Internet Initiative Japan Inc. ("IIJ") (NASDAQ:IIJI) (TSE:3774)
today announced its consolidated financial results for the nine
months of the fiscal year ending March 31, 2016 (“3Q15”, from April
1, 2015 to December 31, 2015).1
Highlights of Financial Results for
3Q15 |
|
Revenues |
JPY99,382 million |
(up 13.1% YoY) |
Operating Income |
JPY4,073 million |
(up 7.6% YoY) |
Net Income attributable to IIJ |
JPY2,573 million |
(up 11.2% YoY) |
|
|
|
Overview of 3Q15 Financial Results and Business
Outlook
“3Q15 nine months revenues and operating income increased by
13.1% and 7.6% respectively year over year,” said Eijiro Katsu,
President and COO of IIJ. “Continuous revenue growth, mainly led by
mobile services, cloud services and systems integration, absorbs
the overall operating costs increase, especially costs related to
mobile infrastructure expansion, human resources enhancement and
new services’ investment and development.2”
“With regards to our mobile business, the total
subscription as of 3Q15-end exceeded our target of one million.
Japanese MVNO3 market should significantly expand in the
middle term along with a subscriber migration from traditional
mobile carriers to MVNOs and the government’s efforts to revitalize
Japanese mobile market.4 We believe our mobile business scale
should become several times larger hereafter by which we survive as
one of a few large MVNOs in Japan. Our mobile business strategy is
to accumulate more consumer subscription through direct sales and
MVNE5 and provide solutions that meet enterprise needs
especially related to M2M6 and IoT7 so that our mobile
infrastructure utilization can be improved with different types of
traffic,8” said Katsu.
“Leveraging our accumulated expertise on
reliable network and systems operation, we launched new network
service “IIJ Omnibus Service9” and new cloud service “IIJ GIO
Infrastructure P2.10” A good number of prospective orders have been
accumulated since their launch in fall 2015, and we anticipate they
become one of our strong growth drivers for the middle term.
Security-related services and solutions, another area we’re well
positioned to exercise our value-added features, have been showing
steady and continuous growth along with the growing demand to
protect corporate systems from numerous security incidents. We can
continuously differentiate ourselves from competitors by
integrating our advantages on mobile, cloud, security and so on,”
continued Katsu.
“We’ve been continuously making investment in
business and service developments for mobile and cloud, and these
investments have begun to contribute to strong revenue growth. In
addition to these, we’d like to further focus on Internet-based
streaming and broadcasting11 and enhancing overseas business.
Ever since the establishment of IIJ, I’ve always envisioned that
Internet would be the fundamental technology for every part of
society and that is slowly but surely happening in Japan. We should
greatly benefit from those progresses,” concluded Koichi Suzuki,
Founder and CEO of IIJ.
1 Unless otherwise stated, all financial
figures discussed in this announcement are prepared in accordance
with U.S. GAAP., unaudited and consolidated.
2 We launched new network service “IIJ
Omnibus Service” and new cloud service “IIJ GIO Infrastructure P2
Service” in September and November, respectively, during 2015.
3 Mobile Virtual Network Operator (MVNO) borrows mobile
infrastructure from mobile network operators to offer mobile
related services.
4 Triggered by Prime Minister Abe’s comment
on current mobile carriers’ pricing is too complicated and too
expensive, Ministry of Internal Affairs and Communications set up a
study group to discuss such issues among interested parties which
includes MVNOs such as IIJ.
5 Mobile Virtual Network Enabler (MVNE) provides business
and service infrastructure to MVNOs.
6 Machine to Machine (M2M) enables devices connected to
network to exchange information automatically and perform
designated actions.
7 Internet of Things (IoT) enables not only physical
objects but any “things” connected to network to exchange
information automatically.
8 Generally speaking, consumers and
corporate users consume data at different hours for different
purposes. For example, consumers tend to use mobile when they are
heading to office, heading back to home, and during lunch hours
while corporate users use mobile during the day time to check
emails from outside of office and midnight for M2M transactions.
IIJ can improve mobile infrastructure utilization because IIJ
provides services to both consumers and corporate users from the
same infrastructure.
9 “IIJ Omnibus Service” incorporates SDN
and NFV technologies, automatically offers several network
elements.
10 “IIJ GIO Infrastructure P2” offers
reliable public could infrastructure with increased processing
performance as well as private cloud infrastructure.
11 Digitally distributing contents such as
movies, videos and music via Internet has slowly become a trend in
Japan. For instance, IIJ launched the world’s first live streaming
service that delivers high-resolution audio in December 2015.
3Q15 Financial Results Summary
Operating Results
Summary |
|
3Q14 |
3Q15 |
YoY %Change |
|
JPY
millions |
JPY millions |
|
Total revenues |
87,846 |
99,382 |
13.1 |
Network services |
51,162 |
58,216 |
13.8 |
Systems integration (SI) |
32,644 |
35,921 |
10.0 |
Equipment sales |
1,366 |
2,365 |
73.2 |
ATM operation business |
2,674 |
2,880 |
7.7 |
Total costs |
71,398 |
81,589 |
14.3 |
Network services |
40,131 |
47,079 |
17.3 |
Systems integration (SI) |
28,179 |
30,455 |
8.1 |
Equipment sales |
1,197 |
2,125 |
77.6 |
ATM operation business |
1,891 |
1,930 |
2.1 |
SG&A expenses and
R&D |
12,662 |
13,720 |
8.4 |
Operating income |
3,786 |
4,073 |
7.6 |
Income before income tax expense |
3,889 |
4,178 |
7.4 |
Net income attributable to IIJ |
2,314 |
2,573 |
11.2 |
Segment Results
Summary |
|
3Q14 |
3Q15 |
|
JPY millions |
JPY millions |
Total revenues |
|
87,846 |
|
|
99,382 |
|
Network services and SI business |
|
85,478 |
|
|
96,789 |
|
ATM operation business |
|
2,674 |
|
|
2,880 |
|
Elimination |
|
(306 |
) |
|
(287 |
) |
Operating income |
|
3,786 |
|
|
4,073 |
|
Network service and SI business |
|
3,232 |
|
|
3,356 |
|
ATM operation business |
|
654 |
|
|
819 |
|
Elimination |
|
(100 |
) |
|
(102 |
) |
|
|
|
|
|
|
|
We have omitted segment analysis because most of
our revenues are dominated by network services and systems
integration (SI) business.
3Q15 Results of Operation
Revenues
Total revenues were JPY99,382 million, up 13.1%
YoY (JPY87,846 million in 3Q14).
Network services revenue was JPY58,216 million,
up 13.8% YoY.
Revenues for Internet connectivity services for
enterprise were JPY12,871 million, up 4.7% YoY compared to
JPY12,288 million for 3Q14 mainly as our MVNE partners’ businesses
had been expanding.
Revenues for Internet connectivity services for
consumers were JPY10,708 million, up 86.1% YoY compared to JPY5,753
million for 3Q14, mainly due to the continuous revenue growth of
“IIJmio High-speed Mobile/D services,” consumer mobile services
which offer inexpensive data communication and voice services with
SIM cards.
Revenues for WAN services were JPY18,826
million, up 3.8% YoY compared to JPY18,145 million for 3Q14.
Revenues for outsourcing services were JPY15,811
million, up 5.6% YoY compared to JPY14,976 million for 3Q14 mainly
by the increase in security-related services.
Network Services
Revenues Breakdown |
|
3Q14 |
3Q15 |
YoY %Change |
|
JPY millions |
JPY millions |
|
Internet connectivity services (Enterprise) |
12,288 |
12,871 |
|
4.7 |
|
IP service*1 |
7,425 |
7,219 |
|
(2.8 |
) |
IIJ FiberAccess/F and IIJ DSL/F |
2,366 |
2,309 |
|
(2.4 |
) |
IIJ Mobile service (Enterprise) |
2,324 |
3,140 |
|
35.1 |
|
Others |
173 |
203 |
|
17.6 |
|
Internet connectivity services (Consumer) |
5,753 |
10,708 |
|
86.1 |
|
IIJ*2 |
3,639 |
8,767 |
|
140.9 |
|
hi-ho |
2,114 |
1,941 |
|
(8.2 |
) |
WAN services |
18,145 |
18,826 |
|
3.8 |
|
Outsourcing services |
14,976 |
15,811 |
|
5.6 |
|
Total network services |
51,162 |
58,216 |
|
13.8 |
|
*1 IP service revenues
include revenues from the data center connectivity service. |
*2 From 1Q15, what were
formerly known as “Under IIJ brand” and “OEM” are now merged under
a newly created category “IIJ.” |
|
Number of
Contracts and Subscription for Connectivity
Services*1 |
|
as of Dec. 31, 2014 |
as ofDec. 31, 2015 |
YoY Change |
Internet connectivity services (Enterprise) |
218,312 |
412,615 |
|
194,303 |
|
IP service (-99Mbps) |
796 |
702 |
|
(94 |
) |
IP service (100Mbps-999Mbps) |
491 |
518 |
|
27 |
|
IP service (1Gbps-) |
330 |
342 |
|
12 |
|
IIJ Data center connectivity service |
280 |
272 |
|
(8 |
) |
IIJ FiberAccess/F and IIJ DSL/F |
61,346 |
74,326 |
|
12,980 |
|
IIJ Mobile service (Enterprise)*2 |
153,743 |
335,193 |
|
181,450 |
|
Others |
1,326 |
1,262 |
|
(64 |
) |
Internet connectivity services (Consumer)*2 |
795,412 |
1,165,667 |
|
370,255 |
|
IIJ*2 |
637,958 |
1,015,994 |
|
378,036 |
|
hi-ho*2 |
157,454 |
149,673 |
|
(7,781 |
) |
Total contracted bandwidth*3 |
1,705.6Gbps |
2,089.9Gbps |
384.3Gbps |
|
*1. Numbers in the table
show number of contracts except for “IIJ Mobile service
(Enterprise),” “IIJ” and “hi-ho” which show number of
subscriptions. |
*2. The table for “Number of Contracts and Subscription for
Connectivity Services” has the following changes from 1Q15: (1)
Number of subscriptions related to “IIJ Mobile MVNO platform
services” are classified under “IIJ Mobile service (Enterprise)” in
Internet connectivity services (Enterprise). They were classified
under “OEM” in Internet connectivity services (Consumer).(2) A
counting unit of mobile related services has been changed from
number of contracts to number of subscriptions.(3) Under Internet
connectivity services (Consumer), what were formerly known as
“Under IIJ brand” and “OEM” are merged under a newly created
category “IIJ.”(4) Number of subscriptions for prepaid SIM cards
are added to “IIJ” in Internet connectivity services
(Consumer). |
*3. Total contracted
bandwidths are calculated by multiplying number of contracts for IP
service, data center connectivity service, IIJ FiberAccess/F and
IIJ DSL/F of Internet connectivity services (Enterprise) by
contracted bandwidths respectively. |
|
SI revenues were JPY35,921 million, up 10.0%
YoY.
Systems construction revenue, a one-time
revenue, was JPY11,547 million, down 7.6% YoY. Systems operation
and maintenance revenue, a recurring revenue, was JPY24,374
million, up 21.0% YoY mainly due to an increase in revenues of
projects shifted from systems construction to systems operation and
maintenance phase and “IIJ GIO Component Services” revenues.
Orders received for SI and equipment sales
totaled JPY43,250 million, up 7.1% YoY; orders received for systems
construction and equipment sales were JPY20,164 million, up 23.1%
YoY and orders received for systems operation and maintenance were
JPY23,086 million, down 3.9% YoY.
Order backlog for SI and equipment sales as of
December 31, 2015 amounted to JPY34,017 million, up 10.9% YoY;
order backlog for systems construction and equipment sales was
JPY10,986 million, up 44.2% YoY and order backlog for systems
operation and maintenance was JPY23,031 million, down 0.2% YoY.
Equipment sales revenues were JPY2,365 million,
up 73.2% YoY mainly due to an increase in selling mobile
devices.
ATM operation business revenues were JPY2,880
million, up 7.7% YoY. As of December 31, 2015, 1,106 ATMs have been
placed.
Cost and expense
Total cost of revenues was JPY81,589 million, up
14.3% YoY (JPY71,398 million in 3Q14).
Cost of network services revenue was JPY47,079
million, up 17.3% YoY. There was an increase in cost related to
mobile services along with the increase in mobile services revenue.
Gross margin was JPY11,137 million, up 1.0% YoY and gross margin
ratio was 19.1%.
Cost of SI revenues was JPY30,455 million, up
8.1% YoY. The increase was mainly due to an increase in
outsourcing-related and personnel-related costs. Gross margin was
JPY5,467 million, up 22.4% YoY and gross margin ratio was
15.2%.
Cost of equipment sales revenues was JPY2,125
million, up 77.6% YoY. There was an increase in purchasing costs
along with the increase in equipment sales revenues. Gross margin
was JPY240 million and gross margin ratio was 10.1%.
Cost of ATM operation business revenues was
JPY1,930 million, up 2.1% YoY. Gross margin was JPY950 million and
gross margin ratio was 33.0%.
SG&A and R&D
expenses
SG&A and R&D expenses in total were
JPY13,720 million, up 8.4% YoY (JPY12,662 million in 3Q14).
Sales and marketing expenses were JPY7,842 million, up 14.8%
YoY. There was an increase in sales commission expenses related to
mobile services and personnel-related expenses.
General and administrative expenses were JPY5,532 million, up
1.2% YoY. There was an increase in personnel-related expenses.
Research and development expenses were JPY346
million, down 5.2% YoY.
Operating income
Operating income was JPY4,073 million, up 7.6%
YoY (JPY3,786 million for 3Q14).
Other income (expenses)
Other income (expenses) was an income of JPY105
million (an income of JPY103 million for 3Q14). There were
distribution from fund investment of JPY144 million (included in
other-net of JPY159 million), dividend income of JPY88 million from
other investments and interest expense of JPY171 million.
Income before income tax
expenses
Income before income tax expenses was JPY4,178
million, up 7.4% YoY (JPY3,889 million for 3Q14).
Net income
Income tax expense was JPY1,697 million
(JPY1,633 million for 3Q14).
Equity in net income of equity method investees
was JPY207 million (JPY115 million for 3Q14), mainly due to net
income of Internet Multifeed Co.
As a result of the above, net income was
JPY2,688 million, up 13.3% YoY (JPY2,371 million for 3Q14).
Net income attributable to
IIJ
Net income attributable to non-controlling
interests was JPY115 million, mainly related to net income of Trust
Networks Inc. (JPY57 million for 3Q14).
Net income attributable to IIJ was JPY2,573 million, up 11.2%
YoY (JPY2,314 million for 3Q14).
3Q15 Financial Condition
Balance sheets
As of December 31, 2015, the balance of total
assets was JPY110,602 million, increased by JPY1,896 million from
the balance as of March 31, 2015 of JPY108,705 million.
As for current assets as of December 31, 2015,
as compared to the respective balances as of March 31, 2015,
prepaid expenses increased by JPY1,687 million, inventories
increased by JPY1,504 million, cash and cash equivalents decreased
by JPY2,860 million and accounts receivable decreased by JPY2,026
million. As for noncurrent assets as of December 31, 2015, as
compared to the respective balances as of March 31, 2015, property
and equipment increased by JPY3,644 million and prepaid
expenses—noncurrent increased by JPY1,036 million. As for current
liabilities as of December 31, 2015, as compared to the respective
balances as of March 31, 2015, accrued expenses increased by JPY226
million and accounts payable decreased by JPY685 million.
As for the balances of capital lease obligations
as of December 31, 2015, as compared to the respective balances as
of March 31, 2015, capital lease obligations-current portion
decreased by JPY59 million to JPY3,463 million and capital lease
obligations-noncurrent increased by JPY776 million to JPY5,117
million.
As of December 31, 2015, the balance of other
investments decreased by JPY561 million to JPY6,099 million. The
breakdown of other investments were JPY4,237 million in
available-for-sale securities, JPY951 million in nonmarketable
equity securities and JPY911 million in investments in funds,
including some through a trust.
As of December 31, 2015, the breakdown of major
non-amortized intangible assets were JPY6,170 million in goodwill
and JPY107 million in trademark. The balance of amortized
intangible assets, which was customer relationships, was JPY3,514
million.
Total IIJ shareholders’ equity as of December
31, 2015 compared to the balance as of March 31, 2015, increased by
JPY1,439 million to JPY63,943 million. IIJ shareholders’ equity
ratio (total IIJ shareholders’ equity divided by total assets) as
of December 31, 2015 was 57.8%.
Cash flows
Cash and cash equivalents as of December 31,
2015 were JPY18,234 million compared to JPY21,047 million as of
December 31, 2014.
Net cash provided by operating activities for
3Q15 was JPY7,811 million compared to net cash provided by
operating activities of JPY10,012 million for 3Q14. There were net
income of JPY2,688 million, depreciation and amortization of
JPY7,294 million and net cash out flow from changes in operating
assets and liabilities of JPY2,427 million.
Net cash used in investing activities for 3Q15
was JPY6,634 million compared to net cash used in investing
activities of JPY6,318 million for 3Q14, mainly due to payments for
purchase of property and equipment of JPY8,454 million (JPY6,569
million for 3Q14) and proceeds from sales of property and equipment
of JPY1,093 million (JPY536 million for 3Q14).
Net cash used in financing activities for 3Q15
was JPY4,047 million compared to net cash used in financing
activities of JPY5,131 million for 3Q14, mainly due to principal
payments under capital leases of JPY3,040 million (JPY3,140 million
for 3Q14) and FY2014 year-end and FY2015 interim dividend payments
of JPY1,011 million (JPY1,011 million for 3Q14).
Prospects for the Fiscal Year Ending March 31,
2016
3Q15 nine months revenues and operating income
have resulted almost accordingly with our plan. For 4Q15, there
remains some uncertainty including weaker than expected cloud
revenues and the timing of the revenue recognition related to a
container type datacenter export project which might be delayed to
FY2016. On the other hand, our systems construction revenues tend
to be largest in 4Q every year due to seasonal factors and our
mobile services and systems operation and maintenance revenues have
been exceeding our target from 1Q15. Additionally, the revised
wholesale telecommunications service charge of NTT Docomo, Inc.
which was fixed in March last year is another uncertainty. Docomo
calculates connection charge, a flat-rate per Mbps which is the
same charge for all of its MVNOs, every year based on its actual
costs in a previous year in an accordance with the rules
administrated by the Ministry of Internal Affairs and
Communications. For FY2015 IIJ estimates such charge, which
decreased by 23.5% in FY2014 from a year before, to be decreased by
15% from a year before. With all these factors considered, our
FY2015 financial targets announced on May 15, 2015 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 |
|
3Q14 |
3Q15 |
|
JPY millions |
JPY millions |
Adjusted EBITDA |
|
11,003 |
|
|
11,367 |
|
Depreciation and Amortization |
|
(7,217 |
) |
|
(7,294 |
) |
Operating Income |
|
3,786 |
|
|
4,073 |
|
Other Income |
|
103 |
|
|
105 |
|
Income Tax Expense |
|
1,633 |
|
|
1,697 |
|
Equity in Net Income of Equity Method
Investees |
|
115 |
|
|
207 |
|
Net income |
|
2,371 |
|
|
2,688 |
|
Less: Net income attributable to noncontrolling
interests |
|
(57 |
) |
|
(115 |
) |
Net Income attributable to IIJ |
|
2,314 |
|
|
2,573 |
|
CAPEX |
|
3Q14 |
3Q15 |
|
JPY millions |
JPY millions |
CAPEX, including capital leases |
9,290 |
12,211 |
Acquisition of Assets by Entering into Capital
Leases |
2,721 |
3,757 |
Purchase of Property and Equipment |
6,569 |
8,454 |
|
Presentation
Presentation materials will be posted on our web
site (http://www.iij.ad.jp/en/ir/) on February 9, 2016.
About Internet Initiative Japan
Inc.
Founded in 1992, IIJ is one of Japan's leading
Internet-access and comprehensive network solutions providers. IIJ
and its group companies provide total network solutions that mainly
cater to high-end corporate customers. IIJ's services include
high-quality Internet connectivity services, systems integration,
cloud computing services, security services and mobile services.
Moreover, IIJ has built one of the largest Internet backbone
networks in Japan that is connected to the United States, the
United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market
in 1999 and on the First Section of the Tokyo Stock Exchange in
2006.
Statements made in this press release regarding
IIJ’s or management’s intentions, beliefs, expectations, or
predictions for the future are forward-looking statements that are
based on IIJ’s and managements’ current expectations, assumptions,
estimates and projections about its business and the industry.
These forward-looking statements, such as statements regarding
revenues, 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 but not limited to: a decrease of corporate
spending or capital expenditure due to depression in the Japanese
economy and/or corporate earnings decreased; an inability to
achieve anticipated results and cause negative impact on
profitability; a possibility that less of reliability for our
services and loss of business changes due to interruption or
suspension of our services; an excess increase and fluctuation in
network-related costs, mobile-related costs, outsourcing costs,
personnel cost etc.; a possibility to lose business opportunity due
to our inadequate resources in personnel and others; an increase in
competition and strong pricing pressure; the recording of an
impairment loss as a result of an impairment test on the
non-amortized intangible assets such as goodwill: a decline in
value and trading value of our hodling securities. Please refer to
IIJ’s filings on Form 20-F of its annual report and other filings
with the United States Securities and Exchange Commission for other
risks.
Internet
Initiative Japan Inc. |
Consolidated
Balance Sheets (Unaudited) |
(As of March 31,
2015 and December 31, 2015) |
|
|
|
|
|
|
As of March 31,2015 |
|
As of December 31,2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
ASSETS |
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
Cash and cash equivalents |
|
21,093,633 |
|
|
|
18,233,738 |
|
|
Accounts receivable, net of allowance for doubtful accounts of JPY
54,590 thousand and JPY 53,630 thousand at March 31, 2015 and
December 31, 2015, respectively |
|
22,251,818 |
|
|
|
20,226,256 |
|
|
Inventories |
|
1,229,463 |
|
|
|
2,733,043 |
|
|
Prepaid expenses |
|
3,691,643 |
|
|
|
5,378,405 |
|
|
Deferred tax assets—current |
|
1,547,474 |
|
|
|
1,408,096 |
|
|
Other current assets, net of allowance for doubtful accounts of
JPY 720 thousand and JPY 15,392 thousand at March 31, 2015
and December 31, 2015, respectively |
|
2,272,605 |
|
|
|
2,389,113 |
|
|
Total current assets |
|
52,086,636 |
|
|
|
50,368,651 |
|
|
INVESTMENTS IN EQUITY METHOD INVESTEES |
|
2,560,557 |
|
|
|
2,696,676 |
|
|
OTHER INVESTMENTS |
|
6,660,706 |
|
|
|
6,099,217 |
|
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation and
amortization of JPY 39,591,769 thousand and JPY 43,861,913 thousand
at March 31, 2015 and December 31, 2015, respectively |
|
29,370,054 |
|
|
|
33,014,363 |
|
|
GOODWILL |
|
6,169,609 |
|
|
|
6,169,609 |
|
|
OTHER INTANGIBLE ASSETS—Net |
|
3,941,279 |
|
|
|
3,650,885 |
|
|
GUARANTEE DEPOSITS |
|
2,800,201 |
|
|
|
2,809,083 |
|
|
DEFERRED TAX ASSETS—Noncurrent |
|
471,087 |
|
|
|
281,056 |
|
|
NET INVESTMENT IN SALES-TYPE LEASES—Noncurrent |
|
762,159 |
|
|
|
779,258 |
|
|
Prepaid expenses—Noncurrent |
|
2,914,375 |
|
|
|
3,949,889 |
|
|
OTHER ASSETS, net of allowance for doubtful accounts of JPY
92,935 thousand and JPY 61,600 thousand at March 31, 2015 and
December 31, 2015, respectively |
|
968,652 |
|
|
|
783,015 |
|
|
TOTAL |
|
108,705,315 |
|
|
|
110,601,702 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31,2015 |
|
As of December 31,2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
Short-term borrowings |
|
9,250,000 |
|
|
|
9,250,000 |
|
|
Capital lease obligations—current portion |
|
3,522,113 |
|
|
|
3,462,666 |
|
|
Accounts payable—trade |
|
12,182,908 |
|
|
|
12,035,158 |
|
|
Accounts payable—other |
|
1,442,810 |
|
|
|
905,351 |
|
|
Income taxes payable |
|
499,104 |
|
|
|
509,393 |
|
|
Accrued expenses |
|
2,968,139 |
|
|
|
3,193,686 |
|
|
Deferred income—current |
|
2,143,480 |
|
|
|
2,524,088 |
|
|
Other current liabilities |
|
1,732,781 |
|
|
|
1,462,129 |
|
|
Total current liabilities |
|
33,741,335 |
|
|
|
33,342,471 |
|
|
CAPITAL LEASE OBLIGATIONS—Noncurrent |
|
4,340,421 |
|
|
|
5,116,551 |
|
|
ACCRUED RETIREMENT AND PENSION COSTS—Noncurrent |
|
2,792,617 |
|
|
|
2,934,231 |
|
|
DEFERRED TAX LIABILITIES—Noncurrent |
|
1,097,650 |
|
|
|
1,028,786 |
|
|
DEFERRED INCOME—Noncurrent |
|
2,943,975 |
|
|
|
2,725,940 |
|
|
OTHER NONCURRENT LIABILITIES |
|
945,537 |
|
|
|
1,049,071 |
|
|
Total Liabilities |
|
45,861,535 |
|
|
|
46,197,050 |
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
Common-stock—authorized, 75,520,000 shares; issued and outstanding,
46,701,000 shares at March 31, 2015 |
|
25,499,857 |
|
|
|
25,509,499 |
|
|
—authorized, 75,520,000 shares; issued and outstanding, 46,711,400
shares at December 31, 2015 |
|
|
Additional paid-in capital |
|
36,014,128 |
|
|
|
36,045,896 |
|
|
Retained earnings (Accumulated deficit) |
|
(556,162 |
) |
|
|
1,005,817 |
|
|
Accumulated other comprehensive income |
|
1,938,649 |
|
|
|
1,773,778 |
|
|
Treasury stock —758,709 shares held by the company at March 31,
2015 and December 31, 2015, respectively |
|
(392,070 |
) |
|
|
(392,070 |
) |
|
Total Internet Initiative Japan Inc. shareholders' equity |
|
62,504,402 |
|
|
|
63,942,920 |
|
|
NONCONTROLLING INTERESTS |
|
339,378 |
|
|
|
461,732 |
|
|
Total equity |
|
62,843,780 |
|
|
|
64,404,652 |
|
|
TOTAL |
|
108,705,315 |
|
|
|
110,601,702 |
|
|
|
|
|
|
|
|
|
|
|
|
Internet
Initiative Japan Inc. |
Quarterly Consolidated Statements of Income
and Quarterly Consolidated Statements of Other
Comprehensive Income (Unaudited) |
(For the Nine
months ended December 31, 2014 and December 31, 2015) |
|
|
|
|
|
|
|
|
|
|
|
Nine Months EndedDecember 31, 2014 |
|
Nine Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
REVENUES: |
|
|
|
|
Network services: |
|
|
|
|
Internet connectivity services (enterprise) |
|
12,288,271 |
|
|
|
12,870,620 |
|
|
Internet connectivity services (consumer) |
|
5,752,832 |
|
|
|
10,707,905 |
|
|
WAN services |
|
18,145,417 |
|
|
|
18,826,362 |
|
|
Outsourcing services |
|
14,975,424 |
|
|
|
15,810,470 |
|
|
Total |
|
51,161,944 |
|
|
|
58,215,357 |
|
|
Systems integration: |
|
|
|
|
Systems construction |
|
12,493,812 |
|
|
|
11,547,216 |
|
|
Systems operation and maintenance |
|
20,150,467 |
|
|
|
24,374,157 |
|
|
Total |
|
32,644,279 |
|
|
|
35,921,373 |
|
|
Equipment sales |
|
1,365,362 |
|
|
|
2,364,695 |
|
|
ATM operation business |
|
2,674,213 |
|
|
|
2,880,146 |
|
|
Total revenues |
|
87,845,798 |
|
|
|
99,381,571 |
|
|
COST AND EXPENSES: |
|
|
|
|
Cost of network services |
|
40,130,904 |
|
|
|
47,078,490 |
|
|
Cost of systems integration |
|
28,179,242 |
|
|
|
30,454,411 |
|
|
Cost of equipment sales |
|
1,196,462 |
|
|
|
2,125,085 |
|
|
Cost of ATM operation business |
|
1,891,279 |
|
|
|
1,930,186 |
|
|
Total cost |
|
71,397,887 |
|
|
|
81,588,172 |
|
|
Sales and marketing |
|
6,829,064 |
|
|
|
7,842,190 |
|
|
General and administrative |
|
5,467,733 |
|
|
|
5,532,088 |
|
|
Research and development |
|
364,778 |
|
|
|
345,878 |
|
|
Total cost and expenses |
|
84,059,462 |
|
|
|
95,308,328 |
|
|
OPERATING INCOME |
|
3,786,336 |
|
|
|
4,073,243 |
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
Dividend income |
|
58,971 |
|
|
|
88,248 |
|
|
Interest income |
|
14,990 |
|
|
|
15,371 |
|
|
Interest expense |
|
(180,095 |
) |
|
|
(170,762 |
) |
|
Foreign exchange gains (losses) |
|
27,415 |
|
|
|
(11,273 |
) |
|
Net gain on sales of other investments |
|
5,317 |
|
|
|
23,765 |
|
|
Other —net |
|
175,640 |
|
|
|
159,048 |
|
|
Other income—net |
|
102,238 |
|
|
|
104,397 |
|
|
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN
NET INCOME OF EQUITY METHOD INVESTEES |
|
3,888,574 |
|
|
|
4,177,640 |
|
|
INCOME TAX EXPENSE |
|
1,632,849 |
|
|
|
1,696,936 |
|
|
EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES |
|
115,486 |
|
|
|
206,823 |
|
|
NET INCOME |
|
2,371,211 |
|
|
|
2,687,527 |
|
|
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
(57,300 |
) |
|
|
(114,704 |
) |
|
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. |
|
2,313,911 |
|
|
|
2,572,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months EndedDecember 31, 2014 |
|
Nine Months EndedDecember 31, 2015 |
|
NET INCOME PER SHARE |
|
|
|
|
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) |
|
45,942,291 |
|
|
|
45,949,250 |
|
|
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) |
|
46,011,417 |
|
|
|
46,039,920 |
|
|
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) |
|
91,884,582 |
|
|
|
91,898,500 |
|
|
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) |
|
92,022,834 |
|
|
|
92,079,840 |
|
|
BASIC NET INCOME PER SHARE (JPY) |
|
50.37 |
|
|
|
55.99 |
|
|
DILUTED NET INCOME PER SHARE (JPY) |
|
50.29 |
|
|
|
55.88 |
|
|
BASIC NET INCOME PER ADS EQUIVALENT (JPY) |
|
25.18 |
|
|
|
28.00 |
|
|
DILUTED NET INCOME PER ADS EQUIVALENT (JPY) |
|
25.14 |
|
|
|
27.94 |
|
|
|
|
|
|
|
|
Quarterly Consolidated Statements of Comprehensive
Income (Unaudited) |
|
|
|
|
Nine Months EndedDecember 31, 2014 |
|
Nine Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
NET INCOME |
|
2,371,211 |
|
|
|
2,687,527 |
|
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
Foreign currency translation adjustments |
|
64,375 |
|
|
|
(74,544 |
) |
|
Unrealized holding loss on securities |
|
(58,352 |
) |
|
|
(85,123 |
) |
|
Defined benefit pension plans |
|
178 |
|
|
|
(1,246 |
) |
|
Total comprehensive income |
|
2,377,412 |
|
|
|
2,526,614 |
|
|
Less: Comprehensive income attributable to noncontrolling
interests |
|
(55,939 |
) |
|
|
(118,662 |
) |
|
Comprehensive income attributable to Internet Initiative Japan
Inc. |
|
2,321,473 |
|
|
|
2,407,952 |
|
|
|
|
|
|
|
|
Internet
Initiative Japan Inc. |
Quarterly
Consolidated Statements of Cash Flows (Unaudited) |
(For the Nine
months ended December 31, 2014 and December 31, 2015) |
|
|
|
|
|
|
Nine Months EndedDecember 31, 2014 |
|
Nine Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
OPERATING ACTIVITIES: |
|
|
|
|
Net income |
|
2,371,211 |
|
|
|
2,687,527 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
7,216,844 |
|
|
|
7,293,768 |
|
|
Provision for retirement and pension costs, less payments |
|
176,514 |
|
|
|
141,614 |
|
|
Provision for allowance for doubtful accounts |
|
2,165 |
|
|
|
26,692 |
|
|
Gain on sales of property and equipment |
|
(29,344 |
) |
|
|
(37,972 |
) |
|
Loss on disposal of property and equipment |
|
91,988 |
|
|
|
37,345 |
|
|
Net gain on sales of other investments |
|
(5,317 |
) |
|
|
(23,765 |
) |
|
Foreign exchange gains—net |
|
(15,390 |
) |
|
|
(24,118 |
) |
|
Equity in net income of equity method investees, less dividends
received |
|
(83,146 |
) |
|
|
(158,313 |
) |
|
Deferred income tax expense |
|
266,540 |
|
|
|
308,241 |
|
|
Other |
|
(15,649 |
) |
|
|
(12,709 |
) |
|
Changes in operating assets and liabilities net of effects from
acquisition of a company: |
|
|
|
|
Decrease in accounts receivable |
|
1,653,474 |
|
|
|
1,985,303 |
|
|
Increase in net investment in sales-type lease — noncurrent |
|
(112,421 |
) |
|
|
(17,099 |
) |
|
Increase in inventories |
|
(632,722 |
) |
|
|
(1,505,965 |
) |
|
Increase in prepaid expenses |
|
(1,541,760 |
) |
|
|
(1,690,890 |
) |
|
Increase in other current and noncurrent assets |
|
(60,501 |
) |
|
|
(1,297,325 |
) |
|
Decrease in accounts payable |
|
(441,078 |
) |
|
|
(165,442 |
) |
|
Increase (decrease) in income taxes payable |
|
(880,942 |
) |
|
|
10,500 |
|
|
Increase in accrued expenses |
|
820,427 |
|
|
|
228,883 |
|
|
Increase in deferred income—current |
|
700,139 |
|
|
|
405,211 |
|
|
Decrease in deferred income—noncurrent |
|
(313,923 |
) |
|
|
(175,389 |
) |
|
Increase (decrease) in other current and noncurrent
liabilities |
|
844,764 |
|
|
|
(204,940 |
) |
|
Net cash provided by operating activities |
|
10,011,873 |
|
|
|
7,811,157 |
|
|
INVESTING ACTIVITIES: |
|
|
|
|
Purchase of property and equipment |
|
(6,568,926 |
) |
|
|
(8,454,171 |
) |
|
Proceeds from sales of property and equipment |
|
535,528 |
|
|
|
1,093,078 |
|
|
Purchase of available-for-sale securities |
|
(4,104 |
) |
|
|
(59,490 |
) |
|
Purchase of other investments |
|
(181,678 |
) |
|
|
(273,686 |
) |
|
Investment in an equity method investee |
|
(50,000 |
) |
|
|
(39,974 |
) |
|
Proceeds from sales of available-for-sale securities |
|
- |
|
|
|
141,235 |
|
|
Proceeds from sales of other investments |
|
30,501 |
|
|
|
804,236 |
|
|
Payments of guarantee deposits |
|
(1,611,498 |
) |
|
|
(21,132 |
) |
|
Refund of guarantee deposits |
|
1,559,399 |
|
|
|
9,040 |
|
|
Payments for refundable insurance policies |
|
(34,379 |
) |
|
|
(42,272 |
) |
|
Refund from insurance policies |
|
- |
|
|
|
10,108 |
|
|
Proceeds from subsidies |
|
200,000 |
|
|
|
200,000 |
|
|
Acquisition of a newly controlled company, net of cash
acquired |
|
(167,678 |
) |
|
|
- |
|
|
Other |
|
(25,000 |
) |
|
|
(678 |
) |
|
Net cash used in investing activities |
|
(6,317,835 |
) |
|
|
(6,633,706 |
) |
|
|
Nine Months EndedDecember 31, 2014 |
|
Nine Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from issuance of short-term borrowings with initial
maturities over three months |
|
50,000 |
|
|
|
1,550,000 |
|
|
Repayments of short-term borrowings with initial maturities over
three months and long-term borrowings |
|
(1,030,000 |
) |
|
|
(1,550,000 |
) |
|
Principal payments under capital leases |
|
(3,140,288 |
) |
|
|
(3,039,877 |
) |
|
Proceeds from issuance of subsidiary stock to noncontrolling
interests |
|
- |
|
|
|
3,692 |
|
|
Dividends paid |
|
(1,010,695 |
) |
|
|
(1,010,844 |
) |
|
Other |
|
3 |
|
|
|
10 |
|
|
Net cash used in financing activities |
|
(5,130,980 |
) |
|
|
(4,047,019 |
) |
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
62,842 |
|
|
|
9,673 |
|
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
(1,374,100 |
) |
|
|
(2,859,895 |
) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD |
|
22,421,100 |
|
|
|
21,093,633 |
|
|
CASH AND CASH EQUIVALENTS, END OF THE PERIOD |
|
21,047,000 |
|
|
|
18,233,738 |
|
|
|
|
|
|
|
ADDITIONAL CASH FLOW INFORMATION: |
|
|
|
|
Interest paid |
|
181,544 |
|
|
|
170,903 |
|
|
Income taxes paid |
|
2,278,660 |
|
|
|
1,392,230 |
|
|
|
|
|
|
|
NONCASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
Acquisition of assets by entering into capital leases |
|
2,720,754 |
|
|
|
3,757,319 |
|
|
Facilities purchase liabilities |
|
656,799 |
|
|
|
905,351 |
|
|
Asset retirement obligation |
|
176,597 |
|
|
|
7,349 |
|
|
Acquisition of a company: |
|
|
|
|
Assets acquired |
|
1,064,736 |
|
|
|
- |
|
|
Liabilities assumed |
|
464,736 |
|
|
|
- |
|
|
Cash paid |
|
(600,000 |
) |
|
|
- |
|
|
Cash acquired |
|
432,322 |
|
|
|
- |
|
|
Acquisition of a newly controlled company, net of cash
acquired |
|
(167,678 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Going Concern Assumption (Unaudited) |
Nothing to be
reported. |
|
Material Changes In Shareholders'
Equity
(Unaudited) |
Nothing to be
reported. |
|
Segment Information (Unaudited) |
Business
Segments: |
Revenues: |
|
Nine Months Ended December 31,2014 |
Nine Months Ended December 31,2015 |
|
|
Thousands of JPY |
Thousands of JPY |
Network service and systems integration business |
|
85,477,918 |
|
|
96,789,223 |
|
|
Customers |
|
85,171,585 |
|
|
96,501,425 |
|
|
Intersegment |
|
306,333 |
|
|
287,798 |
|
ATM operation business |
|
2,674,213 |
|
|
2,880,146 |
|
|
Customers |
|
2,674,213 |
|
|
2,880,146 |
|
|
Intersegment |
|
- |
|
|
- |
|
Elimination |
|
(306,333 |
) |
|
(287,798 |
) |
Consolidated total |
|
87,845,798 |
|
|
99,381,571 |
|
Segment profit or loss: |
|
|
|
Nine Months Ended December 31,2014 |
Nine Months Ended December 31,2015 |
|
Thousands of JPY |
Thousands of JPY |
Network service and systems integration business |
|
3,232,040 |
|
|
3,356,483 |
|
ATM operation business |
|
653,996 |
|
|
818,647 |
|
Elimination |
|
(99,700 |
) |
|
(101,887 |
) |
Consolidated operating income |
|
3,786,336 |
|
|
4,073,243 |
|
|
Geographic information is not presented due to immateriality of
revenue attributable to international operations. |
|
Subsequent Events (Unaudited) |
Nothing to be
reported. |
|
Third Quarter FY2015 Consolidated
Financial Results (3 months)
The following tables are highlight data of 3rd
Quarter FY2015 (3 months) consolidated financial results
(unaudited, for the three months ended December 31, 2015).
Operating Results
Summary |
|
3Q14 |
3Q15 |
YoY % Change |
|
JPY millions |
JPY millions |
|
Total Revenues: |
30,674 |
34,048 |
|
11.0 |
|
Network Services |
17,466 |
20,216 |
|
15.7 |
|
Systems Integration (SI) |
11,776 |
12,196 |
|
3.6 |
|
Equipment Sales |
521 |
726 |
|
39.5 |
|
ATM Operation Business |
911 |
910 |
|
(0.1 |
) |
Cost of Revenues: |
25,131 |
27,962 |
|
11.3 |
|
Network Services |
13,763 |
16,577 |
|
20.5 |
|
Systems Integration (SI) |
10,239 |
10,114 |
|
(1.2 |
) |
Equipment Sales |
458 |
645 |
|
40.8 |
|
ATM Operation Business |
671 |
626 |
|
(6.7 |
) |
SG&A Expenses and R&D |
4,173 |
4,576 |
|
9.6 |
|
Operating Income |
1,370 |
1,510 |
|
10.2 |
|
Income before Income Tax Expense |
1,397 |
1,531 |
|
9.6 |
|
Net Income attributable to IIJ |
870 |
920 |
|
5.8 |
|
|
Network Service
Revenue Breakdown |
|
3Q14 |
3Q15 |
YoY % Change |
|
JPY millions |
JPY millions |
|
Internet Connectivity Service (Enterprise) |
4,080 |
4,514 |
|
10.6 |
|
IP Service*1 |
2,442 |
2,446 |
|
0.2 |
|
IIJ FiberAccess/F and IIJ DSL/F |
778 |
771 |
|
(0.9 |
) |
IIJ Mobile Service |
801 |
1,228 |
|
53.2 |
|
Others |
59 |
69 |
|
16.1 |
|
Internet Connectivity Service (Consumer) |
2,242 |
4,111 |
|
83.3 |
|
IIJ*2 |
1,550 |
3,491 |
|
125.2 |
|
hi-ho |
692 |
620 |
|
(10.4 |
) |
WAN Services |
6,189 |
6,269 |
|
1.3 |
|
Outsourcing Services |
4,955 |
5,322 |
|
7.4 |
|
Network Services Revenues |
17,466 |
20,216 |
|
15.7 |
|
*1 IP service revenues
include revenues from the data center connectivity service. |
*2 From 1Q15, what were
formerly known as “Under IIJ brand” and “OEM” are now merged under
a newly created category “IIJ.” |
|
Reconciliation of Non-GAAP Financial
Measures (3rd Quarter FY2015 (3
months))
The following table summarizes the
reconciliation of adjusted EBITDA to net income in our consolidated
statements of income that are prepared in accordance with U.S.
GAAP.
Adjusted
EBITDA |
|
3Q14 |
3Q15 |
|
JPY millions |
JPY millions |
Adjusted EBITDA |
|
3,903 |
|
|
4,004 |
|
Depreciation and Amortization |
|
2,533 |
|
|
2,494 |
|
Operating Income |
|
1,370 |
|
|
1,510 |
|
Other Income (Expense) |
|
27 |
|
|
21 |
|
Income Tax Expense (Benefit) |
|
558 |
|
|
657 |
|
Equity in Net Income of Equity Method
Investees |
|
46 |
|
|
69 |
|
Net income |
|
885 |
|
|
943 |
|
Less: Net income attributable to noncontrolling
interests |
|
(15 |
) |
|
(23 |
) |
Net Income attributable to IIJ |
|
870 |
|
|
920 |
|
|
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 |
|
3Q14 |
3Q15 |
|
JPY millions |
JPY millions |
CAPEX, including capital leases |
3,489 |
4,268 |
Acquisition of Assets by Entering into Capital
Leases |
930 |
1,135 |
Purchase of Property and Equipment |
2,559 |
3,133 |
|
Internet Initiative Japan Inc. |
Quarterly Consolidated Statements of Income
(Unaudited) |
(For the Three Months ended December 31, 2014
and December 31, 2015) |
|
|
Three Months EndedDecember 31, 2014 |
Three Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
Thousands of JPY |
|
REVENUES: |
|
|
|
|
Network services: |
|
|
|
|
Internet connectivity services (enterprise) |
|
4,080,290 |
|
|
|
4,513,952 |
|
|
Internet connectivity services (consumer) |
|
2,242,443 |
|
|
|
4,111,346 |
|
|
WAN services |
|
6,189,009 |
|
|
|
6,268,555 |
|
|
Outsourcing services |
|
4,954,577 |
|
|
|
5,321,941 |
|
|
Total |
|
17,466,319 |
|
|
|
20,215,794 |
|
|
Systems integration: |
|
|
|
|
Systems Construction |
|
4,625,098 |
|
|
|
3,904,016 |
|
|
Systems Operation and Maintenance |
|
7,150,557 |
|
|
|
8,291,772 |
|
|
Total |
|
11,775,655 |
|
|
|
12,195,788 |
|
|
Equipment sales |
|
520,760 |
|
|
|
726,672 |
|
|
ATM operation business |
|
910,846 |
|
|
|
909,583 |
|
|
Total revenues |
|
30,673,580 |
|
|
|
34,047,837 |
|
|
COST AND EXPENSES: |
|
|
|
|
Cost of network services |
|
13,762,311 |
|
|
|
16,577,185 |
|
|
Cost of systems integration |
|
10,239,223 |
|
|
|
10,113,828 |
|
|
Cost of equipment sales |
|
457,965 |
|
|
|
644,961 |
|
|
Cost of ATM operation business |
|
670,903 |
|
|
|
626,050 |
|
|
Total cost |
|
25,130,402 |
|
|
|
27,962,024 |
|
|
Sales and marketing |
|
2,265,958 |
|
|
|
2,676,708 |
|
|
General and administrative |
|
1,793,802 |
|
|
|
1,785,263 |
|
|
Research and development |
|
113,318 |
|
|
|
113,684 |
|
|
Total cost and expenses |
|
29,303,480 |
|
|
|
32,537,679 |
|
|
OPERATING INCOME |
|
1,370,100 |
|
|
|
1,510,158 |
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
Dividend income |
|
11,432 |
|
|
|
14,040 |
|
|
Interest income |
|
3,752 |
|
|
|
4,259 |
|
|
Interest expense |
|
(57,571 |
) |
|
|
(59,202 |
) |
|
Foreign exchange gains |
|
36,796 |
|
|
|
2,793 |
|
|
Net gain on sales of other investments |
|
- |
|
|
|
23,765 |
|
|
Other—net |
|
32,679 |
|
|
|
34,870 |
|
|
Other income—net |
|
27,088 |
|
|
|
20,525 |
|
|
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND EQUITY IN NET
INCOME OF EQUITY METHOD INVESTEES |
|
1,397,188 |
|
|
|
1,530,683 |
|
|
INCOME TAX EXPENSE |
|
558,440 |
|
|
|
657,051 |
|
|
EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES |
|
46,253 |
|
|
|
69,422 |
|
|
NET INCOME |
|
885,001 |
|
|
|
943,054 |
|
|
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
(15,354 |
) |
|
|
(22,730 |
) |
|
NET INCOME ATTRIBUTABLE TO INTERNET INITIATIVE JAPAN INC. |
|
869,647 |
|
|
|
920,324 |
|
|
|
|
|
|
|
|
Three Months EndedDecember 31, 2014 |
Three Months EndedDecember 31, 2015 |
|
NET INCOME PER SHARE |
|
|
BASIC WEIGHTED-AVERAGE NUMBER OF SHARES (shares) |
|
45,942,291 |
|
45,952,691 |
DILUTED WEIGHTED-AVERAGE NUMBER OF SHARES (shares) |
|
46,017,618 |
|
46,048,049 |
BASIC WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) |
|
91,884,582 |
|
91,905,382 |
DILUTED WEIGHTED-AVERAGE NUMBER OF ADS EQUIVALENTS (ADSs) |
|
92,035,236 |
|
92,096,098 |
BASIC NET INCOME PER SHARE (JPY) |
|
18.93 |
|
20.03 |
DILUTED NET INCOME PER SHARE (JPY) |
|
18.90 |
|
19.99 |
BASIC NET INCOME PER ADS EQUIVALENT (JPY) |
|
9.46 |
|
10.01 |
DILUTED NET INCOME PER ADS EQUIVALENT (JPY) |
|
9.45 |
|
9.99 |
|
|
|
|
|
|
|
|
|
|
Quarterly Consolidated Statements of Comprehensive
Income (Unaudited) |
|
Three Months EndedDecember 31, 2014 |
Three Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
Thousands of JPY |
|
NET INCOME |
|
885,001 |
|
|
943,054 |
|
|
Other comprehensive income (loss), net of tax: |
|
|
|
Foreign currency translation adjustments |
|
125,661 |
|
|
(95,236 |
) |
|
Unrealized holding gain on securities |
|
786,420 |
|
|
90,452 |
|
|
Defined benefit pension plans |
|
59 |
|
|
(415 |
) |
|
Total comprehensive income |
|
1,797,141 |
|
|
937,855 |
|
|
Less: Comprehensive income attributable to noncontrolling
interests |
|
(13,605 |
) |
|
(22,730 |
) |
|
Comprehensive income attributable to Internet Initiative Japan
Inc. |
|
1,783,536 |
|
|
915,125 |
|
|
Internet
Initiative Japan Inc. |
Quarterly
Consolidated Statements of Cash Flows (Unaudited) |
(For the Three
Months ended December 31, 2014 and December 31, 2015) |
|
|
|
|
|
|
Three Months EndedDecember 31, 2014 |
|
Three Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
OPERATING ACTIVITIES: |
|
|
|
|
Net income |
|
885,001 |
|
|
|
943,054 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
2,533,248 |
|
|
|
2,493,478 |
|
|
Provision for retirement and pension costs, less payments |
|
56,928 |
|
|
|
71,204 |
|
|
Provision for allowance for doubtful accounts |
|
416 |
|
|
|
3,380 |
|
|
Gain on sales of property and equipment |
|
- |
|
|
|
(17,030 |
) |
|
Loss on disposal of property and equipment |
|
71,370 |
|
|
|
5,493 |
|
|
Net gain on sales of other investments |
|
- |
|
|
|
(23,765 |
) |
|
Foreign exchange gains—net |
|
(1,893 |
) |
|
|
(25,102 |
) |
|
Equity in net income of equity method investees, less
dividends received |
|
(46,253 |
) |
|
|
(69,422 |
) |
|
Deferred income tax expense |
|
35,806 |
|
|
|
190,568 |
|
|
Other |
|
(38,664 |
) |
|
|
2,337 |
|
|
Changes in operating assets and liabilities net of effects from
acquisition of a company: |
|
|
|
|
Decrease (increase) in accounts receivable |
|
1,887,949 |
|
|
|
(179,928 |
) |
|
Increase in net investment in sales-type lease―noncurrent |
|
(367,550 |
) |
|
|
(13,836 |
) |
|
Increase in inventories |
|
(239,596 |
) |
|
|
(676,714 |
) |
|
Increase in prepaid expenses |
|
(821,921 |
) |
|
|
(523,982 |
) |
|
Decrease (increase) in other current and noncurrent assets |
|
137,732 |
|
|
|
(1,012,756 |
) |
|
Increase in accounts payable |
|
721,952 |
|
|
|
187,324 |
|
|
Decrease in income taxes payable |
|
(553,150 |
) |
|
|
(289,427 |
) |
|
Increase in accrued expenses |
|
557,618 |
|
|
|
68,502 |
|
|
Increase in deferred income― current |
|
298,025 |
|
|
|
191,119 |
|
|
Decrease in deferred income― noncurrent |
|
(834,969 |
) |
|
|
(111,647 |
) |
|
Increase in other current and noncurrent liabilities |
|
385,251 |
|
|
|
518,229 |
|
|
Net cash provided by operating activities |
|
4,667,300 |
|
|
|
1,731,079 |
|
|
INVESTING ACTIVITIES: |
|
|
|
|
Purchase of property and equipment |
|
(2,558,579 |
) |
|
|
(3,132,977 |
) |
|
Proceeds from sales of property and equipment |
|
108,938 |
|
|
|
603,115 |
|
|
Purchase of available-for-sale securities |
|
(4,104 |
) |
|
|
- |
|
|
Purchase of other investments |
|
(57,974 |
) |
|
|
(26,704 |
) |
|
Proceeds from sales of other investments |
|
5,000 |
|
|
|
501,330 |
|
|
Payments of guarantee deposits |
|
(3,512 |
) |
|
|
(4,070 |
) |
|
Refund of guarantee deposits |
|
1,526,219 |
|
|
|
4,722 |
|
|
Payments for refundable insurance policies |
|
(12,014 |
) |
|
|
(14,091 |
) |
|
Acquisition of a newly controlled company, net of cash
acquired |
|
(167,678 |
) |
|
|
- |
|
|
Net cash used in investing activities |
|
(1,163,704 |
) |
|
|
(2,068,675 |
) |
|
|
Three Months EndedDecember 31, 2014 |
|
Three Months EndedDecember 31, 2015 |
|
|
Thousands of JPY |
|
Thousands of JPY |
|
FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from issuance of short-term borrowings with initial
maturities over three months |
|
50,000 |
|
|
|
50,000 |
|
|
Repayments of short-term borrowings with initial maturities over
three months |
|
(50,000 |
) |
|
|
(50,000 |
) |
|
Principal payments under capital leases |
|
(1,057,398 |
) |
|
|
(1,020,122 |
) |
|
Proceeds from issuance of subsidiary stock to minority
shareholders |
|
- |
|
|
|
3,692 |
|
|
Dividends paid |
|
(505,365 |
) |
|
|
(505,479 |
) |
|
Net cash used in financing activities |
|
(1,562,763 |
) |
|
|
(1,521,909 |
) |
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS |
|
57,457 |
|
|
|
(5,226 |
) |
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
1,998,290 |
|
|
|
(1,864,731 |
) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD |
|
19,048,710 |
|
|
|
20,098,469 |
|
|
CASH AND CASH EQUIVALENTS, END OF THE PERIOD |
|
21,047,000 |
|
|
|
18,233,738 |
|
|
|
|
|
|
|
Note: The following information is provided to
disclose Internet Initiative Japan Inc. ("IIJ") financial results
(unaudited) for the nine months ended December 31, 2015 (“3Q15”) in
the form defined by the Tokyo Stock Exchange.
Consolidated Financial Results for the
Nine Months ended December 31, 2015 [Under accounting principles
generally accepted in the United States ("U.S. GAAP")]
February 9, 2016Company name: Internet Initiative
Japan Inc. Exchange listed: Tokyo Stock Exchange
First SectionStock code number:
3774
URL: http://www.iij.ad.jp/Representative: Eijiro Katsu, President
and Representative DirectorContact: Akihisa Watai, Managing
Director and CFOTEL: (03) 5205-6500Scheduled date for filing of
quarterly report (Shihanki -houkokusho) to Japan’s regulatory
organization: February 15, 2016Scheduled date for interim dividend
payment: -Supplemental material on quarterly results:
YesPresentation on quarterly report: Yes (for institutional
investors and analysts)
|
|
(Amounts of
less than JPY one million are rounded) |
1. Consolidated
Financial Results for the Nine Months Ended December 31, 2015
(April 1, 2015 to December 31, 2015) |
|
(1) Consolidated Results of
Operations |
|
|
(% shown is
YoY change) |
|
Total revenues |
Operating income |
Income before income tax expense |
Net income attributable to IIJ |
|
JPY millions |
% |
JPY
millions |
% |
JPY millions |
% |
JPY millions |
% |
Nine Months EndedDecember 31, 2015 |
99,382 |
13.1 |
4,073 |
|
7.6 |
|
4,178 |
|
7.4 |
|
2,573 |
|
11.2 |
|
Nine Months EndedDecember 31, 2014 |
87,846 |
6.2 |
3,786 |
|
(10.1 |
) |
3,889 |
|
(15.9 |
) |
2,314 |
|
(20.9 |
) |
(Note1) |
Total comprehensive
income attributable to IIJ |
|
For the nine months
ended December 31, 2015: JPY2,408 million (up 3.7% YoY) |
|
For the nine months
ended December 31, 2014: JPY2,321 million (down 52.0% 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 incomeattributable to IIJ per share |
Diluted net income attributable to IIJ per share |
|
JPY |
JPY |
Nine Months EndedDecember 31, 2015 |
55.99 |
55.88 |
Nine Months EndedDecember 31, 2014 |
50.37 |
50.29 |
(2) Consolidated Financial
Position |
|
Total assets |
Total equity |
Total IIJ shareholders'equity |
Total IIJ shareholders'equity to total assets |
|
JPY millions |
JPY millions |
JPY millions |
% |
As of December 31, 2015 |
110,602 |
64,405 |
63,943 |
57.8 |
As of March 31, 2015 |
108,705 |
62,844 |
62,504 |
57.5 |
|
2.
Dividends |
|
Dividend per share |
1Q-end |
2Q-end |
3Q-end |
Year-end |
Total |
|
JPY |
JPY |
JPY |
JPY |
JPY |
Fiscal Year Ended March 31, 2015 |
- |
11.00 |
- |
11.00 |
22.00 |
Fiscal Year Ended March 31, 2016 |
- |
11.00 |
- |
|
|
Fiscal Year Ending March 31, 2016(forecast) |
|
|
|
11.00 |
22.00 |
(Note) Change from the
latest released dividend forecasts: No. |
|
3. Target of
Consolidated Financial Results for the Fiscal Year Ending March 31,
2016 (April 1, 2015 through March 31,
2016) |
|
|
|
|
|
|
(% shown is YoY change) |
|
Total revenues |
Operating income |
Income beforeincome tax expense(benefit) |
Net incomeattributable to IIJ |
Basic net incomeattributable to IIJper share |
|
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY |
Fiscal Year Ending March 31, 2016 |
139,000 |
13.0 |
6,500 |
28.1 |
6,400 |
24.5 |
4,000 |
20.4 |
87.07 |
(Note1) Changes to the
latest forecasts released: No |
|
* Notes
(1 |
) |
Changes in significant subsidiaries for the nine months ended
December 31, 2015 |
|
(Changes in significant subsidiaries for the nine months ended
December 31, 2015 which resulted in changes in scope of
consolidation): None |
|
(2 |
) |
Application of simplified or exceptional accounting:
No |
|
(3 |
) |
Changes in significant accounting and reporting policies for
the consolidated financial statements |
|
1) Changes due to the revision of accounting standards: No |
|
2) Others: No |
|
(4 |
) |
Number of shares outstanding (shares of common stock) |
|
1) The number of shares outstanding (inclusive of treasury
stock): |
|
As of December 31, 2015: |
46,711,400 shares |
|
As of March 31, 2015: |
46,701,000 shares |
|
2) The number of treasury stock: |
|
As of December 31, 2015: |
758,709 shares |
|
As of March 31, 2015: |
758,709 shares |
|
3) The weighted average number of shares outstanding: |
|
For the nine months
ended December 31, 2015: 45,949,250 shares |
|
For the nine months
ended December 31, 2014: 45,942,291 shares |
For inquiries, contact:
IIJ Investor Relations
Tel: +81-3-5205-6500 E-mail: ir@iij.ad.jp URL: http://www.iij.ad.jp/en/ir
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