Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March
31, 2019 [Japanese GAAP]
July 30, 2018
Listed company name:
Infocom Corporation
Securities code:
4348
Representative: (Position) President and CEO
Contact: (Position) Head of Corporate Communications Office
Scheduled date to file quarterly securities report: August 7, 2018
Preparation of supplementary materials on financial results: Yes
Holding of financial results briefing: No

Listed on: Tokyo Stock Exchange
URL https://www.infocom.co.jp/(Name) Norihiro Takehara(Name) Shinya Tanaka(TEL) +81-3-6866-3160
Scheduled date to commence dividend payments: -(Amounts less than one million yen are rounded down)

1. Consolidated Business Results for the First Quarter of FY2018 (April 1, 2018 to June 30, 2018)(1) Consolidated operating results (cumulative)(% of change from previous year)

Net sales

Operating profit

Profit attributableto owners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

10,464
9,949

5.2
11.7

677
651

3.9
302.4

720
677

6.3
305.8

479
430

11.4
678.2

First quarter of FY2018First quarter of FY2017(Note) Comprehensive income: First quarter of FY2018: ¥718 million (105.3%); First quarter of FY2017: ¥350 million (— %)Earnings per shareFirst quarter of FY2018First quarter of FY2017

Diluted earnings per share

Yen

Yen

17.52
15.73

17.44
15.67

(2) Consolidated financial position
Total assets

Net assets

Shareholders’ equity ratio

Million yen

Million yen%

36,247
38,23728,34228,36077.7
73.8

First quarter of FY2018
FY2017(Reference) Shareholders’ equity: First quarter of FY2018: ¥28,181 million; FY2017: ¥28,227 million

2. Dividends
End-Q1FY2017FY2018FY2018 (forecasts)

Dividends per share
End-Q3End-Q2Year-end

Annual

Yen

Yen

Yen

Yen

Yen

-

10.00

-

28.00

38.00

10.00

-

30.00

40.00

(Note) Adjustment for the most recent forecasts of dividends: None

3. Forecasts of Consolidated Business Results for FY2017 (April 1, 2018 to March 31, 2019)(Percent figures indicate the rate of changes from the previous fiscal year)

Net sales

Operating profit

Net income
attributable toshareholders

Ordinary profit

Earnings per
share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Second quarterof FY2018

23,000

8.5

2,600

9.9

2,650

0.6

1,800

(30.1)

65.82

Full-year

50,000

9.2

6,500

11.5

6,550

9.5

4,500

(3.0)

164.56(Note) Adjustment for the most recent forecasts of dividends: None

* Statements regarding the proper use of financial forecasts and other special remarks

- Forward-looking statements that include forecasts of business results are based on the information currently available and certain assumptions judged
to be rational. Actual business results may differ substantially because of various factors. For the matters to be noted when using the financial
forecasts and the assumptions behind these forecasts, please see “(3) Explanation of consolidated earnings forecasts and other forward-looking
information” under “1. Qualitative information on the results for the current quarter” on page 3 of the attached materials.

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019

1. Qualitative information on the results for the current quarter(1) Overview of business results
During the three months ended June 30, 2018, the Japanese economy was in a state of recovery due to strong growthin exports and capital investment, as well as a rebound in personal consumption against the backdrop of steady
improvements in corporate earnings and the income and employment situation, despite concerns about overseas risks,such as growing trade friction.
In the IT-related market, overall IT demand was robust. Factors included the use of cloud services via
smartphones, tablets, and other mobile devices; the growing business application of such technologies as the internetof things (IoT) and artificial intelligence (AI); and the use of robotic process automation (RPA) to achieve the workstyle reforms the Japanese government is promoting.
The e-book market returned to a growth phase, due to the waning impact of pirate sites, which had grown sharply
from around August 2017.
In this operating environment, the Infocom Group’s medium-term management plan (April 2016 to March 2020)
emphasized two fundamental policies: pursue growth and continue strengthening the management foundation to
support growth. To this end, we have identified e-comics and healthcare as priority businesses. In these areas, we
proactively pursued M&A and sought to develop businesses leveraging AI and IoT.
As a result, during the three months ended June 30, 2018, the Infocom Group generated net sales of ¥10,464
million, up 5.2% year on year. Operating profit rose 3.9%, to ¥677 million; ordinary profit grew 6.3%, to ¥720
million; and net income attributable to owners of parent increased 11.4%, to ¥479 million.
The Group’s sales and profit tend to be relatively low in the first and third quarters of the fiscal year, but beconcentrated on the fourth quarter. This trend stems from the concentration of deliveries of products and services forcompanies and hospitals in March, at fiscal year-end.
(i) Business Solution Group
Segment sales were ¥4,466 million (-5.1% year on year). Segment operating loss widened to ¥282 million (comparedto ¥143 million loss in the first quarter), due to diminished sales of SI projects, along with greater upfront investment
in AI and the Health IT subsegment.
In the Health IT subsegment, in addition to existing sales promotions on goods and services for hospitals andpharmaceutical companies, sales of clinical information management systems expanded along with medical treatment
fee revisions. Additionally, “care-ring,” a search engine for medical institutions and nursing care facilities, waslaunched as a new initiative in the area of community-based comprehensive care. Infocom also launched the beta
version of “Carestyle,” a direct recruiting platform which specializes in the nursing profession. In order to meet fullyear sales targets, the company is increasing upfront investment to expand the subsegment's product lineup andcontinue enhancing the sales structure.
For corporate IT services, in addition to the new version of the company's integrated business management
software package, GRANDIT3.0, Infocom began offering optional products such as the RPA Solution for GRANDIT
and the “Food Temperature Management IoT Service,” which leverages IoT.
(ii) Digital Entertainment Group
Segment sales were ¥5,997 million (+14.4% year on year). Operating profit for the segment was ¥957 million(+20.7%). The e-comics distribution business continued to post strong returns with both increased sales and profits.
In the e-comics distribution business, as the second joint project with Shueisha, Inc., the company began initial
exclusive distribution of the comics published in the magazine Grand Jump simultaneously with the release of theprint version. In addition, the company expanded its lineup with the launch of comics published by KADOKAWA.
With an eye toward meeting the segment sales target of ¥23.0 billion in the fiscal year ending March 31, 2019,
Infocom is striving to further enhance service content.
Furthermore, in an effort to combat pirate sites and promote a healthy market, consolidated subsidiary Amutus
Corporation established the Japan E-Bookstore Association in cooperation with four e-bookstores.

1

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019(2) Explanation of financial condition(i) Consolidated financial condition
Total assets decreased ¥1,990 million compared with the end of the previous consolidated fiscal year, to ¥36,247
million due to a decrease in notes and accounts receivable. Total liabilities fell ¥1,972 million, to ¥7,904 million due
to declines in provision for bonuses and income taxes payable. Net assets were down ¥17 million, compared with theend of the previous consolidated fiscal year, to ¥28,342 million.
As a result of the above, the equity ratio rose to 77.7% from 73.8% at the end of the previous consolidated fiscal
year.
(ii)Consolidated cash flow
Cash and cash equivalents as of June 30, 2018, amounted to ¥16,541 million, down ¥88 million from the end of theprevious consolidated fiscal year.
[Cash flows from operating activities]
Net cash provided by operating activities amounted to ¥1,242 million (¥1,739 million in the same quarter of theprevious fiscal year). Principal sources of cash were profit before income taxes of ¥720 million (¥637 million) and adecrease in notes and accounts receivable of ¥3,268 million (¥2,471 million). The reason for this decline was a ¥769
million decrease in provision (¥745 million) and income taxes paid of ¥1,682 million (¥999 million).
[Cash flow from investing activities]
Net cash used in investing activities amounted to ¥551 million (¥325 million in the same quarter of the previous fiscal
year). Primary uses of cash included ¥164 million (¥167 million) for the purchase of intangible assets, including
software, and ¥279 million (¥106 million) for the purchase of investment securities.
[Cash flow from financing activities]
Net cash used in financing activities amounted to ¥781 million (¥423 million in the same quarter of previous fiscal
year), mainly due to cash dividends paid of ¥765 million (¥410 million).
(3) Explanation of consolidated earnings forecasts and other forward-looking information
Consolidated results for the first quarter of FY2018 are on schedule; we have made no changes to the consolidated
earnings forecast for the first half and the full fiscal year from those figures announced in “Consolidated Financial
Results for the Year Ended March 31, 2018” on April 26, 2018.
Please note that the above forecasts are based on information available as of the publication date of this material,
so actual results may differ from forecasts due to various factors in the future.

2

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)
As of June 30, 2018

As of March 31, 2018

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Inventories
Other
Allowance for doubtful accounts
Current assets
Fixed assets
Property, plant and equipment
Intangible assets
Software
Other
Intangible assets
Investments and other assets
Investments and other assets
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

3

16,625
9,707
270
1,033
(0)
27,636

16,537
6,439
762
1,456
(0)
25,195

1,004

980

1,968
42
2,010

1,943
41
1,984

7,693
(107)
7,586
10,601
38,237

8,187
(100)
8,086
11,051
36,247

3,457
1,539
1,211
3,460
9,667

3,119
297
442
3,847
7,706

209
209
9,876

197
197
7,904

1,590
1,449
25,089(816)
27,312

1,590
1,449
24,802(816)
27,025

964
0
(49)
915
128
4
28,36038,237

1,264
1
(110)
1,155
157
3
28,342
36,247

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income
Quarterly Consolidated Statements of Income
First Quarter(Unit: million yen)
For the three months ended
June 30, 2018

For the three months ended
June 30, 2017
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Share of profit of entities accounted for using equity
methodPartnership gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Partnership losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests（△）
Loss attributable to owners of parent

4

9,949
5,389
4,560
3,908
651

10,464
5,619
4,845
4,168
677

21

56

4

4

0
0
26

－
0
60

0
0
－
0
0
677

0
0
15
0
17
720

0
0

－
－

0
39
40
637
207
430
(0)
430

0
－
0
720
241
478
(0)
479

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019

Quarterly Consolidated Statements of Comprehensive Income
First Quarter(Unit: million yen)
For the three months ended
June 30, 2017
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

5

For the three months ended
June 30, 2018

430

478

(32)
0
(47)
(79)
350

299
1
(61)
239
718

350

719

(0)

(0)

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019(3) Quarterly Consolidated Statements of Cash Flow
(Unit: Million yen)
For the three months ended
June 30, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in provisionInterest and dividend income
Interest expenses
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Other
SubtotalInterest and dividend income received
Interest expenses paid
Payments for business restructuring
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
OthersNet cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease obligations
Cash dividends paid
Proceeds from share issuance to non-controllingshareholders
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

6

For the three months ended
June 30, 2018

637
289
34
2
(745)
(21)
0

720
259
29
－
(769)
(56)
0

2,471

3,268

(183)

(491)

(214)

(337)

742
3,013
19
(0)
(293)
(999)
1,739

246
2,869
55
(0)
－
(1,682)
1,242

(52)
(167)
(106)
0
0
(325)

(137)
(164)
(279)
30
(0)
(551)

(14)
(410)

(15)
(765)

1

－

0
(423)

(0)
(781)

(3)

1

987
12,40813,395(88)
16,630
16,541

Infocom Corporation (4348) Summary of Financial Results for the First Quarter of the Fiscal Year Ending March 30, 2019(4) Notes on the Quarterly Consolidated Financial Statements(Note on going concern assumption)
Not applicable(Note in case of significant changes in shareholders’ equity)
Not applicable(Segment information)[Segment information]
I. First quarter of FY2017 (from April 1, 2017 to June 30, 2017)
1. Information on net sales and profit or loss for each reporting segment
Reportable segment
Business solution
Net sales
Sales to externalcustomers
Intersegment sales ortransfers
Total

Adjustments(Note) 1

Total

Digitalentertainment(Unit: million yen)Amounts stated in thequarterly consolidated
statements of income(Note) 2

4,707

5,242

9,949

－

9,949

131

0

131

(131)

－

4,838

5,242

10,081

(131)

9,949
651

Segment profit (loss)
(143)
793
649
2
(Notes)1. The ¥2 million adjustment in segment profit is due to the elimination of intersegment transactions and corporate expenses.
2. Segment profit or loss is adjusted with operating profit in the quarterly consolidated income statement.
II. First quarter of FY2018 (from April 1, 2018 to June 30, 2018)
1. Information on net sales and profit or loss for each reporting segment
Reportable segment
Business solution
Net sales
Sales to externalcustomers
Intersegment sales ortransfers
Total

Adjustments(Note) 1

Total

Digitalentertainment(Unit: million yen)Amounts stated in thequarterly consolidated
statements of income(Note) 2

4,466

5,997

10,464－

10,464

21

0

22

(22)

－

4,488

5,998

10,487(22)

10,464677

Segment profit (loss)
(282)
957
674
2
(Notes)1. The ¥2 million adjustment in segment profit is due to the elimination of intersegment transactions and corporate expenses.
2. Segment profit or loss is adjusted with operating profit in the quarterly consolidated income statement.

7