EXHIBIT 99.1
TOKYO, Nov. 8, 2012 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774) today announced its consolidated financial results for the first six months of the fiscal year ending March 31, 2013 (from April 1 to September 30, 2012, "1H FY2012" "1H12").[1]
| Highlights of 1H FY2012 Financial Results | |
| Revenues | JPY51,109 million ($656 million, up 8.3% YoY) |
| Operating Income | JPY3,263 million ($42 million, up 33.3% YoY) |
| Net Income attributable to IIJ | JPY2,007 million ($26 million, up 47.4% YoY) |
| -- 1H FY2012 revenues increased by 8.3%. Revenues for network services, system integration, and ATM operation business each grew YoY. | |
| -- 1H FY2012 operating income increased by 33.3% mainly because gross margin of network services and ATM operation business increased while SG&A stayed around the same level as 2Q11. | |
Overview of 1H FY2012 Financial Results and Business Outlook
"We have been consistently pursuing our strategy for a long time to capture the increasing needs for outsourcing network-systems by leveraging our strong technology expertise and splendid Japanese blue-chip client base. We recognize this strategy has been gradually bearing fruit with growing network traffic and cloud computing trends in Japan, as evident in this first half of FY2012 results," said Koichi Suzuki, President and CEO of IIJ.
"Revenues and incomes in this first half fairly exceed our interim target as a result of continuous accumulation of monthly recurring type services' orders and gradually recovering systems construction revenues," continued Suzuki. "We continue to see strong demands on over 1Gbps bandwidth usage for internet connectivity from carriers, content providers, CATVs and others along with their increasing traffic volume. Also, we are seeing some improvements in the scale of projects for systems construction. As for our overseas business, we continue to expand the cloud service business in the U.S., acquire orders of SI projects, and we are seeing that they are beginning to contribute to the revenue."
"Our business developments as well as financial results accomplished during this first half reflect our successful strategy. With constant introduction of new cloud services features, we have strengthened our position as a leading cloud services provider in Japan. IIJ GIO, our cloud services, was ranked as the top share in the Japanese public cloud market[2] and evaluated as one of the few best brands[3]. Regarding R&D, we are pleased to announce the first commercial version of Software Defined Network (SDN) platform was released this fall."
[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 JPY77.92 per US$1.00, which was the noon buying rate on September 28, 2012.
[2] According to Fuji Chimera Institute's report, IIJ GIO is the top service provider in the Japanese public cloud market based on its FY2011 revenue and accomplishments such as the number of projects. The Institute analyzed strategies and service line-ups of 41 companies and the market trends. IIJ GIO's FY2011 total revenue was JPY3 billion which makes up 17.2% of the JPY17.4 billion market, marking the top share. The report was published in July 2012.
[3] Based on more than 6,000 survey responses of Nikkei BP Agency's "Fifth Cloud Ranking," IIJ was chosen as "Best Brands" for IIJ GIO's popularity, reliability, and technology expertise. IIJ also received 3 "Best Services" awards in "Cloud Platform services (IaaS/PaaS)," "General Information SaaS," and "Specified Tasks SaaS." The ranking was publicized in October 2012.
1H FY2012 Financial Results Summary
| Operating Results Summary | |||
| YoY % | |||
| 1H11 | 1H12 | Change | |
| JPY millions | JPY millions | ||
| Total Revenues | 47,207 | 51,109 | 8.3 |
| Network Services | 31,321 | 32,259 | 3.0 |
| SI | 14,714 | 17,127 | 16.4 |
| Equipment Sales | 611 | 641 | 5.1 |
| ATM Operation Business | 561 | 1,082 | 92.9 |
| Total Costs | 37,971 | 40,961 | 7.9 |
| Network Services | 25,046 | 25,383 | 1.3 |
| SI | 11,726 | 14,089 | 20.2 |
| Equipment Sales | 546 | 551 | 0.9 |
| ATM Operation Business | 653 | 938 | 43.7 |
| SG&A Expenses and R&D | 6,788 | 6,885 | 1.4 |
| Operating Income | 2,448 | 3,263 | 33.3 |
| Income before Income Tax Expense | 2,291 | 3,176 | 38.7 |
| Net income attributable to IIJ | 1,361 | 2,007 | 47.4 |
| Segment Summary | ||
| 1H11 | 1H12 | |
| JPY millions | JPY millions | |
| Net Revenues | 47,207 | 51,109 |
| Network services and SI business | 46,894 | 50,311 |
| ATM operation business | 561 | 1,082 |
| Elimination | 248 | 284 |
| Operating Income (Loss) | 2,448 | 3,263 |
| Network service and SI business | 2,658 | 3,260 |
| ATM operation business | (164) | 83 |
| Elimination | 46 | 80 |
We have omitted segment analysis because most of our revenues are dominated by Network services and SI business.
1H FY2012 Results of Operation
Revenues
Total revenues of 1H FY2012 were JPY51,109 million, up 8.3% YoY.
Network Services revenue was JPY32,259 million, up 3.0% YoY.
Revenues for Internet connectivity services for corporate use were JPY7,816 million, up 7.4% YoY, mainly due to the continuous demands for broader bandwidth by network operators.
Revenues for Internet connectivity services for home use were JPY2,768 million, down 5.5% YoY. While our LTE mobile data communication service, which was introduced in February 2012, has been accumulating orders continuously, the cancellations of old type connectivity services continued.
WAN services revenue was JPY12,577 million, down 1.0% YoY, stayed around the same level as 1H11.
Outsourcing services revenues were JPY9,098 million, up 8.2% YoY. Datacenter-related, web security-related and "IIJ GIO Hosting Package Services" each grew continuously.
| Number of Contracts for Connectivity Services | |||
| YoY | |||
| 1H11 | 1H12 | Change | |
| Internet Connectivity Services (Corporate Use) | 91,404 | 100,282 | 8,878 |
| IP Service (-99Mbps) | 936 | 911 | (25) |
| IP Service (100Mbps-999Mbps) | 329 | 369 | 40 |
| IP Service (1Gbps--) | 129 | 164 | 35 |
| IIJ Data Center Connectivity Service | 304 | 315 | 11 |
| IIJ FiberAccess/F and IIJ DSL/F | 42,577 | 45,741 | 3,164 |
| IIJ Mobile Service[4] | 45,871 | 51,488 | 5,617 |
| Others | 1,258 | 1,294 | 36 |
| Internet Connectivity Services (Home Use) | 376,138 | 431,620 | 55,482 |
| Under IIJ Brand | 38,623 | 65,808 | 27,185 |
| hi-ho | 145,249 | 152,031 | 6,782 |
| OEM | 192,266 | 213,781 | 21,515 |
| Total Contracted Bandwidth | 820.7 Gbps | 1,003.3Gbps | 182.6Gbps |
| Network Services Revenues Breakdown | |||
| YoY % | |||
| 1H11 | 1H12 | change | |
| JPY millions | JPY millions | ||
| Internet Connectivity Service (Corporate Use) | 7,277 | 7,816 | 7.4 |
| IP Service[5] | 4,633 | 4,934 | 6.5 |
| IIJ FiberAccess/F and IIJ DSL/F | 1,564 | 1,606 | 2.7 |
| IIJ Mobile Service[6] | 956 | 1,156 | 20.9 |
| Others | 124 | 120 | (3.2) |
| Internet Connectivity Service (Home Use) | 2,930 | 2,768 | (5.5) |
| Under IIJ Brand | 453 | 621 | 36.9 |
| hi-ho | 2,190 | 1,841 | (15.9) |
| OEM | 287 | 306 | 6.8 |
| WAN Services | 12,702 | 12,577 | (1.0) |
| Outsourcing Services | 8,412 | 9,098 | 8.2 |
| Total Network Services | 31,321 | 32,259 | 3.0 |
SI revenues were JPY17,127 million, up 16.4% YoY.
Systems construction revenue, a one-time revenue, was JPY6,694 million, up 28.9% YoY, mainly due to the increase in the number of mid- to large- sized systems construction projects. Overseas construction projects were also added. Revenues relating to IIJ-Exlayer and its overseas subsidiaries, which operate SI business overseas, have been consolidated from 2Q FY2012, and the total revenues for the three months were JPY171 million. Systems operation and maintenance revenue, a recurring revenue, was JPY10,433 million, up 9.6% YoY. The increase was mainly due to the continuous accumulation of revenue from "IIJ GIO Component Services."
The order backlog for systems construction and equipment sales was JPY4,803 million, up 4.6% YoY. The order backlog for systems operation and maintenance was JPY15,074 million, up 12.4% YoY.
Equipment sales revenues were JPY641 million, up 5.1% YoY.
ATM Operation Business revenues were JPY1,082 million, up 92.9% YoY, along with the increase in the numbers of ATMs newly placed. As of November 8, 2012, 567 ATMs are placed.
[4] Contracts of IIJ Mobile Service are of mobile data communication service for corporate use.
[5] IP Service revenues include revenues from the Data Center Connectivity Service.
[6] Revenue from mobile data communication service for home use is included in Internet Connectivity service (home use).
Cost and expense
Cost of revenues was JPY40,961 million, up 7.9% YoY.
Cost of Network Services revenue was JPY25,383 million, up 1.3% YoY mainly due to the increase in outsourcing-related costs, personnel-related costs and network operation-related costs. Gross margin for network services was JPY6,876 million, up 9.6% YoY and gross margin ratio was 21.3%, up 1.3 points YoY.
Cost of SI revenues was JPY14,089 million, up 20.2% YoY. There were increases in purchasing costs, outsourcing-related costs and network operation-related costs in relation to the increase in systems construction revenues. Gross margin for SI was JPY3,037 million, up 1.6% YoY and gross margin ratio was 17.7%, down 2.6 points YoY.
Cost of Equipment Sales revenues was JPY551 million, up 0.9% YoY. Gross margin was JPY91 million and gross margin ratio was 14.1%, up 3.5 points YoY.
Cost of ATM Operation Business revenues was JPY938 million, up 43.7% YoY mainly due to the increase in the number of newly placed ATMs. Gross margin ratio for ATM operation business was 13.3%.
SG&A and R&D Expenses
SG&A and R&D expenses in total were JPY6,885 million, up 1.4% YoY.
Sales and marketing expenses were JPY3,932 million, up 0.4% YoY, mainly due to the increase in sales commission to our sales partners. Amortization expenses of customer relationship related to IIJ Global Solutions Inc. was JPY184 million, slightly decreased from JPY212 million in 1H11.
General and administrative expenses were JPY2,745 million, up 1.4% YoY. The increase was mainly due to the increase in personnel-related expenses.
Research and development expenses were JPY208 million, up 28.2% YoY.
Operating income
Operating income was JPY3,263 million, up 33.3% YoY mainly because gross margin of each revenue line increased and SG&A stayed around the same level.
Other income (expenses)
Other income (expenses) was an expense of JPY87 million (an expense of JPY157 million for 1H11).
Income before income tax expenses
Income before income tax expenses was JPY3,176 million, up 38.7% YoY.
Net Income
Income tax expense was JPY1,251 million (JPY1,055 million for 1H11).
Equity in net income of equity method investees was JPY83 million (JPY77 million for 1H11) mainly due to net income of Internet Revolution, Inc. and Internet Multifeed Co.
As a result of the above, net income was JPY2,008 million, up 53.0% YoY (JPY1,312 million for 1H11).
Net income attributable to IIJ
Net income attributable to non-controlling interests was JPY1 million (loss of JPY49 million for 1H11) mainly related to Trust Networks Inc.
Net income attributable to IIJ was JPY2,007 million, up 47.4% YoY.
1H FY2012 Financial Condition
Balance Sheets
As of September 30, 2012, the balance of total assets was JPY75,723 million, increased by JPY2,230 million from the balance as of March 31, 2012.
As for current assets as of September 30, 2012, as compared to the respective balances as of March 31, 2012, cash and cash equivalents decreased by JPY1,866 million mainly due to the payment of income tax and the repayment of bank borrowings, prepaid expenses increased by JPY935 million and inventories increased by JPY839 million, respectively. As for noncurrent assets, as compared to the respective balance as of March 31, 2012, property and equipment increased by JPY2,175 million, resulting from the investment in servers and network equipments for cloud computing service and others. As for current liabilities, as compared to the respective balance as of March 31, 2012, income tax payable decreased by JPY1,315 million.
As for the balances of capital lease obligations, as compared to the respective balances as of March 31, 2012, capital lease obligations-current portion increased by JPY380 million to JPY3,377 million and capital lease obligations-noncurrent increased by JPY926 million to JPY5,667 million, respectively. The balance of long-term borrowings including current portion as of September 30, 2012 was decreased to JPY1,990 million resulted from the repayment of JPY1,010 million.
As of September 30, 2012, the balance of other investments was JPY3,251 million. The breakdown of other investments were JPY2,060 million in nonmarketable equity securities, JPY839 million in available-for-sale securities and JPY352 million in other.
As of September 30, 2012, the balance of non-amortized intangible assets (excluding telephone rights) such as goodwill was JPY6,124 million, and the breakdown of non-amortized intangible assets were JPY5,969 million in goodwill and JPY155 million in trademark. The balance of amortized intangible assets, which was customer relationships, was JPY4,944 million.
Total IIJ shareholders' equity as of September 30, 2012 was JPY34,350 million, an increase by JPY1,662 million from the balance as of March 31, 2012. IIJ Shareholders' equity ratio (total IIJ shareholders' equity/total assets) as of September 30, 2012 was 45.4%.
Cash Flows
Cash and cash equivalents as of September 30, 2012 were JPY11,670 million compared to JPY10,974 million as of September 30, 2011.
Net cash provided by operating activities for 1H12 was JPY3,970 million compared to net cash provided by operating activities of JPY4,288 million for 1H11. While operating income increased, there was the increase in payments for income taxes.
Net cash used in investing activities for 1H12 was JPY3,054 million compared to net cash used in investing activities of JPY3,234 million for 1H11, mainly due to payments for purchase of property and equipments of JPY2,785 million (JPY3,382 million for 1H11).
Net cash used in financing activities for 1H12 was JPY2,756 million compared to net cash used in financing activities of JPY3,358 million for 1H11, due to principal payments under capital leases of JPY1,813 million (JPY1,594 million for 1H11), repayment for bank borrowings of JPY589 million (net) (repayment of JPY1,460 million (net) for 1H11)and payments for FY2011 year-end dividends of JPY355 million (JPY304 million for 1H11).
FY2012 Financial Targets (announced on May 15, 2012)
Our financial targets for FY2012 are as follows:
| (JPY in millions) | ||||
| Revenues | Operating Income | Income before Income Tax Expense (Benefit) | Net Income attributable to IIJ | |
| Full FY2012 | 107,000 | 7,500 | 6,900 | 4,000 |
Revenues, operating income, income before income tax expense (benefit) and net income attributable to IIJ for 1H12 all exceeded the disclosed targets. Our financial results tend to be weak in the first half and strong in the second half, especially in fourth quarter, of every fiscal year due to seasonal factor. The second half financial results have larger contribution to the full year financial results, thus, our FY2012 full year financial targets announced on May 15, 2012 remain unchanged.
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 | ||
| 1H11 | 1H12 | |
| JPY millions | JPY millions | |
| Adjusted EBITDA | 5,872 | 6,902 |
| Depreciation and Amortization [7] | 3,424 | 3,639 |
| Operating Income | 2,448 | 3,263 |
| Other Income (Expense) | (157) | (87) |
| Income Tax Expense | 1,056 | 1,251 |
| Equity in Net Income of Equity Method Investees | 77 | 83 |
| Net income | 1,312 | 2,008 |
| Net loss (income) attributable to noncontrolling interests | 49 | (1) |
| Net Income attributable to IIJ | 1,361 | 2,007 |
| CAPEX | ||
| 1H11 | 1H12 | |
| JPY millions | JPY millions | |
| CAPEX, including capital leases | 6,445 | 5,903 |
| Acquisition of Assets by Entering into Capital Leases | 3,063 | 3,118 |
| Purchase of Property and Equipment | 3,382 | 2,785 |
Others
IIJ conducted a 1:200 stock split on common stock with an effective date of October 1, 2012. Accordingly, basic net income attributable to IIJ per share and diluted net income attributable to IIJ per share have been calculated as if the stock split was conducted at the beginning of the previous consolidated fiscal year. Number of authorized shares, shares outstanding (shares of common stock) and treasury stock in the consolidated balance sheet are calculated as if the stock split was conducted at the beginning of the previous consolidated fiscal year.
[7] 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 November 8, 2012.
About Internet Initiative Japan Inc.
Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality systems integration and security services, Internet access, hosting/housing, and content design. Moreover, IIJ has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006.
The Internet Initiative Japan Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4613
For inquiries, contact:
IIJ Investor Relations
Tel: +81-3-5259-6500 E-mail: ir@iij.ad.jp URL: http://www.iij.ad.jp/en/ir
Statements made in this press release regarding IIJ's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ's and managements' current expectations, assumptions, estimates and projections about its business and the industry. These forward-looking statements, such as statements regarding FY2012 revenues and operating and net profitability, are subject to various risks, uncertainties and other factors that could cause IIJ's actual results to differ materially from those contained in any forward-looking statement. These risks, uncertainties and other factors include: IIJ's ability to maintain and increase revenues from higher-margin services such as systems integration and outsourcing services; the possibility that revenues from connectivity services may decline substantially as a result of competition and other factors; the ability to compete in a rapidly evolving and competitive marketplace; the impact on IIJ's profits of fluctuations in costs such as backbone costs and subcontractor costs; the impact on IIJ's profits of fluctuations in the price of available-for-sale securities; the impact of technological changes in its industry; IIJ's ability to raise additional capital to cover its indebtedness; the possibility that NTT, IIJ's largest shareholder, may decide to exercise substantial influence over IIJ; and other risks referred to from time to time in IIJ's filings on Form 20-F of its annual report and other filings with the United States Securities and Exchange Commission.
| Internet Initiative Japan Inc. | ||||
| Quarterly Consolidated Balance Sheets (Unaudited) | ||||
| (As of March 31, 2012 and September 30, 2012) | ||||
| As of March 31, 2012 | As of September 30, 2012 | |||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||
| ASSETS | ||||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | 13,536,824 | 149,775 | 11,670,450 | |
| Accounts receivable, net of allowance for doubtful accounts of JPY 107,919 thousand and JPY 105,762 thousand at March 31, 2012 and September 30, 2012, respectively | 15,722,135 | 200,822 | 15,648,040 | |
| Inventories | 752,075 | 20,414 | 1,590,661 | |
| Prepaid expenses | 1,848,344 | 35,726 | 2,783,735 | |
| Deferred tax assets -Current | 939,370 | 10,655 | 830,227 | |
| Other current assets, net of allowance for doubtful accounts of JPY 10,732 thousand and JPY 10,733 thousand at March 31, 2012 and September 30, 2012, respectively | 891,560 | 11,947 | 930,990 | |
| Total current assets | 33,690,308 | 429,339 | 33,454,103 | |
| INVESTMENTS IN EQUITY METHOD INVESTEES | 1,406,634 | 20,492 | 1,596,746 | |
| OTHER INVESTMENTS | 2,938,146 | 41,723 | 3,251,030 | |
| PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of JPY 25,693,163 thousand and JPY 27,457,471 thousand at March 31, 2012 and September 30, 2012, respectively | 19,735,546 | 281,195 | 21,910,736 | |
| GOODWILL | 5,788,333 | 76,604 | 5,968,960 | |
| OTHER INTANGIBLE ASSETS -Net | 5,396,469 | 65,678 | 5,117,608 | |
| GUARANTEE DEPOSITS | 1,899,815 | 24,567 | 1,914,237 | |
| DEFERRED TAX ASSETS -Noncurrent | 24,760 | 351 | 27,351 | |
| NET INVESTMENT IN SALES-TYPE LEASES —Noncurrent | 935,446 | 10,192 | 794,191 | |
| Prepaid expenses —Noncurrent | 1,536,932 | 20,093 | 1,565,622 | |
| OTHER ASSETS, net of allowance for doubtful accounts of JPY86,388 thousand and JPY 85,995 thousand at March 31, 2012 and September 30, 2012, respectively | 140,857 | 1,573 | 122,599 | |
| TOTAL | 73,493,246 | 971,807 | 75,723,183 | |
| As of March 31, 2012 | As of September 30, 2012 | |||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Short-term borrowings | 9,000,000 | 120,906 | 9,421,000 | |
| Long-term borrowings —current portion | 1,010,000 | 12,962 | 1,010,000 | |
| Capital lease obligations—current portion | 2,997,292 | 43,341 | 3,377,167 | |
| Accounts payable —trade | 9,093,657 | 121,000 | 9,428,326 | |
| Accounts payable —other | 659,266 | 10,328 | 804,789 | |
| Income taxes payable | 2,210,089 | 11,485 | 894,931 | |
| Accrued expenses | 2,277,307 | 29,795 | 2,321,581 | |
| Deferred income―current | 1,495,468 | 23,670 | 1,844,368 | |
| Other current liabilities | 717,342 | 7,409 | 577,282 | |
| Total current liabilities | 29,460,421 | 380,896 | 29,679,444 | |
| LONG-TERM BORROWINGS | 1,990,000 | 12,577 | 980,000 | |
| CAPITAL LEASE OBLIGATIONS -Noncurrent | 4,741,241 | 72,726 | 5,666,838 | |
| ACCRUED RETIREMENT AND PENSION COSTS -Noncurrent | 1,805,683 | 24,541 | 1,912,227 | |
| DEFERRED TAX LIABILITIES -Noncurrent | 652,280 | 8,434 | 657,129 | |
| DEFERRED INCOME -Noncurrent | 1,547,159 | 23,399 | 1,823,249 | |
| OTHER NONCURRENT LIABILITIES | 600,215 | 8,279 | 645,073 | |
| Total Liabilities | 40,796,999 | 530,852 | 41,363,960 | |
| COMMITMENTS AND CONTINGENCIES | ||||
| SHAREHOLDERS' EQUITY: | ||||
| Common-stock—authorized, 75,520,000 shares; issued and outstanding, 41,295,600 shares at March 31, 2012 and September 30, 2012 | 16,833,847 | 216,040 | 16,833,847 | |
| Additional paid-in capital | 27,260,318 | 350,098 | 27,279,619 | |
| Accumulated deficit | (10,990,348) | (119,839) | (9,337,889) | |
| Accumulated other comprehensive loss | (23,533) | (430) | (33,494) | |
| Treasury stock—758,800 shares held by the company at March 31, 2012 and September 30, 2012, respectively | (392,079) | (5,032) | (392,079) | |
| Total Internet Initiative Japan Inc. shareholders' equity | 32,688,205 | 440,837 | 34,350,004 | |
| NONCONTROLLING INTERESTS | 8,042 | 118 | 9,219 | |
| Total equity | 32,696,247 | 440,955 | 34,359,223 | |
| TOTAL | 73,493,246 | 971,807 | 75,723,183 | |
| (Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of September 28, 2012. | ||||
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Income and | |||
| Quarterly Consolidated Statements of Other Comprehensive Income (Unaudited) | |||
| (For The Six Months Ended September 30, 2011 and September 30, 2012) | |||
| Quarterly Consolidated Statements of Income | |||
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| REVENUES: | |||
| Network services: | |||
| Internet connectivity services (corporate use) | 7,276,865 | 100,303 | 7,815,625 |
| Internet connectivity services (home use) | 2,930,147 | 35,526 | 2,768,151 |
| WAN services | 12,701,727 | 161,412 | 12,577,216 |
| Outsourcing services | 8,412,015 | 116,756 | 9,097,610 |
| Total | 31,320,754 | 413,997 | 32,258,602 |
| Systems integration: | |||
| Systems construction | 5,194,343 | 85,903 | 6,693,586 |
| Systems operation and maintenance | 9,519,839 | 133,894 | 10,433,028 |
| Total | 14,714,182 | 219,797 | 17,126,614 |
| Equipment sales | 610,685 | 8,236 | 641,780 |
| ATM operation business | 560,887 | 13,886 | 1,082,005 |
| Total revenues | 47,206,508 | 655,916 | 51,109,001 |
| COST AND EXPENSES: | |||
| Cost of network services | 25,045,706 | 325,752 | 25,382,614 |
| Cost of systems integration | 11,726,201 | 180,818 | 14,089,358 |
| Cost of equipment sales | 546,187 | 7,074 | 551,245 |
| Cost of ATM operation business | 652,854 | 12,039 | 938,041 |
| Total cost | 37,970,948 | 525,683 | 40,961,258 |
| Sales and marketing | 3,916,975 | 50,458 | 3,931,676 |
| General and administrative | 2,707,861 | 35,229 | 2,745,077 |
| Research and development | 162,517 | 2,673 | 208,283 |
| Total cost and expenses | 44,758,301 | 614,043 | 47,846,294 |
| OPERATING INCOME | 2,448,207 | 41,873 | 3,262,707 |
| OTHER INCOME (EXPENSE): | |||
| Interest income | 15,950 | 190 | 14,823 |
| Interest expense | (154,689) | (1,863) | (145,163) |
| Foreign exchange gains (losses) | (9,358) | (641) | (49,997) |
| Net gains on sales of other investments -net | (170) | 174 | 13,565 |
| Losses on write-down of other investments | (77,460) | (254) | (19,788) |
| Other -net | 68,329 | 1,285 | 100,151 |
| Other expense — net | (157,398) | (1,109) | (86,409) |
| INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 2,290,809 | 40,764 | 3,176,298 |
| INCOME TAX EXPENSE | 1,055,254 | 16,057 | 1,251,172 |
| EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 76,709 | 1,066 | 83,088 |
| NET INCOME | 1,312,264 | 25,773 | 2,008,214 |
| LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 49,186 | (14) | (1,058) |
| NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 1,361,450 | 25,759 | 2,007,156 |
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | ||
| NET INCOME PER SHARE | |||
| BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 40,536,800 | 40,536,800 | |
| DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 40,548,600 | 40,564,800 | |
| BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,073,600 | 81,073,600 | |
| DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,097,200 | 81,129,600 | |
| BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 33.59 | 0.64 | 49.51 |
| DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 33.58 | 0.64 | 49.48 |
| BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 16.79 | 0.32 | 24.76 |
| DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 16.79 | 0.32 | 24.74 |
| (Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of September 28, 2012. | |||
| Quarterly Consolidated Statements of Other comprehensive income | |||
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| NET INCOME | 1,312,264 | 25,773 | 2,008,214 |
| Comprehensive income (loss): | |||
| Foreign currency translation adjustments | 4,512 | 42 | 3,299 |
| Unrealized holding gain on securities | 24,023 | (172) | (13,379) |
| Defined benefit pension plans | (6,789) | 2 | 119 |
| Total comprehensive income (loss) | 1,334,010 | 25,645 | 1,998,253 |
| Less: Comprehensive income (loss) attributable to noncontrolling interests | 49,186 | (14) | (1,058) |
| Comprehensive income attributable to Internet Initiative Japan Inc. | 1,383,196 | 25,631 | 1,997,195 |
| (Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of September 28, 2012. | |||
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
| (For The Six Months Ended September 30, 2011 and September 30, 2012) | |||
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| OPERATING ACTIVITIES: | |||
| Net income | 1,312,264 | 25,773 | 2,008,214 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 3,424,428 | 46,706 | 3,639,342 |
| Provision for retirement and pension costs, less payments | 88,871 | 1,370 | 106,730 |
| Provision for allowance for doubtful accounts | 46,551 | 1 | 86 |
| Loss on disposal of property and equipment | 21,917 | 30 | 2,315 |
| Net gains on sales of other investments | 170 | (174) | (13,565) |
| Impairment of other investments | 77,460 | 254 | 19,788 |
| Foreign exchange losses, net | 35,796 | 465 | 36,218 |
| Equity in net income of equity method investees | (76,709) | (1,066) | (83,088) |
| Deferred income tax expense | 165,782 | 1,595 | 124,330 |
| Others | 48,686 | 12 | 967 |
| Changes in operating assets and liabilities net of effects from acquisition of a company: | |||
| Decrease in accounts receivable | 1,932,064 | 2,277 | 177,411 |
| Decrease in net investment in sales-type lease―noncurrent | 121,191 | 1,813 | 141,255 |
| Increase in inventories, prepaid expenses and other current and noncurrent assets | (200,262) | (21,613) | (1,684,108) |
| Increase (decrease) in accounts payable | (3,896,006) | 3,870 | 301,591 |
| Increase (decrease) in income taxes payable | 465,768 | (16,950) | (1,320,716) |
| Increase (decrease) in deferred income-noncurrent | (58,002) | 3,543 | 276,090 |
| Increase in accrued expenses and other current and noncurrent liabilities | 778,284 | 3,047 | 237,403 |
| Net cash provided by operating activities | 4,288,253 | 50,953 | 3,970,263 |
| INVESTING ACTIVITIES: | |||
| Purchase of property and equipment | (3,381,430) | (35,744) | (2,785,190) |
| Proceeds from sales of property and equipment | 218,566 | 4,813 | 375,005 |
| Purchase of available-for-sale securities | (118,948) | (252) | (19,606) |
| Purchase of other investments | (56,115) | (4,799) | (373,909) |
| Investment in an equity method investee | -- | (1,283) | (100,000) |
| Proceeds from sales of available-for-sale securities | 3,879 | -- | -- |
| Proceeds from sales of other investments | 62,205 | 1,144 | 89,117 |
| Payments of guarantee deposits | (18,467) | (288) | (22,473) |
| Refund of guarantee deposits | 20,573 | 159 | 12,397 |
| Payments for refundable insurance policies | (6,239) | (5) | (368) |
| Refund from insurance policies | 42,948 | -- | -- |
| Acquisition of a newly controlled company, net of cash acquired | -- | (2,940) | (229,058) |
| Other | (516) | 1 | 60 |
| Net cash used in investing activities | (3,233,544) | (39,194) | (3,054,025) |
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| FINANCING ACTIVITIES: | |||
| Proceeds from issuance of short-term borrowings with initial maturities over three months and long-term borrowings | 3,320,000 | 270 | 21,000 |
| Repayments of short-term borrowings with initial maturities over three months and long-term borrowings | (500,000) | (12,962) | (1,010,000) |
| Principal payments under capital leases | (1,593,510) | (23,263) | (1,812,654) |
| Net decrease in short-term borrowings with initial maturities less than three months | (4,280,000) | 5,133 | 400,000 |
| Dividends paid | (304,026) | (4,552) | (354,697) |
| Net cash used in financing activities | (3,357,536) | (35,374) | (2,756,351) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (36,335) | (337) | (26,261) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,339,162) | (23,952) | (1,866,374) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 13,313,615 | 173,727 | 13,536,824 |
| CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 10,974,453 | 149,775 | 11,670,450 |
| ADDITIONAL CASH FLOW INFORMATION: | |||
| Interest paid | 151,202 | 1,872 | 145,876 |
| Income taxes paid | 318,190 | 29,369 | 2,288,440 |
| NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
| Acquisition of assets by entering into capital leases | 3,063,124 | 40,017 | 3,118,126 |
| Facilities purchase liabilities | 560,005 | 10,328 | 804,789 |
| Asset retirement obligation | 42,273 | -- | -- |
| Acquisition of a company: | |||
| Assets acquired | -- | 5,187 | 404,140 |
| Liabilities assumed | -- | 1,339 | 104,321 |
| Noncontrolling interests | -- | 2 | 119 |
| Cash paid | -- | 3,846 | 299,700 |
| Cash including acquired assets | -- | 906 | 70,642 |
| Acquisition of a newly controlled company, net of cash acquired | -- | 2,940 | 229,058 |
| (Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of September 28, 2012. | |||
| Going Concern Assumption (Unaudited) | ||
| Nothing to be reported. | ||
| Segment Information (Unaudited) | ||
| Business Segments: | ||
| Revenues: | ||
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | |
| Thousands of JPY | Thousands of JPY | |
| Network service and systems integration business | 46,893,894 | 50,310,706 |
| Customers | 46,645,621 | 50,026,996 |
| Intersegment | 248,273 | 283,710 |
| ATM operation business | 560,887 | 1,082,005 |
| Customers | 560,887 | 1,082,005 |
| Intersegment | － | － |
| Elimination | 248,273 | 283,710 |
| Consolidated total | 47,206,508 | 51,109,001 |
| Segment profit or loss: | ||
| Six Months Ended September 30, 2011 | Six Months Ended September 30, 2012 | |
| Thousands of JPY | Thousands of JPY | |
| Network service and systems integration business | 2,658,464 | 3,260,156 |
| ATM operation business | (163,814) | 82,920 |
| Elimination | 46,443 | 80,369 |
| Consolidated operating income | 2,448,207 | 3,262,707 |
| Substantially all revenues are from customers operating in Japan. Geographic information is not presented due to immateriality of revenue attributable to international operations. | ||
| Material Changes In Shareholders' Equity (Unaudited) | ||
| Nothing to be reported. | ||
| Subsequent Events (Unaudited) | ||
| IIJ conducted a 1:200 stock split on common stock, with an effective date of October 1, 2012. Simultaneously IIJ adopted the unit share system which sets a share-trading unit as 100 shares. | ||
2nd Quarter FY2012 Consolidated Financial Results (3 months)
The following tables are highlight data of 2nd Quarter FY2012 consolidated financial results (unaudited, from April 1, 2012 to September 30, 2012).
| Operating Results Summary | |||
| YoY % | |||
| 2Q11 | 2Q12 | Change | |
| JPY millions | JPY millions | ||
| Total Revenues: | 23,845 | 26,268 | 10.2 |
| Network Services | 15,800 | 16,167 | 2.3 |
| SI | 7,493 | 9,175 | 22.5 |
| Equipment Sales | 235 | 311 | 32.5 |
| ATM Operation Business | 317 | 615 | 93.6 |
| Cost of Revenues: | 19,111 | 20,939 | 9.6 |
| Network Services | 12,606 | 12,619 | 0.1 |
| SI | 5,957 | 7,526 | 26.3 |
| Equipment Sales | 207 | 277 | 34.3 |
| ATM Operation Business | 341 | 517 | 51.5 |
| SG&A Expenses and R&D | 3,200 | 3,440 | 7.5 |
| Operating Income | 1,534 | 1,889 | 23.2 |
| Income before Income Tax Expense | 1,425 | 1,803 | 26.5 |
| Net Income attributable to IIJ | 849 | 1,110 | 30.8 |
| Network Service Revenue Breakdown | |||
| YoY % | |||
| 2Q11 | 2Q12 | Change | |
| JPY millions | JPY millions | ||
| Internet Connectivity Service (Corporate Use) | 3,697 | 3,951 | 6.9 |
| IP Service | 2,363 | 2,495 | 5.6 |
| IIJ FiberAccess/F and IIJ DSL/F | 781 | 804 | 2.9 |
| IIJ Mobile Service | 491 | 592 | 20.6 |
| Others | 62 | 60 | (2.7) |
| Internet Connectivity Service (Home Use) | 1,445 | 1,340 | (7.3) |
| Under IIJ Brand | 226 | 303 | 33.8 |
| hi-ho | 1,074 | 882 | (17.9) |
| OEM | 145 | 155 | 6.7 |
| WAN Services | 6,391 | 6,264 | (2.0) |
| Outsourcing Services | 4,267 | 4,612 | 8.1 |
| Network Services Revenues | 15,800 | 16,167 | 2.3 |
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 | ||
| 2Q11 | 2Q12 | |
| JPY millions | JPY millions | |
| Adjusted EBITDA | 3,294 | 3,730 |
| Depreciation and Amortization | 1,760 | 1,841 |
| Operating Income | 1,534 | 1,889 |
| Other Income (Expense) | (108) | (86) |
| Income Tax Expense | 631 | 736 |
| Equity in Net Income (Loss) of Equity Method Investees | 36 | 50 |
| Net income | 831 | 1,117 |
| Net income attributable to noncontrolling interests | 18 | (7) |
| Net Income attributable to IIJ | 849 | 1,110 |
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 | ||
| 2Q11 | 2Q12 | |
| JPY millions | JPY millions | |
| CAPEX, including capital leases | 3,567 | 2,606 |
| Acquisition of Assets by Entering into Capital Leases | 2,263 | 1,479 |
| Purchase of Property and Equipment | 1,304 | 1,127 |
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Income (Unaudited) | |||
| (Three Months ended September 30, 2011 and September 30, 2012) | |||
| Three Months Ended September 30, 2011 | Three Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| REVENUES: | |||
| Network services: | |||
| Internet connectivity services (corporate use) | 3,696,700 | 50,704 | 3,950,858 |
| Internet connectivity services (home use) | 1,444,977 | 17,184 | 1,339,001 |
| WAN services | 6,391,481 | 80,401 | 6,264,795 |
| Outsourcing services | 4,266,495 | 59,194 | 4,612,416 |
| Total | 15,799,653 | 207,483 | 16,167,070 |
| Systems integration: | |||
| Systems Construction | 2,677,479 | 50,484 | 3,933,690 |
| Systems Operation and Maintenance | 4,815,341 | 67,266 | 5,241,338 |
| Total | 7,492,820 | 117,750 | 9,175,028 |
| Equipment sales | 234,784 | 3,993 | 311,145 |
| ATM operation business | 317,474 | 7,886 | 614,495 |
| Total revenues | 23,844,731 | 337,112 | 26,267,738 |
| COST AND EXPENSES: | |||
| Cost of network services | 12,605,651 | 161,943 | 12,618,608 |
| Cost of systems integration | 5,956,556 | 96,580 | 7,525,533 |
| Cost of equipment sales | 207,203 | 3,571 | 278,206 |
| Cost of ATM operation business | 341,333 | 6,634 | 516,954 |
| Total cost | 19,110,743 | 268,728 | 20,939,301 |
| Sales and marketing | 1,961,469 | 25,685 | 2,001,385 |
| General and administrative | 1,154,957 | 17,121 | 1,334,025 |
| Research and development | 83,925 | 1,339 | 104,343 |
| Total cost and expenses | 22,311,094 | 312,873 | 24,379,054 |
| OPERATING INCOME | 1,533,637 | 24,239 | 1,888,684 |
| OTHER INCOME (EXPENSE): | |||
| Interest income | 8,652 | 85 | 6,630 |
| Interest expense | (75,121) | (946) | (73,726) |
| Foreign exchange losses | (9,374) | (380) | (29,579) |
| Net gains (losses) on sales of other investments -net | (170) | 174 | 13,563 |
| Losses on write-down of other investments | (77,460) | (229) | (17,825) |
| Other—net | 45,208 | 196 | 15,271 |
| Other expense — net | (108,265) | (1,100) | (85,666) |
| INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET INCOME IN EQUITY METHOD INVESTEES | 1,425,372 | 23,139 | 1,803,018 |
| INCOME TAX EXPENSE | 630,707 | 9,451 | 736,412 |
| EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES | 36,682 | 645 | 50,201 |
| NET INCOME | 831,347 | 14,333 | 1,116,807 |
| LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 17,838 | (82) | (6,358) |
| NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. | 849,185 | 14,251 | 1,110,449 |
| Three Months Ended September 30, 2011 | Three Months Ended September 30, 2012 | ||
| NET INCOME PER SHARE | |||
| BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 40,536,800 | 40,536,800 | |
| DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) | 40,560,200 | 40,569,000 | |
| BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,073,600 | 81,073,600 | |
| DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) | 81,120,400 | 81,138,000 | |
| BASIC NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 20.95 | 0.35 | 27.39 |
| DILUTED NET INCOME PER SHARE (JPY / U.S. Dollars / JPY) | 20.94 | 0.35 | 27.37 |
| BASIC NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 10.47 | 0.18 | 13.70 |
| DILUTED NET INCOME PER ADS EQUIVALENT (JPY / U.S. Dollars / JPY) | 10.47 | 0.18 | 13.69 |
| (Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of September 28, 2012. | |||
| Internet Initiative Japan Inc. | |||
| Quarterly Consolidated Statements of Cash Flows (Unaudited) | |||
| (Three Months ended September 30, 2011 and September 30, 2012) | |||
| Three Months Ended September 30, 2011 | Three Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| OPERATING ACTIVITIES: | |||
| Net income | 831,347 | 14,333 | 1,116,807 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 1,760,537 | 23,627 | 1,841,047 |
| Provision for retirement and pension costs, less payments | 31,912 | 692 | 53,919 |
| Provision for allowance for doubtful accounts and advances | 22,746 | 2 | 145 |
| Loss on disposal of property and equipment | 5,316 | 16 | 1,271 |
| Net losses (gains) on sales of other investments | 170 | (174) | (13,563) |
| Impairment of other investments | 77,460 | 229 | 17,825 |
| Foreign exchange gains, net | 5,669 | 30 | 2,373 |
| Equity in net income of equity method investees | (36,682) | (644) | (50,201) |
| Deferred income tax benefit | (140,003) | (350) | (27,279) |
| Others | 38,632 | 293 | 22,818 |
| Changes in operating assets and liabilities net of effects from acquisition of business and a company: | |||
| Increase in accounts receivable | (413,487) | (15,939) | (1,241,974) |
| Decrease in net investment in sales-type lease―noncurrent | 24,794 | 1,260 | 98,205 |
| Decrease in inventories, prepaid expenses and other current and noncurrent assets | 1,798,644 | 3,318 | 258,544 |
| Increase (decrease) in accounts payable | (1,345,398) | 2,259 | 175,983 |
| Increase in income taxes payable | 744,936 | 9,295 | 724,293 |
| Increase (decrease) in deferred income― noncurrent | (442,376) | 3,479 | 271,080 |
| Increase (decrease) in accrued expenses, other current and noncurrent liabilities | 1,468 | (9,052) | (705,353) |
| Net cash provided by operating activities | 2,965,685 | 32,674 | 2,545,940 |
| INVESTING ACTIVITIES: | |||
| Purchase of property and equipment | (1,303,549) | (14,462) | (1,126,849) |
| Proceeds from sales of property and equipment | 101,971 | 2,705 | 210,799 |
| Purchase of available-for-sale securities | (41,123) | (45) | (3,503) |
| Purchase of other investments | (6,115) | (765) | (59,599) |
| Proceeds from sales of available-for-sale securities | 3,879 | -- | -- |
| Proceeds from sales of other investments | 53,262 | 886 | 68,996 |
| Payments of guarantee deposits | (16,260) | (279) | (21,708) |
| Refund of guarantee deposits | 878 | 34 | 2,646 |
| Payments for refundable insurance policies | (413) | (2) | (187) |
| Refund from insurance policies | 42,948 | -- | -- |
| Other | (480) | 87 | 6,773 |
| Net cash used in investing activities | (1,165,002) | (11,841) | (922,632) |
| Three Months Ended September 30, 2011 | Three Months Ended September 30, 2012 | ||
| Thousands of JPY | Thousands of U.S. Dollars | Thousands of JPY | |
| FINANCING ACTIVITIES: | |||
| Proceeds from issuance of short-term borrowings with initial maturities over three months and long-term borrowings | 3,120,000 | 270 | 21,000 |
| Repayments of short-term borrowings with initial maturities over three months long-term borrowings | (500,000) | (12,962) | (1,010,000) |
| Principal payments under capital leases | (790,752) | (12,005) | (935,440) |
| Net Increase (decrease) in short-term borrowings with initial maturities less than three months | (4,080,000) | 6,416 | 500,000 |
| Net cash used in financing activities | (2,250,752) | (18,281) | (1,424,440) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (10,374) | 20 | 1,490 |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (460,443) | 2,572 | 200,358 |
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD | 11,434,896 | 147,203 | 11,470,092 |
| CASH AND CASH EQUIVALENTS, END OF THE PERIOD | 10,974,453 | 149,775 | 11,670,450 |
| (Note) The U.S. dollar amounts have been translated from yen, for convenience only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate in New York City for cable transfers in foreign currencies as of September 28, 2012. | |||
| (Note2) The above presentation for the three months ended March 31, 2011 has been changed to conform to the presentation for the three months ended March 31, 2012. | |||
| Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the six months ended September 30, 2012 ("FY2012 1H") in the form defined by the Tokyo Stock Exchange. | |
| Consolidated Financial Results for the Six Months Ended September 30, 2012 | |
| [Under accounting principles generally accepted in the United States ("U.S. GAAP")] | |
| November 8, 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, Representative Director and CEO | |
| Contact: Akihisa Watai, Managing Director and CFO | TEL: (03) 5259-6500 |
| Filing of quarterly report (Shihanki-houkokusho) to the regulatory organization in Japan: Scheduled on November 14, 2012 | |
| Payment of dividend: December 6, 2012 | |
| Supplemental material on this Quarterly Results: Yes | |
| Presentation on this Quarterly Results: Yes (for institutional investors and analysts) | |
| (Amounts of less than JPY one million are rounded) | ||||||||
| 1. Consolidated Financial Results for the Six Months Ended September 30, 2012 | ||||||||
| (April 1, 2012 to September 30, 2012) | ||||||||
| (1) Consolidated Results of Operations | (% shown is YoY change) | |||||||
| Total Revenues | Operating Income | Income before Income Tax Expense | Net Income attributable to IIJ | |||||
| JPY millions | ％ | JPY millions | ％ | JPY millions | ％ | JPY millions | ％ | |
| Six Months Ended September 30, 2012 | 51,109 | 8.3 | 3,263 | 33.3 | 3,176 | 38.7 | 2,007 | 47.4 |
| Six Months Ended September 30, 2011 | 47,207 | 37.7 | 2,488 | 103.8 | 2,291 | 127.7 | 1,361 | 58.4 |
| (Note1) Total comprehensive income attributable to IIJ | ||
| Six Months Ended September 30, 2012: JPY1,998 million (up 49.8% YoY) | ||
| Six Months Ended September 30, 2011: JPY1,334 million (up 115.7% YoY) | ||
| (Note2) Income before income tax expense represents income from operations before income tax expense and equity in net income in equity method investees, respectively, in IIJ's consolidated financial statements. | ||
| Basic Net Income attributable to IIJ per Share | Diluted Net Income attributable to IIJ per Share | |
| JPY | JPY | |
| Six Months Ended September 30, 2012 | 49.51 | 49.48 |
| Six Months Ended September 30, 2011 | 33.59 | 33.58 |
| (Note) IIJ conducted a 1:200 stock split on common stock with an effective date of October 1, 2012. Accordingly, basic net income attributable to IIJ per share and diluted net income attributable to IIJ per share have been calculated as if the stock split was conducted at the beginning of the previous consolidated fiscal year. | ||||
| (2) Consolidated Financial Position | ||||
| Total Assets | Total Equity | Total IIJ Shareholders' Equity | Total IIJ Shareholders' Equity to Total Assets | |
| JPY millions | JPY millions | JPY millions | % | |
| As of September 30, 2012 | 75,723 | 34,359 | 34,350 | 45.4 |
| As of March 31, 2012 | 73,493 | 32,696 | 32,688 | 44.5 |
| 2. Dividends | |||||
| Dividend per Shares | |||||
| 1Q-end | 2Q-end | 3Q-end | Year-end | Total | |
| JPY | JPY | JPY | JPY | JPY | |
| Fiscal Year Ended March 31, 2012 | -- | 1,500.00 | -- | 1,750.00 | 3,250.00 |
| Fiscal Year Ending March 31, 2013 | -- | 1,750.00 | |||
| Fiscal Year Ending March 31, 2013 (Target) | -- | 8.75 | 1,758.75 | ||
| (Note1) Changes in the latest forecasts released: None | |||||
| (Note2) The year-end dividend forecast per share for the fiscal year ending March 31, 2013 was adjusted, taking into account a 1:200 stock split on common stock, with an effective date of October 1, 2012. | |||||
| 3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2013 | |||||||||
| (April 1, 2012 through March 31, 2013) | (% shown is YoY change) | ||||||||
| Total Revenues | Operating Income | Income before Income Tax Expense (Benefit) | Net Income Attributable to IIJ | Basic Net Income attributable to IIJ per Share | |||||
| JPY millions | % | JPY millions | % | JPY millions | % | JPY millions | % | JPY | |
| Fiscal Year Ending March 31, 2013 | 107,000 | 10.0 | 7,500 | 18.0 | 6,900 | 15.5 | 4,000 | 9.9 | 98.68 |
| (Note1) Changes in the latest forecasts released: None | |||||||||
| (Note2) Basic net income attributable to IIJ per share for the fiscal year ending march 31, 2013 was adjusted, taking into account a 1:200 stock split on common stock, with an effective date of October 1, 2012. | |||||||||
| 4. Others |
| (1) Changes in Significant Subsidiaries for the Six Months Ended September 30, 2012 |
| (Changes in significant subsidiaries for the Six Months Ended September 30, 2012 which resulted in changes in scope of consolidation): None |
| (2) Changes in Significant Accounting and Reporting Policies for the Quarterly Consolidated Financial Statements |
| 1) Changes due to the revision of accounting standards: Yes |
| 2) Others: No |
| (3) Number of Shares Outstanding (Shares of Common Stock) |
| 1) The number of shares outstanding (inclusive of treasury stock): |
| As of September 30, 2012: 41,295,600 shares |
| As of March 31, 2012: 41,295,600 shares |
| 2) The number of treasury stock: |
| As of September 30, 2012: 758,800 shares |
| As of March 31, 2012: 758,800 shares |
| 3) The weighted average number of shares outstanding: |
| For the Six Months Ended September 30, 2012: 40,536,800 shares |
| For the Six Months Ended September 30, 2011: 40,536,800 shares |
| (Note) IIJ conducted a 1:200 stock split on common stock with an effective date of October 1, 2012. Number of shares outstanding (shares of common stock) in the above have been calculated as if the stock split was conducted at the beginning of the previous fiscal year (April 1, 2011). |
CONTACT: Internet Initiative Japan Inc.
E-mail: ir@iij.ad.jp Tel: +81-3-5259-6500
URL: http://www.iij.ad.jp/en/ir