TOKYO, Feb. 8, 2013 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774) today announced its consolidated financial results for the nine months of the fiscal year ending March 31, 2013 (from April 1 to December 31, 2012, "3Q12").1
| Highlights of 3Q12 Financial Results | |
| Revenues | JPY76,690 million ($890 million, up 8.4% YoY) |
| Operating Income | JPY5,043 million ($59 million, up 26.1% YoY) |
| Net Income attributable to IIJ | JPY3,112 million ($36 million, up 30.2% YoY) |
| -- 3Q12 revenues increased by 8.4%. Revenues for network services, systems integration, and ATM operation business each grew YoY. | |
| -- 3Q12 operating income increased by 26.1% because gross margin of network services, systems integration, | |
| and ATM operation business each increased while SG&A only slightly increased. | |
| -- Revised the year-end dividend plan from the previous JPY8.75 to JPY10.00 per share of common stock along with the increase in income. | |
Overview of 3rd Quarter FY2012 Financial Results and Business Outlook
"From the start, IIJ had envisioned that Internet would become the fundamental infrastructure for society, and with that clear vision, we have cultivated and led the Japanese IT market for the past 20 years," said Koichi Suzuki, founder and CEO of IIJ. "As a pioneer in introducing a variety of internet-related services, we have established a very unique market position in Japan by engaging in both network services and systems integration. With the explosion of data traffic caused by the pervasive use of smart phones and the growing trend of cloud computing, we are seeing our corporate clients' network and outsourcing demands getting stronger. We recognize it as an enormous business opportunity for our further growth with our rich blue-chip client base, large-scale network, exceptional network engineering skills, and reputation to take initiatives. We will continue to strategically invest on our network resources and business development to seize the growing demands and to foresee tremendous business scale up in the middle term."
"We executed our business strategy as planned this quarter," continued Suzuki. "The revenue and profit growth were driven primarily by the continuous demand for broader network bandwidth and the accumulation of systems integration orders. Cloud and overseas business, two of our future growth drivers, are still small portion of the total revenue, yet they are surely starting to contribute to the overall revenue growth. We are going to construct a second container type datacenter to meet the growing demand on cloud. We have enhanced the overseas cloud line-ups with the release of the cloud service for China in January, following the U.S. cloud service."
"Lastly, we decided to increase the year-end dividend along with our profit growth," concluded Suzuki.
3rd Quarter FY2012 Financial Results Summary
| Operating Results Summary | |||
| 3Q11 | 3Q12 | YoY % Change | |
| JPY millions | JPY millions | ||
| Total Revenues | 70,752 | 76,690 | 8.4 |
| Network Services | 47,242 | 48,515 | 2.7 |
| Systems Integration (SI) | 21,709 | 25,601 | 17.9 |
| Equipment Sales | 879 | 867 | (1.3) |
| ATM Operation Business | 922 | 1,707 | 85.0 |
| Total Costs | 56,654 | 61,165 | 8.0 |
| Network Services | 37,587 | 37,972 | 1.0 |
| Systems Integration (SI) | 17,267 | 20,994 | 21.6 |
| Equipment Sales | 787 | 749 | (4.7) |
| ATM Operation Business | 1,013 | 1,450 | 43.2 |
| SG&A Expenses and R&D | 10,100 | 10,482 | 3.8 |
| Operating Income | 3,998 | 5,043 | 26.1 |
| Income before Income Tax Expense | 3,780 | 4,946 | 30.8 |
| Net income attributable to IIJ | 2,390 | 3,112 | 30.2 |
| Segment Summary | ||
| 3Q11 | 3Q12 | |
| JPY millions | JPY millions | |
| Net Revenues | 70,752 | 76,690 |
| Network services and SI business | 70,204 | 75,399 |
| ATM operation business | 922 | 1,707 |
| Elimination | 374 | 416 |
| Operating Income (Loss) | 3,998 | 5,043 |
| Network service and SI business | 4,250 | 4,965 |
| ATM operation business | (194) | 164 |
| Elimination | 58 | 86 |
We have omitted segment analysis because most of our revenues are dominated by Network services and Systems Integration (SI) business.
3rd Quarter FY2012 Results of Operation
Revenues
Total revenues of 3Q12 were JPY76,690 million, up 8.4% YoY.
Network Services revenue was JPY48,515 million, up 2.7% YoY.
Revenues for Internet connectivity services for corporate use were JPY11,783 million, up 7.9% YoY, mainly due to the continuous demands for broader bandwidth by network operators.
Revenues for Internet connectivity services for home use were JPY4,111 million, down 5.0% YoY. While our LTE mobile data communication service, which was introduced in February 2012, has been accumulating orders continuously, the cancellations of old type connectivity services still continued.
WAN services revenues were JPY18,880 million, down 1.6% YoY.
Outsourcing services revenues were JPY13,741 million, up 7.2% YoY. The revenue growth was mainly led by the continuous demands on "IIJ GIO Hosting Package Services," datacenter-related services and security-related services.
| Network Services Revenues Breakdown | |||
| 3Q11 | 3Q12 |
YoY % change |
|
| JPY millions | JPY millions | ||
| Internet Connectivity Service (Corporate Use) | 10,920 | 11,783 | 7.9 |
| IP Service2 | 6,911 | 7,435 | 7.6 |
| IIJ FiberAccess/F and IIJ DSL/F | 2,352 | 2,397 | 1.9 |
| IIJ Mobile Service3 | 1,473 | 1,772 | 20.3 |
| Others | 184 | 179 | (2.6) |
| Internet Connectivity Service (Home Use) | 4,328 | 4,111 | (5.0) |
| Under IIJ Brand | 671 | 969 | 44.4 |
| hi-ho | 3,222 | 2,678 | (16.9) |
| OEM | 435 | 464 | 6.7 |
| WAN Services | 19,177 | 18,880 | (1.6) |
| Outsourcing Services | 12,817 | 13,741 | 7.2 |
| Total Network Services | 47,242 | 48,515 | 2.7 |
| Number of Contracts for Connectivity Services | |||
| 3Q11 | 3Q12 | YoY Change | |
| Internet Connectivity Services (Corporate Use) | 93,345 | 105,672 | 12,327 |
| IP Service (-99Mbps) | 938 | 908 | (30) |
| IP Service (100Mbps-999Mbps) | 342 | 370 | 28 |
| IP Service (1Gbps--) | 132 | 186 | 54 |
| IIJ Data Center Connectivity Service | 303 | 309 | 6 |
| IIJ FiberAccess/F and IIJ DSL/F | 43,425 | 46,670 | 3,245 |
| IIJ Mobile Service4 | 46,964 | 55,883 | 8,919 |
| Others | 1,241 | 1,346 | 105 |
| Internet Connectivity Services (Home Use) | 383,745 | 465,624 | 81,879 |
| Under IIJ Brand | 37,322 | 89,885 | 52,563 |
| hi-ho | 148,856 | 150,238 | 1,382 |
| OEM | 197,567 | 225,501 | 27,934 |
| Total Contracted Bandwidth | 853.0Gbps | 1,107.5Gbps | 254.5Gbps |
SI revenues were JPY25,601 million, up 17.9% YoY.
Systems construction revenue, a one-time revenue, was JPY9,824 million, up 33.7% YoY, mainly due to the increase in both number and volume of systems construction projects. Large overseas construction projects have been added. Systems operation and maintenance revenue, a recurring revenue, was JPY15,777 million, up 9.9% YoY. The increase was mainly due to the continuous accumulation of revenue from "IIJ GIO Component Services."
The order backlog for systems construction and equipment sales was JPY5,333 million, down 7.1% YoY. The order backlog for systems operation and maintenance was JPY14,917 million, up 14.4% YoY.
Equipment sales revenues were JPY867 million, down 1.3% YoY.
ATM Operation Business revenues were JPY1,707 million, up 85.0% YoY, along with the increase in the numbers of ATMs newly placed. As of February 8, 2013, 593 ATMs are placed.
Cost and expense
Cost of revenues was JPY61,165 million, up 8.0% YoY.
Cost of Network Services revenue was JPY37,972 million, up 1.0% YoY mainly due to the increase in outsourcing-related costs, personnel-related costs and network operation-related costs. Gross margin for network services was JPY10,543 million, up 9.2% YoY and gross margin ratio was 21.7%, up 1.3 points YoY.
Cost of SI revenues was JPY20,994 million, up 21.6% YoY. The increases of purchasing costs, some portion of outsourcing-related costs and personnel-related costs are in the relation to the increase in systems construction revenues. Gross margin for SI was JPY4,608 million, up 3.7% YoY and gross margin ratio was 18.0%, down 2.5 points YoY.
Cost of Equipment Sales revenues was JPY749 million, down 4.7% YoY. Gross margin was JPY118 million and gross margin ratio was 13.6%, up 3.1 points YoY.
Cost of ATM Operation Business revenues was JPY1,450 million, up 43.2% YoY mainly due to the increase in the number of newly placed ATMs. Gross margin was JPY256 million compared to gross loss of JPY91 million for 3Q11, and gross margin ratio was 15.0%.
SG&A and R&D Expenses
SG&A and R&D expenses in total were JPY10,482million, up 3.8% YoY.
Sales and marketing expenses were JPY6,031 million, up 1.5% YoY, mainly due to the increase in advertizing expenses. Amortization expenses of customer relationship related to IIJ Global Solutions Inc. was JPY275 million, slightly decreased from JPY319 million in 3Q11.
General and administrative expenses were JPY4,147 million, up 5.8% YoY. The increase was mainly due to the increase in personnel-related expenses.
Research and development expenses were JPY304 million, up 27.0% YoY.
Operating income
Operating income was JPY5,043 million, up 26.1% YoY mainly because gross margin of each revenue line increased.
Other income (expenses)
Other income (expenses) was an expense of JPY97 million (an expense of JPY218 million for 3Q11).
Income before income tax expenses
Income before income tax expenses was JPY4,946 million, up 30.8% YoY.
Net Income
Income tax expense was JPY1,954 million (JPY1,603 million for 3Q11).
Equity in net income of equity method investees was JPY131 million (JPY153 million for 3Q11) mainly due to net income of Internet Revolution, Inc. and Internet Multifeed Co.
As a result of the above, net income was JPY3,123 million, up 34.1% YoY (JPY2,330 million for 3Q11).
Net income attributable to IIJ
Net income attributable to non-controlling interests was JPY11 million (net loss of JPY60 million for 3Q11) mainly related to net income of Trust Networks Inc.
Net income attributable to IIJ was JPY3,112 million, up 30.2% YoY.
3Q FY2012 Financial Condition
Balance Sheets
As of December 31, 2012, the balance of total assets was JPY75,892 million, increased by JPY2,399 million from the balance as of March 31, 2012.
As for current assets as of December 31, 2012, as compared to the respective balances as of March 31, 2012, cash and cash equivalents decreased by JPY2,889 million mainly due to the payment of income tax and the repayment of bank borrowings, prepaid expenses increased by JPY1,394 million and inventories increased by JPY1,038 million, respectively. As for noncurrent assets, as compared to the respective balance as of March 31, 2012, property and equipment increased by JPY2,432 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 JPY1,814 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 JPY460 million to JPY3,457 million and capital lease obligations-noncurrent increased by JPY841 million to JPY5,582 million, respectively. The balance of long-term borrowings including current portion as of December 31, 2012 was decreased to JPY1,990 million resulted from the repayment of JPY1,010 million.
As of December 31, 2012, the balance of other investments was JPY3,466 million. The breakdown of other investments were JPY2,066 million in nonmarketable equity securities, JPY1,051 million in available-for-sale securities and JPY349 million in other.
As of December 31, 2012, the balance of non-amortized intangible assets (excluding telephone rights) such as goodwill was JPY6,125 million, and the breakdown of non-amortized intangible assets were JPY5,970 million in goodwill and JPY155 million in trademark. The balance of amortized intangible assets, which was customer relationships, was JPY4,804 million.
Total IIJ shareholders' equity as of December 31, 2012 was JPY35,196 million, an increase by JPY2,508 million from the balance as of March 31, 2012. IIJ Shareholders' equity ratio (total IIJ shareholders' equity/total assets) as of December 31, 2012 was 46.4%.
Cash Flows
Cash and cash equivalents as of December 31, 2012 were JPY10,648 million compared to JPY10,928 million as of December 31, 2011.
Net cash provided by operating activities for 3Q12 was JPY5,880 million compared to net cash provided by operating activities of JPY6,580 million for 3Q11. While operating income increased compared to 3Q11, there were effects of changes in operating assets and liabilities such as increase in inventories and prepaid expenses and there was also the increase in payments for income taxes.
Net cash used in investing activities for 3Q12 was JPY4,704 million compared to net cash used in investing activities of JPY4,391 million for 3Q11, mainly due to payments for purchase of property and equipments of JPY4,410 million (JPY4,534 million for 3Q11).
Net cash used in financing activities for 3Q12 was JPY4,057 million compared to net cash used in financing activities of JPY4,541 million for 3Q11, due to principal payments under capital leases of JPY2,741 million (JPY2,503 million for 3Q11), JPY709 million in total for FY2011 year-end dividends and FY2012 interim dividends payments (JPY608 million for 3Q11) and repayment for bank borrowings of JPY610 million (net) (repayment of JPY1,430 million (net) for 3Q11).
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 | |
| Full FY2012 | 107,000 | 7,500 | 6,900 | 4,000 |
Our financial results tend to be weak in the first half and strong in the second half, especially in fourth quarter, of every fiscal year due to seasonal factors. The fourth quarter financial results have the largest contribution to the full year financial results. Our FY2012 full year financial targets announced on May 15, 2012 remain unchanged.
Revision of FY2012 Year-end Dividend Forecast
On February 8, 2012, we revised upward our FY2012 year-end dividend forecast from JPY8.75 to JPY10.00 per common stock. Accordingly, FY2012 full-year dividend forecast will be JPY18.75 per common stock, up JPY2.5 per common stock YoY as shown below:
| Interim | Year-end | Full Year | |
| FY2012 Dividend (Forecast) | JPY8.75 (Paid) | JPY10.00 (Forecast) | JPY18.75 (Forecast) |
| FY2011 | JPY7.50 | JPY8.75 | JPY16.25 |
*Dividend figures shown above are retroactively adjusted to reflect a 1:200 stock split conducted on October 1, 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 | ||
| 3Q11 | 3Q12 | |
| JPY millions | JPY millions | |
| Adjusted EBITDA | 9,249 | 10,586 |
| Depreciation and Amortization 5 | 5,251 | 5,543 |
| Operating Income | 3,998 | 5,043 |
| Other Income (Expense) | (218) | (97) |
| Income Tax Expense | 1,603 | 1,954 |
| Equity in Net Income of Equity Method Investees | 153 | 131 |
| Net income | 2,330 | 3,123 |
| Net loss (income) attributable to noncontrolling interests | 60 | (11) |
| Net Income attributable to IIJ | 2,390 | 3,112 |
| CAPEX | ||
| 3Q11 | 3Q12 | |
| JPY millions | JPY millions | |
| CAPEX, including capital leases | 8,652 | 8,452 |
|
Acquisition of Assets by Entering into Capital Leases |
4,118 | 4,042 |
| Purchase of Property and Equipment | 4,534 | 4,410 |
Others
On October 1, 2012, IIJ conducted a 1:200 stock split on common stock. Accordingly, the followings are calculated as if the stock split was conducted at the beginning of FY2011: basic net income attributable to IIJ per share, diluted net income attributable to IIJ per share, the number of authorized shares, the shares outstanding (shares of common stock), and treasury stock in the consolidated balance sheet. With this stock split, the ADS to common stock ratio has been changed to 2 ADSs per 1 share of common stock from 400 ADSs per 1 share of common stock since October 1, 2012.
Presentation
Presentation Materials will be posted on our web site (http://www.iij.ad.jp/en/ir/) on February 8, 2013.
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 JPY86.12 per US$1.00, which was the noon buying rate on December 28, 2012.
2 IP Service revenues include revenues from the Data Center Connectivity Service.
3 Revenue from mobile data communication service for home use is included in Internet Connectivity service (home use).
4 Contracts of IIJ Mobile Service are of mobile data communication service for corporate 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 December 31, 2012) | |||
| As of March 31, 2012 | As of December 31, 2012 | ||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| ASSETS | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | 13,536,824 | 123,645 | 10,648,296 |
| Accounts receivable, net of allowance for doubtful accounts of JPY 107,919 thousand and JPY 105,571 thousand at March 31, 2012 and December 31, 2012, respectively | 15,722,135 | 178,692 | 15,388,973 |
| Inventories | 752,075 | 20,786 | 1,790,064 |
| Prepaid expenses | 1,848,344 | 37,646 | 3,242,103 |
| Deferred tax assets -Current | 939,370 | 7,826 | 674,011 |
| Other current assets, net of allowance for doubtful accounts of JPY 10,732 thousand at March 31, 2012 and December 31, 2012, respectively | 891,560 | 13,554 | 1,167,220 |
| Total current assets | 33,690,308 | 382,149 | 32,910,667 |
| INVESTMENTS IN EQUITY METHOD INVESTEES | 1,406,634 | 19,105 | 1,645,346 |
| OTHER INVESTMENTS | 2,938,146 | 40,250 | 3,466,298 |
| PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of JPY 25,693,163 thousand and JPY 28,190,585 thousand at March 31, 2012 and December 31, 2012, respectively | 19,735,546 | 257,401 | 22,167,374 |
| GOODWILL | 5,788,333 | 69,321 | 5,969,951 |
| OTHER INTANGIBLE ASSETS -Net | 5,396,469 | 57,806 | 4,978,211 |
| GUARANTEE DEPOSITS | 1,899,815 | 22,940 | 1,975,580 |
| DEFERRED TAX ASSETS -Noncurrent | 24,760 | 657 | 56,585 |
| NET INVESTMENT IN SALES-TYPE LEASES —Noncurrent | 935,446 | 8,077 | 695,579 |
| Prepaid expenses —Noncurrent | 1,536,932 | 22,003 | 1,894,891 |
| OTHER ASSETS, net of allowance for doubtful accounts of JPY86,388 thousand and JPY 79,338 thousand at March 31, 2012 and December 31, 2012, respectively | 140,857 | 1,528 | 131,648 |
| TOTAL | 73,493,246 | 881,237 | 75,892,130 |
| As of March 31, 2012 | As of December 31, 2012 | ||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| CURRENT LIABILITIES: | |||
| Short-term borrowings | 9,000,000 | 109,150 | 9,400,000 |
| Long-term borrowings —current portion | 1,010,000 | 11,728 | 1,010,000 |
| Capital lease obligations—current portion | 2,997,292 | 40,146 | 3,457,410 |
| Accounts payable —trade | 9,093,657 | 106,253 | 9,150,548 |
| Accounts payable —other | 659,266 | 4,262 | 367,018 |
| Income taxes payable | 2,210,089 | 4,594 | 395,625 |
| Accrued expenses | 2,277,307 | 26,070 | 2,245,125 |
| Deferred income―current | 1,495,468 | 19,827 | 1,707,505 |
| Other current liabilities | 717,342 | 9,792 | 843,260 |
| Total current liabilities | 29,460,421 | 331,822 | 28,576,491 |
| LONG-TERM BORROWINGS | 1,990,000 | 11,379 | 980,000 |
| CAPITAL LEASE OBLIGATIONS -Noncurrent | 4,741,241 | 64,821 | 5,582,375 |
| ACCRUED RETIREMENT AND PENSION COSTS -Noncurrent | 1,805,683 | 22,883 | 1,970,667 |
| DEFERRED TAX LIABILITIRES -Noncurrent | 652,280 | 7,064 | 608,283 |
| DEFERRED INCOME -Noncurrent | 1,547,159 | 26,840 | 2,311,430 |
| OTHER NONCURRENT LIABILITIES | 600,215 | 7,486 | 644,672 |
| Total Liabilities | 40,796,999 | 472,294 | 40,673,918 |
| COMMITMENTS AND CONTINGENCIES | |||
| SHAREHOLDERS' EQUITY: | |||
| Common-stock—authorized, 75,520,000 shares; issued and outstanding, 41,295,600 shares at March 31, 2012 and December 31, 2012 | 16,833,847 | 195,470 | 16,833,847 |
| Additional paid-in capital | 27,260,318 | 316,883 | 27,289,972 |
| Accumulated deficit | (10,990,348) | (99,715) | (8,587,457) |
| Accumulated other comprehensive income (loss) | (23,533) | 604 | 51,998 |
| Treasury stock—758,800 shares held by the company at March 31, 2012 and December 31, 2012, respectively | (392,079) | (4,553) | (392,079) |
| Total Internet Initiative Japan Inc. shareholders' equity | 32,688,205 | 408,689 | 35,196,281 |
| NONCONTROLLING INTERESTS | 8,042 | 255 | 21,931 |
| Total equity | 32,696,247 | 408,942 | 35,218,212 |
| TOTAL | 73,493,246 | 881,237 | 75,892,130 |
|
(Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY86.12 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of December 28, 2012. |
|||
| Internet Initiative Japan Inc. | |||
|
Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Other Comprehensive Income (Unaudited) |
|||
| (For The Nine Months Ended December 31, 2011 and December 31, 2012) | |||
| Quarterly Consolidated Statements of Income | |||
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 2012 |
||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| REVENUES: | |||
| Network services: | |||
| Internet connectivity services (corporate use) | 10,919,624 | 136,821 | 11,783,029 |
| Internet connectivity services (home use) | 4,327,929 | 47,732 | 4,110,638 |
| WAN services | 19,177,295 | 219,226 | 18,879,758 |
| Outsourcing services | 12,817,335 | 159,563 | 13,741,605 |
| Total | 47,242,183 | 563,342 | 48,515,030 |
| Systems integration: | |||
| Systems construction | 7,348,767 | 114,075 | 9,824,179 |
| Systems operation and maintenance | 14,359,541 | 183,198 | 15,776,992 |
| Total | 21,708,308 | 297,273 | 25,601,171 |
| Equipment sales | 878,749 | 10,071 | 867,303 |
| ATM operation business | 922,352 | 19,817 | 1,706,586 |
| Total revenues | 70,751,592 | 890,503 | 76,690,090 |
| COST AND EXPENSES: | |||
| Cost of network services | 37,587,001 | 440,916 | 37,971,665 |
| Cost of systems integration | 17,267,064 | 243,772 | 20,993,632 |
| Cost of equipment sales | 786,589 | 8,702 | 749,397 |
| Cost of ATM operation business | 1,013,198 | 16,842 | 1,450,459 |
| Total cost | 56,653,852 | 710,232 | 61,165,153 |
| Sales and marketing | 5,940,188 | 70,028 | 6,030,817 |
| General and administrative | 3,920,530 | 48,156 | 4,147,197 |
| Research and development | 239,440 | 3,531 | 304,060 |
| Total cost and expenses | 66,754,010 | 831,947 | 71,647,227 |
| OPERATING INCOME | 3,997,582 | 58,556 | 5,042,863 |
| OTHER INCOME (EXPENSE): | |||
| Interest income | 25,047 | 231 | 19,889 |
| Interest expense | (227,127) | (2,530) | (217,897) |
| Foreign exchange gains (losses) | (13,469) | (148) | (12,705) |
| Net gains (losses) on sales of other investments -net | (170) | 158 | 13,565 |
| Losses on write-down of other investments | (84,577) | (230) | (19,788) |
| Other -net | 82,631 | 1,394 | 120,039 |
| Other expense — net | (217,665) | (1,125) | (96,897) |
| INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 3,779,917 | 57,431 | 4,945,966 |
| INCOME TAX EXPENSE | 1,603,606 | 22,691 | 1,954,168 |
| EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 153,336 | 1,529 | 131,688 |
| NET INCOME | 2,329,647 | 36,269 | 3,123,486 |
| LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 60,000 | (130) | (11,201) |
| NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 2,389,647 | 36,139 | 3,112,285 |
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 2012 |
||
| NET INCOME PER SHARE | |||
| BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 40,536,800 | 40,536,800 | |
| DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 40,553,800 | 40,569,000 | |
| BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,073,600 | 81,073,600 | |
| DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,107,600 | 81,138,000 | |
| BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 58.95 | 0.89 | 76.78 |
| DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 58.93 | 0.89 | 76.72 |
| BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 29.48 | 0.45 | 38.39 |
| DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 29.46 | 0.45 | 38.36 |
|
(Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY86.12 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of December 28, 2012. |
|||
| Quarterly Consolidated Statements of Other comprehensive income | |||
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 2012 |
||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| NET INCOME | 2,329,647 | 36,269 | 3,123,486 |
| Comprehensive income (loss), net of tax: | |||
| Foreign currency translation adjustments | (15,920) | (168) | (14,446) |
| Unrealized holding gain on securities | 13,409 | 1,043 | 89,799 |
| Defined benefit pension plans | (6,789) | 2 | 178 |
| Total comprehensive income (loss) | 2,320,347 | 37,146 | 3,199,017 |
| Less: Comprehensive income (loss) attraibutable to noncontrolling interests | 60,000 | (130) | (11,201) |
| Comprehensive income attributable to Internet Initiative Japan Inc. | 2,380,347 | 37,016 | 3,187,816 |
|
(Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY86.12 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of December 28, 2012. |
|||
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
| (For The Nine Months Ended December 31, 2011 and December 31, 2012) | |||
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 2012 |
||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| OPERATING ACTIVITIES: | |||
| Net income | 2,329,647 | 36,269 | 3,123,486 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 5,251,482 | 64,370 | 5,543,517 |
| Provision for retirement and pension costs, less payments | 149,105 | 1,919 | 165,262 |
| Provision for (reversal of) allowance for doubtful accounts | 45,852 | (2) | (142) |
| Loss on disposal of property and equipment | 39,616 | 53 | 4,593 |
| Net losses (gains) on sales of other investments | 170 | (158) | (13,565) |
| Impairment of other investments | 84,577 | 230 | 19,788 |
| Foreign exchange losses (gains), net | 32,088 | (201) | (17,284) |
| Equity in net income of equity method investees | (153,336) | (1,529) | (131,688) |
| Deferred income tax expense | 108,174 | 1,765 | 151,975 |
| Others | 34,705 | 153 | 13,153 |
| Changes in operating assets and liabilities net of effects from acquisition of a company: | |||
| Decrease in accounts receivable | 928,294 | 5,055 | 435,371 |
| Decrease in net investment in sales-type lease―noncurrent | 227,371 | 2,785 | 239,867 |
| Increase in inventories, prepaid expenses and other current and noncurrent assets | (1,047,996) | (34,282) | (2,952,371) |
| Increase (decrease) in accounts payable | (3,864,764) | 694 | 59,748 |
| Increse (decrease) in income taxes payable | 832,873 | (21,136) | (1,820,268) |
| Increase (decrease) in deferred income-noncurrent | (120,220) | 9,018 | 776,649 |
| Increase in accrued expenses and other current and noncurrent liabilities | 1,702,329 | 3,271 | 281,706 |
| Net cash provided by operating activities | 6,579,967 | 68,274 | 5,879,797 |
| INVESTING ACTIVITIES: | |||
| Purchase of property and equipment | (4,534,276) | (51,209) | (4,410,119) |
| Proceeds from sales of property and equipment | 294,265 | 5,489 | 472,706 |
| Purchase of available-for-sale securities | (118,948) | (479) | (41,250) |
| Purchase of other investments | (106,115) | (4,726) | (407,002) |
| Investment in an equity method investee | (24,647) | (1,161) | (100,000) |
| Proceeds from sales of available-for-sale securities | 3,879 | -- | -- |
| Proceeds from sales of other investments | 62,205 | 1,076 | 92,634 |
| Payments of guarantee deposits | (20,269) | (1,010) | (86,954) |
| Refund of guarantee deposits | 21,314 | 178 | 15,363 |
| Payments for refundable insurance policies | (6,422) | (6) | (554) |
| Refund from insurance policies | 42,948 | -- | -- |
| Acquisition of a newly controlled company, net of cash acquired | -- | (2,660) | (229,058) |
| Other | (4,577) | (112) | (9,618) |
| Net cash used in investing activities | (4,390,643) | (54,620) | (4,703,852) |
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 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 | 3,370,000 | 824 | 71,000 |
| Repayments of short-term borrowings with initial maturities over three months and long-term borrowings | (620,000) | (12,552) | (1,081,000) |
| Principal payments under capital leases | (2,502,602) | (31,824) | (2,740,622) |
| Net incrase (decrease) in short-term borrowings with initial maturities less than three months | (4,180,000) | 4,645 | 400,000 |
| Proceeds from issuance of subsidiary stock to minority shareholders | -- | 30 | 2,570 |
| Dividends paid | (608,052) | (8,237) | (709,394) |
| Net cash used in financing activities | (4,540,654) | (47,114) | (4,057,446) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (34,314) | (81) | (7,027) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,385,644) | (33,541) | (2,888,528) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 13,313,615 | 157,186 | 13,536,824 |
| CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 10,927,971 | 123,645 | 10,648,296 |
| ADDITIONAL CASH FLOW INFORMATION: | |||
| Interest paid | 225,749 | 2,535 | 218,322 |
| Income taxes paid | 480,415 | 40,461 | 3,484,499 |
| NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
| Acquisition of assets by entering into capital leases | 4,118,138 | 46,933 | 4,041,871 |
| Facilities purchase liabilities | 385,074 | 4,262 | 367,018 |
| Asset retirement obligation | 42,273 | -- | -- |
| Acquisition of a company: | |||
| Assets acquired | -- | 4,693 | 404,139 |
| Liabilities assumed | -- | 1,211 | 104,321 |
| Noncontrolling interests | -- | 1 | 118 |
| Cash paid | -- | 3,480 | 299,700 |
| Cash including acquired assets | -- | 819 | 70,642 |
| Acquisition of a newly controlled company, net of cash acquired | -- | 2,660 | 229,058 |
|
(Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY86.12 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of December 28, 2012. |
|||
| Going Concern Assumption (Unaudited) | ||
| Nothing to be reported. | ||
| Segment Information (Unaudited) | ||
| Business Segments: | ||
| Revenues: | ||
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 2012 |
|
| Thousands of JPY | Thousands of JPY | |
| Network service and systems integration business | 70,204,107 | 75,399,477 |
| Customers | 69,829,240 | 74,983,504 |
| Intersegment | 374,867 | 415,973 |
| ATM operation business | 922,352 | 1,706,586 |
| Customers | 922,352 | 1,706,586 |
| Intersegment | － | － |
| Elimination | 374,867 | 415,973 |
| Consolidated total | 70,751,592 | 76,690,090 |
| Segment profit or loss: | ||
|
Nine Months Ended December 31, 2011 |
Nine Months Ended December 31, 2012 |
|
| Thousands of JPY | Thousands of JPY | |
| Network service and systems integration business | 4,249,778 | 4,964,544 |
| ATM operation business | (194,337) | 163,845 |
| Elimination | 57,859 | 85,526 |
| Consolidated operating income | 3,997,582 | 5,042,863 |
|
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. | ||
3rd Quarter FY2012 Consolidated Financial Results (3 months)
The following tables are highlight data of 3rd Quarter FY2012 (3 months) consolidated financial results (unaudited, from October 1, 2012 to December 31, 2012).
| Operating Results Summary | |||
| 3Q11 | 3Q12 | YoY % Change | |
| JPY millions | JPY millions | ||
| Total Revenues: | 23,545 | 25,581 | 8.6 |
| Network Services | 15,922 | 16,256 | 2.1 |
| Systems Integration (SI) | 6,994 | 8,475 | 21.2 |
| Equipment Sales | 268 | 225 | (15.9) |
| ATM Operation Business | 361 | 625 | 72.8 |
| Cost of Revenues: | 18,683 | 20,204 | 8.1 |
| Network Services | 12,541 | 12,589 | 0.4 |
| Systems Integration (SI) | 5,541 | 6,904 | 24.6 |
| Equipment Sales | 241 | 198 | (17.6) |
| ATM Operation Business | 360 | 513 | 42.2 |
| SG&A Expenses and R&D | 3,313 | 3,597 | 8.6 |
| Operating Income | 1,549 | 1,780 | 14.9 |
| Income before Income Tax Expense | 1,489 | 1,770 | 18.8 |
| Net Income attributable to IIJ | 1,028 | 1,105 | 7.5 |
| Network Service Revenue Breakdown | |||
| 3Q11 | 3Q12 | YoY % Change | |
| JPY millions | JPY millions | ||
| Internet Connectivity Service (Corporate Use) | 3,643 | 3,967 | 8.9 |
| IP Service | 2,277 | 2,500 | 9.8 |
| IIJ FiberAccess/F and IIJ DSL/F | 788 | 791 | 0.5 |
| IIJ Mobile Service | 517 | 616 | 19.1 |
| Others | 61 | 60 | (1.5) |
| Internet Connectivity Service (Home Use) | 1,398 | 1,343 | (4.0) |
| Under IIJ Brand | 217 | 348 | 60.1 |
| hi-ho | 1,033 | 837 | (18.9) |
| OEM | 148 | 158 | 6.6 |
| WAN Services | 6,476 | 6,302 | (2.7) |
| Outsourcing Services | 4,405 | 4,644 | 5.4 |
| Network Services Revenues | 15,922 | 16,256 | 2.1 |
Reconciliation of Non-GAAP Financial Measures (3rd Quarter FY2012 (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 | ||
| 3Q11 | 3Q12 | |
| JPY millions | JPY millions | |
| Adjusted EBITDA | 3,376 | 3,684 |
| Depreciation and Amortization | 1,827 | 1,904 |
| Operating Income | 1,549 | 1,780 |
| Other Income (Expense) | (60) | (10) |
| Income Tax Expense | 548 | 703 |
| Equity in Net Income of Equity Method Investees | 77 | 49 |
| Net income | 1,018 | 1,115 |
| Net Loss (Income) attributable to non-controlling interests | 10 | (10) |
| Net Income attributable to IIJ | 1,028 | 1,105 |
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 | ||
| 3Q11 | 3Q12 | |
| JPY millions | JPY millions | |
| CAPEX, including capital leases | 2,208 | 2,549 |
|
Acquisition of Assets by Entering into Capital Leases |
1,055 | 924 |
| Purchase of Property and Equipment | 1,153 | 1,625 |
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Income (Unaudited) | |||
| (Three Months ended December 31, 2011 and December 31, 2012) | |||
|
Three Months Ended December 31, 2011 |
Three Months Ended December 31, 2012 |
||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| REVENUES: | |||
| Network services: | |||
| Internet connectivity services (corporate use) | 3,642,759 | 46,068 | 3,967,404 |
| Internet connectivity services (home use) | 1,397,782 | 15,589 | 1,342,487 |
| WAN services | 6,475,568 | 73,183 | 6,302,542 |
| Outsourcing services | 4,405,320 | 53,925 | 4,643,995 |
| Total | 15,921,429 | 188,765 | 16,256,428 |
| Systems integration: | |||
| Systems Construction | 2,154,424 | 36,351 | 3,130,593 |
| Systems Operation and Maintenance | 4,839,702 | 62,053 | 5,343,964 |
| Total | 6,994,126 | 98,404 | 8,474,557 |
| Equipment sales | 268,064 | 2,619 | 225,523 |
| ATM operation business | 361,465 | 7,252 | 624,581 |
| Total revenues | 23,545,084 | 297,040 | 25,581,089 |
| COST AND EXPENSES: | |||
| Cost of network services | 12,541,295 | 146,180 | 12,589,051 |
| Cost of systems integration | 5,540,863 | 80,170 | 6,904,274 |
| Cost of equipment sales | 240,402 | 2,302 | 198,152 |
| Cost of ATM operation business | 360,344 | 5,950 | 512,418 |
| Total cost | 18,682,904 | 234,602 | 20,203,895 |
| Sales and marketing | 2,023,213 | 24,374 | 2,099,141 |
| General and administrative | 1,212,669 | 16,281 | 1,402,120 |
| Research and development | 76,923 | 1,112 | 95,777 |
| Total cost and expenses | 21,995,709 | 276,369 | 23,800,933 |
| OPERATING INCOME | 1,549,375 | 20,671 | 1,780,156 |
| OTHER INCOME (EXPENSE): | |||
| Interest income | 9,097 | 59 | 5,066 |
| Interest expense | (72,438) | (845) | (72,734) |
| Foreign exchange gains (losses) | (4,111) | 433 | 37,292 |
| Losses on write-down of other investments | (7,117) | － | － |
| Other—net | 14,302 | 231 | 19,888 |
| Other expense — net | (60,267) | (122) | (10,488) |
|
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME IN EQUITY METHOD INVESTEES |
1,489,108 | 20,549 | 1,769,668 |
| INCOME TAX EXPENSE | 548,352 | 8,163 | 702,996 |
|
EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES |
76,627 | 564 | 48,600 |
| NET INCOME | 1,017,383 | 12,950 | 1,115,272 |
|
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
10,814 | (118) | (10,143) |
|
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. |
1,028,197 | 12,832 | 1,105,129 |
|
Three Months Ended December 31, 2011 |
Three Months Ended December 31, 2012 |
||
| NET INCOME PER SHARE | |||
|
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) |
40,536,800 | 40,536,800 | |
|
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) |
40,564,400 | 40,577,200 | |
|
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) |
81,073,600 | 81,073,600 | |
|
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) |
81,128,800 | 81,154,400 | |
|
BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) |
25.36 | 0.32 | 27.26 |
|
DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) |
25.35 | 0.32 | 27.24 |
|
BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) |
12.68 | 0.16 | 13.63 |
|
DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) |
12.67 | 0.16 | 13.62 |
|
(Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY86.12 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of December 28, 2012. |
|||
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
| (Three Months ended December 31, 2011 and December 31, 2012) | |||
|
Three Months Ended December 31, 2011 |
Three Months Ended December 31, 2012 |
||
|
Thousands of JPY |
Thousands of U.S. Dollars |
Thousands of JPY |
|
| OPERATING ACTIVITIES: | |||
| Net income | 1,017,383 | 12,950 | 1,115,272 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 1,827,054 | 22,111 | 1,904,175 |
| Provision for retirement and pension costs, less payments | 60,234 | 680 | 58,532 |
| Reversal of allowance for doubtful accounts | (699) | (3) | (228) |
| Loss on disposal of property and equipment | 17,699 | 26 | 2,278 |
| Impairment of other investments | 7,117 | -- | -- |
| Foreign exchange gains, net | (3,708) | (621) | (53,502) |
| Equity in net income of equity method investees | (76,627) | (564) | (48,600) |
| Deferred income tax expense (benefit) | (57,608) | 321 | 27,645 |
| Others | (13,981) | 142 | 12,186 |
| Changes in operating assets and liabilities net of effects from acquisition of a company: | |||
| Decrease (Increase) in accounts receivable | (1,003,770) | 2,995 | 257,960 |
| Decrease in net investment in sales-type lease―noncurrent | 106,180 | 1,145 | 98,612 |
| Increase in inventories, prepaid expenses and other current and noncurrent assets | (847,734) | (14,726) | (1,268,263) |
| Increase (decrease) in accounts payable | 31,242 | (2,808) | (241,843) |
| Increase (decrease) in income taxes payable | 367,105 | (5,801) | (499,552) |
| Increase (decrease) in deferred income― noncurrent | (62,218) | 5,812 | 500,559 |
| Increase in accrued expenses, other current and noncurrent liabilities | 924,045 | 514 | 44,303 |
| Net cash provided by operating activities | 2,291,714 | 22,173 | 1,909,534 |
| INVESTING ACTIVITIES: | |||
| Purchase of property and equipment | (1,152,846) | (18,868) | (1,624,929) |
| Proceeds from sales of property and equipment | 75,699 | 1,134 | 97,701 |
| Purchase of available-for-sale securities | -- | (251) | (21,644) |
| Purchase of other investments | (50,000) | (384) | (33,093) |
| Proceeds from sales of other investments | -- | 41 | 3,517 |
| Payments of guarantee deposits | (1,802) | (749) | (64,481) |
| Refund of guarantee deposits | 741 | 34 | 2,966 |
| Payments for refundable insurance policies | (183) | (2) | (186) |
| Other | (4,061) | (112) | (9,678) |
| Net cash used in investing activities | (1,157,099) | (19,157) | (1,649,827) |
|
Three Months Ended December 31, 2011 |
Three Months Ended December 31, 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 | 50,000 | 581 | 50,000 |
| Repayments of short-term borrowings with initial maturities over three months long-term borrowings | (120,000) | (824) | (71,000) |
| Principal payments under capital leases | (909,092) | (10,776) | (927,968) |
| Net decrease in short-term borrowings with initial maturities less than three months | 100,000 | -- | -- |
| Proceeds from issuance of subsidiary stock to minority shareholders | -- | 30 | 2,570 |
| Dividends paid | (304,026) | (4,119) | (354,697) |
| Net cash used in financing activities | (1,183,118) | (15,108) | (1,301,095) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 2,021 | 223 | 19,234 |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (46,482) | (11,869) | (1,022,154) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 10,974,453 | 135,514 | 11,670,450 |
| CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 10,927,971 | 123,645 | 10,648,296 |
|
(Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY86.12 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of December 28, 2012. |
|||
|
(Note2) The above presentation for the three months ended March 31, 2011 has been changed to conform to the presentation for the three months ended March 31, 2012. |
|||
Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the nine months ended December 31, 2012 in the form defined by the Tokyo Stock Exchange.
| Consolidated Financial Results for the Nine Months Ended December 31, 2012 | ||
| [Under accounting principles generally accepted in the United States ("U.S. GAAP")] | ||
| February 8, 2013 | ||
| 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, Representative Director and CEO | ||
| 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 February 14, 2013 | ||
| 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 Nine Months Ended December 31, 2012 (April 1, 2012 to December 31, 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 | ％ | |
| Nine Months Ended December 31, 2012 | 76,690 | 8.4 | 5,043 | 26.1 | 4,946 | 30.8 | 3,112 | 30.2 |
| Nine Months Ended December 31, 2011 | 70,752 | 24.6 | 3,998 | 64.5 | 3,780 | 73.8 | 2,390 | 19.7 |
| (Note1) Total comprehensive income attributable to IIJ | ||||||||
| Nine Months Ended December 31, 2012: JPY3,188 million (up 33.9% YoY) | ||||||||
| Nine Months Ended December 31, 2011: JPY2,380 million (up 22.3% 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, 2012 | 76.78 | 76.72 |
| Nine Months Ended December 31, 2011 | 58.95 | 58.93 |
| (Note) IIJ conducted a 1:200 stock split on common stock with an effective date of October 1, 2012. Accordingly, basic net income attributable to IIJ per share and diluted net income attributable to IIJ per share have been calculated as if the stock split was conducted at the beginning of the previous consolidated fiscal year. | ||
| (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, 2012 | 75,892 | 35,218 | 35,196 | 46.4 |
| 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 |
-- | 1,750.00 | -- | ||
|
Fiscal Year Ending March 31, 2013 (Forecast) |
10.00 | 1,760.00 | |||
| (Note1) Changes in the latest forecasts released: Yes | |||||
| (Note2) The year-end dividend forecast for fiscal year ending March 31, 2013 reflects the stock split effective on October 1, 2012. For details, please refer to the "4. Others (4) Others" of this document. | |||||
|
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 | |
| Fiscal Year Ending March 31, 2013 | 107,000 | 10.0 | 7,500 | 18.0 | 6,900 | 15.5 | 4,000 | 9.9 | 98.68 |
| (Note1) Changes in the latest target released: None | |||||||||
| (Note2) Basic net income attributable to IIJ per share for the fiscal year ending March 31, 2013 reflects the stock split effective on October 1, 2012. | |||||||||
4. Others
(1) Changes in Significant Subsidiaries for the Nine Months Ended December 31, 2012
(Changes in significant subsidiaries for the Nine Months Ended December 31, 2012 which resulted in changes in scope of consolidation): None
(2) Changes in Significant Accounting and Reporting Policies for the Quarterly Consolidated Financial Statements
1) Changes due to the revision of accounting standards: Yes
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, 2012: | 41,295,600 shares | |
| As of March 31, 2012: | 41,295,600 shares | |
| 2) The number of treasury stock: | |
| As of December 31, 2012: | 758,800 shares |
| As of March 31, 2012: | 758,800 shares |
| 3) The weighted average number of shares outstanding: | |
| For the Nine Months Ended December 31, 2012: | 40,536,800 shares |
| For the Nine Months Ended December 31, 2011: | 40,536,800 shares |
(Note) IIJ conducted a 1:200 stock split on common stock with an effective date of October 1, 2012. Number of shares outstanding (shares of common stock) in the above have been calculated as if the stock split was conducted at the beginning of the previous fiscal year (fiscal year ended on April 1, 2011).
(4) Others
The below table provides the dividends retroactively adjusted to reflect the stock split.
| Dividend per Shares | |||
| 2Q-end | Year-end | Total | |
| JPY | JPY | JPY | |
| Fiscal Year Ended March 31, 2012 | 7.50 | 8.75 | 16.25 |
| Fiscal Year Ending March 31, 2013 | 8.75 (Paid) | 10.00 (Forecast) | 18.75 (Forecast) |