February 7, 2019

Summary of Consolidated Financial Results
for the Third Quarter of Fiscal Year Ending March 31, 2019 (FY2018)(Nine Months Ended December 31, 2018)[Japanese GAAP]
Company name: ZUKEN Inc.
Listing: Tokyo Stock Exchange, First Section
Stock code:
6947
URL: https://www.zuken.co.jp
Representative:
Makoto Kaneko, President and Representative Director
Contact:
Susumu Yoshida, General Manager of Finance Department
Tel: +81-45-942-1511
Scheduled date of filing of Quarterly Report:
February 8, 2019
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting:None(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter Ended December 31, 2018 (Apr. 1, 2018 – Dec. 31, 2018)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Nine months ended
Dec. 31, 2018
18,89916.8
Dec. 31, 201716,1788.0
Note: Comprehensive income (Millions of yen)

Net income per share
Nine months ended
Dec. 31, 2018
Dec. 31, 2017

Millions of yen

Profit attributable toowners of parent

Ordinary profit

Millions of yen

%

1,898
145.4
1,999
130.2
1,397
773
96.7
868
128.1
479
Nine months ended Dec. 31, 2018:
1,798 (up 49.5%)
Nine months ended Dec. 31, 2017:
1,203 (up 988.9%)%

Millions of yen

%

191.4
103.4

Diluted net income per
share

Yen

Yen

60.10
20.63

-

(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Millions of yen

Millions of yen

As of Dec. 31, 2018
44,138
As of Mar. 31, 2018
43,647
Reference: Shareholders’ equity (Millions of yen)
As of Dec. 31, 2018:%

31,77030,54731,366
As of Mar. 31, 2018:

71.1
69.0
30,1192. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2018
10.00
Fiscal year ending Mar. 31, 2019
12.00
Fiscal year ending Mar. 31, 2019 (forecast)
Note: Revisions to the most recently announced dividend forecast: None

-

12.00

22.00

12.00

24.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2019 (Apr. 1, 2018 – Mar. 31, 2019)
Net sales
Millions of yen

Operating profit%

Millions of yen

Ordinary profit%(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillions of yen%

Millions of yen%

Yen

Full year
25,500
8.1
2,500
23.4
2,600
Note: Revisions to the most recently announced consolidated forecast: None

22.9

1,800

19.1

77.42

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scopeof consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements(a) Changes in accounting policies due to revisions in accounting standards, others:None(b) Changes in accounting policies other than (a) above:None(c) Changes in accounting-based estimates:

None(d) Restatements:

None(4) Number of outstanding shares (common stock)(a) Number of shares outstanding at the end of the period (including treasury shares)
As of Dec. 31, 2018:23,267,169 shares

As of Mar. 31, 2018:23,267,169 shares

As of Mar. 31, 2018:

17,057 shares(b) Number of treasury shares at the end of the period
As of Dec. 31, 2018:17,267 shares(c) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2018:23,250,040 shares

Nine months ended Dec. 31, 2017:23,250,254 shares* The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
* Cautionary statement with respect to forward-looking statements and other special items
Forecasts of future performance in this report are based on assumption judged to be valid and information available to theCompany’s management at the time this report was prepared, but are not promises by the Company regarding future performance.
Actual results may differ substantially from the forecasts for a number of reasons. Please refer to “1. Qualitative Information on
Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements”
on page 2 for forecast assumptions and notes of caution for usage.

ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018

Contents of Attachments
1.

Qualitative Information on Quarterly Consolidated Financial Performance ........................................................ 2(1) Explanation of Results of Operations ................................................................................................................ 2(2) Explanation of Financial Position ...................................................................................................................... 2(3) Explanation of Consolidated Forecast and Other Forward-looking Statements ................................................. 2

2.

Quarterly Consolidated Financial Statements and Notes ..................................................................................... 3(1) Quarterly Consolidated Balance Sheet .............................................................................................................. 3(2) Quarterly Consolidated Statements of Income and Comprehensive Income ...................................................... 5
Quarterly Consolidated Statement of Income ...................................................................................................... 5
Quarterly Consolidated Statement of Comprehensive Income ............................................................................. 6(3) Notes to Quarterly Consolidated Financial Statements ...................................................................................... 7
Going Concern Assumption................................................................................................................................. 7
Significant Changes in Shareholders’ Equity ....................................................................................................... 7
Additional Information ........................................................................................................................................ 7
Segment Information ........................................................................................................................................... 73.

Supplementary Information ................................................................................................................................. 8(1) Sales and Orders................................................................................................................................................ 8

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of the fiscal year ending on March 31, 2019, gradual economic recoveries continued to takeplace in Japan, Europe and the United States. However, the overall outlook remained uncertain because of slowing
economic growth in emerging Asian countries, concerns about U.S. economic policies and other reasons. In theelectronic equipment, automotive and industrial equipment manufacturing sectors, which are the major customer
segments of the Zuken Group, there were clear signs of an aggressive approach to capital investments backed byrecovering corporate earnings.
Net sales in the first nine months were 18,899 million yen, 16.8% higher than one year earlier, as growth in all
solutions sales remained steady. In particular, there was a strong growth in sales of Circuit design solutions led by
the E3.series of wire harness design systems. Significant growth in sales of IT solutions due to strong sales of our
DS-CR design data management system and network systems also contributed to the sales growth.
Earnings increased significantly due to the growth in sales. Ordinary profit was 1,999 million yen, 130.2% higher
than one year earlier, and profit attributable to owners of parent was 1,397 million yen, 191.4% higher than one year
earlier.
(2) Explanation of Financial Position

Total assets at the end of the third quarter of the current fiscal year increased 491 million yen from the end of theprevious fiscal year to 44,138 million yen.
Current assets increased 123 million yen. The main factors include increases of 1,098 million yen in cash anddeposits, 272 million yen in work in process and 212 million yen in other current assets due to an increase in prepaid
expenses, while there was a decrease of 1,513 million yen in notes and accounts receivable-trade. Non-current assets
increased 367 million yen. The main factors include an increase of 641 million yen in investments and other assets
primarily due to an increase in investment securities and a decrease of 202 million yen in intangible assets.
Total liabilities decreased 731 million yen from the end of the previous fiscal year to 12,368 million yen. Current
liabilities decreased 760 million yen mainly due to decreases of 444 million yen in income taxes payable and 269
million yen in provision for bonuses. Non-current liabilities increased 28 million yen mainly due to an increase in
net defined benefit liability.
Net assets increased 1,223 million yen from the end of the previous fiscal year to 31,770 million yen, and theshareholders’ equity ratio was 71.1%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

We currently maintain the consolidated forecast for the fiscal year ending March 31, 2019 that was released on May
7, 2018.

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2017(As of Mar. 31, 2018)(Thousands of yen)
Third quarter of FY2018(As of Dec. 31, 2018)

AssetsCurrent assets
Cash and deposits

16,868,686

17,967,481

Notes and accounts receivable-trade5,375,965

3,862,328

Securities

6,700,000

6,700,000

Merchandise and finished goods

269,857

333,004

Work in process

95,659367,660

Raw materials and supplies

3,908

2,858

Other

2,172,359

2,385,343

Allowance for doubtful accounts(44,416)(52,831)

31,442,019

31,565,844

Buildings and structures, net

2,889,876

2,803,718

Land

3,015,103

3,015,103

455,438

470,884

6,360,419

6,289,706

Goodwill

661,482

537,099

Other

699,954621,613

1,361,437

1,158,712

Investment securities

3,089,690

4,078,025

Other

1,393,722

1,046,685

Total current assets
Non-current assets
Property, plant and equipment

Other, net
Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Total investments and other assets
Total non-current assets
Total assets

3

4,483,412

5,124,710

12,205,268

12,573,129

43,647,287

44,138,974

ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018

FY2017(As of Mar. 31, 2018)(Thousands of yen)
Third quarter of FY2018(As of Dec. 31, 2018)

Liabilities
Current liabilities
Accounts payable-trade726,558

562,422

Income taxes payable573,228

128,601

Advances received

5,256,136

5,328,215

Provision for bonuses

799,513529,548

Other provision

62,887

57,632

Other

1,864,426

1,915,963

Total current liabilities

9,282,751

8,522,384

3,541,427

3,664,436

275,473

181,183

3,816,901

3,845,620

13,099,652

12,368,004

Capital stock

10,117,065

10,117,065

Capital surplus

8,659,021

8,659,016

Retained earnings

10,675,443

11,514,823

Treasury shares(15,716)(16,043)

29,435,814

30,274,861

1,124,695

1,429,593

Non-current liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

146,943

96,905Remeasurements of defined benefit plans(587,708)(434,512)

Total accumulated other comprehensive income

683,930

1,091,986

427,891

404,12230,547,635

31,770,969

43,647,287

44,138,974

Non-controlling interests
Total net assets
Total liabilities and net assets

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY2017(Apr. 1, 2017 – Dec. 31, 2017)(Thousands of yen)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)

Net sales

16,178,494

18,899,838

Cost of sales

4,407,957

5,290,019

Gross profit

11,770,536

13,609,818

Selling, general and administrative expenses

10,997,146

11,711,585

773,390

1,898,233

Interest income

3,902

5,264

Dividend income

31,62834,707

Rent income

35,31237,608

Other

34,12955,213

Total non-operating income

104,973

132,793

Foreign exchange losses

4,462

29,626

Share of loss of entities accounted for using equity method

3,870

-

Other

1,186

1,732

Operating profit
Non-operating income

Non-operating expenses

Total non-operating expenses

9,520

31,359868,843

1,999,668

Gain on sales of non-current assets

2,295

327

Gain on liquidation of subsidiaries-

23,321

Ordinary profit
Extraordinary income

Gain on bargain purchase

35,996-

Total extraordinary income

38,291

23,648Loss on disposal of non-current assets

6,806

3,799

Retirement benefit expenses

90,208-Extraordinary losses

97,015

3,799

Profit before income taxes

Total extraordinary losses

810,1192,019,517

Income taxes-current

257,520476,323

Income taxes-deferred

81,079152,647

Total income taxes

338,599

628,971

Profit471,519

1,390,546

Loss attributable to non-controlling interests(8,040)(6,834)

Profit attributable to owners of parent

479,560

1,397,381

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY2017(Apr. 1, 2017 – Dec. 31, 2017)(Thousands of yen)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)

471,519

1,390,546

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

204,206

304,898

Foreign currency translation adjustment

264,224(50,038)

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

271,464

153,196(8,334)-Comprehensive income

731,560

408,056

1,203,080

1,798,602

1,211,120

1,805,437(8,040)(6,834)Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Additional Information(Application of Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.)
Effective from the beginning of the first quarter of the current fiscal year, the Company applied Partial Amendments
to Accounting Standard for Tax Effect Accounting (Accounting Standards Board of Japan (ASBJ) Statement No. 28,
February 16, 2018) and other related pronouncements. Accordingly, deferred tax assets and deferred tax liabilities
have been presented in the investments and other assets section and the non-current liabilities section of the balance
sheet, respectively.
Segment Information
I. First nine months of FY2017 (Apr. 1, 2017 –Dec. 31, 2017)
Information about reportable segment net sales and profit or loss
Reportable segment
Japan

EuropeAmericas

Asia

Total

10,900,017

3,247,162

1,140,164

891,150 16,178,494

645,965642,288

39,633

11,545,982

3,889,450

1,179,798(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)

Net sales
Sales to third parties
Intersegment sales ortransfers
Total-

16,178,494

1,376,783 (1,376,783)-

940,046 17,555,278 (1,376,783)

16,178,494

48,896

Segment profit
470,878
40,501
13,565
257,824
782,770(9,380)773,390
Notes: 1. Adjustment amount in segment profit includes amount of -9,380 thousand yen eliminated for intersegment transactions.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statement of income.

II. First nine months of FY2018 (Apr. 1, 2018 – Dec. 31, 2018)
Information about reportable segment net sales and profit or loss
Reportable segment
Japan

EuropeAmericas

Asia

Total

12,991,160

3,587,951

1,232,980

1,087,745 18,899,838

890,397

674,577

28,656

13,881,557

4,262,528

1,261,637(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)

Net sales
Sales to third parties
Intersegment sales ortransfers
Total-

18,899,838

1,655,939 (1,655,939)-

1,150,053 20,555,777 (1,655,939)

18,899,838

62,308Segment profit
1,386,122
180,621
18,283327,226 1,912,255(14,021)
1,898,233
Notes: 1. Adjustment amount in segment profit includes amount of -14,021 thousand yen eliminated for intersegment
transactions.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statement of income.

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018

3. Supplementary Information(1) Sales and Orders(a) Sales

Segment
Japan
EuropeAmericas
Asia
Total

First nine months of FY2017(Apr. 1, 2017 – Dec. 31, 2017)
AmountComposition (%)
10,900,017
67.4
3,247,162
20.1
1,140,164
7.0
891,150
5.5
16,178,494
100.0(Thousands of yen)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
AmountComposition (%)
12,991,160
68.7
3,587,951
19.0
1,232,980
6.5
1,087,745
5.8
18,899,838
100.0(b) Orders received and order backlog(Thousands of yen)First nine months of FY2017First nine months of FY2018(Apr. 1, 2017 – Dec. 31, 2017)(Apr. 1, 2018 – Dec. 31, 2018)
Segment
Orders received
Order backlog
Orders received
Order backlog
Japan
11,761,305
6,637,911
14,343,441
7,554,920
Europe2,777,023
1,080,159
2,778,755
839,706
Americas881,523
851,163
1,215,228
1,083,809
Asia
843,298
577,900
883,464
409,610
Total
16,263,150
9,147,134
19,220,889
9,888,046
Notes: 1. Intersegment transactions have been eliminated.
2. The above amounts are based on selling prices and the amounts do not include consumption taxes.

8

ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2018(Reference) Results by product category are as follows.
(a) Sales

Product category

First nine months of FY2017(Apr. 1, 2017 – Dec. 31, 2017)
AmountComposition (%)(Thousands of yen)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
AmountComposition (%)

Printed Circuit Board design solutions

2,477,941

15.3

2,974,448

15.7

Circuit design solutions

3,131,250

19.4

4,137,811

21.9

IT solutions

2,974,550

18.4

3,901,330

20.6

Client services

7,593,884

46.9

7,882,316

41.8

867

0.0

3,930

0.0

16,178,494

100.0

18,899,838

100.0

OthersTotal(b) Orders received and order backlog

Product category

First nine months of FY2017(Apr. 1, 2017 – Dec. 31, 2017)
Orders received
Order backlog(Thousands of yen)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
Orders received
Order backlog

Printed Circuit Board design solutions

2,350,352

558,1993,029,287

731,741

Circuit design solutions

3,369,437

1,110,759

4,856,943

1,577,944

IT solutions

3,733,941

1,340,555

4,680,411

1,631,408

Client services

6,807,981

6,137,049

6,646,305

5,942,774

1,438

570

7,941

4,176

16,263,150

9,147,134

19,220,889

9,888,046

Others
Total

Notes: 1. The above amounts are based on selling prices and the amounts do not include consumption taxes.
2. Name of major products by product category are as follows.
Major products of Printed Circuit Board design
solutions

Major products of Circuit design solutions

Major products of IT solutions

CR-8000 Design Force
CR-8000 DFM Center
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-8000 System PlannerArchitecture Planner
E3.series
Cabling Designer
Harness Designer
PreSight visual BOM
DS-CR
DS-2 Expresso
DS-E3

CR-5000 Board Designer

CR-5000 System Designer

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been prepar edin accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer
an English translation.

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