IIJ Announces Nine Months Financial Results for the Fiscal Year Ending March 31, 2011
TOKYO, Feb. 10, 2011 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774) today announced its consolidated financial results for the nine months ended December 31, 2010 (from April 1 to December 31, 2010).1
Highlights of Financial Results for the Nine Months Ended Dec 2010
- Revenues were JPY56,797 million ($695.4 million), up 17.6% YoY. Outsourcing services steadily grew and there were 4 months contribution from IIJ Global Solutions Inc. ("IIJ-GS").
- Operating income was JPY2,430 million ($29.8 million), up 21.1% YoY. Gross margin of network services increased and operating loss related to ATM operation business decreased.
- Net income attributable to IIJ was JPY1,997 million ($24.5 million), up 76.2% YoY.
- FY2010 year-end dividend forecast was revised upward from JPY1,250 to JPY1,500 per share. FY2010 full-year dividend forecast will be JPY2,750, up JPY500 YoY. 2
- Full-year financial targets remain unchanged.
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 JPY81.67 per US$1.00, which was the noon buying rate on December 31, 2010.
2 IIJ's 1 common stock is equivalent to 400 ADSs
Overview of FY2010 Nine Months Financial Results and Business Outlook
"With the cloud computing service performing as a door opener to new clients, despite the continued weakness in Japanese economy and corporate spending on network systems, our outsourcing services continued to grow. 4 months additional revenue from IIJ-GS which we acquired from AT&T Japan on September 1, 2010 also contributed to revenue and income growth," said Koichi Suzuki, President and CEO of IIJ.
"Our new cloud computing service is growing at a much faster speed than we expected. It is one of our fastest growing service. As of December 2010, we are servicing over 300 cloud computing projects to both clients we had prior contact with and to those who are new to us and there are over 1,000 prospected cloud computing projects," continued Suzuki.
"In addition, our outsourcing services such as Web-gateway service, SMX service, contents delivery network service and data center related services have also continued its steady growth. We believe it's our long experience in providing outsourcing service and our persistent effort to introduce new services which prevents any internet related security crisis that makes corporate customers choose our services. During the 3rd quarter of this fiscal year, we've launched several new services: IIJ Mobile Biz Plus that provides access restriction features, IIJ Smart Mobile Manager that enables remote management of iPad and other smart phone devices and add on firewall feature for SMF service. All these services give solutions to those critical problems which many corporate customers are facing."
"There's also been progress with IIJ-GS. IIJ and IIJ-GS has strengthened its sales force that cross-sells both IIJ's network outsourcing services and IIJ-GS's WAN services to both corporate customers," said Suzuki.
"For our mid-term business developments, we will introduce new services in addition to further expanding our service facilities for cloud computing such as Japan's first container-unit commercial data center. We will also promote the use of IPv6 address. As many of you may know, the Internet will run out of IPv4 addresses to allocate and internet users, both corporate and individual, eventually will have to start using IPv6 addresses. Our backbones, servers and services are already IPv6 ready and we have solutions, engineering skills and experience to support IPv6. As for IIJ-GS, it is currently preparing to take its business abroad, especially in Asia, by providing global-WAN services mainly to Japanese companies overseas."
FY2010 Nine Months Financial Results Summary | |||
Operating Results Summary | |||
Nine months ended Dec 31, 2009 | Nine months ended Dec 31, 2010 | YoY % change | |
JPY millions | JPY millions | ||
Total Revenues | 48,313 | 56,797 | 17.6 |
Network Services 3 | 27,601 | 36,110 | 30.8 |
SI | 20,165 | 19,784 | (1.9) |
Equipment Sales | 439 | 550 | 25.3 |
ATM Operation Business | 108 | 353 | 226.1 |
Total Costs | 38,693 | 45,257 | 17.0 |
Network Services | 22,878 | 29,205 | 27.7 |
SI | 14,751 | 14,876 | 0.8 |
Equipment Sales | 380 | 473 | 24.6 |
ATM Operation Business | 684 | 703 | 2.9 |
SG&A Expenses and R&D | 7,613 | 9,110 | 19.7 |
Operating Income | 2,007 | 2,430 | 21.1 |
Income before Income Tax Expense | 1,783 | 2,175 | 22.0 |
Net income attributable to IIJ | 1,133 | 1,997 | 76.2 |
3 From the second quarter of FY2010, "Connectivity and Outsourcing Services Revenues" has been renamed to "Network Services Revenues". | |||
Segment Summary | ||
Nine months ended Dec 31, 2009 | Nine months ended Dec 31, 2010 | |
JPY millions | JPY millions | |
Net Revenues | 48,313 | 56,797 |
Network services and SI business | 48,525 | 56,776 |
ATM operation business | 108 | 353 |
Elimination | 320 | 332 |
Operating Income (Loss) | 2,007 | 2,430 |
Network service and SI business | 2,754 | 2,922 |
ATM operation business | (731) | (465) |
Elimination | 16 | 27 |
We have omitted segment analysis because most of our revenues are dominated by Network services and systems integration business.
FY2010 Nine Months Results of Operation
Revenues
Revenues were JPY56,797 million, up 17.6% YoY. Additional revenue of 4 months related to IIJ-GS was JPY8,652 million.
Network Services revenue were JPY36,110 million, up 30.8% YoY.
Revenues for Internet connectivity services for corporate use were JPY10,433 million, up 0.6% YoY as IIJ mobile service and broadband connectivity services increased. Contracts of over 1Gbps IP service as of end of December 2010 was 127 contracts, up 6 contracts YoY.
Revenues for Internet connectivity services for home use were JPY4,974 million, down 3.1% YoY.
WAN Services revenue were JPY9,702 million, up 408.8% YoY. There were additional revenues related to IIJ-GS of 4 months.
Outsourcing services revenue were JPY11,001 million, up 7.9% YoY. Services such as Web Security, anti-spam email related services, contents delivery services, data center related services and cloud computing related services increased, respectively. Our cloud computing service "IIJ GIO" is growing and its monthly revenue, including revenue which is recognized in systems operation and maintenance, as of end of December 2010 has reached over JPY90 million.
Number of Contracts for Connectivity Services | |||
as of Dec 31, 2009 | as of Dec 31, 2010 | YoY Change | |
Internet Connectivity Services (Corporate Use) 4 | 60,023 | 75,287 | 15,264 |
IP Service (-99Mbps) | 927 | 903 | (24) |
IP Service (100Mbps-999Mbps) | 244 | 281 | 37 |
IP Service (1Gbps-) | 121 | 127 | 6 |
IIJ Data Center Connectivity Service | 299 | 307 | 8 |
IIJ FiberAccess/F and IIJ DSL/F | 27,805 | 38,034 | 10,229 |
IIJ Mobile Service 5 | 29,209 | 34,303 | 5,094 |
Others | 1,418 | 1,332 | (86) |
Internet Connectivity Services (Home Use) | 404,700 | 378,985 | (25,715) |
Under IIJ Brand | 47,718 | 43,057 | (4,661) |
hi-ho | 171,511 | 159,725 | (11,786) |
OEM | 185,471 | 176,203 | (9,268) |
Total Contracted Bandwidth | 647.2 Gbps | 702.0 Gbps | 54.8 Gbps |
Network Services Revenues Breakdown | |||
Nine months ended Dec 31, 2009 | Nine months ended Dec 31, 2010 | YoY % Change | |
JPY millions | JPY millions | ||
Internet Connectivity Service (Corporate Use) | 10,368 | 10,433 | 0.6 |
IP Service 6 | 6,957 | 6,705 | (3.6) |
IIJ FiberAccess/F and IIJ DSL/F | 2,196 | 2,265 | 3.2 |
IIJ Mobile Service 7 | 994 | 1,268 | 27.5 |
Others | 221 | 195 | (11.7) |
Internet Connectivity Service (Home Use) | 5,134 | 4,974 | (3.1) |
Under IIJ Brand | 775 | 753 | (2.8) |
hi-ho | 3,934 | 3,818 | (3.0) |
OEM | 425 | 403 | (5.1) |
WAN Services 8 | 1,907 | 9,702 | 408.8 |
Outsourcing Services | 10,192 | 11,001 | 7.9 |
Total Network Services | 27,601 | 36,110 | 30.8 |
4 From the second quarter of FY2010, "Connectivity Services" has been renamed to "Internet Connectivity Services ". | |||
5 Contracts of IIJ Mobile Service are of mobile data communication service for corporate use. | |||
6 IP Service revenues include revenues from the Data Center Connectivity Service. | |||
7 Revenue from mobile data communication service for home use is included in Internet Connectivity service (home use). | |||
8 From the second quarter of FY2010, to reflect the acquisition of IIJ Global on September 1, 2010, "WAN services", which were components of "Outsourcing services revenues" were separately disclosed to clarify the contents of WAN services revenues. |
SI revenues were JPY19,784 million, down 1.9% YoY. Systems construction revenues, a one-time revenue, were JPY6,920 million, up 12.8% YoY as there were mid- to small sized network construction projects. Systems operation and maintenance revenues, a recurring revenue, was JPY12,864 million, down 8.3% YoY affected by the scale-down from a certain large client in 1Q10.
The order backlog for systems construction and equipment sales was JPY5,928 million, up 11.9% YoY. The order backlog for systems operation and maintenance was JPY10,883 million, up 12.3% YoY.
Equipment sales revenues were JPY550 million, up 25.3% YoY.
ATM Operation Business revenues were JPY353 million. As of February 10, 2011, 200 ATMs are placed.
Cost and expense
Cost of revenues was JPY45,257 million, up 17.0% YoY. Cost of revenues related to IIJ-GS of 4 months were JPY6,976 million.
Cost of Network Services revenue was JPY29,205 million, up 27.7% YoY mainly due to the increase in circuit related and outsourcing related costs related to IIJ-GS of 4 months. Gross margin for network services was JPY6,905 million, up 46.2% YoY and gross margin ratio was 19.1%.
Cost of SI revenues was JPY14,876 million, up 0.8% YoY. While purchasing cost decreased, network operation related and personnel related costs increased. Gross margin for SI was JPY4,908 million, down 9.3% YoY and gross margin ratio was 24.8%.
Cost of Equipment Sales revenues was JPY473 million, up 24.6% YoY. Gross margin was JPY77 million and gross margin ratio was 13.9%.
Cost of ATM Operation Business revenues was JPY703 million. Outsourcing costs were reduced. We are additionally placing new ATMs and full FY2010 operating loss related to ATM operation business is expected to be around JPY0.6 billion.
SG&A and R&D Expenses
SG&A and R&D expenses were JPY9,110 million, up 19.7% YoY. SG&A expenses related to IIJ-GS of 4 months was JPY1,001 million.
Sales and marketing expenses were JPY4,756 million, up 21.1% YoY mainly due to the additional expenses related to IIJ-GS, personnel related expenses and depreciation and amortization increased. Amortization of customer relationship related to IIJ-GS was JPY129 million.
General and administrative expenses were JPY4,095 million, up 18.9% YoY mainly due to the additional expenses related to IIJ-GS, personnel related expenses and depreciation and amortization increased. In 3Q10, there were restoration expenses, to return the rented office to its original state, of JPY48 million in relation to next fiscal year's new office plan.
Research and development expenses were JPY259 million, up 7.6% YoY.
Operating income
Operating income was JPY2,430 million, up 21.1% YoY as gross margin for network services increased and operation loss related to ATM operation business decreased.
Other income (expenses)
Other income (expenses) was net other expense of JPY255 million (expense of JPY224 million for the nine months ended December 2009) as there were interest expenses and losses on write-down of other investments.
Income before income tax expenses
Income before income tax expenses was JPY2,175 million, up 22.0% YoY (JPY1,783 million for the nine months ended December 2009).
Net Income
Income tax expense was JPY459 million (JPY1,042 million for the nine months ended December 2009). Deferred income tax expenses was JPY242 million (JPY790 million for the nine months ended December 2009).
Equity in net income of equity method investees was JPY129 million (JPY127 million for the nine months ended December 2009).
Net income was JPY1,845 million, up 112.5% YoY (JPY868 million for the nine months ended December 2009).
Net income attributable to IIJ
Net loss attributable to noncontrolling interests was JPY152 million (JPY265 million for the nine months ended December 2009), related to Trust Networks Inc. and GDX Japan Inc.
Net income attributable to IIJ was JPY1,997 million, up 76.2% YoY (JPY1,133 million for the nine months ended December 2009).
FY2010 Nine Months Financial Condition
Balance Sheets
As of December 31, 2010, the balance of total assets was JPY67,145 million, up JPY15,048 million from the balance as of March 31, 2010 as a result of the acquisition of IIJ-GS.
For current assets, as compared to each of the respective balances as of March 31, 2010, accounts receivable increased by JPY4,735 million, prepaid expenses increased by JPY879 million and deferred tax assets decreased by JPY601 million. As of noncurrent assets, other intangible assets (net) increased by JPY4,615 million, property and equipments increased by JPY1,564 million and goodwill increased by JPY494 million. As for current liabilities, as compared to each of the respective balances as of March 31, 2010, short-term borrowings increased by JPY9,000 million mainly for the acquisition of IIJ-GS and accounts payable increased by JPY3,499 million. Noncurrent capital lease obligations decreased by JPY576 million to JPY3,081 million.
As of December 31, 2010, the balance of other investments was JPY2,934 million, an increase of JPY353 million from the balance as of March 31, 2010. The breakdown of other investments were JPY1,843 million in nonmarketable equity securities, JPY892 million in available-for-sale securities and JPY199 million in other.
As of December 31, 2010, the balance of non-amortized intangible assets (excluding telephone rights) such as goodwill was JPY4,306 million and the balance of amortized intangible assets was JPY7,228 million. The breakdown of non-amortized intangible assets were JPY4,114 million in goodwill (JPY594 million related to IIJ-GS) and JPY192 in trademark. The breakdown of amortized intangible assets were JPY7,191 million in customer relationships (JPY4,766 million related to IIJ-GS) and JPY37 million in licenses.
Total IIJ shareholders' equity as of December 31, 2010 was JPY28,696 million, an increase of JPY1,376 million from the balance as of March 31, 2010. IIJ Shareholders' equity ratio (IIJ shareholders' equity/total assets) as of December 31, 2010 was 42.7%.
The measurement of the assets acquired and liabilities assumed related to the acquisition of IIJ-GS is to be completed within a year from the acquisition date. The measurement has not yet been completed as of the end of December 31, 2010 and therefore, the preliminary estimates are subject to revisions.
Cash Flows
Cash and cash equivalents as of December 31, 2010 were JPY10,800 million compared to JPY8,466 million as of December 31, 2009.
Net cash provided by operating activities for the nine months ended December 31, 2010 was JPY8,387 million compared to net cash provided by operating activities of JPY6,261 million for the nine months ended December 31, 2009. While operating income increased YoY due to the increase in gross margin for network services, there were changes in operating assets and liabilities during the nine months ended December 31, 2010, mainly resulting from the Increase in inventories, prepaid expenses and other current and noncurrent assets of JPY722 million, increase in accounts payable of JPY3,950 million, decrease in accrued expenses and other current and noncurrent liabilities of JPY2,031 million.
Net cash used in investing activities for the nine months ended December 31, 2010 was JPY12,629 million compared to net cash used in investing activities of JPY2,798 million for the nine months ended December 31, 2009, mainly due to the acquisition of IIJ-GS for JPY9,170 million and the purchase of property and equipments of JPY3,037 million.
Net cash provided by financing activities for the nine months ended December 31, 2010 was JPY6,321 million compared to net cash used in financing activities of JPY5,163 million for the nine months ended December 31, 2009, mainly due to the net increase in short-term borrowings of JPY9,000 million, principal payments under capital leases of JPY2,210 million and payments of JPY507 million for FY2009 year-end and FY2010 interim dividends.
FY2010 Financial Targets (announced on June 1, 2010)
Generally speaking, our full year target largely depends on the outcome of the 4th quarter revenue and income results which becomes the largest due to seasonal factors. Taking into account our nine months ended December 31, 2010 results, we remain our full FY2010 target unchanged.
Our targets for the fiscal year ending March 31, 2011 are as follows:
(JPY in millions) | ||||
Revenues | Operating Income | Income before Income Tax Expense (Benefit) | Net Income attributable to IIJ | |
Full FY2010 Target | 84,500 | 4,800 | 4,100 | 3,000 |
FY2010 Year-end Dividend Forecast
We revised upward our FY2010 year-end dividend forecast from JPY1,250 to JPY1,500 per share. FY2010 full-year dividend forecast will be JPY2,750, up JPY500 YoY.
Interim | Year-end | Full-Year | |
FY2010 Dividend (forecast) | JPY1,250 (paid) | JPY1,500 (forecast) | JPY2,750 (forecast) |
FY2009 Dividend | JPY1,000 | JPY1,250 | JPY2,250 |
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 | ||
Nine months ended Dec 31, 2009 | Nine months ended Dec 31, 2010 | |
JPY millions | JPY millions | |
Adjusted EBITDA | 5,942 | 6,667 |
Depreciation and Amortization 9 | 3,935 | 4,137 |
Impairment loss on other intangible assets | -- | 100 |
Operating Income | 2,007 | 2,430 |
Other Income (Expense) | (224) | (255) |
Income Tax Expense | 1,042 | 459 |
Equity in Net Income of Equity Method Investees | 127 | 129 |
Net income | 868 | 1,845 |
Net loss attributable to noncontrolling interests | 265 | 152 |
Net Income attributable to IIJ | 1,133 | 1,997 |
9 Depreciation and amortization includes impairment loss on other intangible assets. (See IIJ's consolidated financial statements for details). |
CAPEX | ||
Nine months ended Dec 31, 2009 | Nine months ended Dec 31, 2010 | |
JPY millions | JPY millions | |
CAPEX, including capital leases | 4,366 | 4,539 |
Acquisition of Assets by Entering into Capital Leases | 1,563 | 1,502 |
Purchase of Property and Equipment | 2,803 | 3,037 |
Other Information
From the second quarter of FY2010, to reflect the acquisition of IIJ Global on September 1, 2010, "WAN services", which were components of "Outsourcing services revenues" were separately disclosed to clarify the contents of WAN services revenues. In addition, "Connectivity Services" was renamed to "Internet Connectivity Services".
"During the fiscal years ended March 31, 2007 and 2008, IIJ acquired additional shares of its subsidiary, IIJ Technology Inc. and made it IIJ's 100% owned consolidated subsidiary. In the course of these acquisitions, IIJ recognized indefinite-lived customer relationship intangible asset of JPY2,669,152 thousand in the aggregated. Subsequent to the issuance of its March 31, 2010 financial statements, IIJ's management determined that the deferred tax liabilities associated with the intangible asset should have been recorded with corresponding increase in goodwill at the time of the acquisitions. The amounts for goodwill, deferred tax liabilities (noncurrent) and total assets as of March 31, 2010 as previously reported were JPY2,639,319 thousand, JPY212,773 thousand and JPY51,115,450 thousand, respectively. The amounts for goodwill, deferred tax liabilities (noncurrent) and total assets as of March 31, 2010 as corrected are JPY3,620,342 thousand, JPY1,193,796 thousand and JPY52,096,473 thousand, resp ectively. The effect on income statement is immaterial.
Presentation
Presentation Materials will be posted on our web site (http://www.iij.ad.jp/en/IR/) on February 10, 2011.
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:
YUKO KAZAMA
IIJ Investor Relations Office
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 FY2008 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.
Tables to follow
Internet Initiative Japan Inc. | |||||
Quarterly Consolidated Balance Sheets (Unaudited) | |||||
(As of March 31, 2010 and December 31, 2010) | |||||
As of March 31, 2010 | As of December 31, 2010 | ||||
Thousands of JPY | % | Thousands of U.S. Dollars | Thousands of JPY | % | |
ASSETS | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | 8,764,415 | 132,238 | 10,799,903 | ||
Accounts receivable, net of allowance for doubtful accounts of JPY 37,178 thousand and JPY 33,315 thousand at March 31, 2010 and December 31, 2010, respectively | 11,396,597 | 197,524 | 16,131,816 | ||
Inventories | 807,803 | 11,051 | 902,539 | ||
Prepaid expenses | 1,593,000 | 30,270 | 2,472,114 | ||
Deferred tax assets —Current | 1,570,746 | 11,871 | 969,505 | ||
Other current assets, net of allowance for doubtful accounts of JPY 720 thousand and JPY 48,780 thousand at March 31, 2010 and December 31, 2010, respectively | 762,081 | 12,518 | 1,022,326 | ||
Total current assets | 24,894,642 | 47.8 | 395,472 | 32,298,203 | 48.1 |
INVESTMENTS IN EQUITY METHOD INVESTEES | 1,131,354 | 2.2 | 15,415 | 1,258,954 | 1.9 |
OTHER INVESTMENTS | 2,581,610 | 5.0 | 35,927 | 2,934,146 | 4.4 |
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of JPY 17,653,271 thousand and JPY 20,682,523 thousand at March 31, 2010 and December 31, 2010, respectively | 12,970,152 | 24.9 | 177,967 | 14,534,536 | 21.6 |
GOODWILL | 3,620,342 | 6.9 | 50,372 | 4,113,857 | 6.1 |
OTHER INTANGIBLE ASSETS —Net | 2,819,187 | 5.4 | 91,023 | 7,433,843 | 11.1 |
GUARANTEE DEPOSITS | 2,003,862 | 3.8 | 23,945 | 1,955,567 | 2.9 |
DEFERRED TAX ASSETS —Noncurrent | 685,370 | 1.3 | 13,279 | 1,084,533 | 1.6 |
OTHER ASSETS, net of allowance for doubtful accounts of JPY 91,319 thousand and JPY 80,986 thousand at March 31, 2010 and December 31, 2010, respectively, and net of loan loss valuation allowance of JPY 16,701 thousand at March 31, 2010 and December 31, 2010, respectively | 1,389,954 | 2.7 | 18,749 | 1,531,260 | 2.3 |
TOTAL | 52,096,473 | 100.0 | 822,149 | 67,144,899 | 100.0 |
As of March 31, 2010 | As of December 31, 2010 | |||||||
Thousands of JPY | % | Thousands of U.S. Dollars | Thousands of JPY | % | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term borrowings | 4,450,000 | 164,687 | 13,450,000 | |||||
Capital lease obligations — current portion | 2,729,673 | 31,814 | 2,598,273 | |||||
Accounts payable | 6,967,654 | 128,154 | 10,466,330 | |||||
Accrued expenses | 1,184,483 | 26,542 | 2,167,714 | |||||
Accrued retirement and pension costs — current | 14,539 | 178 | 14,539 | |||||
Deferred income — current | 1,445,174 | 20,467 | 1,671,496 | |||||
Other current liabilities | 922,345 | 11,817 | 965,056 | |||||
Total current liabilities | 17,713,868 | 34.0 | 383,659 | 31,333,408 | 46.7 | |||
CAPITAL LEASE OBLIGATIONS — Noncurrent | 3,657,657 | 7.0 | 37,729 | 3,081,304 | 4.6 | |||
ACCRUED RETIREMENT AND PENSION COSTS — Noncurrent | 1,302,054 | 2.5 | 18,410 | 1,503,550 | 2.2 | |||
DEFERRED TAX LIABILITIES — Noncurrent | 1,193,796 | 2.3 | 14,198 | 1,159,559 | 1.7 | |||
DEFERRED INCOME — Noncurrent | 560,677 | 1.1 | 13,194 | 1,077,516 | 1.6 | |||
OTHER NONCURRENT LIABILITIES | 304,718 | 0.6 | 3,688 | 301,247 | 0.5 | |||
Total Liabilities | 24,732,770 | 47.5 | 470,878 | 38,456,584 | 57.3 | |||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Common-stock—authorized, 377,600 shares; issued and outstanding, 206,478 shares at March 31, 2010 and December 31, 2010 | 16,833,847 | 32.3 | 206,120 | 16,833,847 | 25.1 | |||
Additional paid-in capital | 27,443,600 | 52.7 | 335,074 | 27,365,518 | 40.7 | |||
Accumulated deficit | (16,720,092) | (32.1) | (186,476) | (15,229,539) | (22.7) | |||
Accumulated other comprehensive income | 168,769 | 0.3 | 1,447 | 118,188 | 0.2 | |||
Treasury stock — 3,934 shares and 3,794 shares held by the company at March 31, 2010 and December 31, 2010 | (406,547) | (0.8) | (4,801) | (392,079) | (0.6) | |||
Total Internet Initiative Japan Inc. shareholders' equity | 27,319,577 | 52.4 | 351,364 | 28,695,935 | 42.7 | |||
NONCONTROLLING INTERESTS | 44,126 | 0.1 | (93) | (7,620) | (0.0) | |||
Total equity | 27,363,703 | 52.5 | 351,271 | 28,688,315 | 42.7 | |||
TOTAL | 52,096,473 | 100.0 | 822,149 | 67,144,899 | 100.0 | |||
(Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York prevailing as of December 31, 2010. |
Internet Initiative Japan Inc. | |||||
Quarterly Consolidated Statements of Income (Unaudited) | |||||
(For the nine months ended December 31, 2009 and December 31, 2010) | |||||
Nine Months Ended December 31, 2009 | Nine Months Ended December 31, 2010 | ||||
Thousands of JPY | % of total revenues | Thousands of U.S. Dollars | Thousands of JPY | % of total revenues | |
REVENUES: | |||||
Network services: | |||||
Internet Connectivity (corporate use) | 10,367,448 | 127,743 | 10,432,772 | ||
Internet Connectivity (home use) | 5,133,887 | 60,908 | 4,974,360 | ||
WAN services | 1,906,695 | 118,796 | 9,702,110 | ||
Outsourcing services | 10,192,433 | 134,696 | 11,000,562 | ||
Total | 27,600,463 | 442,143 | 36,109,804 | ||
Systems integration: | |||||
Systems Construction | 6,134,986 | 84,737 | 6,920,522 | ||
Systems Operation and Maintenance | 14,030,403 | 157,510 | 12,863,826 | ||
Total | 20,165,389 | 242,247 | 19,784,348 | ||
Equipment sales | 438,710 | 6,730 | 549,624 | ||
ATM operation business | 108,217 | 4,321 | 352,884 | ||
Total revenues | 48,312,779 | 100.0 | 695,441 | 56,796,660 | 100.0 |
COST AND EXPENSES: | |||||
Cost of network services | 22,878,358 | 357,590 | 29,204,323 | ||
Cost of systems integration | 14,751,253 | 182,148 | 14,876,036 | ||
Cost of equipment sales | 379,946 | 5,796 | 473,345 | ||
Cost of ATM operation business | 683,253 | 8,612 | 703,366 | ||
Total cost | 38,692,810 | 80.1 | 554,146 | 45,257,070 | 79.7 |
Sales and marketing | 3,927,736 | 8.1 | 58,233 | 4,755,852 | 8.4 |
General and administrative | 3,444,078 | 7.1 | 50,134 | 4,094,513 | 7.2 |
Research and development | 240,924 | 0.5 | 3,173 | 259,158 | 0.4 |
Total cost and expenses | 46,305,548 | 95.8 | 665,686 | 54,366,593 | 95.7 |
OPERATING INCOME | 2,007,231 | 4.2 | 29,755 | 2,430,067 | 4.3 |
OTHER INCOME (EXPENSE): | |||||
Interest income | 17,990 | 208 | 16,952 | ||
Interest expense | (241,172) | (2,369) | (193,504) | ||
Foreign exchange gains (losses) | (3,804) | (358) | (29,253) | ||
Net gains on sales of other investments | 20,640 | 660 | 53,925 | ||
Losses on write-down of other investments | (49,441) | (2,105) | (171,863) | ||
Other—net | 31,762 | 837 | 68,328 | ||
Other expense — net | (224,025) | (0.5) | (3,127) | (255,415) | (0.5) |
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 1,783,206 | 3.7 | 26,628 | 2,174,652 | 3.8 |
INCOME TAX EXPENSE | 1,042,191 | 2.2 | 5,626 | 459,409 | 0.8 |
EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 127,164 | 0.3 | 1,584 | 129,359 | 0.2 |
NET INCOME | 868,179 | 1.8 | 22,586 | 1,844,602 | 3.2 |
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 265,114 | 0.5 | 1,867 | 152,486 | 0.3 |
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 1,133,293 | 2.3 | 24,453 | 1,997,088 | 3.5 |
Nine Months Ended December 31, 2009 | Nine Months Ended December 31, 2010 | |||
NET INCOME PER SHARE | ||||
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,544 | 202,632 | ||
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,544 | 202,632 | ||
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,017,600 | 81,052,800 | ||
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,017,600 | 81,052,800 | ||
BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 5,595.29 | 120.68 | 9,855.74 | |
DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 5,595.29 | 120.68 | 9,855.74 | |
BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 13.99 | 0.30 | 24.64 | |
DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 13.99 | 0.30 | 24.64 | |
(Note 1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York prevailing as of December 31, 2010. | ||||
(Note2) The above presentation for the nine months ended December 31, 2009 has been changed to conform to the presentation for the nine months ended December 31, 2010. |
Internet Initiative Japan Inc | |||
Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
(For the nine months ended December 31, 2009 and December 31, 2010) | |||
Nine Months Ended December 31, 2009 | Nine Months Ended December 31, 2010 | ||
Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
OPERATING ACTIVITIES: | |||
Net income | 868,179 | 22,586 | 1,844,602 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 3,934,464 | 50,653 | 4,136,853 |
Impairment loss on other intangible assets | -- | 1,224 | 100,000 |
Provision for retirement and pension costs, less payments | 238,421 | 2,467 | 201,496 |
Provision for (reversal of) allowance for doubtful accounts and advances | 27,074 | (271) | (22,171) |
Loss on disposal of property and equipment | 22,750 | 189 | 15,402 |
Net gains on sales of other investments | (20,640) | (660) | (53,925) |
Losses on write-down of other investments | 49,441 | 2,104 | 171,863 |
Gain on receipt of investment securities | -- | (221) | (18,060) |
Foreign exchange losses | 16,213 | 354 | 28,938 |
Equity in net income of equity method investees | (127,164) | (1,584) | (129,359) |
Deferred income tax expense | 790,481 | 2,960 | 241,704 |
Others | -- | 757 | 61,777 |
Changes in operating assets and liabilities net of effects from acquisition of business and a company: | |||
Decrease in accounts receivable | 1,657,103 | 9,079 | 741,476 |
Increase in inventories, prepaid expenses and other current and noncurrent assets | (638,113) | (8,838) | (721,771) |
Increase (decrease) in accounts payable | (669,050) | 48,364 | 3,949,881 |
Decrease in income taxes payable | (113,578) | (1,604) | (130,985) |
Increase (decrease) in accrued expenses, other current and noncurrent liabilities | 225,018 | (24,863) | (2,030,560) |
Net cash provided by operating activities | 6,260,599 | 102,696 | 8,387,161 |
INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (2,802,777) | (37,187) | (3,037,071) |
Proceeds from sales of property and equipment | 178,270 | 51 | 4,147 |
Purchase of available-for-sale securities | (29,184) | (569) | (46,468) |
Purchase of other investments | (250,016) | (1,837) | (150,000) |
Investment in equity method investees | (22,834) | -- | -- |
Proceeds from sales of available-for-sale securities | 67,592 | 656 | 53,605 |
Proceeds from sales and redemption of other investments | 56,824 | 366 | 29,901 |
Acquisition of a newly controlled company | -- | (112,281) | (9,170,000) |
Payments of guarantee deposits | (60,250) | (5,247) | (428,529) |
Refund of guarantee deposits | 64,750 | 1,511 | 123,425 |
Payments for refundable insurance policies | (41,866) | (210) | (17,190) |
Refund from insurance policies | 39,959 | 363 | 29,642 |
Other | 1,498 | (252) | (20,622) |
Net cash used in investing activities | (2,798,034) | (154,636) | (12,629,160) |
Nine Months Ended December 31, 2009 | Nine Months Ended December 31, 2010 | |||
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 | 5,750,000 | 15,918 | 1,300,000 | |
Repayments of short-term borrowings with initial maturities over three months | (10,450,000) | (3,674) | (300,000) | |
Principal payments under capital leases | (2,658,062) | (27,056) | (2,209,641) | |
Net increase in short-term borrowings with initial maturities less than three months | 2,450,000 | 97,955 | 8,000,000 | |
Proceeds from issuance of subsidiary stock to ?minority shareholders | 150,000 | -- | -- | |
Dividends paid | (405,088) | (6,202) | (506,535) | |
Proceeds from sales of treasury stock | -- | 455 | 37,126 | |
Net cash provided by (used in) financing activities | (5,163,150) | 77,396 | 6,320,950 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (21,037) | (532) | (43,463) | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,721,622) | 24,924 | 2,035,488 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 10,187,724 | 107,314 | 8,764,415 | |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 8,466,102 | 132,238 | 10,799,903 | |
ADDITIONAL CASH FLOW INFORMATION: | ||||
Interest paid | 243,173 | 2,363 | 192,977 | |
Income tax paid | 160,263 | 4,284 | 349,843 | |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||
Acquisition of assets by entering into capital leases | 1,562,959 | 18,396 | 1,502,423 | |
Facilities purchase liabilities | 174,722 | 2,228 | 181,945 | |
Acquisition of business and a company: | ||||
Assets acquired | -- | 160,577 | 13,114,284 | |
Cash paid | -- | (112,281) | (9,170,000) | |
Liabilities assumed | -- | 48,296 | 3,944,284 | |
(Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York prevailing as of December 31, 2010. |
Going Concern Assumption (Unaudited) | ||
Nothing to be reported. | ||
Segment Information (Unaudited) | ||
Business Segments: | ||
Revenues: | ||
Nine Months Ended December 31, 2009 | Nine Months Ended December 31, 2010 | |
Thousands of JPY | Thousands of JPY | |
Network service and systems integration business | 48,524,786 | 56,776,195 |
Customers | 48,204,562 | 56,443,776 |
Intersegment | 320,224 | 332,419 |
ATM operation business | 108,217 | 352,884 |
Customers | 108,217 | 352,884 |
Intersegment | -- | -- |
Elimination | 320,224 | 332,419 |
Consolidated total | 48,312,779 | 56,796,660 |
Segment profit or loss: | ||
Nine Months Ended December 31, 2009 | Nine Months Ended December 31, 2010 | |
Thousands of JPY | Thousands of JPY | |
Network service and systems integration business | 2,753,891 | 2,922,142 |
ATM operation business | (730,462) | (465,460) |
Elimination | 16,198 | 26,615 |
Consolidated operating income | 2,007,231 | 2,430,067 |
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. |
3rd Quarter FY2010 Consolidated Financial Results (3 months)
The following tables are highlight data of 3rd Quarter FY2010 consolidated financial results (unaudited, from October 1, 2010 to December 31, 2010).
Operating Results Summary | |||
3Q09 | 3Q10 | YoY % Change | |
JPY millions | JPY millions | ||
Total Revenues: | 16,038 | 22,525 | 40.4 |
Network Services | 9,297 | 15,424 | 65.9 |
SI | 6,542 | 6,797 | 3.9 |
Equipment Sales | 129 | 179 | 38.5 |
ATM Operation Business | 70 | 125 | 77.8 |
Cost of Revenues: | 12,656 | 17,827 | 40.9 |
Network Services | 7,567 | 12,402 | 63.9 |
SI | 4,702 | 5,017 | 6.7 |
Equipment Sales | 111 | 160 | 44.8 |
ATM Operation Business | 276 | 248 | (10.7) |
SG&A Expenses and R&D | 2,541 | 3,469 | 36.6 |
Operating Income | 841 | 1,229 | 46.1 |
Income before Income Tax Expense | 758 | 1,169 | 54.3 |
Net Income attributable to IIJ | 418 | 1,138 | 172.3 |
Connectivity and Outsourcing Services Revenues Breakdown and Cost | |||
3Q09 | 3Q10 | YoY % Change | |
JPY millions | JPY millions | ||
Internet Connectivity Service (Corporate Use) | 3,480 | 3,492 | 0.3 |
IP Service | 2,308 | 2,227 | (3.5) |
IIJ FiberAccess/F and IIJ DSL/F | 740 | 771 | 4.2 |
IIJ Mobile Service | 361 | 430 | 19.2 |
Others | 71 | 64 | (9.8) |
Internet Connectivity Service (Home Use) | 1,724 | 1,622 | (5.9) |
Under IIJ Brand | 262 | 245 | (6.3) |
hi-ho | 1,322 | 1,241 | (6.1) |
OEM | 140 | 136 | (3.2) |
WAN Services | 643 | 6,405 | 896.6 |
Outsourcing Services | 3,450 | 3,905 | 13.2 |
Network Services Revenues | 9,297 | 15,424 | 65.9 |
Reconciliation of Non-GAAP Financial Measures
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 | ||
3Q09 | 3Q10 | |
JPY millions | JPY millions | |
Adjusted EBITDA | 2,132 | 2,747 |
Depreciation and Amortization | 1,291 | 1,518 |
Operating Income | 841 | 1,229 |
Other Income (Expense) | (84) | (60) |
Income Tax Expense | 514 | 179 |
Equity in Net Income (Loss) of Equity Method Investees | 85 | 97 |
Net income | 328 | 1,087 |
Net income attributable to noncontrolling interests | 90 | 51 |
Net Income attributable to IIJ | 418 | 1,138 |
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 | ||
3Q09 | 3Q10 | |
JPY millions | JPY millions | |
CAPEX, including capital leases | 1,752 | 1,515 |
Acquisition of Assets by Entering into Capital Leases | 899 | 641 |
Purchase of Property and Equipment | 853 | 874 |
Internet Initiative Japan Inc. | |||||
Quarterly Consolidated Statements of Income (Unaudited) | |||||
(Three Months ended December 31, 2009 and December 31, 2010) | |||||
Three Months Ended December 31, 2009 | Three Months Ended December 31, 2010 | ||||
Thousands of JPY | % of total revenues | Thousands of U.S. Dollars | Thousands of JPY | % of total revenues | |
REVENUES: | |||||
Network services: | |||||
Internet Connectivity (corporate use) | 3,480,241 | 42,755 | 3,491,817 | ||
Internet Connectivity (home use) | 1,723,836 | 19,867 | 1,622,533 | ||
WAN services | 642,668 | 78,422 | 6,404,689 | ||
Outsourcing services | 3,450,020 | 47,812 | 3,904,810 | ||
Total | 9,296,765 | 188,856 | 15,423,849 | ||
Systems integration: | |||||
Systems Construction | 1,986,972 | 29,653 | 2,421,784 | ||
Systems Operation and Maintenance | 4,554,855 | 53,576 | 4,375,565 | ||
Total | 6,541,827 | 83,229 | 6,797,349 | ||
Equipment sales | 129,124 | 2,190 | 178,874 | ||
ATM operation business | 70,039 | 1,525 | 124,508 | ||
Total revenues | 16,037,755 | 100.0 | 275,800 | 22,524,580 | 100.0 |
COST AND EXPENSES: | |||||
Cost of network services | 7,567,089 | 151,852 | 12,401,754 | ||
Cost of systems integration | 4,701,783 | 61,434 | 5,017,343 | ||
Cost of equipment sales | 110,631 | 1,961 | 160,184 | ||
Cost of ATM operation business | 276,736 | 3,028 | 247,248 | ||
Total cost | 12,656,239 | 78.9 | 218,275 | 17,826,529 | 79.1 |
Sales and marketing | 1,334,099 | 8.3 | 22,932 | 1,872,826 | 8.3 |
General and administrative | 1,128,380 | 7.1 | 18,253 | 1,490,717 | 6.6 |
Research and development | 77,889 | 0.5 | 1,292 | 105,532 | 0.5 |
Total cost and expenses | 15,196,607 | 94.8 | 260,752 | 21,295,604 | 94.5 |
OPERATING INCOME | 841,148 | 5.2 | 15,048 | 1,228,976 | 5.5 |
OTHER INCOME (EXPENSE): | |||||
Interest income | 4,904 | 55 | 4,521 | ||
Interest expense | (72,983) | (920) | (75,156) | ||
Foreign exchange losses | (8,423) | (145) | (11,805) | ||
Net gains on sales of other investments | 9,338 | 262 | 21,422 | ||
Losses on write-down of other investments | (18,269) | (21) | (1,772) | ||
Other—net | 1,878 | 31 | 2,502 | ||
Other expense — net | (83,555) | (0.5) | (738) | (60,288) | (0.3) |
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME IN EQUITY METHOD INVESTEES | 757,593 | 4.7 | 14,310 | 1,168,688 | 5.2 |
INCOME TAX EXPENSE | 514,382 | 3.2 | 2,194 | 179,199 | 0.8 |
EQUITY IN NET INCOME (LOSS) OF EQUITY METHOD INVESTEES | 85,017 | 0.5 | 1,194 | 97,538 | 0.4 |
NET INCOME | 328,228 | 2.0 | 13,310 | 1,087,027 | 4.8 |
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 89,678 | 0.6 | 622 | 50,784 | 0.3 |
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 417,906 | 2.6 | 13,932 | 1,137,811 | 5.1 |
Three Months Ended December 31, 2009 | Three Months Ended December 31, 2010 | ||
NET INCOME PER SHARE | |||
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,544 | 202,684 | |
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,544 | 202,684 | |
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,017,600 | 81,073,600 | |
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,017,600 | 81,073,600 | |
BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 2,063.29 | 68.74 | 5,613.72 |
DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 2,063.29 | 68.74 | 5,613.72 |
BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 5.16 | 0.17 | 14.03 |
DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 5.16 | 0.17 | 14.03 |
(Note 1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York prevailing as of December 31, 2010. | |||
(Note2) The above presentation for the three months ended December 31, 2009 has been changed to conform to the presentation for the three months ended December 31, 2010. |
Internet Initiative Japan Inc. | |||
Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
(Three Months ended December 31, 2009 and December 31, 2010) | |||
Internet Initiative Japan Inc. | |||
Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
(Three Months ended December 31, 2009 and December 31, 2010) | |||
Three Months Ended December 31, 2009 | Three Months Ended December 31, 2010 | ||
Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
OPERATING ACTIVITIES: | |||
Net income | 328,228 | 13,310 | 1,087,027 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,290,948 | 18,583 | 1,517,730 |
Provision for retirement and pension costs, less payments | 92,052 | 940 | 76,791 |
Provision for (reversal of) allowance for doubtful accounts and advances | 27,720 | (90) | (7,328) |
Loss on disposal of property and equipment | 4,499 | 121 | 9,889 |
Net gains on sales of other investments | (9,338) | (262) | (21,422) |
Losses on write-down of other investments | 18,269 | 22 | 1,772 |
Foreign exchange losses (gains) | (1,999) | 37 | 3,043 |
Equity in net income of equity method investees | (85,017) | (1,194) | (97,538) |
Deferred income tax expense | 417,616 | 955 | 78,006 |
Others | -- | 457 | 37,319 |
Changes in operating assets and liabilities net of effects from acquisition of business and a company: | |||
Decrease in accounts receivable | 121,875 | 18,317 | 1,495,960 |
Increase in inventories, prepaid expenses and other current and noncurrent assets | (401,483) | (9,659) | (788,859) |
Increase (decrease) in accounts payable | (154,017) | 50,534 | 4,127,102 |
Increase (decrease) in income taxes payable | (69,577) | 603 | 49,229 |
Decrease in accrued expenses, other current and noncurrent liabilities -net | (111,391) | (52,530) | (4,290,134) |
Net cash provided by operating activities | 1,468,385 | 40,144 | 3,278,587 |
INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (853,726) | (10,694) | (873,339) |
Proceeds from sales of property and equipment | 178,270 | -- | -- |
Purchase of available-for-sale securities | (12,817) | -- | -- |
Purchase of other investments | (50,000) | (612) | (50,000) |
Proceeds from sales of available-for-sale securities | 34,800 | 314 | 25,674 |
Proceeds from sales and redemption of other investments | 9,693 | 121 | 9,881 |
Payments of guarantee deposits | (15,607) | (4) | (315) |
Refund of guarantee deposits | 28,188 | 10 | 808 |
Payments for refundable insurance policies | (12,936) | (61) | (5,015) |
Other | 1,179 | -- | -- |
Net cash used in investing activities | (692,956) | (10,926) | (892,306) |
Three Months Ended December 31, 2009 | Three Months Ended December 31, 2010 | ||
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 | 650,000 | 11,632 | 950,000 |
Repayments of short-term borrowings with initial maturities over three months | (5,100,000) | -- | -- |
Principal payments under capital leases | (947,971) | (8,932) | (729,507) |
Net Increase (decrease) in short-term borrowings with initial maturities less than three months | 2,350,000 | (11,632) | (950,000) |
Proceeds from issuance of subsidiary stock to ?minority shareholders | 150,000 | -- | -- |
Dividends paid | (202,544) | (3,102) | (253,355) |
Net cash used in financing activities | (3,100,515) | (12,034) | (982,862) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 2,171 | (141) | (11,547) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2,322,915) | 17,043 | 1,391,872 |
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 10,789,017 | 115,195 | 9,408,031 |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 8,466,102 | 132,238 | 10,799,903 |
(Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York prevailing as of December 31, 2010. |
Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the nine months of Fiscal Year Ending March 31, 2011(from April 1 to December 31, 2010) in the form defined by the Tokyo Stock Exchange.
Consolidated Financial Results for the Nine Months Ended December 31, 2010
[Under accounting principles generally accepted in the United States ("U.S. GAAP")]
February 10, 2011 | |
Company name: Internet Initiative Japan Inc. | Exchange listed: Tokyo Stock Exchange First Section |
Stock code number: 3774 | URL: http://www.iij.ad.jp/ |
Representative: | Koichi Suzuki, President and Representative Director |
Contact: Akihisa Watai, Managing Director and CFO | TEL: (03) 5259-6500 |
Schedule date for filing of quarterly report: | scheduled on February 14, 2011 |
Supplemental material on quarterly results: | Yes Dividends payment day: - |
Presentation on quarterly results: | Yes (for institutional investors and analysts) |
&nbs p; (Amounts of less than JPY one million are rounded) | |||||||||
1. Consolidated Financial Results for the Nine Months Ended December 31, 2010 (April 1, 2010 to December 31, 2010) | |||||||||
(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, 2010 | 56,797 | 17.6 | 2,430 | 21.1 | 2,175 | 22.0 | 1,997 | 76.2 | |
Nine months ended December 31, 2009 | 48,313 | (4.9) | 2,007 | 8.8 | 1,783 | 43.6 | 1,133 | 219.8 |
Basic Net Income attributable to IIJ per Share | Diluted Net Income attributable to IIJ per Share | |
JPY | JPY | |
Nine months ended December 31, 2010 | 9,855.74 | 9,855.74 |
Nine months ended December 31, 2009 | 5,595.29 | 5,595.29 |
(2) Consolidated Financial Position | |||||
Total Assets | Total Equity | Shareholders' Equity | Shareholders' Equity as a percentage of Total Assets | Shareholders' Equity per share | |
JPY millions | JPY millions | JPY millions | % | JPY | |
December 31, 2010 | 67,145 | 28,688 | 28,696 | 42.7 | 141,579.68 |
March 31, 2010 | 52,096 | 27,364 | 27,320 | 52.4 | 134,882.18 |
2. Dividends | |||||
Dividend per Shares | |||||
1st quarter-end | 2nd quarter-end | 3rd quarter-end | Year-end | Total | |
Yen | Yen | Yen | Yen | Yen | |
Fiscal year ended March 31, 2010 | -- | 1,000.00 | -- | 1,250.00 | 2,250.00 |
Fiscal year ending March 31, 2011 | -- | 1,250.00 | -- | ||
Fiscal year ending March 31, 2011 (Target) | 1,500.00 | 2,750.00 | |||
Changes in dividends forecasts during the three months ended December 31, 2010: Yes |
3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2011 | |||||||||
(April 1, 2010 through March 31, 2011) | (% 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, 2011 | 84,500 | 24.3 | 4,800 | 40.7 | 4,100 | 43.4 | 3,000 | 34.3 | 14,801.37 |
Changes in earnings forecasts during or after the three months ended December 31, 2010: None |
4. Others |
(1) Change in significant subsidiaries for the three months ended December 31, 2010 |
(Change in significant subsidiaries for the three months ended December 31, 2010 which resulted in changes in scope of consolidation): No |
Newly Consolidated ( -- ) Excluded: ( -- ) |
(2) Application of simplified or exceptional accounting: None |
(Application of simplified or exceptional accounting for quarterly consolidated financial statements): |
(3) Changes in Significant Accounting and Reporting Policies for Consolidated Financial Statements |
1) Changes duet to the revision of accounting standards: No |
2) Others: Yes |
(4) Number of Shares Outstanding (Shares of Common Stock) |
1) The number of shares outstanding (inclusive of treasury stock): |
As of December 31, 2010: 206,478 shares |
As of March 31, 2010: 206,478 shares |
2) The number of treasury stock: |
As of December 31, 2010: 3,794 shares |
As of March 31, 2010: 3,934 shares |
3) The weighted average number of shares outstanding: |
For the nine months ended December 31, 2010: 202,632 shares |
For the nine months ended December 31, 2009: 202,544 shares |
CONTACT: Internet Initiative Japan Inc. YUKO KAZAMA Investor Relations Office E-mail: ir@iij.ad.jp Tel: +81-3-5259-6500 URL: http://www.iij.ad.jp/en/IR