provided by operating activities of JPY4,408 million for 3Q16.) There were net income of JPY2,816 million, depreciation and amortization of JPY9,156 million and net cash out flow of JPY3,486 million from changes in operating assets and liabilities. As for changes in operating assets and liabilities, there were an increase in prepaid expenses (including prepaid expense-noncurrent) in relation to up front payment for software licenses and maintenance cost for service facilities, an increase in inventories due to the increase in systems construction projects and an increase in prepaid expenses for seasonal bonus payments to our employees.
Net cash used in investing activities for 3Q17 was JPY8,272 million (net cash used in investing activities of JPY5,389 million for 3Q16), mainly due to payments for purchase of property and equipment of JPY11,785 million (JPY7,940 million for 3Q16), including JPY1,205 million by purchase of land, proceeds from sales of property and equipment, which include sales and leaseback transactions, of JPY2,757 million (JPY2,219 million for 3Q16) and proceeds from sale of stock of hi-ho (net of cash divested) of JPY726 million.
Net cash provided by financing activities for 3Q17 was JPY1,049 million (net cash provided by financing activities of JPY2,831 million for 3Q16), mainly due to procceds from long-term borrowings of JPY7,000 million, principal payments under capital leases of JPY4,230 million (JPY3,535 million for 3Q16) and FY2016 year-end and FY2017 interim dividends payments of JPY1,217 million (JPY1,126 million for 3Q16).
FY2017 Financial Targets
Due to seasonal factors, our financial results tend to be small in a first quarter and strong in strong in a fourth quarter every fiscal year. 3Q17 financial results resulted almost as planed. Our financial targets for the fiscal year ending March 31, 2018 (FY2017) announced on May 15, 2017 remain unchanged.
3Q17 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
3Q16
3Q17
JPY millions
JPY millions
Adjusted EBITDA
11,161
12,932
Depreciation and Amortization
(8,006
)
(9,156
)
Operating Income
3,155
3,776
Other Income
278
553
Income Tax Expense
1,466
1,614
Equity in Net Income of Equity Method Investees
69
101
Net income
2,036
2,816
Less: Net income attributable to noncontrolling interests
(126
)
(128
)
Net Income attributable to IIJ
1,910
2,688
CAPEX
3Q16
3Q17
JPY millions
JPY millions
CAPEX, including capital leases
12,258
15,756
Acquisition of Assets by Entering into Capital Leases
5,843
5,625
Purchase of Property and Equipment
6,415
10,131
Presentation
Presentation materials will be posted on our web site (https://www.iij.ad.jp/en/ir/) on February 8, 2018.
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 companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, mobile services, security services, cloud computing services, and systems integration. Moreover, IIJ operates one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006.
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 FY2017 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.
Internet Initiative Japan Inc.
Consolidated Balance Sheets (Unaudited)
(As of March 31, 2017 and December 31, 2017)
As of March 31, 2017
As of December 31, 2017
Thousands of JPY
Thousands of JPY
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
21,958,591
23,044,148
Accounts receivable, net of allowance for doubtful accounts of JPY 107,684 thousand and JPY 118,034 thousand at March 31, 2017 and December 31, 2017, respectively
27,383,692
27,615,182
Inventories
2,798,054
4,329,210
Prepaid expenses—current
7,610,925
8,953,946
Deferred tax assets—current
1,298,469
-
Other current assets, net of allowance for doubtful accounts of JPY 15,192 thousand and JPY 720 thousand at March 31, 2017 and December 31, 2017, respectively
2,672,008
4,118,959
Total current assets
63,721,739
68,061,445
INVESTMENTS IN EQUITY METHOD INVESTEES
3,150,175
3,382,804
OTHER INVESTMENTS
7,924,914
10,932,942
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of JPY 50,566,983 thousand and JPY 53,092,388 thousand at March 31, 2017 and December 31, 2017, respectively
39,775,444
45,124,889
GOODWILL
6,169,609
6,082,472
OTHER INTANGIBLE ASSETS—Net
3,087,017
2,797,659
GUARANTEE DEPOSITS
3,060,365
3,345,893
DEFERRED TAX ASSETS—Noncurrent
80,566
145,141
NET INVESTMENT IN SALES-TYPE LEASES—Noncurrent
2,047,682
1,676,234
Prepaid expenses—Noncurrent
6,607,437
7,342,288
OTHER ASSETS, net of allowance for doubtful accounts of JPY 61,877 thousand and JPY 60,749 thousand at March 31, 2017 and December 31, 2017, respectively
1,770,201
1,380,815
TOTAL
137,395,149
150,272,582
As of March 31, 2017
As of December 31, 2017
Thousands of JPY
Thousands of JPY
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings
9,250,000
9,400,000
Capital lease obligations—current portion
4,818,723
5,490,906
Accounts payable—trade
14,653,065
15,450,618
Accounts payable—other
2,308,790
1,973,532
Income taxes payable
1,075,745
530,746
Accrued expenses
2,755,581
3,000,449
Deferred income—current
3,750,542
4,169,086
Other current liabilities
1,370,661
1,539,525
Total current liabilities
39,983,107
41,554,862
LONG-TERM BORROWINGS
8,500,000
15,500,000
CAPITAL LEASE OBLIGATIONS—Noncurrent
10,384,643
11,094,802
ACCRUED RETIREMENT AND PENSION COSTS—Noncurrent
3,532,965
3,724,948
DEFERRED TAX LIABILITIES—Noncurrent
963,845
780,689
DEFERRED INCOME—Noncurrent
3,656,612
3,865,199
OTHER NONCURRENT LIABILITIES
2,993,777
2,706,064
Total Liabilities
70,014,949
79,226,564
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common-stock—authorized, 75,520,000 shares; issued and outstanding, 46,711,400 and 46,713,800 shares at March 31, 2017 and December 31, 2017, respectively
25,509,499
25,511,804
Additional paid-in capital
36,117,511
36,161,451
Retained earnings
4,511,945
5,983,175
Accumulated other comprehensive income
2,499,700
4,620,983
Treasury stock—1,650,909 shares held by the company at March 31, 2017 and December 31, 2017, respectively
(1,896,784
)
(1,896,784
)
Total Internet Initiative Japan Inc. shareholders' equity
66,741,871
70,380,629
NONCONTROLLING INTERESTS
638,329
665,389
Total equity
67,380,200
71,046,018
TOTAL
137,395,149
150,272,582
Internet Initiative Japan Inc.
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Unaudited)
(For the nine months ended December 31, 2016 and December 31, 2017)
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
REVENUES:
Network services:
Internet connectivity services (enterprise)
16,461,205
20,417,963
Internet connectivity services (consumer)
15,902,952
18,707,332
WAN services
19,847,736
21,675,903
Outsourcing services
16,268,643
19,198,399
Total
68,480,536
79,999,597
Systems integration:
Systems construction
13,972,807
14,530,478
Systems operation and maintenance
25,885,221
27,770,579
Total
39,858,028
42,301,057
Equipment sales
2,207,649
2,275,363
ATM operation business
3,055,739
3,035,957
Total revenues
113,601,952
127,611,974
COSTS AND EXPENSES:
Cost of network services
56,273,528
66,109,118
Cost of systems integration
35,644,158
37,897,888
Cost of equipment sales
2,024,262
2,053,432
Cost of ATM operation business
1,830,095
1,795,912
Total costs
95,772,043
107,856,350
Sales and marketing
8,392,014
9,550,884
General and administrative
5,928,165
6,070,008
Research and development
354,411
359,125
Total costs and expenses
110,446,633
123,836,367
OPERATING INCOME
3,155,319
3,775,607
OTHER INCOME (EXPENSES):
Dividend income
106,336
230,784
Interest income
26,781
23,130
Interest expense
(218,204
)
(276,374
)
Foreign exchange gain (loss), net
(23,072
)
28,531
Net gain on sales of other investments
213,938
373,499
Impairment of other investments
(30,554
)
-
Other —net
202,486
173,396
Other income —net
277,711
552,966
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE
AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES
3,433,030
4,328,573
INCOME TAX EXPENSE
1,465,852
1,613,955
EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES
69,244
101,169
NET INCOME
2,036,422
2,815,787
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(126,161
)
(127,891
)
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC.
1,910,261
2,687,896
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
NET INCOME PER SHARE
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares)
45,846,887
45,062,874
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares)
45,962,442
45,211,765
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs)
91,693,774
90,125,748
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs)
91,924,884
90,423,530
BASIC NET INCOME PER SHARE (JPY)
41.67
59.65
DILUTED NET INCOME PER SHARE (JPY)
41.56
59.45
BASIC NET INCOME PER ADS EQUIVALENT (JPY)
20.83
29.82
DILUTED NET INCOME PER ADS EQUIVALENT (JPY)
20.78
29.73
Quarterly Consolidated Statements of Comprehensive Income (Unaudited)
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
NET INCOME
2,036,422
2,815,787
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation adjustments
(455,158
)
(13,401
)
Unrealized holding gain on securities
920,735
2,132,187
Defined benefit pension plans
10,878
2,497
TOTAL COMPREHENSIVE INCOME
2,512,877
4,937,070
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(126,161
)
(127,891
)
COMPREHENSIVE INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC.
2,386,716
4,809,179
Internet Initiative Japan Inc.
Consolidated Statements of Cash Flows (Unaudited)
(For the nine months ended December 31, 2016 and December 31, 2017)
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
OPERATING ACTIVITIES:
Net income
2,036,422
2,815,787
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
8,006,049
9,155,860
Provision for retirement and pension costs, less payments
188,923
196,199
Provision for allowance for doubtful accounts
19,989
67,931
Gain on sales of property and equipment
(15,410
)
(13,636
)
Loss on disposal of property and equipment
54,481
62,391
Net gain on sales of other investments
(213,938
)
(373,499
)
Impairment of other investments
30,554
-
Foreign exchange gain, net
(277
)
(11,011
)
Equity in net income of equity method investees, less dividends received
(18,162
)
(49,978
)
Deferred income tax expense (benefit)
349,735
(23,009
)
Others
(51,716
)
(45,309
)
Changes in operating assets and liabilities net of effects from divestitures of a company :
Increase in accounts receivable
(64,287
)
(589,876
)
Decrease in net investment in sales-type lease — noncurrent
400,390
371,448
Increase in inventories
(1,586,556
)
(1,528,797
)
Increase in prepaid expenses
(2,454,437
)
(1,355,406
)
Increase in other current and noncurrent assets
(4,534,405
)
(1,992,382
)
Increase in accounts payable
160,327
898,983
Decrease in income taxes payable
(767,172
)
(535,204
)
Increase in accrued expenses
18,639
241,367
Increase in deferred income—current
140,038
419,937
Increase in deferred income—noncurrent
302,157
236,485
Increase in other current and noncurrent liabilities
2,406,335
347,722
Net cash provided by operating activities
4,407,679
8,296,003
INVESTING ACTIVITIES:
Purchase of property and equipment
(7,940,090
)
(11,785,162
)
Proceeds from sales of property and equipment
2,219,179
2,756,719
Purchase of other investments
(316,171
)
(131,118
)
Investment in an equity method investee
(99,000
)
(174,808
)
Proceeds from sales of available-for-sale securities
-
460,017
Proceeds from sales of other investments
534,249
156,266
Payments of guarantee deposits
(17,102
)
(298,145
)
Refund of guarantee deposits
87,704
20,833
Payments for refundable insurance policies
(42,385
)
(42,272
)
Proceeds from sale of stock of a subsidiary, net of cash divested
-
726,081
Proceeds from subsidies
200,000
48,976
Other
(15,000
)
(9,710
)
Net cash used in investing activities
(5,388,616
)
(8,272,323
)
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
FINANCING ACTIVITIES:
Proceeds from short-term borrowings with initial maturities over three months and long-term borrowings
8,550,000
9,550,000
Repayments of short-term borrowings with initial maturities over three months
(50,000
)
(2,550,000
)
Principal payments under capital leases
(3,534,887
)
(4,229,975
)
Repayments of long-term accounts payable
-
(406,251
)
Payments for purchase of treasury stock
(982,107
)
-
Dividends paid
(1,125,841
)
(1,216,666
)
Other
(26,000
)
(97,660
)
Net cash provided by financing activities
2,831,165
1,049,448
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
(153,105
)
12,429
NET INCREASE IN CASH AND CASH EQUIVALENTS.
1,697,123
1,085,557
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
19,569,095
21,958,591
CASH AND CASH EQUIVALENTS, END OF THE PERIOD
21,266,218
23,044,148
ADDITIONAL CASH FLOW INFORMATION:
Interest paid
217,414
270,664
Income taxes paid
1,961,521
1,914,600
NONCASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of assets by entering into capital leases
5,842,869
5,625,021
Facilities purchase liabilities
899,852
1,973,532
Asset retirement obligation
-
49,609
Going Concern Assumption (Unaudited)
Nothing to be reported.
Material Changes In Shareholders' Equity (Unaudited)
Nothing to be reported.
Segment Information (Unaudited)
Business Segments:
Revenues:
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
Network service and systems integration business
110,830,849
124,834,793
Customers
110,546,213
124,576,017
Intersegment
284,636
258,776
ATM operation business
3,055,739
3,035,957
Customers
3,055,739
3,035,957
Intersegment
-
-
Elimination
(284,636
)
(258,776
)
Consolidated total
113,601,952
127,611,974
Segment profit or loss:
Nine Months Ended
Nine Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
Network service and systems integration business
2,177,784
2,781,424
ATM operation business
1,088,056
1,123,290
Elimination
(110,521
)
(129,107
)
Consolidated operating income
3,155,319
3,775,607
Geographic information is not presented due to immateriality of revenue attributable to international operations.
Subsequent Events (Unaudited)
Nothing to be reported.
Third Quarter FY2017 Consolidated Financial Results (3 months) The following tables are highlight data of 3rd Quarter FY2017 (3 months) consolidated financial results (unaudited, for the three months ended December 31, 2017).
Operating Results Summary
3Q16
3Q17
YoY Change
JPY millions
JPY millions
%
Total Revenues:
39,479
44,624
13.0
Network Services
23,645
27,714
17.2
Systems Integration (SI)
14,090
15,302
8.6
Equipment Sales
741
616
(16.9
)
ATM Operation Business
1,003
992
(1.1
)
Cost of Revenues:
33,497
37,894
13.1
Network Services
19,558
23,073
18.0
Systems Integration (SI)
12,651
13,677
8.1
Equipment Sales
681
548
(19.5
)
ATM Operation Business
607
596
(1.7
)
SG&A Expenses and R&D
4,774
5,270
10.4
Operating Income
1,208
1,460
20.9
Income before Income Tax Expense
1,328
1,860
40.1
Net Income attributable to IIJ
802
1,200
49.6
Network Service Revenue Breakdown
3Q16
3Q17
YoY Change
JPY millions
JPY millions
%
Internet Connectivity Service (Enterprise)
5,884
7,152
21.5
IP Service*
2,457
2,557
4.0
IIJ FiberAccess/F and IIJ DSL/F
762
752
(1.2
)
IIJ Mobile Service
2,608
3,787
45.2
IIJ Mobile MVNO Platform Service
1,784
2,822
58.2
Others
57
56
(2.1
)
Internet Connectivity Service (Consumer)
5,575
6,356
14.0
IIJ
5,064
5,936
17.2
IIJmio Mobile Service
4,402
5,255
19.4
hi-ho
511
420
(17.9
)
WAN Services
6,559
7,593
15.8
Outsourcing Services
5,627
6,613
17.5
Network Services Revenues
23,645
27,714
17.2
* IP service revenues include revenues from the data center connectivity service.
Reconciliation of Non-GAAP Financial Measures (3rd Quarter FY2017 (3 months)) The following table summarizes the reconciliation of adjusted EBITDA to net income in our consolidated statements of income that are prepared in accordance with U.S. GAAP.
Adjusted EBITDA
3Q16
3Q17
JPY millions
JPY millions
Adjusted EBITDA
3,930
4,594
Depreciation and Amortization
(2,722
)
(3,134
)
Operating Income
1,208
1,460
Other Income (Expense)
120
400
Income Tax Expense (Benefit)
512
645
Equity in Net Income of Equity Method Investees
27
24
Net income
843
1,239
Less: Net income attributable to noncontrolling interests
(41
)
(39
)
Net Income attributable to IIJ
802
1,200
The following table summarizes the reconciliation of capital expenditures to the purchase of property and equipment in our consolidated statements of cash flows that are prepared and presented in accordance with U.S. GAAP.
CAPEX
3Q16
3Q17
JPY millions
JPY millions
CAPEX, including capital leases
3,886
6,410
Acquisition of Assets by Entering into Capital Leases
2,051
1,218
Purchase of Property and Equipment
1,835
5,192
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income (Unaudited)
(Three Months ended December 31, 2016 and December 31, 2017)
Three Months Ended
Three Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
REVENUES:
Network services:
Internet connectivity services (enterprise)
5,884,331
7,152,000
Internet connectivity services (consumer)
5,574,632
6,355,678
WAN services
6,559,024
7,592,525
Outsourcing services
5,626,783
6,613,953
Total
23,644,770
27,714,156
Systems integration:
Systems construction
5,389,388
5,722,530
Systems operation and maintenance
8,700,314
9,579,514
Total
14,089,702
15,302,044
Equipment sales
740,991
615,444
ATM operation business
1,003,219
992,045
Total revenues
39,478,682
44,623,689
COST AND EXPENSES:
Cost of network services
19,558,238
23,072,762
Cost of systems integration
12,651,235
13,676,673
Cost of equipment sales
681,145
548,271
Cost of ATM operation business
606,601
596,164
Total costs
33,497,219
37,893,870
Sales and marketing
2,756,066
3,223,719
General and administrative
1,907,809
1,938,024
Research and development
109,971
107,998
Total costs and expenses
38,271,065
43,163,611
OPERATING INCOME
1,207,617
1,460,078
OTHER INCOME (EXPENSE):
Dividend income
14,929
33,721
Interest income
8,263
7,354
Interest expense
(75,859
)
(92,009
)
Foreign exchange gain, net
82,844
9,823
Net gain on sales of other investments
-
373,499
Other—net
89,881
67,308
Other income —net
120,058
399,696
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES
1,327,675
1,859,774
INCOME TAX EXPENSE
512,174
644,428
EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES
27,598
23,830
NET INCOME
843,099
1,239,176
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(40,772
)
(39,249
)
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC.
802,327
1,199,927
Three Months Ended
Three Months Ended
December 31, 2016
December 31, 2017
NET INCOME PER SHARE
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares)
45,636,429
45,062,891
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares)
45,758,296
45,220,584
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs)
91,272,858
90,125,782
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs)
91,516,592
90,441,168
BASIC NET INCOME PER SHARE (JPY)
17.58
26.63
DILUTED NET INCOME PER SHARE (JPY)
17.53
26.53
BASIC NET INCOME PER ADS EQUIVALENT (JPY)
8.79
13.31
DILUTED NET INCOME PER ADS EQUIVALENT (JPY)
8.77
13.27
Quarterly Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended
Three Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
NET INCOME
843,099
1,239,176
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation adjustments
(45,068
)
41,807
Unrealized holding gain on securities
469,974
955,606
Defined benefit pension plans
3,626
809
TOTAL COMPREHENSIVE INCOME
1,271,631
2,237,398
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(40,772
)
(39,249
)
COMPREHENSIVE INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC.
1,230,859
2,198,149
Internet Initiative Japan Inc.
Consolidated Statements of Cash Flows (Unaudited)
(Three Months ended December 31, 2016 and December 31, 2017)
Three Months Ended
Three Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
OPERATING ACTIVITIES:
Net income
843,099
1,239,176
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
2,722,545
3,133,980
Provision for retirement and pension costs, less payments
66,477
69,420
Provision for allowance for doubtful accounts
14,856
22,695
Loss (gain) on sales of property and equipment
(7,706
)
868
Loss on disposal of property and equipment
18,825
25,237
Net gain on sales of other investments
-
(373,499
)
Foreign exchange gain, net
(83,375
)
(2,553
)
Equity in net income of equity method investees, less dividends received
(27,598
)
(23,830
)
Deferred income tax expense
66,553
112,939
Other
(46,536
)
(37,280
)
Changes in operating assets and liabilities net of effects from divestitures of a company :
Increase in accounts receivable
(560,123
)
(1,690,935
)
Decrease (increase) in net investment in sales-type lease — noncurrent
101,218
(17,142
)
Increase in inventories
(874,042
)
(165,796
)
Increase in prepaid expenses
(1,046,904
)
(208,278
)
Increase in other current and noncurrent assets
(2,849,833
)
(927,696
)
Increase (decrease) in accounts payable
(357,834
)
686,591
Decrease in income taxes payable
(174,286
)
(473,059
)
Increase in accrued expenses
65,056
16,453
Increase (decrease) in deferred income—current
92,031
(5,671
)
Increase in deferred income—noncurrent
178,857
447,996
Increase in other current and noncurrent liabilities
2,193,546
364,106
Net cash provided by operating activities
334,826
2,193,722
INVESTING ACTIVITIES:
Purchase of property and equipment
(2,581,985
)
(5,361,874
)
Proceeds from sales of property and equipment
1,009,711
372,958
Purchase of other investments
(29,113
)
(73,629
)
Investment in an equity method investee
(99,000
)
-
Proceeds from sales of available-for-sale securities
-
460,017
Proceeds from sales of other investments
229,707
122,810
Payments of guarantee deposits
(2,699
)
(4,112
)
Refund of guarantee deposits
10,228
5,557
Payments for refundable insurance policies
(14,204
)
(14,091
)
Proceeds from sale of stock of a subsidiary, net of cash divested
-
726,081
Other
(15,000
)
(6,710
)
Net cash used in investing activities
(1,492,355
)
(3,772,993
)
Three Months Ended
Three Months Ended
December 31, 2016
December 31, 2017
Thousands of JPY
Thousands of JPY
FINANCING ACTIVITIES:
Proceeds from short-term borrowings with initial maturities over three months and long-term borrowings
5,550,000
7,050,000
Net increase in short-term borrowings with initial maturities less than three months
-
2,500,000
Repayments of short-term borrowings with initial maturities over three months
(50,000
)
(2,550,000
)
Principal payments under capital leases
(1,221,124
)
(1,465,754
)
Repayments of long-term accounts payable
-
(202,979
)
Payments for purchase of treasury stock
(982,107
)
-
Dividends paid
(620,361
)
(608,349
)
Net cash provided by financing activities
2,676,408
4,722,918
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
79,517
29,470
NET INCREASE IN CASH AND CASH EQUIVALENTS
1,598,396
3,173,117
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
19,667,822
19,871,031
CASH AND CASH EQUIVALENTS, END OF THE PERIOD
21,266,218
23,044,148
Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the nine months ended December 31, 2017 (“3Q17”) in the form defined by the Tokyo Stock Exchange.
Consolidated Financial Results for the Nine Months ended December 31, 2017 [Under accounting principles generally accepted in the United States ("U.S. GAAP")]
February 8, 2018
Company name: Internet Initiative Japan Inc. Exchange listed: Tokyo Stock Exchange First Section Stock code number: 3774 URL: https://www.iij.ad.jp/ Representative: Eijiro Katsu, President and Representative Director Contact: Akihisa Watai, Managing Director and CFO TEL: (03) 5205-6500 Scheduled date for filing of quarterly report (Shihanki-houkokusho) to Japan’s regulatory organization: February 14, 2018 Scheduled date for dividend payment: - Supplemental material on quarterly results: Yes Presentation on quarterly report: Yes (for institutional investors and analysts)
(Amounts of less than JPY one million are rounded)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2017 (April 1, 2017 to December 31, 2017)
(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
%
Nine months ended December 31, 2017
127,612
12.3
3,776
19.7
4,329
26.1
2,688
40.7
Nine months ended December 31, 2016
113,602
14.3
3,155
(22.5
)
3,433
(17.8
)
1,910
(25.8
)
(Note1)
Total comprehensive income attributable to IIJ
For the nine months ended December 31, 2017: JPY4,809 million (up 101.5% YoY)
For the nine months ended December 31, 2016: JPY2,387 million (down 0.9% 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
Nine months ended December 31, 2017
59.65
59.45
Nine months ended December 31, 2016
41.67
41.56
(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 December 31, 2017
150,273
71,046
70,381
46.8
As of March 31, 2017
137,395
67,380
66,742
48.6
2. Dividends
Dividend per Shares
1Q-end
2Q-end
3Q-end
Year-end
Total
JPY
JPY
JPY
JPY
JPY
Fiscal Year Ended March 31, 2017
-
13.50
-
13.50
27.00
Fiscal Year Ending March 31, 2018
-
13.50
-
Fiscal Year Ending March 31, 2018 (forecast)
13.50
27.00
(Note) Change from the latest released dividend forecasts: No.
3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2018
(April 1, 2017 through March 31, 2018)
(% 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
Fiscal Year Ending March 31, 2018
176,000
11.5
6,500
26.6
6,500
19.8
4,000
26.3
88.77
(Note1) Changes from the latest forecasts released: No
* Notes
(1) Changes in significant subsidiaries for the nine months ended December 31, 2017
(Changes in significant subsidiaries for the nine months ended December 31, 2017 which resulted in changes in scope of consolidation): None
(2) Changes in significant accounting and reporting policies for the consolidated financial statements
1
)
Changes due to the revision of accounting standards: Yes
In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-17 “Balance Sheet Classification of Deferred Taxes.” This ASU requires that deferred tax assets and liabilities be classified as noncurrent on the consolidated balance sheet. IIJ adopted this ASU from the first quarter beginning April 1, 2017, on a prospective basis, and did not retrospectively adjust the consolidated balance sheet as of March 31, 2017. As of March 31, 2017, the balance of current deferred tax assets and liabilities amounted to JPY1,298,469 thousand and JPY108,994 thousand, respectively.
2
)
Others: No
(3) Number of shares outstanding (shares of common stock)
1
)
The number of shares outstanding (inclusive of treasury stock):
As of December 31, 2017: 46,713,800 shares
As of March 31, 2017: 46,711,400 shares
2
)
The number of treasury stock:
As of December 31, 2017: 1,650,909 shares
As of March 31, 2017: 1,650,909 shares
3
)
The weighted average number of shares outstanding:
For the nine months ended December 31, 2017: 45,062,874 shares
For the nine months ended December 31, 2016: 45,846,887 shares