Internet Initiative Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774)
today announced its full year ("FY2014") and 4th quarter ("4Q14")
consolidated financial results for the fiscal year ended March 31,
2015 (from April 1, 2014 to March 31, 2015).1
|
Highlights of Financial
Results for FY2014 |
Revenues |
JPY123,050 million |
(up 7.7% YoY) |
Operating Income |
JPY5,075 million |
(down 11.3% YoY) |
Income before Income Tax Expense |
JPY5,139 million |
(down 18.1% YoY) |
Net Income attributable to IIJ |
JPY3,322 million |
(down 25.2% YoY) |
|
|
|
Financial Targets for
FY2015 |
Revenues |
JPY139,000 million |
(up 13.0% YoY) |
Operating Income |
JPY6,500 million |
(up 28.1% YoY) |
Income before Income Tax Expense |
JPY6,400 million |
(up 24.5% YoY) |
Net Income attributable to IIJ |
JPY4,000 million |
(up 20.4% YoY) |
Annual Cash Dividend |
JPY22.00 per share |
|
Overview of FY2014 Financial Results and Business
Outlook
"Business environment continues to be favorable
along with the growing outsourcing demands and the return of
Japanese corporate IT investment appetite. Under such positive
momentum, we're continuously enhancing our business investment. We
hired 155 new graduates this April, and allocate more resources in
areas of MVNO (Mobile Virtual Network Operator), Cloud, and systems
integration where we're focusing on services and solutions
developments in particular. We also promote overseas businesses
aggressively by establishing affiliated companies and through
partnerships. These forward-looking investments require some time
to be reflected in financial results and thus our overall costs
have increased. In the meantime, we saw an accelerated revenues
growth, especially in the latter half of FY2014 where the total
revenues grew by 10.0% year over year. We shall continue to execute
our business expansion strategies for middle-to-long term growth,"
said Koichi Suzuki, Founder and CEO of IIJ.
"MVNO and Cloud continue to be strong growth
drivers, which we started in January 2008 and December 2009. MVNO
revenues for FY2014 grew by 63.5% to JPY7.7 billion and its
subscription as of March 31, 2015 increased by 289 thousand to 673
thousand from a year ago. Consumer MVNO services, which became
popular in FY2014 for their cost-effectiveness, can be anticipated
to achieve a significant market penetration within two to three
years as only about 1.3%2 of total mobile phone users in Japan are
using these services currently. We're different from competitors as
we can improve the infrastructure efficiency by gathering consumer
and enterprise traffic, leveraging our blue-chip corporate client
base. As for Cloud services, its revenue has grown to JPY12.3
billion in five years, which represents 10.0% of our FY2014 total
revenues. We see some large Japanese companies began to use Cloud
for their mission-critical and core business operation systems,
such as online banking security systems by a major commercial bank.
We expect it might take time but this trend gradually becomes
prominent in the middle term," followed Eijiro Katsu, COO and
President of IIJ.
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.
2 The figure is calculated by dividing the
total mobile subscription (154.75 million) by MVNO's SIM card
subscription (1.95 million) as of December 31, 2014. These figures
are published by the Ministry of Internal Affairs and
Communications in March and April of 2015.
http://www.soumu.go.jp/menu_news/s-news/01kiban02_02000151.html
"As for FY2014 financial results, revenues
continuously increased mainly with consumer MVNO services, Cloud
services, and systems integration. On the other hand, operating
income decreased year over year primarily because the operating
costs such as personnel-related and outsourcing-related are on an
increasing trend due to our enhanced business investment while the
accumulation of recurring revenue services was not as strong as
planned. In addition, mobile data communication charge from NTT
DOCOMO, Inc. hadn't decreased largely against our initial
expectation," continued Katsu.
"For FY2015 earnings, we target revenues and
operating income to increase by 13.0% and 28.1% respectively from
FY2014. Our business investment should start to make contribution
by accelerating revenue growth. Operating income growth should be
achieved mainly by accumulating recurring revenues, increasing
Cloud services profit, decreasing overseas business deficit, and
improving system integration gross margin. We remain committed to
returning to an operating income growth and further scale up of our
business," concluded Katsu.
FY2014 Financial Results Summary
Operating Results Summary |
|
FY2013 |
FY2014 |
YoY % |
|
|
|
Change |
|
JPY millions |
JPY millions |
|
Total Revenues |
114,272 |
123,050 |
7.7 |
Network
Services |
67,286 |
69,006 |
2.6 |
Systems
Integration (SI) |
42,469 |
48,237 |
13.6 |
Equipment
Sales |
1,690 |
2,167 |
28.2 |
ATM Operation
Business |
2,827 |
3,640 |
28.8 |
Total Costs |
93,206 |
100,978 |
8.3 |
Network
Services |
53,046 |
54,932 |
3.6 |
Systems
Integration (SI) |
36,510 |
41,562 |
13.8 |
Equipment
Sales |
1,527 |
1,932 |
26.6 |
ATM Operation
Business |
2,123 |
2,552 |
20.2 |
SG&A Expenses and
R&D |
15,343 |
16,997 |
10.8 |
Operating Income |
5,723 |
5,075 |
(11.3) |
Income before Income Tax
Expense |
6,275 |
5,139 |
(18.1) |
Net Income attributable to
IIJ |
4,442 |
3,322 |
(25.2) |
|
Segment Results Summary |
|
FY2013 |
FY2014 |
|
JPY millions |
JPY millions |
Total Revenues |
114,272 |
123,050 |
Network services
and SI business |
111,901 |
119,819 |
ATM Operation
Business |
2,827 |
3,640 |
Elimination |
456 |
409 |
Operating Income |
5,723 |
5,075 |
Network service
and SI business |
5,275 |
4,335 |
ATM Operation
Business |
578 |
886 |
Elimination |
130 |
146 |
We have omitted segment analysis because most of our revenues
are dominated by Network services and Systems Integration (SI)
business.
FY2014 Results of Operation
Revenues
Total revenues were JPY123,050 million, up 7.7% YoY.
Network Services revenue was JPY69,006 million, up 2.6% YoY.
Revenues for Internet connectivity services for enterprise were
JPY16,350 million, down 1.4% YoY from JPY16,585 million for FY2013.
There were increase in enterprise mobile service revenues and
decrease in IP services revenues including data center connectivity
services revenues.
Revenues for Internet connectivity services for consumer were
JPY8,222 million, up 36.5% YoY from JPY6,025 million for FY2013,
mainly due to the large revenue growth of consumer mobile services
"IIJmio High-speed Mobile/D service," consumer mobile services
which offers inexpensive data communication and voice services with
SIM cards.
WAN services revenues were JPY24,326 million, down 2.7% YoY
compared to JPY25,006 million for FY2013.
Outsourcing services revenues were JPY20,108 million, up 2.2%
YoY from JPY19,670 million for FY2013, mainly by the increase in
revenues of "IIJ GIO Hosting Package Services."
Network Services Revenues Breakdown |
|
|
|
YoY % |
|
FY2013 |
FY2014 |
Change |
|
JPY millions |
JPY millions |
|
Internet Connectivity Service
(Enterprise)3 |
16,585 |
16,350 |
(1.4) |
IP
Service4 |
10,357 |
9,831 |
(5.1) |
IIJ FiberAccess/F
and IIJ DSL/F |
3,147 |
3,143 |
(0.1) |
IIJ Mobile
Service(Enterprise) |
2,850 |
3,143 |
10.3 |
Others |
231 |
233 |
1.0 |
Internet Connectivity Service
(Consumer)3 |
6,025 |
8,222 |
36.5 |
Under IIJ
Brand |
2,273 |
4,781 |
110.3 |
hi-ho |
3,047 |
2,793 |
(8.3) |
OEM |
705 |
648 |
(8.1) |
WAN Services |
25,006 |
24,326 |
(2.7) |
Outsourcing
Services |
19,670 |
20,108 |
2.2 |
Total Network
Services |
67,286 |
69,006 |
2.6 |
|
|
|
|
Number of Contracts for Connectivity Services |
|
as of |
as of |
YoY |
|
March 31, 2014 |
March 31,
2015 |
Change |
Internet Connectivity Services
(Enterprise) |
142,655 |
172,613 |
29,958 |
IP Service
(-99Mbps) |
847 |
763 |
(84) |
IP Service
(100Mbps-999Mbps) |
448 |
504 |
56 |
IP Service
(1Gbps-) |
271 |
340 |
69 |
IIJ Data
Center Connectivity Service |
288 |
278 |
(10) |
IIJ
FiberAccess/F and IIJ DSL/F |
56,384 |
62,926 |
6,542 |
IIJ Mobile
Service(Enterprise) |
83,124 |
106,493 |
23,369 |
Others |
1,293 |
1,309 |
16 |
Internet Connectivity Services
(Consumer) |
625,297 |
894,009 |
268,712 |
Under IIJ
Brand |
171,968 |
373,125 |
201,157 |
hi-ho |
155,177 |
150,776 |
(4,401) |
OEM |
298,152 |
370,108 |
71,956 |
Total Contracted
Bandwidth |
1,539.3Gbps |
1,730.8Gbps |
191.5Gbps |
|
|
|
|
3 We have renamed Internet
Connectivity Service (for Corporate Use) and Internet Connectivity
Service (for home use) to Internet Connectivity Service
(Enterprise) and Internet Connectivity Service (Consumer),
respectively in June 2014. |
4 IP Service revenues
include revenues from the Data Center Connectivity Service. |
SI revenues were JPY48,237 million, up 13.6% YoY.
Systems construction revenue, a one-time revenue, was JPY20,437
million, up 9.4% YoY. Revenue increased mainly due to the increase
in the scale of systems construction projects. Systems operation
and maintenance revenue, a recurring revenue, was JPY27,800
million, up 16.8% YoY. "IIJ GIO Component Services" revenues
increased and systems construction projects that were completed and
shifted to operation and maintenance phase contributed to the
revenue increase of systems operation and maintenance.
Orders received for SI and equipment sales totaled JPY55,149
million, up 14.0% YoY; orders received for systems construction and
equipment sales were JPY22,236 million, up 2.2% YoY and orders
received for systems operation and maintenance were JPY32,913
million, up 23.6% YoY.
Order backlog for SI and equipment sales as of March 31, 2015
amounted to JPY29,053 million, up 19.5% YoY; order backlog for
systems construction and equipment sales was JPY4,734 million, down
7.2% YoY and order backlog for systems operation and
maintenance was JPY24,319 million, up 26.6% YoY.
Equipment sales revenues were JPY2,167 million, up 28.2%
YoY.
ATM Operation Business revenues were JPY3,640 million, up 28.8%
YoY. The increase was in accordance with the increase in the number
of placed ATMs. As of March 31, 2015, 1,059 ATMs are in
operation.
Cost and expense
Total cost of revenues was JPY100,978 million, up 8.3% YoY.
Cost of Network Services revenue was JPY54,932 million, up 3.6%
YoY. The increase was mainly due to the increase in
outsourcing-related costs6 along with the increase in
mobile-related services revenues, and the increase in depreciation
and amortization cost along with the expansion and upgrade of
network facilities. Gross margin was JPY14,073 million, down 1.2%
YoY and gross margin ratio was 20.4%.
Cost of SI revenues was JPY41,562 million, up 13.8% YoY. The
increase was mainly due to the increase in personnel-related costs
and outsourcing-related costs along with the revenue growth and
solution development, increase in purchasing costs along with the
systems construction revenue growth, and the increase in
depreciation and amortization costs was due to the expansion of
service facility such as for Cloud services. Gross margin was
JPY6,676 million, up 12.0% YoY and gross margin ratio was
13.8%.
Cost of Equipment Sales revenues was JPY1,932 million, up 26.6%
YoY. Gross margin was JPY235 million, up 43.5% YoY and gross margin
ratio was 10.8%.
Cost of ATM Operation Business revenues was JPY2,552 million, up
20.2% YoY in accordance with increase in the number of placed ATMs.
Gross margin was JPY1,089 million and gross margin ratio was
29.9%.
SG&A and R&D Expenses
SG&A and R&D expenses in total were JPY16,997 million,
up 10.8% YoY (JPY15,343 million in FY2013).
Sales and marketing expenses were JPY9,188 million, up 7.5% YoY.
The increase was mainly due to the increase in personnel-related
and sales commission expenses.
General and administrative expenses were JPY7,368 million, up
15.6% YoY. The increase was mainly due to the expenses related to
the headquarter relocation and an increase in personnel-related
expenses.
Research and development expenses were JPY441 million, up 4.7%
YoY.
Operating income
Operating income was JPY5,075 million, down 11.3% YoY (JPY5,723
million for FY2013).
5 IIJ provides mobile communications service
through an MVNO scheme by purchasing mobile infrastructure from NTT
Docomo. IIJ pays wholesale telecommunications service charge which
is recognized in outsourcing-related costs in our cost of network
services revenue.
Other income (expenses)
Other income (expenses) was an income of JPY64 million (an
income of JPY552 million for FY2013), mainly due to distribution
from other investments of JPY171 million (included in other-net of
JPY209 million), dividend income of JPY63 million, net gain on
sales of other investments of JPY41 million,and interest expense of
JPY238 million.
Income before income tax expenses
Income before income tax expense was JPY5,139 million, down
18.1% YoY(JPY6,275 million for FY2013) .
Net Income
Income tax expense was JPY1,897 million (JPY1,795 million for
FY2013).
Equity in net income of equity method investees was JPY155
million (JPY204 million for FY2013) mainly due to net income of
Internet Revolution, Inc. and Internet Multifeed Co.
As a result of the above, net income was JPY3,397 million, down
27.5% YoY (JPY4,684 million for FY2013).
Net income attributable to IIJ
Net income attributable to non-controlling interests was JPY75
million mainly related to net income of Trust Networks Inc. (JPY242
million for FY2013).
Net income attributable to IIJ was JPY3,322 million, down 25.2%
YoY (JPY4,442 million for FY2013).
FY2014 Financial Condition
Balance Sheets
As of March 31, 2015, the balance of total assets was JPY108,705
million, increased by JPY4,839 million from the balance as of March
31, 2014 of JPY103,867 million.
As for current assets as of March 31, 2015, as compared to the
respective balances as of March 31, 2014, accounts receivable
increased by JPY3,038 million, current portion of guarantee
deposits decreased by JPY1,462 million along with our headquarter
relocation, and cash and cash equivalents decreased by JPY1,327
million mainly related to the repayment of bank borrowings. As for
noncurrent assets as of March 31, 2015, as compared to the
respective balances as of March 31, 2014, property and equipment
increased by JPY2,399 million and guarantee deposits increased by
JPY1,536 million. As for current liabilities as of March 31, 2015,
as compared to the respective balances as of March 31, 2014,
accounts payable increased by JPY1,084 million, accrued expenses
increased by JPY915 million and current portion of long-term
borrowings decreased by JPY980 million.
As for the balances of capital lease obligations as of March 31,
2015, as compared to the respective balances as of March 31, 2014,
capital lease obligations-current portion decreased by JPY231
million to JPY3,522 million and capital lease
obligations-noncurrent decreased by JPY263 million to JPY4,340
million.
As of March 31, 2015, the balance of other investments increased
by JPY305 million to JPY6,661 million. The breakdown of other
investments were JPY4,314 million in available-for-sale securities,
JPY2,263 million in nonmarketable equity securities and JPY83
million in other.
As of March 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 JPY3,805 million.
Total IIJ shareholders' equity as of March 31, 2015 compared to
the balance as of March 31, 2014, increased by JPY2,592 million to
JPY62,504 million. IIJ shareholders' equity ratio (total IIJ
shareholders' equity/total assets) as of March 31, 2015 was
57.5%.
Cash Flows
Cash and cash equivalents as of March 31, 2015 were JPY21,094
million compared to JPY22,421 million as of March 31, 2014.
Net cash provided by operating activities for FY2014 was
JPY12,912 million compared to net cash provided by operating
activities of JPY8,787 million for FY2013. Net income for FY2014
decreased from FY2013, however, non-cash operating expense such as
depreciation and amortization cost increased. Additionally, in
relation to the changes in operating assets and liabilities, there
were positive effects to operating cash flow from increase in
advance receipts from long-term systems maintenance projects,
decrease in other receivable, increase in accrued expenses and
increase in accounts payables.
Net cash used in investing activities for FY2014 was JPY8,073
million compared to net cash used in investing activities of
JPY10,203 million for FY2013, mainly due to payments for purchase
of property and equipment of JPY8,157 million (JPY9,124 million for
FY2013), payments of guarantee deposits of JPY1,636 million (JPY689
million for FY2013), payments for purchase of other investments of
JPY282 million (JPY1,186 million for FY2013) and refund of
guarantee deposits of JPY1,573 million (JPY20 million for
FY2013).
Net cash used in financing activities for FY2014 was JPY6,283
million compared to net cash provided by financing activities of
JPY11,382 million for FY2013, mainly due to principal payments
under capital leases of JPY4,194 million (JPY3,969 million for
FY2013), net repayments of borrowings of JPY1,130 million (JPY1,010
million for FY2013) and FY2013 year-end and FY2014 interim dividend
payments of JPY1,011 million (JPY911 million for FY2013).
FY2015 Financial Targets
Our financial targets for FY2015
are as follows: |
|
|
|
|
|
(JPY in
millions) |
|
|
Operating |
Income before Income |
Net Income |
|
Revenues |
Income |
Tax Expense |
attributable to IIJ |
1H FY2015 Target |
64,000 |
2,450 |
2,400 |
1,500 |
Full FY2015 Target |
139,000 |
6,500 |
6,400 |
4,000 |
With the steady recovery of the Japanese economy, IT investment
in Japan should continue during FY2015. We see a great business
opportunity for the middle-to-long term as we expect enterprises'
adoption of Cloud-related services to penetrate further,
mobile-related services to become more popular, and the demands for
outsourcing corporate IT systems to continue. As for FY2015, we
shall increase revenue as well as operating income mainly by
largely expanding consumer mobile services revenues, accumulating
enterprise network services, increasing systems integration revenue
and improving its profitability, and decreasing overseas business
deficit by half.
We target revenue of JPY139 billion, up 13.0% YoY. We expect
mobile services-related revenue to reach JPY13 billion,
Cloud-related revenue to reach over JPY15 billion, systems
integration revenue to increase, its profitability to improve, and
ATM operation business revenue to continuously increase.
We target operating income of JPY6.5 billion, up 28.1% YoY. We
expect SG&A and R&D expenses to increase around the same
amount as in FY2014 while gross margin to increase along with
revenue growth.
We target income before income tax expense (benefit) of JPY6.4
billion, up 24.5% YoY, considering interest expenses and
others.
We target net income attributable to IIJ of JPY4.0 billion, up
20.4% YoY, considering taxes calculated by a normal statutory rate
and income of equity method investees and non-controlling
interests.
FY2015 Dividend Forecast
Our FY2015 dividend forecast is
as follows: |
|
|
Interim |
Year-end |
Full Year |
FY2015 Dividend
(forecast) |
JPY11.00
(forecast) |
JPY11.00
(forecast) |
JPY22.00
(forecast) |
FY2014 Dividend (scheduled) |
JPY11.00 (paid) |
JPY11.00 (scheduled) |
JPY22.00 (scheduled) |
Based on our Company's Article of Incorporation, we plan to pay
our dividend twice a year, at interim and at fiscal year-end. The
dividends for interim and fiscal year-end are decided at the
Company's board of directors and at the general meeting of
shareholders, respectively.
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 |
|
FY2013 |
FY2014 |
|
JPY millions |
JPY millions |
Adjusted EBITDA |
14,546 |
14,752 |
Depreciation and Amortization
6 |
(8,823) |
(9,677) |
Operating Income |
5,723 |
5,075 |
Other Income |
552 |
64 |
Income Tax
Expense |
1,795 |
1,897 |
Equity in Net Income of Equity
Method Investees |
204 |
155 |
Net income |
4,684 |
3,397 |
Less: Net income attributable
to noncontrolling interests |
(242) |
(75) |
Net Income attributable to
IIJ |
4,442 |
3,322 |
|
|
|
|
|
|
CAPEX |
|
FY2013 |
FY2014 |
|
JPY millions |
JPY millions |
CAPEX, including capital
leases |
12,560 |
11,835 |
Acquisition of
Assets by Entering into Capital Leases |
3,436 |
3,678 |
Purchase of
Property and Equipment |
9,124 |
8,157 |
Presentation
Presentation materials will be posted on our web site
(http://www.iij.ad.jp/en/ir/) on May 15, 2015.
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
systems integration and security services, Internet access, and
cloud computing. 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 FY2015
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. |
Consolidated Balance
Sheets (Unaudited) |
(As of March 31, 2014
and March 31, 2015) |
|
|
As of March 31, 2014 |
As of March 31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
22,421,100 |
21,093,633 |
Accounts receivable, net of
allowance for doubtful accounts of JPY 53,871 thousand and JPY
54,590 thousand at March 31, 2014 and March 31, 2015,
respectively |
19,214,248 |
22,251,818 |
Inventories |
1,670,258 |
1,229,463 |
Prepaid expenses |
3,128,290 |
3,691,643 |
Deferred tax
assets—current |
1,392,971 |
1,547,474 |
Guarantee deposits—current |
1,462,223 |
-- |
Other current assets, net of
allowance for doubtful accounts of JPY 720 thousand at March
31, 2014 and March 31, 2015, respectively |
2,411,376 |
2,272,605 |
Total current
assets |
51,700,466 |
52,086,636 |
INVESTMENTS IN EQUITY METHOD INVESTEES |
2,085,689 |
2,560,557 |
OTHER INVESTMENTS |
6,355,817 |
6,660,706 |
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization of JPY 34,725,611 thousand and
JPY 39,591,769 thousand at March 31, 2014 and March 31, 2015,
respectively |
26,971,485 |
29,370,054 |
GOODWILL |
5,969,951 |
6,169,609 |
OTHER INTANGIBLE ASSETS—Net |
4,338,944 |
3,941,279 |
GUARANTEE DEPOSITS |
1,264,535 |
2,800,201 |
DEFERRED TAX ASSETS—Noncurrent |
636,807 |
471,087 |
NET INVESTMENT IN SALES-TYPE
LEASES—Noncurrent |
752,774 |
762,159 |
Prepaid expenses—Noncurrent |
2,633,154 |
2,914,375 |
OTHER ASSETS, net of allowance for doubtful
accounts of JPY 62,800 thousand and JPY 92,935
thousand at March 31, 2014 and March 31, 2015,
respectively |
1,156,953 |
968,652 |
TOTAL |
103,866,575 |
108,705,315 |
|
|
|
|
|
|
|
As of March 31, 2014 |
As of March 31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Short-term borrowings |
9,400,000 |
9,250,000 |
Long-term borrowings—current
portion |
980,000 |
-- |
Capital lease
obligations—current portion |
3,753,026 |
3,522,113 |
Accounts payable—trade |
11,491,666 |
12,182,908 |
Accounts payable—other |
1,050,429 |
1,442,810 |
Income taxes payable |
1,079,480 |
499,104 |
Accrued expenses |
2,053,550 |
2,968,139 |
Deferred income—current |
1,560,603 |
2,143,480 |
Other current liabilities |
1,098,173 |
1,732,781 |
Total current
liabilities |
32,466,927 |
33,741,335 |
CAPITAL LEASE OBLIGATIONS—Noncurrent |
4,603,322 |
4,340,421 |
ACCRUED RETIREMENT AND PENSION
COSTS—Noncurrent |
2,274,540 |
2,792,617 |
DEFERRED TAX LIABILITIES—Noncurrent |
1,092,863 |
1,097,650 |
DEFERRED INCOME—Noncurrent |
2,711,347 |
2,943,975 |
OTHER NONCURRENT LIABILITIES |
536,950 |
945,537 |
Total Liabilities |
43,685,949 |
45,861,535 |
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
Common-stock |
|
|
—authorized, 75,520,000 shares;
issued and outstanding, 46,697,800 shares at March 31,
2014 |
25,497,022 |
25,499,857 |
—authorized, 75,520,000 shares;
issued and outstanding, 46,701,000 shares at March 31,
2015 |
Additional paid-in capital |
35,961,995 |
36,014,128 |
Accumulated deficit |
(2,867,548) |
(556,162) |
Accumulated other comprehensive
income |
1,712,786 |
1,938,649 |
Treasury stock —758,709 shares
held by the company at March 31, 2014 and March 31, 2015,
respectively |
(392,070) |
(392,070) |
Total Internet
Initiative Japan Inc. shareholders' equity |
59,912,185 |
62,504,402 |
NONCONTROLLING INTERESTS |
268,441 |
339,378 |
Total equity |
60,180,626 |
62,843,780 |
TOTAL |
103,866,575 |
108,705,315 |
|
|
Internet Initiative
Japan Inc. |
Consolidated Statements
of Income (Unaudited) |
(For the fiscal year
ended March 31, 2014 and March 31, 2015) |
|
|
|
|
|
Fiscal Year Ended March
31, 2014 |
Fiscal Year Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
REVENUES: |
|
|
Network services: |
|
|
Internet
connectivity services (enterprise) |
16,585,175 |
16,349,785 |
Internet
connectivity services (consumer) |
6,024,560 |
8,222,015 |
WAN services |
25,005,867 |
24,325,951 |
Outsourcing
services |
19,670,127 |
20,107,850 |
Total |
67,285,729 |
69,005,601 |
Systems integration: |
|
|
Systems
construction |
18,673,638 |
20,437,326 |
Systems operation
and maintenance |
23,795,927 |
27,800,132 |
Total |
42,469,565 |
48,237,458 |
Equipment sales |
1,690,225 |
2,166,928 |
ATM operation business |
2,826,832 |
3,640,128 |
Total
revenues |
114,272,351 |
123,050,115 |
COST AND EXPENSES: |
|
|
Cost of network services |
53,045,814 |
54,932,285 |
Cost of systems
integration |
36,510,328 |
41,561,621 |
Cost of equipment sales |
1,526,618 |
1,932,180 |
Cost of ATM operation
business |
2,123,168 |
2,551,437 |
Total cost |
93,205,928 |
100,977,523 |
Sales and marketing |
8,547,693 |
9,188,425 |
General and administrative |
6,374,057 |
7,367,600 |
Research and development |
421,361 |
441,329 |
Total cost and
expenses |
108,549,039 |
117,974,877 |
OPERATING INCOME |
5,723,312 |
5,075,238 |
OTHER INCOME (EXPENSE): |
|
|
Dividend income |
51,003 |
63,143 |
Interest income |
26,719 |
23,111 |
Interest expense |
(256,371) |
(238,260) |
Foreign exchange gains
(losses) |
219,381 |
(5,045) |
Net gain on sales of other
investments |
107,655 |
41,251 |
Net gain on other
investments |
313,393 |
-- |
Impairment of other
investments |
-- |
(29,117) |
Other —net |
89,799 |
208,671 |
Other
income—net |
551,579 |
63,754 |
INCOME FROM OPERATIONS BEFORE INCOME TAX
EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD INVESTEES |
6,274,891 |
5,138,992 |
INCOME TAX EXPENSE |
1,795,305 |
1,896,865 |
EQUITY IN NET INCOME OF EQUITY METHOD
INVESTEES |
204,046 |
154,626 |
NET INCOME |
4,683,632 |
3,396,753 |
LESS: NET INCOME ATTRIBUTABLE
TO NONCONTROLLING INTERESTS |
(241,395) |
(74,672) |
NET INCOME ATTRIBUTABLE TO
INTERNET INITIATIVE JAPAN INC. |
4,442,237 |
3,322,081 |
|
|
|
Fiscal Year Ended March
31, 2014 |
Fiscal Year Ended March
31, 2015 |
NET INCOME PER SHARE |
|
|
BASIC WEIGHTED-AVERAGE NUMBER
OF SHARES (shares) |
44,306,680 |
45,942,291 |
DILUTED WEIGHTED-AVERAGE NUMBER
OF SHARES (shares) |
44,361,083 |
46,014,737 |
BASIC WEIGHTED-AVERAGE NUMBER
OF ADS EQUIVALENTS (ADSs) |
88,613,360 |
91,884,582 |
DILUTED WEIGHTED-AVERAGE
NUMBER OF ADS EQUIVALENTS (ADSs) |
88,722,166 |
92,029,474 |
BASIC NET INCOME PER
SHARE (JPY) |
100.26 |
72.31 |
DILUTED NET INCOME PER
SHARE (JPY) |
100.14 |
72.20 |
BASIC NET INCOME PER
ADS EQUIVALENT (JPY) |
50.13 |
36.15 |
DILUTED NET
INCOME PER ADS EQUIVALENT (JPY) |
50.07 |
36.10 |
|
|
|
Consolidated
Statements of Other Comprehensive Income (Unaudited) |
|
Fiscal Year Ended March
31, 2014 |
Fiscal Year Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
NET INCOME |
4,683,632 |
3,396,753 |
Comprehensive income (loss): |
|
|
Foreign currency translation
adjustments |
419,557 |
243,538 |
Unrealized holding gain (loss)
on securities |
988,139 |
61,590 |
Defined benefit pension
plans |
41,115 |
(83,000) |
Total comprehensive income |
6,132,443 |
3,618,881 |
Less: Comprehensive income attributable to
noncontrolling interests |
(241,251) |
(70,937) |
Comprehensive income attributable to Internet
Initiative Japan Inc. |
5,891,192 |
3,547,944 |
|
|
Internet Initiative
Japan Inc. |
Consolidated Statements
of Shareholders' Equity (Unaudited) |
(For the fiscal year
ended March 31, 2014 and March 31, 2015) |
|
|
|
Internet
Initiative Japan Inc. shareholders' equity |
|
|
Total equity |
Accumulated deficit |
Accumulated other
comprehensive income |
Shares of common stock
outstanding |
Common stock |
Treasury stock |
Additional paid-in
capital |
NON CONTROLLING
INTERESTS |
|
Thousands of JPY |
Thousands of JPY |
Thousands of JPY |
Shares |
Thousands of JPY |
Thousands of JPY |
Thousands of JPY |
Thousands of JPY |
BALANCE, MARCH 31, 2013 |
37,634,178 |
(6,399,088) |
263,770 |
41,295,600 |
16,833,847 |
(392,079) |
27,300,325 |
27,403 |
Acquisition of noncontrolling
interests in consolidated subsidiaries |
-- |
|
61 |
|
|
53 |
99 |
(213) |
Issuance of common stock,
net of issuance cost |
17,271,204 |
|
|
5,400,000 |
8,661,600 |
|
8,609,604 |
|
Issuance of common stock upon
exercise of stock options |
3,151 |
|
|
2,200 |
1,575 |
|
1,576 |
|
Stock-based compensation |
50,391 |
|
|
|
|
|
50,391 |
|
Comprehensive
income (loss): |
|
|
|
|
|
|
|
|
Net Income |
4,683,632 |
4,442,237 |
|
|
|
|
|
241,395 |
Other
Comprehensive income (loss), net of tax |
1,448,811 |
|
1,448,955 |
|
|
|
|
(144) |
Total comprehensive income |
6,132,443 |
|
|
|
|
|
|
|
Dividends paid |
(910,697) |
(910,697) |
|
|
|
|
|
|
Purchase of treasury stock |
(44) |
|
|
|
|
(44) |
|
|
BALANCE, MARCH 31, 2014 |
60,180,626 |
(2,867,548) |
1,712,786 |
46,697,800 |
25,497,022 |
(392,070) |
35,961,995 |
268,441 |
Issuance of common stock
upon exercise of stock options |
5,671 |
|
|
3,200 |
2,835 |
|
2,836 |
|
Stock-based compensation |
49,297 |
|
|
|
|
|
49,297 |
|
Comprehensive income
(loss): |
|
|
|
|
|
|
|
|
Net Income |
3,396,753 |
3,322,081 |
|
|
|
|
|
74,672 |
Other
Comprehensive income (loss), net of tax |
222,128 |
|
225,863 |
|
|
|
|
(3,735) |
Total comprehensive
income: |
3,618,881 |
|
|
|
|
|
|
|
Dividends paid |
(1,010,695) |
(1,010,695) |
|
|
|
|
|
|
BALANCE, MARCH 31, 2015 |
62,843,780 |
(556,162) |
1,938,649 |
46,701,000 |
25,499,857 |
(392,070) |
36,014,128 |
339,378 |
|
|
|
|
|
|
|
|
|
|
Internet Initiative
Japan Inc. |
Consolidated Statements
of Cash Flows (Unaudited) |
(For the fiscal year
ended March 31, 2014 and March 31, 2015) |
|
|
Fiscal Year Ended March
31, 2014 |
Fiscal Year Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
OPERATING ACTIVITIES: |
|
|
Net income |
4,683,632 |
3,396,753 |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
Depreciation and
amortization |
8,822,981 |
9,677,339 |
Provision for
retirement and pension costs, less payments |
226,599 |
256,661 |
Provision for
(reversal of) allowance for doubtful accounts |
(46,935) |
33,158 |
Gain on sales of
property and equipment |
-- |
(29,733) |
Loss on disposal
of property and equipment |
83,487 |
101,189 |
Net gain on sales
of other investments |
(107,655) |
(41,251) |
Net gain on other
investments |
(313,393) |
-- |
Impairment of
other investments |
-- |
29,117 |
Foreign exchange
gains, net |
(129,916) |
(18,259) |
Equity in net
income of equity method investees, less dividends received |
(204,046) |
(122,286) |
Deferred income
tax expense (benefit) |
(699,826) |
211,230 |
Others |
71,448 |
8,560 |
Changes in operating assets and
liabilities net of effects from acquisition of a company: |
|
|
Increase in
accounts receivable |
(342,391) |
(2,819,564) |
Decrease
(increase) in net investment in sales-type lease — noncurrent |
145,266 |
(9,385) |
Decrease
(increase) in inventories |
(365,533) |
450,256 |
Increase in
prepaid expenses |
(612,802) |
(542,770) |
Decrease
(increase) in other current and noncurrent assets |
(1,801,403) |
715,132 |
Increase in
accounts payable |
476,860 |
648,562 |
Decrease in
income taxes payable |
(594,782) |
(718,737) |
Increase
(decrease) in accrued expenses |
(219,277) |
873,815 |
Increase
(decrease) in deferred income-current |
(158,972) |
465,469 |
Increase
(decrease) in deferred income-noncurrent |
91,462 |
(248,061) |
Increase (decrease) in other current and noncurrent
liabilities |
(217,925) |
595,178 |
Net cash provided by operating activities |
8,786,879 |
12,912,373 |
INVESTING ACTIVITIES: |
|
|
Purchase of property and
equipment |
(9,123,998) |
(8,157,115) |
Proceeds from sales of property
and equipment |
456,330 |
772,226 |
Purchase of available-for-sale
securities |
(167,545) |
(4,104) |
Purchase of other
investments |
(1,185,985) |
(282,478) |
Investment in an equity method
investee |
(199,920) |
(338,240) |
Proceeds from sales of
available-for-sale securities |
391,814 |
-- |
Proceeds from sales of other
investments |
351,740 |
40,501 |
Payments of guarantee
deposits |
(688,902) |
(1,635,910) |
Refund of guarantee
deposits |
20,233 |
1,572,885 |
Payments for refundable
insurance policies |
(18,787) |
(47,831) |
Refund from insurance
policies |
16,026 |
-- |
Proceeds from subsidies |
-- |
200,000 |
Acquisition of a newly
controlled company, net of cash acquired |
-- |
(167,678) |
Other |
(53,766) |
(25,000) |
Net cash
used in investing activities |
(10,202,760) |
(8,072,744) |
|
|
Fiscal Year Ended March
31, 2014 |
Fiscal Year Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
FINANCING ACTIVITIES: |
|
|
Proceeds from issuance of
short-term borrowings with initial maturities over three
months |
250,000 |
50,000 |
Repayments of short-term
borrowings with initial maturities over three months and
long-term borrowings |
(1,260,000) |
(1,030,000) |
Principal payments under
capital leases |
(3,968,724) |
(4,193,654) |
Proceeds from sale and lease
back |
-- |
50,847 |
Net decrease in short-term
borrowings with initial maturities less than three months |
-- |
(150,000) |
Dividends paid |
(910,697) |
(1,010,695) |
Proceeds from issuance of
common stock, net of issuance cost |
17,271,204 |
-- |
Other |
109 |
3 |
Net cash provided by (used in) financing activities |
11,381,892 |
(6,283,499) |
|
|
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS |
196,217 |
116,403 |
|
|
|
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS |
10,162,228 |
(1,327,467) |
CASH AND CASH
EQUIVALENTS, BEGINNING OF THE PERIOD |
12,258,872 |
22,421,100 |
CASH AND CASH EQUIVALENTS, END OF THE PERIOD |
22,421,100 |
21,093,633 |
|
|
|
ADDITIONAL CASH FLOW INFORMATION: |
|
|
Interest paid |
256,722 |
239,940 |
Income taxes paid |
2,707,784 |
2,405,067 |
|
|
|
NONCASH INVESTING AND FINANCING
ACTIVITIES: |
|
|
Acquisition of assets by
entering into capital leases |
3,436,245 |
3,678,012 |
Facilities purchase
liabilities |
1,050,429 |
1,442,810 |
Asset retirement
obligation |
170,814 |
287,036 |
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) |
|
Fourth Quarter FY2014 Consolidated Financial Results (3
months)
The following tables are highlight data of 4th Quarter FY2014 (3
months) consolidated financial results (unaudited, for the 3 months
ended March 31, 2015).
Operating Results Summary |
|
|
|
YoY % |
|
4Q13 |
4Q14 |
Change |
|
JPY millions |
JPY millions |
|
Total Revenues: |
31,526 |
35,204 |
11.7 |
Network
Services |
16,984 |
17,844 |
5.1 |
Systems
Integration (SI) |
13,273 |
15,593 |
17.5 |
Equipment
Sales |
512 |
801 |
56.5 |
ATM Operation
Business |
757 |
966 |
27.7 |
Cost of Revenues: |
25,977 |
29,579 |
13.9 |
Network
Services |
13,282 |
14,801 |
11.4 |
Systems
Integration (SI) |
11,684 |
13,382 |
14.5 |
Equipment
Sales |
465 |
736 |
58.4 |
ATM Operation
Business |
546 |
660 |
20.8 |
SG&A Expenses and
R&D |
4,036 |
4,336 |
7.4 |
Operating Income |
1,513 |
1,289 |
(14.8) |
Income before Income Tax
Expense |
1,649 |
1,250 |
(24.2) |
Net Income attributable to
IIJ |
1,518 |
1,008 |
(33.6) |
|
|
|
|
|
|
|
|
Network Service Revenue Breakdown |
|
|
|
YoY % |
|
4Q13 |
4Q14 |
Change |
|
JPY millions |
JPY millions |
|
Internet Connectivity Service
(Enterprise) |
4,085 |
4,062 |
(0.6) |
IP
Service |
2,539 |
2,406 |
(5.3) |
IIJ FiberAccess/F
and IIJ DSL/F |
779 |
777 |
(0.4) |
IIJ Mobile
Service |
709 |
819 |
15.6 |
Others |
58 |
60 |
3.2 |
Internet Connectivity Service
(Consumer) |
1,628 |
2,469 |
51.7 |
Under IIJ
Brand |
696 |
1,639 |
135.4 |
hi-ho |
749 |
679 |
(9.4) |
OEM |
183 |
151 |
(17.1) |
WAN Services |
6,220 |
6,181 |
(0.6) |
Outsourcing
Services |
5,051 |
5,132 |
1.6 |
Network Services
Revenues |
16,984 |
17,844 |
5.1 |
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
(4th Quarter FY2014 (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 |
|
4Q13 |
4Q14 |
|
JPY millions |
JPY millions |
Adjusted EBITDA |
3,832 |
3,749 |
Depreciation and
Amortization |
(2,319) |
(2,460) |
Operating Income |
1,513 |
1,289 |
Other Income
(Expense) |
136 |
(39) |
Income Tax Expense
(Benefit) |
(47) |
264 |
Equity in Net Income of Equity
Method Investees |
13 |
40 |
Net income |
1,709 |
1,026 |
Less: Net income attributable
to noncontrolling interests |
(191) |
(18) |
Net Income attributable to
IIJ |
1,518 |
1,008 |
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 |
|
4Q13 |
4Q14 |
|
JPY millions |
JPY millions |
CAPEX, including capital
leases |
2,697 |
2,545 |
Acquisition of
Assets by Entering into Capital Leases |
801 |
957 |
Purchase of
Property and Equipment |
1,896 |
1,588 |
|
|
|
Internet Initiative
Japan Inc. |
Quarterly Consolidated
Statements of Income (Unaudited) |
(Three Months ended
March 31, 2014 and March 31, 2015) |
|
|
Three Months Ended March
31, 2014 |
Three Months Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
REVENUES: |
|
|
Network services: |
|
|
Internet
connectivity services (enterprise) |
4,085,649 |
4,061,514 |
Internet
connectivity services (consumer) |
1,627,764 |
2,469,183 |
WAN services |
6,219,920 |
6,180,534 |
Outsourcing
services |
5,050,931 |
5,132,426 |
Total |
16,984,264 |
17,843,657 |
Systems integration: |
|
|
Systems
Construction |
7,038,521 |
7,943,514 |
Systems Operation
and Maintenance |
6,234,333 |
7,649,665 |
Total |
13,272,854 |
15,593,179 |
Equipment sales |
512,236 |
801,566 |
ATM operation business |
756,554 |
965,915 |
Total
revenues |
31,525,908 |
35,204,317 |
COST AND EXPENSES: |
|
|
Cost of network services |
13,281,985 |
14,801,381 |
Cost of systems
integration |
11,684,188 |
13,382,379 |
Cost of equipment sales |
464,561 |
735,718 |
Cost of ATM operation
business |
546,532 |
660,158 |
Total cost |
25,977,266 |
29,579,636 |
Sales and marketing |
2,201,980 |
2,359,361 |
General and administrative |
1,728,538 |
1,899,867 |
Research and development |
105,561 |
76,551 |
Total cost and
expenses |
30,013,345 |
33,915,415 |
OPERATING INCOME |
1,512,563 |
1,288,902 |
OTHER INCOME (EXPENSE): |
|
|
Dividend income |
2,744 |
4,172 |
Interest income |
8,049 |
8,121 |
Interest expense |
(62,263) |
(58,165) |
Foreign exchange gains
(losses) |
16,783 |
(32,460) |
Net gain on sales of other
investments |
140,970 |
35,934 |
Impairment of other
investments |
-- |
(29,117) |
Other—net |
30,613 |
33,031 |
Other income
(expense) — net |
136,896 |
(38,484) |
INCOME FROM OPERATIONS BEFORE INCOME TAX
EXPENSE AND EQUITY IN NET INCOME OF EQUITY METHOD
INVESTEES |
1,649,459 |
1,250,418 |
INCOME TAX EXPENSE (BENEFIT) |
(46,385) |
264,016 |
EQUITY IN NET INCOME OF EQUITY METHOD
INVESTEES |
12,842 |
39,140 |
NET INCOME |
1,708,686 |
1,025,542 |
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS |
(190,519) |
(17,372) |
NET INCOME ATTRIBUTABLE
TO INTERNET INITIATIVE JAPAN INC. |
1,518,167 |
1,008,170 |
|
|
Three Months Ended March
31, 2014 |
Three Months Ended March
31, 2015 |
NET INCOME PER SHARE |
|
|
BASIC WEIGHTED-AVERAGE NUMBER
OF SHARES (shares) |
45,939,091 |
45,942,291 |
DILUTED WEIGHTED-AVERAGE
NUMBER OF SHARES (shares) |
45,998,489 |
46,024,884 |
BASIC WEIGHTED-AVERAGE NUMBER
OF ADS EQUIVALENTS (ADSs) |
91,878,182 |
91,884,582 |
DILUTED WEIGHTED-AVERAGE NUMBER
OF ADS EQUIVALENTS (ADSs) |
91,996,978 |
92,049,768 |
BASIC NET INCOME PER
SHARE (JPY) |
33.05 |
21.94 |
DILUTED NET INCOME PER
SHARE (JPY) |
33.00 |
21.90 |
BASIC NET INCOME PER
ADS EQUIVALENT (JPY) |
16.52 |
10.97 |
DILUTED NET INCOME PER
ADS EQUIVALENT (JPY) |
16.50 |
10.95 |
|
|
|
|
|
|
Quarterly
Consolidated Statements of Other Comprehensive Income
(Unaudited) |
|
Three Months Ended March
31, 2014 |
Three Months Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
NET INCOME |
1,708,686 |
1,025,542 |
Comprehensive income (loss): |
|
|
Foreign currency translation
adjustments |
140,450 |
179,163 |
Unrealized holding gain (loss)
on securities |
(640,291) |
119,942 |
Defined benefit pension
plans |
40,937 |
(83,178) |
Total comprehensive income |
1,249,782 |
1,241,469 |
Less: Comprehensive income attributable to
noncontrolling interests |
(190,214) |
(14,998) |
Comprehensive income
attributable to Internet Initiative Japan Inc. |
1,059,568 |
1,226,471 |
|
|
|
|
|
Internet Initiative
Japan Inc. |
Quarterly Consolidated
Statements of Cash Flows (Unaudited) |
(Three Months ended
March 31, 2014 and March 31, 2015) |
|
|
Three Months Ended March
31, 2014 |
Three Months Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
OPERATING ACTIVITIES: |
|
|
Net income |
1,708,686 |
1,025,542 |
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
Depreciation and amortization |
2,318,779 |
2,460,495 |
Provision for retirement and pension costs, less payments |
53,784 |
80,147 |
Provision for (reversal of) allowance for doubtful accounts |
(1,127) |
30,993 |
Loss on
disposal of property and equipment |
72,044 |
9,201 |
Net
gain on sales of other investments |
-- |
(35,934) |
Net
gain on other investments |
(140,970) |
-- |
Impairment of other investments |
-- |
29,117 |
Foreign
exchange losses (gains), net |
25,478 |
(2,869) |
Equity
in net income of equity method investees, less dividends
received |
(12,842) |
(39,140) |
Deferred income tax benefit |
(1,090,417) |
(55,310) |
Others |
17,881 |
23,820 |
Changes in operating
assets and liabilities net of effects from acquisition of a
company: |
|
|
Increase in accounts receivable |
(2,419,892) |
(4,473,038) |
Decrease in net investment in sales-type lease―noncurrent |
37,794 |
103,036 |
Decrease in inventories |
848,410 |
1,082,978 |
Decrease in prepaid expenses |
849,097 |
998,990 |
Decrease (increase) in other current and noncurrent assets |
(1,039,069) |
775,633 |
Increase in accounts payable |
1,234,546 |
1,089,640 |
Increase in income taxes payable |
898,628 |
162,205 |
Increase in deferred income― noncurrent |
99,854 |
65,862 |
Decrease in
accrued expenses, other current and noncurrent liabilities |
(405,831) |
(430,868) |
Net cash provided by
operating activities |
3,054,833 |
2,900,500 |
INVESTING ACTIVITIES: |
|
|
Purchase of property and
equipment |
(1,896,347) |
(1,588,189) |
Proceeds from sales of property
and equipment |
219,831 |
236,698 |
Purchase of available-for-sale
securities |
(69,051) |
-- |
Purchase of other
investments |
(58,154) |
(100,800) |
Investment in an equity method
investee |
(199,920) |
(288,240) |
Proceeds from sales of other
investments |
331,740 |
10,000 |
Payments of guarantee
deposits |
(7,524) |
(24,412) |
Refund of guarantee
deposits |
12,415 |
13,486 |
Payments for refundable
insurance policies |
(14,090) |
(13,452) |
Other |
(41,557) |
-- |
Net cash used in
investing activities |
(1,722,657) |
(1,754,909) |
|
|
Three Months Ended March
31, 2014 |
Three Months Ended March
31, 2015 |
|
Thousands of JPY |
Thousands of JPY |
FINANCING ACTIVITIES: |
|
|
Principal payments under
capital leases |
(1,026,718) |
(1,053,366) |
Proceeds from sale and lease
back |
-- |
50,847 |
Net decrease in short-term
borrowings with initial maturities less than three months |
-- |
(150,000) |
Other |
150 |
-- |
Net cash used in financing activities |
(1,026,568) |
(1,152,519) |
|
|
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS |
13,142 |
53,561 |
|
|
|
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS |
318,750 |
46,633 |
CASH AND CASH
EQUIVALENTS, BEGINNING OF THE PERIOD |
22,102,350 |
21,047,000 |
CASH AND
CASH EQUIVALENTS, END OF THE PERIOD |
22,421,100 |
21,093,633 |
|
|
|
Note: The following information is provided to
disclose Internet Initiative Japan Inc. ("IIJ") financial results
(unaudited) for the fiscal year ended March 31, 2015 ("FY2014") in
the form defined by the Tokyo Stock Exchange.
Consolidated Financial Results for the Fiscal Year Ended
March 31, 2015
[Under accounting principles generally accepted in the
United States ("U.S. GAAP")]
May 15, 2015 |
Company name: Internet Initiative Japan
Inc. |
Exchange listed: Tokyo Stock Exchange First
Section |
Stock code number: 3774 |
URL:
http://www.iij.ad.jp/ |
Representative: Eijiro Katsu,
President and Representative Director |
Contact: Akihisa Watai, Managing Director and
CFO |
TEL: (03) 5205-6500 |
Scheduled date for annual general
shareholder's meeting: June 26, 2015 |
Scheduled date for dividend
payment: June 29, 2015 |
Scheduled date for filing of
annual report (Yuka-shoken-houkokusho) to Japan's regulatory
organization: June 30, 2015 |
Supplemental material on annual
results: Yes |
Presentation on annual results:
Yes (for institutional investors and analysts) |
1. Consolidated Financial Results for the
Fiscal Year Ended March 31, 2015
(April 1, 2014 to March 31,
2015)
(1) Consolidated Results of
Operations |
(% shown is YoY
change) |
|
Total |
Operating |
Income before Income |
Net Income attributable to |
|
Revenues |
Income |
Tax
Expense |
IIJ |
|
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
Fiscal Year Ended March 31, 2015 |
123,050 |
7.7 |
5,075 |
(11.3) |
5,139 |
(18.1) |
3,322 |
(25.2) |
Fiscal Year Ended March 31, 2014 |
114,272 |
7.6 |
5,723 |
(26.2) |
6,275 |
(19.1) |
4,442 |
(16.2) |
(Note1) Total comprehensive income attributable to IIJ
Fiscal Year Ended March 31, 2015: JPY3,548 million (down 39.8%
YoY)
Fiscal Year Ended March 31, 2014: JPY5,891 million
(up 5.4% 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.
|
|
|
Diluted Net |
Net Income |
Income before |
|
|
Basic Net Income |
Income |
attributable to IIJ to |
Income Tax |
Total Revenues |
|
attributable to IIJ |
attributable to IIJ |
Total Shareholders' |
Expense to Total |
Operating Margin |
|
per Share |
per Share |
Equity |
Assets |
Ratio |
|
JPY |
JPY |
% |
% |
% |
Fiscal Year Ended March 31, 2015 |
72.31 |
72.20 |
5.4 |
4.8 |
4.1 |
Fiscal Year Ended March 31, 2014 |
100.26 |
100.14 |
9.1 |
6.7 |
5.0 |
(Reference) Equity in net income of equity method
investees
Fiscal Year Ended March 31, 2015: JPY155 million
Fiscal Year Ended March 31, 2014: JPY204 million
(2) Consolidated Financial
Position |
|
|
|
Total IIJ |
Total IIJ |
Total IIJ |
|
Total |
Total |
Shareholders' |
Shareholders' Equity |
Shareholders' Equity |
|
Assets |
Equity |
Equity |
to Total Assets |
per Share |
|
JPY millions |
JPY millions |
JPY millions |
% |
JPY |
As of March 31, 2015 |
108,705 |
62,844 |
62,504 |
57.5 |
1,360.50 |
As of March 31, 2014 |
103,867 |
60,181 |
59,912 |
57.7 |
1,304.17 |
|
|
|
|
|
|
(3) Consolidated Cash
Flow |
|
|
|
|
Cash and Cash Equivalents |
|
Operating Activities |
Investing Activities |
Financing Activities |
(End of the Period) |
|
JPY millions |
JPY millions |
JPY millions |
JPY millions |
Fiscal year ended March 31, 2015 |
12,912 |
(8,073) |
(6,283) |
21,094 |
Fiscal year ended March 31, 2014 |
8,787 |
(10,203) |
11,382 |
22,421 |
2. Dividends
|
|
Dividend per
Shares |
|
|
Ratio of |
|
|
Total cash |
|
Dividends to |
|
1Q-end |
2Q-end |
3Q-end |
Year-end |
Total |
dividends for |
Payout Ratio |
Shareholder's |
|
|
|
|
|
|
the year |
(consolidated) |
Equity |
|
|
|
|
|
|
|
|
(consolidated) |
|
JPY |
JPY |
JPY |
JPY |
JPY |
JPY millions |
% |
% |
Fiscal Year Ended March 31, 2014 |
-- |
11.00 |
-- |
11.00 |
22.00 |
1,011 |
21.9 |
2.0 |
Fiscal Year Ended March 31, 2015 |
-- |
11.00 |
-- |
11.00 |
22.00 |
1,011 |
30.4 |
1.7 |
Fiscal Year Ending March 31, 2016
(forecast) |
-- |
11.00 |
-- |
11.00 |
22.00 |
|
25.3 |
|
(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) |
|
|
|
Income before |
|
Basic Net Income |
|
Total |
Operating |
Income Tax |
Net Income |
attributable to IIJ |
|
Revenues |
Income |
Expense
(Benefit) |
attributable
to IIJ |
per Share |
|
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY millions |
% |
JPY |
Interim Period Ending September 30,
2015 |
64,000 |
11.9 |
2,450 |
1.4 |
2,400 |
(3.7) |
1,500 |
3.9 |
32.65 |
Fiscal Year Ending March 31, 2016 |
139,000 |
13.0 |
6,500 |
28.1 |
6,400 |
24.5 |
4,000 |
20.4 |
87.07 |
* Notes |
(1) Changes in Significant Subsidiaries for
the Fiscal Year Ended March 31, 2015 |
(Changes in significant
subsidiaries for the Fiscal Year Ended March 31, 2015 which
resulted in changes in scope of consolidation): None |
|
(2) 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 |
|
(3) Number of Shares Outstanding (Shares of
Common Stock) |
1) The number of shares
outstanding (inclusive of treasury stock): |
As of March 31,
2015: 46,701,000 shares |
As of March 31,
2014: 46,697,800 shares |
2) The number of treasury
stock: |
As of March 31,
2015: 758,709 shares |
As of March 31,
2014: 758,709 shares |
3) The weighted average number
of shares outstanding: |
For the Fiscal
Year Ended March 31, 2015: 45,942,291 shares |
For the Fiscal
Year Ended March 31, 2014: 44,306,680 shares |
May 15, 2015 |
Company name: Internet Initiative Japan
Inc. |
Company representative: Eijiro Katsu, President
and Representative Director |
(Stock Code Number: 3774 The First Section of
the Tokyo Stock Exchange) |
Contact: Akihisa Watai, Managing Director and
CFO |
TEL: 81-3-5205-6500 |
|
Information Pertaining to Our
Largest Shareholder
1. About Our Largest Shareholder (As of March 31, 2015)
|
|
|
Its Ownership
Percentage (%) |
Securities Exchanges where its |
Name |
Relationship |
Direct |
Indirect |
|
Shares are Listed |
|
|
ownership |
ownership |
Total |
|
Nippon Telegraph and Telephone
Corporation("NTT") |
IIJ is NTT's affiliate company |
22.0 |
4.4 |
26.4 |
Tokyo Stock Exchange (First Section)
New York Stock Exchange |
2. Position of the Listed Company (IIJ) within NTT
Group and other relationships
a) Position of the Listed Company (IIJ) within NTT
Group
The ownership percentage by NTT, which is IIJ's largest
shareholder, was 26.4% as of March 31, 2015, including its indirect
ownership. However, IIJ's business activities are not affected by
NTT's ownership in IIJ and IIJ is maintaining its management
independence.
b) Personal Relationships with NTT Group
IIJ's board of directors consists of 12 members including 4
outside directors as of May 15, 2015. Takashi Hiroi, an outside
director (part-time director) of IIJ, is an employee of NTT (Senior
Vice President, Finance and Accounting of NTT). Mr. Hiroi is
monitoring IIJ's business operations as an outside director and
does not have any personal relationships, such as family
relationships, with IIJ's other directors and auditors. He did not
acquire any interest such as capital or business relationships upon
becoming an outside director.
3. Business Relationship with NTT Group
IIJ uses services provided by Nippon Telegraph and Telephone
East Corporation ("NTT East") and Nippon Telegraph and Telephone
West Corporation ("NTT West") for a significant portion of IIJ's
access circuits, services provided by NTT Communications
Corporation ("NTT Communications") for a significant portion of
IIJ's domestic and international backbone circuits, and wholesale
telecommunications services provided by NTT DOCOMO, INC ("NTT
Docomo") for a significant portion of IIJ's mobile infrastructure.
The aggregate amount paid to NTT East, NTT West, NTT Communications
and NTT Docomo for these services was JPY7,076 million for the
fiscal year ended March 31, 2015.
IIJ leases a part of Internet data center facilities from NTT
Group companies to provide Internet data center services to IIJ's
customers. The amount paid to NTT Group related to the lease of
Internet data center facilities was JPY1,564 million for the fiscal
year ended March 31, 2015.
4. Policy Concerning Measures to Protect Minority
Shareholders in Transactions with NTT Group
Business transactions with the NTT Group are within the scope of
normal business practices and there is no special contract made in
relation to the investment by NTT Group.
CONTACT: 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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