EXHIBIT 99.1
TOKYO, May 15, 2012 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774) today announced its full year ("FY2011") and 4th quarter ("4Q11") consolidated financial results for the fiscal year ended March 31, 2012.1
| Highlights of Financial Results for FY2011 | ||
| FY2011 Actual Results | FY2012 Target | |
| Revenues | JPY97,315 million ($1,180.9 million) | JPY107,000 million |
| Operating Income | JPY6,353 million ($77.1 million) | JPY7,500 million |
| Net Income attributable to IIJ | JPY3,641 million ($44.1 million) | JPY4,000 million |
Financial Targets for FY2012
Overview of FY2011 Financial Results and Business Outlook
"FY2011 results were satisfactory to us with revenues and income largely increasing. In addition to the good financial results, we saw good progress with our new services and businesses we've invested in, such as cloud computing services and ATM operation business. We can expect another double-digit growth the following year," said Koichi Suzuki, President and CEO of IIJ.
"Today's results demonstrate our successful strategy," continued Suzuki. "Combining our over 15 years of experience providing outsourcing services, pioneering technological skills in developing network services and our strong relationships with Japanese blue chip clients, we have been successful in attracting outsourcing and network service demands. Broadband services are growing as data traffic increases. Outsourcing services such as data center and security related services are growing fast along with customers' needs for professional IT support. Our cloud computing service "IIJ GIO" has also continued its revenue growth during its second year of service. IIJ GIO increased its number of clients and revenue for FY2011 reached over JPY3.1 billion compared to JPY0.6 billion the previous year."
"We have also strengthened our global network services towards the growing demands from Japanese companies that are heading into global markets. We are now prepared to provide Cloud computing services in the United States and in China together with global internet-VPN service and bilingual help desk service. We have also established a subsidiary and a representative office in the Asian region.
"As a result, combined with the full contribution of IIJ Global Solutions which we acquired in September 2010, our FY2011 revenues increased by 18.1% YoY and operating income increased by 53.4% YoY. Although there were initial cost burden related to our new services and projects, especially cloud computing services, gross margin related to network service increased. In addition to that, ATM operation business which we have been engaging as a new supplemental growth driver nearly reached its break-even point in 4Q11."
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 JPY82.41 per US$1.00, which was the noon buying rate on March 30, 2012.
2 IIJ's 1 common stock is equivalent to 400 ADSs
| FY2011 Financial Results Summary | |||
| Operating Results Summary | |||
| FY2010 | FY2011 | YoY % change | |
| JPY millions | JPY millions | ||
| Total Revenues | 82,418 | 97,315 | 18.1 |
| Network Services | 51,662 | 63,410 | 22.7 |
| SI | 29,444 | 31,469 | 6.9 |
| Equipment Sales | 796 | 1,112 | 39.6 |
| ATM Operation Business | 516 | 1,324 | 156.3 |
| Total Costs | 65,828 | 77,326 | 17.5 |
| Network Services | 41,678 | 49,985 | 19.9 |
| SI | 22,467 | 24,979 | 11.2 |
| Equipment Sales | 683 | 980 | 43.5 |
| ATM Operation Business | 1,000 | 1,382 | 38.2 |
| SG&A Expenses and R&D | 12,449 | 13,636 | 9.5 |
| Operating Income | 4,141 | 6,353 | 53.4 |
| Income before Income Tax Expense | 3,834 | 5,976 | 55.9 |
| Net income attributable to IIJ | 3,203 | 3,641 | 13.7 |
| Segment Summary | |||
| FY2010 | FY2011 | ||
| JPY millions | JPY millions | ||
| Net Revenues | 82,418 | 97,315 | |
| Network services and SI business | 82,357 | 96,497 | |
| ATM operation business | 516 | 1,324 | |
| Elimination | 455 | 506 | |
| Operating Income (Loss) | 4,141 | 6,353 | |
| Network service and SI business | 4,813 | 6,631 | |
| ATM operation business | (643) | (194) | |
| Elimination | 29 | 84 | |
We have omitted segment analysis because most of our revenues are dominated by Network services and SI business.
FY2011 Results of Operation
Revenues
Revenues were JPY97,315 million, up 18.1% YoY. In addition to the full year contribution from IIJ-Global of JPY26,118 million (JPY15,094 million for FY2010 (7 months)), network services revenues contributed to the total revenue growth.
Network Services revenue were JPY63,410 million, up 22.7% YoY.
Revenues for Internet connectivity services for corporate use were JPY14,707 million, up 5.0% YoY as new IP Service contracts accumulated and volume charge revenues increased.
Revenues for Internet connectivity services for home use were JPY 5,717 million, down 12.4% YoY.
WAN Services revenue was JPY25,667 million, up 59.4% YoY due to the full year contribution of IIJ-Global as well as the increase in number of new contracts of IIJ's WAN services.
Outsourcing services revenue were JPY17,319 million, up 15.2% YoY. Services such as data center services, IIJ GIO Hosting Package Service and security-related services grew continuously.
| Number of Contracts for Connectivity Services | |||
| as of 3/31/2011 | as of 3/31/2012 | YoY Change | |
| Internet Connectivity Services (Corporate Use) | 86,803 | 93,807 | 7,004 |
| IP Service (-99Mbps) | 908 | 923 | 15 |
| IP Service (100Mbps-999Mbps) | 305 | 344 | 39 |
| IP Service (1Gbps--) | 126 | 132 | 6 |
| IIJ Data Center Connectivity Service | 305 | 323 | 18 |
| IIJ FiberAccess/F and IIJ DSL/F | 42,851 | 44,510 | 1,659 |
| IIJ Mobile Service3 | 40,988 | 46,329 | 5,341 |
| Others | 1,320 | 1,246 | (74) |
| Internet Connectivity Services (Home Use) | 374,328 | 397,191 | 22,863 |
| Under IIJ Brand | 41,176 | 42,721 | 1,545 |
| hi-ho | 151,828 | 153,901 | 2,073 |
| OEM | 181,324 | 200,569 | 19,245 |
| Total Contracted Bandwidth | 733.4 Gbps | 857.7 Gbps | 124.3Gbps |
| Network Services Revenues Breakdown | |||
| FY2010 | FY2011 | YoY % change | |
| JPY millions | JPY millions | ||
| Internet Connectivity Service (Corporate Use) | 14,005 | 14,707 | 5.0 |
| IP Service4 | 8,962 | 9,299 | 3.8 |
| IIJ FiberAccess/F and IIJ DSL/F | 3,047 | 3,151 | 3.4 |
| IIJ Mobile Service5 | 1,738 | 2,013 | 15.8 |
| Others | 258 | 244 | (5.2) |
| Internet Connectivity Service (Home Use) | 6,525 | 5,717 | (12.4) |
| Under IIJ Brand | 989 | 911 | (7.8) |
| hi-ho | 4,996 | 4,222 | (15.5) |
| OEM | 540 | 584 | 8.1 |
| WAN Services | 16,100 | 25,667 | 59.4 |
| Outsourcing Services | 15,032 | 17,319 | 15.2 |
| Total Network Services | 51,662 | 63,410 | 22.7 |
| 3 Contracts of IIJ Mobile Service are of mobile data communication service for corporate use. | |||
| 4 IP Service revenues include revenues from the Data Center Connectivity Service. | |||
| 5 Revenue from mobile data communication service for home use is included in Internet Connectivity service (home use). | |||
SI revenues were JPY31,469 million, up 6.9% YoY. Systems construction revenue, a one-time revenue, increased by 0.5% to JPY11,997 million. Projects were mainly mid- to small sized construction projects. Systems operation and maintenance revenue, a recurring revenue, increased by 11.2% to JPY19,472 million. The increase was mainly due to the steady increase in IIJ GIO Component service.
The order backlog for systems construction and equipment sales was JPY3,839 million, up 1.1% YoY. The order backlog for systems operation and maintenance was JPY13,014 million, up 14.7% YoY.
Equipment sales revenues were JPY1,112 million, up 39.6% YoY.
ATM Operation Business revenues were JPY1,324 million (JPY516 million in FY2010). The ATM operation business is operated by Trust Networks Inc., IIJ's consolidated subsidiary, and it receives a commission for each bank withdrawal transaction when a customer uses its serviced ATMs. As of May 15, 2012, 440 ATMs are placed.
Cost and expense
Cost of revenues was JPY77,326 million, up 17.5% YoY. Cost of revenues related to IIJ-Global was JPY20,894 million (JPY12,137 million for FY2010(7 months)).
Cost of Network Services revenue was JPY49,985 million, up 19.9% YoY mainly due to the increase in circuit-related costs of IIJ-Global and outsourcing-related costs. Gross margin for network services was JPY13,425 million, up 34.5% YoY and gross margin ratio was 21.2%, up 1.8 points YoY.
Cost of SI revenues was JPY24,979 million, up 11.2% YoY. The increase was mainly due to the increase in both outsourcing cost and network operation related cost mostly for IIJ GIO. Gross margin for SI was JPY6,491 million, down 7.0% YoY and gross margin ratio was 20.6%.
Cost of Equipment Sales revenues was JPY980 million, up 43.5% YoY. Gross margin was JPY131 million and gross margin ratio was 11.8%.
Cost of ATM Operation Business revenues was JPY1,382 million, up 38.2% YoY mainly due to the increase in the number of newly placed ATMs. Gross loss for ATM operation business decreased to JPY58 million from JPY484 million in FY2010 due to the increase in revenues.
SG&A and R&D Expenses
SG&A and R&D expenses were JPY13,636 million, up 9.5% YoY. SG&A expenses related to IIJ-Global was JPY3,037 million (JPY1,767 million for FY2010(7 months)). The ratio of SG&A and R&D expenses to total revenue was 14.0%, down 1.1 points compared to the ratio of FY2010.
Sales and marketing expenses were JPY7,947 million, up 20.1% YoY mainly due to the increase in personnel-related expenses, depreciation and amortization, and advertisement expenses. Amortization of customer relationship related to IIJ-Global was JPY425 million (JPY255 million for FY2010 (7 months)).
General and administrative expenses were JPY5,300 million, down 3.3% YoY. While personnel-related expense increased, rent expense decrease as a result of allocation change.
Research and development expenses were JPY389 million, up 9.9% YoY.
Operating income
Operating income was JPY6,353 million, up 53.4% YoY as there were full year contribution from IIJ-Global, increase in gross margin of network services revenues and the decrease in gross loss of ATM operation business.
Other income (expenses)
Other income (expenses) was expense of JPY377 million (expense of JPY307 million for FY2010) mainly due to interest expenses.
Income before income tax expenses
Income before income tax expenses was JPY5,976 million, up 55.9% YoY (JPY3,834 million for FY2010).
Net Income
Income tax expense was JPY2,525 million (JPY956 million for FY2010).
Equity in net income of equity method investees was JPY124 million (JPY123 million for FY2010) mainly due to income of Internet Multifeed Co. and Internet Revolution, Inc.
Net income was JPY3,575 million, up 19.1% YoY (JPY3,001 million for FY2010).
Net income attributable to IIJ
Net loss attributable to noncontrolling interests was JPY66 million (JPY202 million for FY2010) related to Trust Networks Inc.
Net income attributable to IIJ was JPY3,641 million, up 13.7% YoY (JPY3,203 million for FY2010).
FY2011 Financial Condition
Balance Sheets
As of March 31, 2012, the balance of total assets was JPY73,493 million, increased by JPY2,020 million from the balance as of March 31, 2011.
For current assets as of March 31, 2012, as compared to the respective balances as of March 31, 2011, accounts receivable decreased by JPY709 million. As for noncurrent assets, as compared to each of the respective balances as of March 31, 2011, property and equipment increased by JPY3,255 million, resulting from the increase of investment in servers, network equipment and facilities for cloud computing service and others, prepaid expense –noncurrent increased by JPY350 million and other intangible assets- net decreased by JPY658 million. As for current liabilities, as compared to each of the respective balances as of March 31, 2011, accounts payable decreased by JPY3,821 million and income taxes payable increased by JPY1,855 million.
As for the bank borrowings, as compared to the respective balances as of March 31, 2011, the balance of short-term borrowings decreased by JPY4,430 million, long-term borrowings-current portion increased by JPY1,010 million and long-term borrowing increased by JPY1,990 million, respectively. Bank borrowings to purchase the stocks of IIJ-Global was partially repaid and refinanced. Capital lease obligations-noncurrent increased by JPY1,115 million.
As of March 31, 2012, the balance of other investments was JPY2,938 million, an increase of JPY144 million from the balance as of March 31, 2011. The breakdown of other investments were JPY1,958 million in nonmarketable equity securities, JPY861 million in available-for-sale securities and JPY119 million in other.
As of March 31, 2012, the balance of non-amortized intangible assets (excluding telephone rights) such as goodwill was JPY5,943 million, and the breakdown of non-amortized intangible assets were JPY5,788 million in goodwill and JPY155 million in trademark. As of March 31, 2012, the balance of amortized intangible assets, which was customer relationships, was JPY5,223 million.
Total IIJ shareholders' equity as of March 31, 2012 was JPY32,688 million, an increase of JPY3,036 million from the balance as of March 31, 2011. IIJ Shareholders' equity ratio (total IIJ shareholders' equity/total assets) as of March 31, 2012 was 44.5%.
Cash Flows
Cash and cash equivalents as of March 31, 2012 were JPY13,537 million compared to JPY13,314 million as of March 31, 2011.
Net cash provided by operating activities for FY2011 was JPY11,659 million compared to net cash provided by operating activities of JPY12,564 million for FY2010. Operating income increased YoY mainly due to the full year operating income from IIJ-Global contributed, gross margin of network services revenues increased and gross loss of ATM operation business decreased. In addition, there were effects of changes in operating assets and liabilities such as decrease in accounts payable in relation to payment for equipments for systems integration projects.
Net cash used in investing activities for FY2011 was JPY5,954 million compared to net cash used in investing activities of JPY13,493 million for FY2010, mainly due to payments for purchase of property and equipment of JPY6,167 million (JPY3,839 million for FY2010). As for FY2010, there was payment for the acquisition of IIJ-GS for JPY9,170 million.
Net cash used in financing activities for FY2011 was JPY5,464 million compared to net cash provided by financing activities of JPY5,521 million for FY2010, mainly due to proceeds from issuance of short-term borrowings with initial maturities over three months and long-term borrowings of JPY3,370 million, repayments of short-term borrowings with initial maturities over three months of JPY620 million and net decrease of short-term borrowings with initial maturities less than three months of JPY 4,180 million (net proceeds from issuance of short-term borrowings of JPY8,980 million for FY2010), principal payments under capital leases of JPY3,426 million (JPY2,989 million for FY2010) and JPY608 million for FY2010 year-end and FY2011 interim dividends payments.
FY2012 Financial Targets
| Our targets for the fiscal year ending March 31, 2013 are as follows: | ||||
| (JPY in millions) | ||||
| Revenues | Operating Income | Income before Income Tax Expense (Benefit) | Net Income attributable to IIJ | |
| 1H FY2012 Target | 50,500 | 2,700 | 2,500 | 1,400 |
| Full FY2012 Target | 107,000 | 7,500 | 6,900 | 4,000 |
We target revenue of JPY107 billion yen, up 10.0% YoY. We expect revenues from our network services to continue to increase, IIJ GIO revenue to largely increase (to reach over JPY7.0 billion from JPY3.1 billion for FY2011), additional revenues from the global business, and ATM operation business revenues to increase (to become almost double from JPY1.3 billion for FY2011) along with the increase in number of newly placed ATMs.
For operating income, we target JPY7.5 billion, up 18.0 % YoY with expectations for continuous gross margin increase in network services, and by IIJ GIO and ATM operating business to turning into positive in FY2012 from their deficits in FY2011.
For income before income tax expense (benefit), considering interest and other expenses, we target JPY6.9 billion, up 15.5% YoY.
For net Income attributable to IIJ, we target JPY4.0 billion, up 9.9% YoY.
FY2012 Dividend Forecast
| Our FY2012 dividend forecasts are as follows: | |||
| Interim | Year-end | Full-Year | |
| FY2012 Dividend (forecast) | JPY1,750 (forecast) | JPY1,750 (forecast) | JPY3,500 (forecast) |
| FY2011 Dividend (scheduled) | JPY1,500 | JPY1,750 (scheduled) | JPY3,250 (scheduled) |
While we give full consideration in securing our funds to strengthen our financial position and to prepare for our mid- to-long term operation and business development, we seek to achieve stable and continuous dividends to shareholders.
Based on our Company's article of incorporation, we plan to pay our dividend twice a year, at interim and at fiscal year-end. The dividends for interim and fiscal year-end are decided at the Company's board of directors and the general meeting of stockholders, respectively.
As for the FY2011 year-end dividend, we plan to revise our year-end dividend from JPY1,500 to JPY1,750 per share of our common stock. We have paid interim dividend of JPY1,500 per share of common stock for FY2011 interim period. FY2011 total dividend is scheduled to be JPY3,250.
For FY2012, we target to pay total dividend of JPY3,500 per share of common stock (JPY1,750 for the interim period and JPY1,750 for the fiscal year-end).
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 | ||
| FY2010 | FY2011 | |
| JPY millions | JPY millions | |
| Adjusted EBITDA | 10,210 | 13,534 |
| Depreciation and Amortization 6 | (5,851) | (7,144) |
| Impairment loss on other intangible assets | (218) | (37) |
| Operating Income | 4,141 | 6,353 |
| Other Income (Expense) | (307) | (377) |
| Income Tax Expense | 956 | 2,525 |
| Equity in Net Income of Equity Method Investees | 123 | 124 |
| Net income | 3,001 | 3,575 |
| Net loss attributable to noncontrolling interests | 202 | 66 |
| Net Income attributable to IIJ | 3,203 | 3,641 |
| CAPEX | ||
| FY2010 | FY2011 | |
| JPY millions | JPY millions | |
| CAPEX, including capital leases | 6,752 | 10,917 |
| Acquisition of Assets by Entering into Capital Leases | 2,913 | 4,750 |
| Purchase of Property and Equipment | 3,839 | 6,167 |
| 6 Depreciation and amortization includes impairment loss on other intangible assets. (See IIJ's consolidated financial statements for details). |
Presentation
Presentation Materials will be posted on our web site (http://www.iij.ad.jp/en/IR/) on May 15, 2012.
About Internet Initiative Japan Inc.
Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality systems integration and security services, Internet access, hosting/housing, and content design. Moreover, IIJ has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006.
The Internet Initiative Japan Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4613
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. | ||||||
| Consolidated Balance Sheets (Unaudited) | ||||||
| (As of March 31, 2011 and March 31, 2012) | ||||||
| As of March 31, 2011 | As of March 31, 2012 | |||||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | 13,313,615 | 164,262 | 13,536,824 | |||
| Accounts receivable, net of allowance for doubtful accounts of JPY 44,002 thousand and JPY 107,919 thousand at March 31, 2011 and March 31, 2012, respectively | 16,431,374 | 190,779 | 15,722,135 | |||
| Inventories | 601,088 | 9,126 | 752,075 | |||
| Prepaid expenses | 1,680,158 | 22,429 | 1,848,344 | |||
| Deferred tax assets -Current | 978,263 | 11,399 | 939,370 | |||
| Other current assets, net of allowance for doubtful accounts of JPY 43,640 thousand and JPY 10,732 thousand at March 31, 2011 and March 31, 2012, respectively | 1,533,185 | 10,818 | 891,560 | |||
| Total current assets | 34,537,683 | 408,813 | 33,690,308 | |||
| INVESTMENTS IN EQUITY METHOD INVESTEES | 1,251,990 | 17,069 | 1,406,634 | |||
| OTHER INVESTMENTS | 2,794,046 | 35,653 | 2,938,146 | |||
| PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of JPY 21,891,126 thousand and JPY 25,693,163 thousand at March 31, 2011 and March 31, 2012, respectively | 16,480,724 | 239,480 | 19,735,546 | |||
| GOODWILL | 5,788,333 | 70,238 | 5,788,333 | |||
| OTHER INTANGIBLE ASSETS -Net | 6,054,503 | 65,483 | 5,396,469 | |||
| GUARANTEE DEPOSITS | 1,889,796 | 23,053 | 1,899,815 | |||
| DEFERRED TAX ASSETS -Noncurrent | 16,393 | 301 | 24,760 | |||
| NET INVESTMENT IN SALES-TYPE LEASES —Noncurrent | 1,266,409 | 11,351 | 935,446 | |||
| Prepaid expenses —Noncurrent | 1,187,219 | 18,650 | 1,536,932 | |||
| OTHER ASSETS, net of allowance for doubtful accounts of JPY81,448 thousand and JPY86,388 thousand at March 31, 2011 and March 31, 2012, respectively, and net of loan loss valuation allowance of JPY 16,701thousand at March 31, 2011. | 205,893 | 1,709 | 140,857 | |||
| TOTAL | 71,472,989 | 891,800 | 73,493,246 | |||
| As of March 31, 2011 | As of March 31, 2012 | |||||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Short-term borrowings | 13,430,000 | 109,210 | 9,000,000 | |||
| Long-term borrowings -Current portion | -- | 12,256 | 1,010,000 | |||
| Capital lease obligations -Current portion | 2,787,955 | 36,370 | 2,997,292 | |||
| Accounts payable | 13,574,152 | 118,346 | 9,752,923 | |||
| Income taxes payable | 355,183 | 26,818 | 2,210,089 | |||
| Accrued expenses | 1,889,891 | 27,634 | 2,277,307 | |||
| Deferred income -Current | 1,667,336 | 18,147 | 1,495,468 | |||
| Other current liabilities | 460,934 | 8,705 | 717,342 | |||
| Total current liabilities | 34,165,451 | 357,486 | 29,460,421 | |||
| LONG-TERM BORROWINGS | -- | 24,148 | 1,990,000 | |||
| CAPITAL LEASE OBLIGATIONS -Noncurrent | 3,626,565 | 57,532 | 4,741,241 | |||
| ACCRUED RETIREMENT AND PENSION COSTS -Noncurrent | 1,567,050 | 21,911 | 1,805,683 | |||
| DEFERRED TAX LIABILITIES -Noncurrent | 609,412 | 7,915 | 652,280 | |||
| DEFERRED INCOME -Noncurrent | 1,270,984 | 18,774 | 1,547,159 | |||
| OTHER NONCURRENT LIABILITIES | 592,177 | 7,283 | 600,215 | |||
| Total Liabilities | 41,831,639 | 495,049 | 40,796,999 | |||
| COMMITMENTS AND CONTINGENCIES | ||||||
| SHAREHOLDERS' EQUITY: | ||||||
| Common-stock—authorized, 377,600 shares; issued and outstanding, 206,478 shares at March 31, 2011 and March 31, 2012 | 16,833,847 | 204,269 | 16,833,847 | |||
| Additional paid-in capital | 27,318,912 | 330,789 | 27,260,318 | |||
| Accumulated deficit | (14,023,259) | (133,362) | (10,990,348) | |||
| Accumulated other comprehensive loss | (85,134) | (285) | (23,533) | |||
| Treasury stock—3,794 shares held by the company at March 31, 2011 and March 31, 2012, respectively | (392,079) | (4,758) | (392,079) | |||
| Total Internet Initiative Japan Inc. shareholders' equity | 29,652,287 | 396,653 | 32,688,205 | |||
| NONCONTROLLING INTERESTS | (10,937) | 98 | 8,042 | |||
| Total equity | 29,641,350 | 396,751 | 32,696,247 | |||
| TOTAL | 71,472,989 | 891,800 | 73,493,246 | |||
| (Note1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 82.41 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 March 30, 2012. | ||||||
| (Note2) The above presentation as of March 31, 2011 has been changed to conform to the presentation as of March 31, 2012. | ||||||
| Internet Initiative Japan Inc. | ||||||
| Consolidated Statements of Income (Unaudited) | ||||||
| (For the fiscal year ended March 31, 2011 and March 31, 2012) | ||||||
| Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2012 | |||||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||||
| REVENUES: | ||||||
| Network services: | ||||||
| Internet connectivity services (corporate use) | 14,004,608 | 178,455 | 14,706,511 | |||
| Internet connectivity services (home use) | 6,525,128 | 69,378 | 5,717,417 | |||
| WAN services | 16,100,046 | 311,449 | 25,666,524 | |||
| Outsourcing services | 15,031,785 | 210,156 | 17,318,954 | |||
| Total | 51,661,567 | 769,438 | 63,409,406 | |||
| Systems integration: | ||||||
| Systems construction | 11,936,581 | 145,585 | 11,997,680 | |||
| Systems operation and maintenance | 17,507,099 | 236,278 | 19,471,641 | |||
| Total | 29,443,680 | 381,863 | 31,469,321 | |||
| Equipment sales | 796,385 | 13,490 | 1,111,722 | |||
| ATM operation business | 516,574 | 16,068 | 1,324,156 | |||
| Total revenues | 82,418,206 | 1,180,859 | 97,314,605 | |||
| COST AND EXPENSES: | ||||||
| Cost of network services | 41,678,052 | 606,538 | 49,984,821 | |||
| Cost of systems integration | 22,466,436 | 303,102 | 24,978,607 | |||
| Cost of equipment sales | 683,285 | 11,895 | 980,279 | |||
| Cost of ATM operation business | 1,000,470 | 16,772 | 1,382,194 | |||
| Total cost | 65,828,243 | 938,307 | 77,325,901 | |||
| Sales and marketing | 6,616,013 | 96,431 | 7,946,852 | |||
| General and administrative | 5,479,176 | 64,308 | 5,299,608 | |||
| Research and development | 353,732 | 4,717 | 388,761 | |||
| Total cost and expenses | 78,277,164 | 1,103,763 | 90,961,122 | |||
| OPERATING INCOME | 4,141,042 | 77,096 | 6,353,483 | |||
| OTHER INCOME (EXPENSE): | ||||||
| Interest income | 23,113 | 420 | 34,602 | |||
| Interest expense | (268,129) | (3,632) | (299,271) | |||
| Foreign exchange losses | (31,975) | (55) | (4,549) | |||
| Net gains (losses) on sales of other investments -net | 105,252 | (38) | (3,154) | |||
| Losses on write-down of other investments | (179,829) | (1,937) | (159,592) | |||
| Other -net | 44,515 | 664 | 54,701 | |||
| Other income (expense) -net | (307,053) | (4,578) | (377,263) | |||
| INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 3,833,989 | 72,518 | 5,976,220 | |||
| INCOME TAX EXPENSE | 955,697 | 30,645 | 2,525,486 | |||
| EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 122,667 | 1,502 | 123,776 | |||
| NET INCOME | 3,000,959 | 43,375 | 3,574,510 | |||
| LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 202,409 | 806 | 66,453 | |||
| NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 3,203,368 | 44,181 | 3,640,963 | |||
| Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2012 | |||||
| NET INCOME PER SHARE | ||||||
| BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,644 | 202,684 | ||||
| DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,644 | 202,782 | ||||
| BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,057,600 | 81,073,600 | ||||
| DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,057,600 | 81,112,800 | ||||
| BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 15,807.86 | 217.98 | 17,963.74 | |||
| DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 15,807.86 | 217.87 | 17,955.06 | |||
| BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 39.52 | 0.54 | 44.91 | |||
| DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 39.52 | 0.54 | 44.89 | |||
| (Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 82.41 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 March 30, 2012. | ||||||
| Internet Initiative Japan Inc. | ||||||||||||||||||
| Consolidated Statements of Shareholders' Equity (Unaudited) | ||||||||||||||||||
| (For the fiscal year ended March 31, 2011 and March 31, 2012) | ||||||||||||||||||
| Total equity | Comprehensive income （loss） | Internet Initiative Japan Inc. shareholders' equity | NON CONTROLLING INTERESTS | |||||||||||||||
| Accumulated deficit | Accumulated other comprehensive income (loss) | Shares of common stock outstanding | Common Stock | Treasury Stock | Additional Paid-in Capital | |||||||||||||
| Thousands of JPY | Thousands of JPY | Thousands of JPY | Thousands of JPY | Shares | Thousands of JPY | Thousands of JPY | Thousands of JPY | Thousands of JPY | ||||||||||
| BALANCE, APRIL 1, 2010 | 27,363,703 | (16,720,092) | 168,769 | 206,478 | 16,833,847 | (406,547) | 27,443,600 | 44,126 | ||||||||||
| Subsidiary stock issuance | -- | (147,346) | 147,346 | |||||||||||||||
| Comprehensive income （loss）: | ||||||||||||||||||
| Net Income (loss) | 3,000,959 | 3,000,959 | 3,203,368 | (202,409) | ||||||||||||||
| Other Comprehensive loss, net of tax | (253,903) | (253,903) | (253,903) | |||||||||||||||
| Total comprehensive income | 2,747,056 | 2,747,056 | ||||||||||||||||
| Dividends paid | (506,535) | (506,535) | ||||||||||||||||
| Disposal of Treasury stock | 37,126 | 14,468 | 22,658 | |||||||||||||||
| BALANCE, MARCH 31, 2011 | 29,641,350 | (14,023,259) | (85,134) | 206,478 | 16,833,847 | (392,079) | 27,318,912 | (10,937) | ||||||||||
| Purchase of noncontrolling interests of consolidated subsidiaries | (5) | (19,395) | 19,390 | |||||||||||||||
| Subsidiary stock issuance | -- | (66,042) | 66,042 | |||||||||||||||
| Stock-based compensation | 26,843 | 26,843 | ||||||||||||||||
| Comprehensive income （loss）: | ||||||||||||||||||
| Net Income (loss) | 3,574,510 | 3,574,510 | 3,640,963 | (66,453) | ||||||||||||||
| Other Comprehensive income, net of tax | 61,601 | 61,601 | 61,601 | |||||||||||||||
| Total comprehensive income: | 3,636,111 | 3,636,111 | ||||||||||||||||
| Dividends paid | (608,052) | (608,052) | ||||||||||||||||
| BALANCE, MARCH 31, 2012 | 32,696,247 | (10,990,348) | (23,533) | 206,478 | 16,833,847 | (392,079) | 27,260,318 | 8,042 | ||||||||||
| (For the fiscal year ended March 31, 2012 (In USD)) | ||||||||||||||||||
| Total equity | Comprehensive income （loss） | Internet Initiative Japan Inc. shareholders' equity | NON CONTROLLING INTERESTS | |||||||||||||||
| Accumulated deficit | Accumulated other comprehensive income (loss) | Shares of common stock outstanding | Common Stock | Treasury Stock | Additional Paid-in Capital | |||||||||||||
| Thousands of USD | Thousands of USD | Thousands of USD | Thousands of USD | Shares | Thousands of USD | Thousands of USD | Thousands of USD | Thousands of USD | ||||||||||
| BALANCE, APRIL 1, 2011 | 359,681 | (170,165) | (1,033) | 206,478 | 204,269 | (4,758) | 331,500 | (132) | ||||||||||
| Purchase of noncontrolling interests of consolidated subsidiaries | 0 | (235) | 235 | |||||||||||||||
| Subsidiary stock issuance | -- | (801) | 801 | |||||||||||||||
| Stock-based compensation | 325 | 325 | ||||||||||||||||
| Comprehensive income （loss）: | ||||||||||||||||||
| Net Income (loss) | 43,375 | 43,375 | 44,181 | (806) | ||||||||||||||
| Other Comprehensive income, net of tax | 748 | 748 | 748 | |||||||||||||||
| Total comprehensive income: | 44,122 | 44,122 | ||||||||||||||||
| Dividends paid | (7,378) | (7,378) | ||||||||||||||||
| BALANCE, MARCH 31, 2012 | 396,751 | (133,362) | (285) | 206,478 | 204,269 | (4,758) | 330,789 | 98 | ||||||||||
| (Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 82.41 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 March 30, 2012. | ||||||||||||||||||
| Internet Initiative Japan Inc. | |||
| Consolidated Statements of Cash Flows (Unaudited) | |||
| (For the fiscal year ended March 31, 2011 and March 31, 2012) | |||
| Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 31, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| OPERATING ACTIVITIES: | |||
| Net income | 3,000,959 | 43,375 | 3,574,510 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 5,850,882 | 86,684 | 7,143,631 |
| Impairment loss on other intangible assets | 218,073 | 449 | 37,000 |
| Provision for retirement and pension costs, less payments | 253,818 | 2,273 | 187,287 |
| Provision for (reversal of) allowance for doubtful accounts | (10,522) | 996 | 82,046 |
| Loss on disposal of property and equipment | 23,588 | 757 | 62,398 |
| Net losses (gains) on sales of other investments | (105,252) | 38 | 3,154 |
| Impairment of other investments | 179,829 | 1,937 | 159,592 |
| Gain on receipt of investment securities | (18,060) | -- | -- |
| Foreign exchange losses, net | 27,309 | 172 | 14,202 |
| Equity in net income of equity method investees | (122,667) | (1,502) | (123,776) |
| Deferred income tax expense | 606,875 | 433 | 35,714 |
| Others | 16,960 | 819 | 67,440 |
| Changes in operating assets and liabilities net of effects from acquisition of business and a company: | |||
| Decrease in accounts receivable | 429,691 | 7,606 | 626,783 |
| Decrease (increase) in net investment in sales-type lease―noncurrent | (765,510) | 4,016 | 330,961 |
| Increase in inventories, prepaid expenses and other current and noncurrent assets | (65,828) | (1,959) | (161,418) |
| Increase (decrease) in accounts payable | 1,995,375 | (35,541) | (2,928,912) |
| Increase in income taxes payable | 27,490 | 22,358 | 1,842,553 |
| Decrease (increase) in deferred income-noncurrent | 333,548 | (3,707) | (305,512) |
| Increase in accrued expenses and other current and noncurrent liabilities | 687,658 | 12,276 | 1,011,685 |
| Net cash provided by operating activities | 12,564,216 | 141,480 | 11,659,338 |
| INVESTING ACTIVITIES: | |||
| Purchase of property and equipment | (3,839,011) | (74,838) | (6,167,434) |
| Proceeds from sales of property and equipment | 174,334 | 4,249 | 350,136 |
| Purchase of available-for-sale securities | (141,020) | (3,268) | (269,218) |
| Purchase of other investments | (200,000) | (2,259) | (186,115) |
| Investment in an equity method investee | -- | (299) | (24,647) |
| Proceeds from sales of available-for-sale securities | 155,571 | 2,747 | 226,346 |
| Proceeds from sales of other investments | 66,047 | 1,144 | 94,285 |
| Payments of guarantee deposits | (686,825) | (478) | (39,403) |
| Refund of guarantee deposits | 165,193 | 316 | 26,045 |
| Payments for refundable insurance policies | (22,188) | (80) | (6,604) |
| Refund from insurance policies | 29,642 | 521 | 42,948 |
| Acquisition of a newly controlled company, net of cash acquired | (9,170,000) | -- | -- |
| Other | (24,860) | (7) | (594) |
| Net cash used in investing activities | (13,493,117) | (72,252) | (5,954,255) |
| Fiscal Year Ended March 31, 2011 | Fiscal Year Ended March 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 | 1,600,000 | 40,893 | 3,370,000 |
| Repayments of short-term borrowings with initial maturities over three months | (1,550,000) | (7,523) | (620,000) |
| Principal payments under capital leases | (2,989,471) | (41,569) | (3,425,680) |
| Net increase (decrease) in short-term borrowings with initial maturities less than three months | 8,930,000 | (50,722) | (4,180,000) |
| Dividends paid | (506,535) | (7,378) | (608,052) |
| Proceeds from sales of treasury stock | 37,126 | -- | -- |
| Net cash provided by (used in) financing activities | 5,521,120 | (66,299) | (5,463,732) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (43,019) | (220) | (18,142) |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 4,549,200 | 2,709 | 223,209 |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 8,764,415 | 161,553 | 13,313,615 |
| CASH AND CASH EQUIVALENTS, END OF YEAR | 13,313,615 | 164,262 | 13,536,824 |
| ADDITIONAL CASH FLOW INFORMATION: | |||
| Interest paid | 267,750 | 3,614 | 297,862 |
| Income taxes paid | 346,561 | 5,844 | 481,580 |
| NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
| Acquisition of assets by entering into capital leases | 2,912,806 | 57,635 | 4,749,695 |
| Facilities purchase liabilities | 1,559,343 | 8,000 | 659,266 |
| Asset retirement obligation | 213,336 | 513 | 42,273 |
| Acquisition of a company: | |||
| Assets acquired | 14,956,137 | -- | -- |
| Cash paid | (9,170,000) | -- | -- |
| Liabilities assumed | 5,786,137 | -- | -- |
| (Note1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 82.41 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 March 30, 2012. | |||
| (Note2) The above presentation for the fiscal year ended March 31, 2011 has been changed to conform to the presentation for the fiscal year ended March 31, 2012. | |||
4th Quarter FY2011 Consolidated Financial Results (3 months)
The following tables are highlight data of 4th Quarter FY2011 consolidated financial results (unaudited, from January 1, 2012 to March 31, 2012).
| Operating Results Summary | |||
| 4Q10 | 4Q11 | YoY % Change | |
| JPY millions | JPY millions | ||
| Total Revenues: | 25,622 | 26,563 | 3.7 |
| Network Services | 15,552 | 16,167 | 4.0 |
| SI | 9,659 | 9,761 | 1.1 |
| Equipment Sales | 247 | 233 | (5.6) |
| ATM Operation Business | 164 | 402 | 145.5 |
| Cost of Revenues: | 20,572 | 20,672 | 0.5 |
| Network Services | 12,474 | 12,398 | (0.6) |
| SI | 7,591 | 7,712 | 1.6 |
| Equipment Sales | 210 | 194 | (7.7) |
| ATM Operation Business | 297 | 368 | 24.2 |
| SG&A Expenses and R&D | 3,339 | 3,535 | 5.9 |
| Operating Income | 1,711 | 2,356 | 37.7 |
| Income before Income Tax Expense | 1,659 | 2,196 | 32.4 |
| Net Income attributable to IIJ | 1,206 | 1,251 | 3.7 |
| Connectivity and Outsourcing Services Revenues Breakdown and Cost | |||
| 4Q10 | 4Q11 | YoY % Change | |
| JPY millions | JPY millions | ||
| Internet Connectivity Service (Corporate Use) | 3,572 | 3,787 | 6.0 |
| IP Service | 2,256 | 2,389 | 5.9 |
| IIJ FiberAccess/F and IIJ DSL/F | 782 | 799 | 2.1 |
| IIJ Mobile Service | 471 | 539 | 14.7 |
| Others | 63 | 60 | (4.4) |
| Internet Connectivity Service (Home Use) | 1,551 | 1,389 | (10.4) |
| Under IIJ Brand | 236 | 241 | 2.3 |
| hi-ho | 1,178 | 1,000 | (15.2) |
| OEM | 137 | 148 | 8.7 |
| WAN Services | 6,398 | 6,489 | 1.4 |
| Outsourcing Services | 4,031 | 4,502 | 11.6 |
| Network Services Revenues | 15,552 | 16,167 | 4.0 |
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 | ||||
| 4Q10 | 4Q11 | |||
| JPY millions | JPY millions | |||
| Adjusted EBITDA | 3,543 | 4,285 | ||
| Depreciation and Amortization | (1,714) | (1,892) | ||
| Impairment loss on other intangible assets | (118) | (37) | ||
| Operating Income | 1,711 | 2,356 | ||
| Other Income (Expense) | (52) | (160) | ||
| Income Tax Expense | 496 | 922 | ||
| Equity in Net Income (Loss) of Equity Method Investees | (7) | (29) | ||
| Net income | 1,156 | 1,245 | ||
| Net income attributable to noncontrolling interests | 50 | 6 | ||
| Net Income attributable to IIJ | 1,206 | 1,251 | ||
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 | ||
| 4Q10 | 4Q11 | |
| JPY millions | JPY millions | |
| CAPEX, including capital leases | 2,212 | 2,265 |
| Acquisition of Assets by Entering into Capital Leases | 1,410 | 632 |
| Purchase of Property and Equipment | 802 | 1,633 |
| Internet Initiative Japan Inc. | ||||||
| Quarterly Consolidated Statements of Income (Unaudited) | ||||||
| (Three Months ended March 31, 2011 and March 31, 2012) | ||||||
| Three Months Ended March 31, 2011 | Three Months Ended March 31, 2012 | |||||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||||
| REVENUES: | ||||||
| Network services: | ||||||
| Internet connectivity services (corporate use) | 3,571,836 | 45,952 | 3,786,887 | |||
| Internet connectivity services (home use) | 1,550,768 | 16,861 | 1,389,488 | |||
| WAN services | 6,397,936 | 78,743 | 6,489,229 | |||
| Outsourcing services | 4,031,223 | 54,625 | 4,501,619 | |||
| Total | 15,551,763 | 196,180 | 16,167,223 | |||
| Systems integration: | ||||||
| Systems Construction | 5,016,059 | 56,412 | 4,648,913 | |||
| Systems Operation and Maintenance | 4,643,273 | 62,033 | 5,112,100 | |||
| Total | 9,659,332 | 118,445 | 9,761,013 | |||
| Equipment sales | 246,761 | 2,827 | 232,973 | |||
| ATM operation business | 163,690 | 4,876 | 401,804 | |||
| Total revenues | 25,621,546 | 322,328 | 26,563,013 | |||
| COST AND EXPENSES: | ||||||
| Cost of network services | 12,473,729 | 150,441 | 12,397,820 | |||
| Cost of systems integration | 7,590,400 | 93,575 | 7,711,543 | |||
| Cost of equipment sales | 209,940 | 2,350 | 193,690 | |||
| Cost of ATM operation business | 297,104 | 4,478 | 368,996 | |||
| Total cost | 20,571,173 | 250,844 | 20,672,049 | |||
| Sales and marketing | 1,860,161 | 24,350 | 2,006,664 | |||
| General and administrative | 1,384,663 | 16,734 | 1,379,078 | |||
| Research and development | 94,574 | 1,812 | 149,321 | |||
| Total cost and expenses | 23,910,571 | 293,740 | 24,207,112 | |||
| OPERATING INCOME | 1,710,975 | 28,588 | 2,355,901 | |||
| OTHER INCOME (EXPENSE): | ||||||
| Interest income | 6,161 | 116 | 9,555 | |||
| Interest expense | (74,625) | (875) | (72,144) | |||
| Foreign exchange losses | (2,722) | 108 | 8,920 | |||
| Net gains (losses) on sales of other investments -net | 51,327 | -- | (2,984) | |||
| Losses on write-down of other investments | (7,966) | (910) | (75,015) | |||
| Other—net | (23,813) | (339) | (27,930) | |||
| Other expense — net | (51,638) | (1,937) | (159,598) | |||
| INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME IN EQUITY METHOD INVESTEES | 1,659,337 | 26,651 | 2,196,303 | |||
| INCOME TAX EXPENSE | 496,288 | 11,187 | 921,880 | |||
| EQUITY IN NET INCOME (LOSS) OF EQUITY METHOD INVESTEES | (6,692) | (359) | (29,560) | |||
| NET INCOME | 1,156,357 | 15,106 | 1,244,863 | |||
| LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 49,923 | 78 | 6,453 | |||
| NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 1,206,280 | 15,184 | 1,251,316 | |||
| Three Months Ended March 31, 2011 | Three Months Ended March 31, 2012 | |||||
| NET INCOME PER SHARE | ||||||
| BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,684 | 202,684 | ||||
| DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 202,684 | 202,822 | ||||
| BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,073,600 | 81,073,600 | ||||
| DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,073,600 | 81,128,800 | ||||
| BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 5,951.53 | 74.91 | 6,173.73 | |||
| DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 5,951.53 | 74.86 | 6,169.53 | |||
| BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 14.88 | 0.19 | 15.43 | |||
| DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 14.88 | 0.19 | 15.42 | |||
| (Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 82.41 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 March 30, 2012. | ||||||
| Internet Initiative Japan Inc. | ||||||
| Quarterly Consolidated Statements of Cash Flows (Unaudited) | ||||||
| (Three Months ended March 31, 2011 and March 31, 2012) | ||||||
| Three Months Ended March 31, 2011 | Three Months Ended March 31, 2012 | |||||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||||
| OPERATING ACTIVITIES: | ||||||
| Net income | 1,156,357 | 15,106 | 1,244,863 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 1,714,029 | 22,960 | 1,892,149 | |||
| Impairment loss on other intangible assets | 118,073 | 449 | 37,000 | |||
| Provision for retirement and pension costs, less payments | 52,322 | 463 | 38,182 | |||
| Provision for allowance for doubtful accounts and advances | 11,649 | 439 | 36,194 | |||
| Loss on disposal of property and equipment | 8,186 | 276 | 22,782 | |||
| Net losses (gains) on sales of other investments | (51,327) | 36 | 2,984 | |||
| Impairment of other investments | 7,966 | 910 | 75,015 | |||
| Foreign exchange gains, net | (1,629) | (217) | (17,886) | |||
| Equity in net income of equity method investees | 6,692 | 359 | 29,560 | |||
| Deferred income tax expense (benefit) | 365,171 | (879) | (72,460) | |||
| Others | (44,817) | 397 | 32,735 | |||
| Changes in operating assets and liabilities net of effects from acquisition of business and a company: | ||||||
| Increase in accounts receivable | (311,785) | (3,658) | (301,511) | |||
| Decrease (increase) in net investment in sales-type lease―noncurrent | (924,955) | 1,257 | 103,590 | |||
| Decrease in inventories, prepaid expenses and other current and noncurrent assets | 815,388 | 10,758 | 886,578 | |||
| Increase (decrease) in accounts payable | (1,954,506) | 11,356 | 935,852 | |||
| Increase in income taxes payable | 158,475 | 12,252 | 1,009,680 | |||
| Increase (decrease) in deferred income― noncurrent | 850,278 | (2,248) | (185,293) | |||
| Increase (decrease) in accrued expenses, other current and noncurrent liabilities | 2,201,488 | (8,381) | (690,643) | |||
| Net cash provided by operating activities | 4,177,055 | 61,635 | 5,079,371 | |||
| INVESTING ACTIVITIES: | ||||||
| Purchase of property and equipment | (801,940) | (19,818) | (1,633,158) | |||
| Proceeds from sales of property and equipment | 170,187 | 678 | 55,871 | |||
| Purchase of available-for-sale securities | (94,552) | (1,823) | (150,270) | |||
| Purchase of other investments | (50,000) | (971) | (80,000) | |||
| Proceeds from sales of available-for-sale securities | 101,966 | 2,700 | 222,467 | |||
| Proceeds from sales of other investments | 36,146 | 389 | 32,080 | |||
| Payments of guarantee deposits | (258,296) | (232) | (19,134) | |||
| Refund of guarantee deposits | 41,768 | 57 | 4,731 | |||
| Payments for refundable insurance policies | (4,998) | (2) | (182) | |||
| Other | (4,238) | 48 | 3,983 | |||
| Net cash used in financing activities | (863,957) | (18,974) | (1,563,612) | |||
| Three Months Ended March 31, 2011 | Three Months Ended March 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 | 300,000 | -- | -- | |||
| Repayments of short-term borrowings with initial maturities over three months | (1,250,000) | -- | -- | |||
| Principal payments under capital leases | (779,830) | (11,201) | (923,078) | |||
| Net Increase (decrease) in short-term borrowings with initial maturities less than three months | 930,000 | -- | -- | |||
| Net cash used in financing activities | (799,830) | (11,201) | (923,078) | |||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 444 | 197 | 16,172 | |||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,513,712 | 31,657 | 2,608,853 | |||
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 10,799,903 | 132,605 | 10,927,971 | |||
| CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 13,313,615 | 164,262 | 13,536,824 | |||
| (Note1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 82.41 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 March 30, 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 Fiscal Year Ended March 31, 2012("FY2011") in the form defined by the Tokyo Stock Exchange.
Consolidated Financial Results for the Fiscal Year Ended March 31, 2012
[Under accounting principles generally accepted in the United States ("U.S. GAAP")]
May 15, 2012
Company name: Internet Initiative Japan Inc. Exchange listed: Tokyo Stock Exchange First Section
Stock code number: 3774 URL: http://www.iij.ad.jp/
Representative: Koichi Suzuki, President and Representative Director
Contact: Akihisa Watai, Managing Director and CFO TEL: (03) 5259-6500
Annual general shareholder's meeting: scheduled on June 27, 2012
Payment of dividend: Scheduled to be started on June 28, 2012
Filing of annual report (Yuka-shoken-houkokusho) to the regulatory organization in Japan: Scheduled on June 29, 2012
Supplemental material on Fiscal year results: Yes
Presentation on Fiscal year results: Yes (for institutional investors and analysts)
(Amounts of less than JPY one million are rounded)
| 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2012 | |||||||||||||||
| (April 1, 2011 to March 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 | ％ | ||||||||
| Fiscal year ended March 31, 2012 | 97,315 | 18.1 | 6,353 | 53.4 | 5,976 | 55.9 | 3,641 | 13.7 | |||||||
| Fiscal year ended March 31, 2011 | 82,418 | 21.2 | 4,141 | 21.4 | 3,834 | 34.1 | 3,203 | 43.4 | |||||||
| (Note1) Total comprehensive income | Fiscal Year ended March 31, 2012: JPY3,636 million (up 32.4% YoY) | ||||||||||||||
| Fiscal Year ended March 31, 2011: JPY2,747 million (up 15.6% 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 | Net Income attributable to IIJ to Total Shareholders' Equity | Income before Income Tax Expense to Total Assets | Total Revenues Operating Margin Ratio | ||
| JPY | JPY | % | % | % | ||
| Fiscal year ended March 31, 2012 | 17,963.74 | 17,955.06 | 11.7 | 8.2 | 6.5 | |
| Fiscal year ended March 31, 2011 | 15,807.86 | 15,807.86 | 11.2 | 6.2 | 5.0 | |
| (Reference) Equity in net income of equity method investees | Fiscal Year ended March 31, 2012: JPY124 million | |||||
| Fiscal Year ended March 31, 2011: JPY123 million | ||||||
| (2) Consolidated Financial Position | ||||||||||
| Total Assets | Total Equity | Total IIJ Shareholders' Equity | Total IIJ Shareholders' Equity to Total Assets | Shareholders' Equity per share | ||||||
| JPY millions | JPY millions | JPY millions | % | JPY | ||||||
| March 31, 2012 | 73,493 | 32,696 | 32,688 | 44.5 | 161,276.69 | |||||
| March 31, 2011 | 71,473 | 29,641 | 29,652 | 41.5 | 146,298.11 | |||||
| (3) Consolidated Cash Flow | ||||||||
| Operating Activities | Investing Activities | Financing Activities | Cash and Cash Equivalents (End of the Period) | |||||
| JPY millions | JPY millions | JPY millions | JPY millions | |||||
| Fiscal year ended March 31, 2012 | 11,659 | (5,954) | (5,464) | 13,537 | ||||
| Fiscal year ended March 31, 2011 | 12,564 | (13,493) | 5,521 | 13,314 | ||||
| 2. Dividends | ||||||||||||||||
| Dividend per Shares | Total cash dividends for the year | Payout Ratio (consolidated) | Ratio of Dividends to Shareholder's Equity (consolidated) | |||||||||||||
| 1Q-end | 2Q-end | 3Q-end | Year-end | Total | ||||||||||||
| JPY | JPY | JPY | JPY | JPY | JPY millions | % | % | |||||||||
| Fiscal year ended March 31, 2011 | -- | 1,250.00 | -- | 1,500.00 | 2,750.00 | 557 | 17.4 | 2.0 | ||||||||
| Fiscal year ended March 31, 2012 | -- | 1,500.00 | -- | 1,750.00 | 3,250.00 | 659 | 18.1 | 2.1 | ||||||||
| Fiscal year ending March 31, 2013 (Target) | -- | 1,750.00 | -- | 1,750.00 | 3,500.00 | 17.7 | ||||||||||
| 3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2013 | |||||||||
| (April 1, 2012 through March 31, 2013) | (% shown is YoY change) | ||||||||
| Total Revenues | Operating Income | Income before Income Tax Expense (Benefit) | Net Income Attributable to IIJ | Basic Net Income attributable to IIJ per Share | |||||
| JPY millions | % | JPY millions | % | JPY millions | % | JPY millions | % | JPY | |
| Interim Period Ending September 30, 2012 | 50,500 | 7.0 | 2,700 | 10.3 | 2,500 | 9.1 | 1,400 | 2.8 | 6,907.30 |
| Fiscal year ending March 31, 2013 | 107,000 | 10.0 | 7,500 | 18.0 | 6,900 | 15.5 | 4,000 | 9.9 | 19,735.15 |
| 4. Others |
| (1) Changes in significant subsidiaries for the Fiscal Year ended March 31, 2012 |
| (Changes in significant subsidiaries for the Fiscal year ended March 31, 2012 which resulted in changes in scope of consolidation): None |
| Newly Consolidated: None, Excluded: None |
| (2) Changes in Significant Accounting and Reporting Policies for Consolidated Financial Statements |
| 1) Changes due to the revision of accounting standards: Yes |
| 2) Others: Yes |
| (3) Number of Shares Outstanding (Shares of Common Stock) |
| 1) The number of shares outstanding (inclusive of treasury stock): |
| As of March 31, 2012: 206,478 shares |
| As of March 31, 2011: 206,478 shares |
| 2) The number of treasury stock: |
| As of March 31, 2012: 3,794 shares |
| As of March 31, 2011: 3,794 shares |
| 3) The weighted average number of shares outstanding: |
| For the Fiscal Year ended March 31, 2012: 202,684 shares |
| For the Fiscal Year ended March 31, 2011: 202,644 shares |
[English Translation]
May 15, 2012
Company name: 1-105 Kanda Jimbo-cho, Chiyoda-ku, Tokyo
Internet Initiative Japan Inc.
Company representative: Koichi Suzuki, President and Representative Director
(Stock Code Number: 3774 The First Section of the Tokyo Stock Exchange)
Contact: Akihisa Watai, Managing Director and CFO
TEL: 03-5259-6500
| Information Pertaining to Controlling Shareholders | ||||||
| 1. Name of Controlling Shareholders | ||||||
| (as of March 31, 2012) | ||||||
| Name | Relationship | Its Ownership Percentage (%) | Securities Exchanges where its Shares are Listed | |||
| Nippon Telegraph and Telephone Corporation | IIJ is NTT's affiliate company | 29.9 | Tokyo Stock Exchange, Inc. (First Section) | |||
| (5.0) | Osaka Securities Exchange, Co., Ltd. (First Section) | |||||
| Nagoya Stock Exchange, Inc. (First Section) | ||||||
| Fukuoka Stock Exchange | ||||||
| Sapporo Stock Exchange | ||||||
| New York Stock Exchange, Inc. | ||||||
| London Stock Exchange plc. | ||||||
| (Notes) The percentage in parentheses is the indirect ownership by NTT included in the figure above. | ||||||
2. Position of the Listed Company (IIJ) within Parent Company's Corporate Group and other Parent Company Relationships
a) Position of the Listed Company (IIJ) within the Group of the Parent Company
The ownership percentage by NTT, which is IIJ's largest shareholder, was 29.9% as of March 31, 2012, including its indirect ownership. However, IIJ's sales activities are not affected by NTT's ownership in IIJ and IIJ is maintaining its management independence.
b) Personal Relationships with the Parent Company, other Related Company and their Group Companies
IIJ's board of directors consists of 12 members including 4 outside directors. Takashi Hiroi, an outside director (part-time director) of IIJ, is an employee of NTT (General Manager of Business Planning Division of NTT). However, he is monitoring IIJ's business operations as an outside director and does not have any personal relationships, such as family relationships, with IIJ's other directors and auditors. He did not acquire any interest such as capital or business relationships upon becoming an outside director.
3. Business Relationship with NTT Group
IIJ uses services provided by Nippon Telegraph and Telephone East Corporation ("NTT East") and Nippon Telegraph and Telephone West Corporation ("NTT West") for a significant portion of its access circuits, and services provided by NTT Communications Corporation ("NTT Communications") for a significant portion of its domestic and international backbones. The amount paid to NTT East and West, and to NTT Communications for their telecommunication circuits was JPY1,426million and JPY3,046 million, respectively for the fiscal year ended March 31, 2012.
IIJ leases a part of Internet data center facilities from NTT Group companies to provide our Internet data center services to our customers and the amount paid to NTT Group related to the lease of Internet data center facilities are JPY1,699 million.
Business transactions with the NTT Group are within the scope of normal business practices, and there is no special contract made in relation to the investment by NTT Group.
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