English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

Consolidated financial results (Japanese Accounting Standards)
for the Third Quarter of the fiscal year ending March 31, 2018
Company name:Imagica Robot Holdings Inc.

Filing date: February 8, 2018
Stock exchange listings: Tokyo 1st section

Securities code:

6879

URL:

https://www.imagicarobot.jp/en/

Representative:
Makoto Tsukada, President
Inquiries:
Masakazu Morita, Director and Executive Officer
Quarterly report filing date(as planned):
February 8, 2018
Dividend payment date(as planned):－
Supplemental material of quarterly－
results:
Convening briefing of quarterly results:－

Tel:+81-3-6741-5742

1. Consolidated Financial Results for the Third Quarter ending December 31, 2017
(April 1, 2017 - December 31, 2017)(In millions of yen)

(1) Consolidated Operating Results(Percentage represents change from the same period of the previous fiscal year.)Net sales

Operating income

Net income attributableto owners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions ofyen%

9months ending December 31, 2017

64,464

6.5

1,646

131.1

1,721

63.7

2,197

136.3

9months ending December 31, 2016

60,552

27.7

712

－

1,051

902.0

929

168.4

(Note) Comprehensive income: 3st quarter ending December 31, 2017：2,796 millions of yen /－%3st quarter ended December 31, 2017：(845) millions of yen /－%Earnings per shareof common stock

Diluted earnings
per share ofcommon stock

yen

yen

9months en ding December 31, 2017

49.36

－

9months en ding December 31, 2016

20.88

－

(2) Consolidated Financial Position
Total assets

3st quarter ending December 31, 2017
Year ended March 31, 2017

(Reference) Shareholdersʼ equity:

Net assets

Shareholders' equity
ratio to total assets

Millions of yen

Millions of yen%

66,671

32,34043.3

68,20729,94138.6

3st quarter ending December 31, 2017: 28,869 millions of yen
Year ended March 31, 2017: 26,313 millions of yen

2. Dividends
1st quarter- end

Dividend per share

2nd quarter- end

3rd quarter- end

Year ended March 31,2017

－

0.00

－

10.00

10.00

Year ending March 31,2018

－

0.00
－

10.00

10.00

yen

Year ending March 31,2018(Forecast)

yen

0.00

yen

(Note) Changes in dividends forecast from the latest disclosed information: No

Year-endyen

Annualyen

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

3. Consolidated forecast for the fiscal year ending March 31, 2018
(April 1, 2017 - March 31, 2018)(Percentage represents change from the same period of the previous fiscal year.)Net sales

Operating income

Millions of yen
Year ending March 31,2018%

90,000

2.8

Millions of yen

%

2,000

1.9

Ordinary income
Millions of yen

Net income
attributableto owners of theparentEarnings per
shareof commonstock%

Millions of yen%

yen

2,000 (0.7)

2,400

40.6

53.9

(Note) Changes in earnings forecast from the latest disclosed information： Yes(Reference) It is included goodwill amortization 1.4 billion yen due to the acquisition as an expense in the operating income.

* Notes(1) Material changes in subsidiaries during this period (Changes in scope of consolidations resulting
from change is subsidiaries): Yes
Name of subsidiaries newly consolidated: IMAGICA TV Corporation(2) Applying of specific accounting of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective
1) Changes in accounting policies based on revisions of accounting standards: None
2) Changes in accounting policies other than ones based on revisions of accounting standard: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Number of issued and outstanding shares (common stock)1) Number of issued and outstanding shares at the end of fiscal year (including treasury stock)
As of December 31, 201744,531,567 shares

As of March 31, 201744,531,567 shares

108 shares

As of March 31, 2017108 shares

44,531,459 shares

As of June 30, 2016

44,531,459 shares

2) Number of treasury stock at the end of fiscal year
As of December 31, 2017

3) Average number of shares
As of December 31, 2017(Explanation about the appropriate usage of business prospects and other special notes)
・The above-mentioned business forecasts were based on the information available as of the date of therelease of this report.
・Future events may cause the actual results to be significantly different from the forecasts.
(Disclaimer)This document is a translation of the Japanese original. The Japanese original has been disclosed inJapan in accordance with Japanese accounting standards and the Financial Instruments andExchange Act. This document does not contain or constitute any guarantee and the Company will notcompensate any losses and/or damage stemming from actions taken based on this document. In thecase that there is any discrepancy between the Japanese original and this document, the Japaneseoriginal is assumed to be correct.

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

1. Qualitative Information on Results in the Third Quarter(1) Explanation of operating results(Summary of this second quarter)

During the third quarter of the consolidated fiscal year under review, the Japanese economy saw
exports and production activities continue recovering moderately, while it witnessed consumer spending
revived steadily against the backdrop of strong employment and income situation.
Under such environment, the Imagica Robot Holdings Group (the “Group”) developed its businessextensively in the Content Creation segment and endeavored to improve its profitability and strengthen its
balance sheet by exerting its collective ability.
Consequently, the Group reported net sales of 64,464 million yen (up 6.5% year-on-year), operating
income of 1,646 million yen (up 131.1% year-on-year), ordinary income of 1,721 million yen (up 63.7%
year-on-year), and net income attributable to owners of the parent of 2,197 million yen (up 136.3% yearon-year).
Meanwhile, the Group recorded an extraordinary income of 2,177 million yen as gain on sales of shares ofsubsidiaries and associates, since it transferred all interest in Imagica TV Corp. to WOWOW INC. on April(Performance by Business segments)
From the first quarter of the consolidated fiscal year ending March 31, 2018, the Group has reorganized
its reportable segments from six segments to the following four segments: Content Creation (former
Video Software), Production Services (former Video Technology Services and Human Resources
Consulting), Media Localization, and Imaging Systems & Solutions. In the year-on-year comparison of
performance by business segment, the Group reclassified the figures for the year-earlier period to reflect
the above segment reorganization.
(The Group discontinued the Broadcasting segment, since it sold Imagica TV Corp., a core company of thesegment, on April 3, 2017.)
1)

Content Creation

During the third quarter of the consolidated fiscal year under review, revenues from sales of movies
grew from the previous year, and the production of projection mapping videos and live music performance
videos increased steadily. These significantly contributed to a rise in net sales. However, operating income
decreased by 122 million yen from the year-earlier period due to a year-on-year fall in distributions fromthe movie production committee in the first quarter of the consolidated fiscal year under review.
Consequently, the segment posted operating income of 703 million yen (down 14.9% year-on-year) on
net sales of 17,523 million yen (up 19.0% year-on-year).
2) Production Services
Revenues from post production in television and commercial film fields decreased from the previous
year due to a fall in orders caused by the TV programming reshuffle, etc. However, revenues fromencoding and localizing services for over-the-top (OTT) platforms and digital cinema services grew sharply
from the previous year, contributing to an increase in net sales and operating income. Revenues from thepersonnel agency business rose, while revenues from the temporary staffing service declined due to a fallin the number of personnel dispatched. Meanwhile, revenues from the CG production and debugging
businesses, works done by contract, expanded.
Consequently, the segment posted operating income of 912 million yen (up 21.0% year-on-year) on net
sales of 20,360 million yen (up 7.9% year-on-year).
3) Media Localization
The Media Localization segment saw its business results improve sharply. The OTT platform-related
business grew steadily, contributing greatly to a rise in net sales. Moreover, the segmentʼs operating loss
decreased significantly due to the improvement of direct margin in Europe and the reduction in temporary
expenses related to selling, general and administrative expenses, which were incurred in thecorresponding year-earlier period.
Consequently, the segment posted operating loss of 362 million yen (operating loss of 1,204 million yen
in the previous year) on net sales of 18,049 million yen (up 17.7% year-on-year).
Since the fiscal year of SDI Media Group, Inc. and its subsidiary ends on December 31, the Group
reflected their performance of nine months from January 1, 2017 to September 30, 2017 to theEnglish translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

segmentʼs results for the third quarter of the consolidated fiscal year ending March 31, 2018 underreview.
4) Imaging Systems & Solutions
The professional video equipment business performed robustly. This was attributable to an increase insales of imported systems due to a rise in demand supported by the shift from the HD format to the 4K
format in the live broadcasting sector and a growth in orders for the Groupʼs internally-developed textsuperimposition system and maintenance service.
Moreover, in the LSI Development sector, shipments of video and image processing LSI for China
increased, leading to a rise in net sales and operating income.
Consequently, the segment posted operating income of 635 million yen (up 70.1% year-on-year) on net
sales of 9,620 million yen (up 15.0% year-on-year).

Explanation of financial position(Assets Statement)

Current assets increased by 155 million yen (or 0.4%) from the end of the previous consolidated fiscal
year to 38,861 million yen. This was mainly due to a rise in inventories.
Non-current assets decreased by 1,691 million yen (or 5.7%) from the end of the previous consolidated
fiscal year to 27,809 million yen. This was mainly due to a fall in deferred tax assets.
Consequently, total assets declined by 1,536 million yen (or 2.3%) from the end of the previous fiscal
year to 66,671 million yen.
(Liabilities Statement)
Current liabilities decreased by 1,351 million yen (or 5.6%) from the end of the previous consolidated
fiscal year to 22,922 million yen. This was mainly due to a fall in notes and accounts payable-trade.
Non-current liabilities declined by 2,583 million yen (or 18.5%) from the end of the previous
consolidated fiscal year to 11,408 million yen. This was mainly due to a fall in long-term loans payable.
Consequently, total liabilities decreased by 3,935 million yen (or 10.3%) from the end of the previous
consolidated fiscal year to 34,330 million yen.
(Net Assets)
Net assets grew by 2,398 million yen (or 8.0%) from the end of the previous consolidated fiscal year to
32,340 million yen. This was mainly due to an increase in retained earnings.

(2) Explanation of consolidated forecasts

The Group has revised its full-year forecasts of consolidated operational results for the year ending March

31, 2018 announced on November 7, 2017. For details, please refer to “Revision on consolidated forecast”
announced today (on February 8, 2018).

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

2. Quarterly Consolidated Financial Statements(1) Quarterly consolidated balance sheets

Year ended March

3st quarter ending

31, 2017

December 31, 2017

AssetsCurrent assets
Cash and deposits

8,716,936

9,855,286

Notes and accounts receivable- trade17,648,525

14,766,571

Inventories

9,909,273

11,045,048

Deferred tax asset

929,336

617,920

1,561,625

2,635,940(59,198)(58,985)

38,706,498

38,861,781

Buildings and structures

3,872,655

3,754,175

Machinery and equipment

233,414185,0122,943,085

2,943,085

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Land
Construction in progress

79,69635,532Other

2,554,998

2,482,876

Total Property, plant and equipment

9,683,850

9,400,682
1,207,619

Intangible assets
Software1,380,473

Goodwill

7,203,768

6,499,612

Other

4,422,632

3,897,131

Total Intangible assets

13,006,874

11,604,363

3,718,646

4,880,916

Investments and other assets
Investment securities

475,571

540,432

Lease and guarantee deposits

Stocks of subsidiaries and affiliates

1,186,175

1,106,275

Deferred tax asset

1,137,903

59,214482,494442,570

Other
Allowance for doubtful accounts(190,640)(224,966)

Total Investments and other assets

6,810,152

6,804,442

Total Non-current assets

29,500,876

27,809,488

68,207,375

66,671,270

Total assets

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

Year ended March

3st quarter ending

31, 2017

December 31, 2017

Liabilities
Current liabilities
Notes and accounts payable- trade

6,722,108

Short-term loans payable

4,793,499

5,441,296
4,583,573

Accounts payable

3,234,345

3,505,906

Income taxes payable

1,235,608

562,480

Provision for bonuses

1,394,256

658,772

113,707

72,162

Provision for directors compensations based on profit

92,734

152,290

Other

Provision for loss on order received

6,687,338

7,945,857

Total current liabilities

24,273,600

22,922,339

8,735,073

6,609,380

Non-current liabilities
Long-term loans payable
Long-term accounts payable-other

216,815

618,162

Deferred tax liabilities

1,036,147

1,183,358

Net defined benefit liabilities

2,070,931

1,226,348

Other

1,933,232

1,771,211

Total non-current liabilities

13,992,200

11,408,460

Total Liabilities

38,265,800

34,330,799

Net assets
Shareholdersʼ equity
Capital stock

3,244,915

3,244,915

Capital surplus

15,189,280

15,190,196

Retained earnings

7,256,468

9,009,030

Treasury stock
Total shareholdersʼ equity

(42)

(42)

25,690,622

27,444,099

1,080,094

1,900,680

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land

(17,933)(17,933)

Foreign currency translation adjustment(443,718)(462,003)

Re-measurements of defined benefit plans
Total accumulated other comprehensive income

4,308

4,451

622,752

1,425,195

Non-controlling Interests

3,628,199

3,471,175

Total Net assets

29,941,574

32,340,470

Total liabilities and Net assets

68,207,375

66,671,270

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

(2) Quarterly consolidated statements of income and statements of comprehensive income

Quarterly consolidated statements of income
9months ended

9months ending

December 31, 2016

December 31, 2017

Net sales

60,552,670

64,464,904

Cost of sales

42,572,003

47,038,039

Gross profit

17,980,667

17,426,864

Selling, general and administrative expenses

17,267,878

15,779,940

712,788

1,646,924

Operating income
Non-operating income
Interest income

4,345

3,218

Dividend income

51,75434,406Equity in earnings of affiliates

42,55739,860Foreign exchange gains

182,440

26,233

Other

188,765

111,780

Total non-operating income

469,863

215,499

Interest expenses

106,444

117,322

Other

24,56023,181

Total non-operating expenses

131,004

140,03

1,051,647

1,721,919

Gain on sales of non-current assets

287,933

5,280

Gain on step acquisitions

190,403--2,177,929

Non-operating expenses

Ordinary income
Extraordinary income

Gain on sales of subsidiaries and affiliates' stocks
Other

20,492-

Total extraordinary income

498,8292,183,210

Extraordinary losses
Loss on sales of non-current assets

2,650

183

Loss on retirement of non-current assets

36,16913,946

Impairment loss

21,837

14,139Loss on valuation of stocks of subsidiaries and affiliates

187,324-

Loss On Workers Compensation

88,809Other

46,49987,432

Total extraordinary losses

294,481204,512

Income before income taxes
Income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (Loss) attributable to owners of parent

1,255,994

3,700,617

774,798

1,672,092

481,195

2,028,524(448,787)(169,351)

929,983

2,197,876

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

Quarterly consolidated statements of income

Profit (Loss)

9months ended

9months ending

December 31, 2016

December 31, 2017

481,195

2,028,524

140,940

820,3171

1,004-(1,487,008)(52,086)

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Re-measurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

18,155142(1,326,908)

768,373(845,712)

2,796,898

323,875

3,000,319(1,169,588)(203,431)

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

(3) Notes to quarterly consolidated statements
I.

Segment information

For the 9 months ended December 31,2016 (from April 1,2016 to December 31,2016)
Information about operating revenue and profit (loss) by reportable segment
Imaging

Content

Production

Media

Creation

Services

Localization

14,690,117

18,228,002

15,257,909

7,976,955

56,152,985

34,097649,165

71,829388,037

1,143,130

14,724,125

18,877,168

15,329,738

8,364,933

57,296,115

826,225754,352(1,204,467)

373,238

749,349

Systems &Sub total

Solutions

Net sales
Sales toexternalcustomers
Inter-segment
sales ortransfers
Total
Segment profit(loss)

Amount in the
Other

Adjustments(Note 1)

(Note 2)quarterly
consolidated
statement ofincome(Note 3)

Net sales
Sales toexternal

4,315,749

83,93660,552,670

1,728(1,144,858)-

4,317,477(1,060,922)

60,552,670

214,249(250,809)

712,788

customers
Inter-segment
sales ortransfers
Total
Segment profit(loss)
Notes:
1.

The “Other” category is for operating segments that are not included among the reportable segments,
and it shows data pertaining to divested subsidiaries.

2.

The Segment profit (loss) adjustment of (250,809) thousand yen consists of 1,097,209 thousand yen in
profits of holding companies (consolidated financial statement-submitting companies) and intersegment
transaction eliminations of (1,348,019) thousand yen.

3.

The segment profit (loss) adjustment is based on the operating income item in the quarterly
consolidated statements of income.

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

II.

For the 9 months ending December 31,2017 (from April 1,2017 to December 31,2017)
Information about operating revenue and profit (loss) by reportable segment
Imaging

Content

Production

Media

Creation

Services

Localization

17,377,352

19,864,977

17,792,428

9,322,736

64,357,495

145,754495,586

257,000

298,205

1,196,547

17,523,107

20,360,563

18,049,429

9,620,941

65,554,043

703,368

912,396(362,961)

635,054

1,887,856

Systems &Sub total

Solutions

Net sales
Sales toexternalcustomers
Intersegment
sales ortransfers
Total
Segment profit(loss)

Amount in the
Adjustments(Note 2)quarterly
consolidated
statement ofincome(Note 3)

Net sales
Sales toexternal

107,408

64,464,904

customers
Inter-segment
sales or

(1,196,547)

transfers
Total
Segment profit(loss)(1,089,139)

64,464,904(240,932)

1,646,924

Notes:
1.

The Segment profit (loss) adjustment of (240,932) thousand yen consists of 1,023,480 thousand yen
in profits of holding companies (consolidated financial statement-submitting companies) andintersegment transaction eliminations of (1,264,413) thousand yen.

2.

The segment profit (loss) adjustment is based on the operating income item in the quarterly
consolidated statements of income.