(English Translation)

This English translation is an abridged version of the original document in Japanese. In the event of any discrepancy,
the Japanese version prevails.

Summary of Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March
31, 2019 [Japanese GAAP]
October 29, 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: November 7, 2018
Preparation of supplementary materials on financial results: Yes
Holding of financial results briefing: Yes

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: November 27, 2018

(Amounts less than one million yen are rounded down)

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

Net sales

Operating profit

Million yen%

23,12821,203

Second quarter of FY2018
Second quarter of FY2017

Million yen

9.1
9.7

%

2,596
2,365

Profit attributableto owners of parent

Ordinary profit
Million yen

9.8
46.9

2,616
2,634

%

Million yen

1,877
2,574

(0.7)
62.3

%

(27.1)
145.8(Note) Comprehensive income: Second quarter of FY2018: ¥3,331 million (14.9%); Second quarter of FY2017: ¥2,899 million (285.0 %)Earnings per share

Second quarter of FY2018
Second quarter of FY2017

Diluted earnings per share

Yen

Yen

68.65
94.16

68.35
93.77

(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Million yen

Million yen%

40,15338,23730,95728,36076.7
73.8

Second quarter of FY2018
FY2017(Reference) Shareholders’ equity: Second quarter of FY2018: ¥30,787 million; FY2017: ¥28,227 million

2. Dividends
End-Q1FY2017FY2018FY2018 (forecasts)

End-Q2

Dividends per share
End-Q3Year-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 FY2018 (April 1, 2018 to March 31, 2019)(Percent figures indicate the rate of changes from the previous fiscal year)

Net sales
Million yen

Full-year

51,000%

11.4

Operating profit

Ordinary profit

Million yen

Million yen

6,700

%

14.9

6,700

%

12.0

Profit attributable toEarnings per shareowners of the parent
Million yen

4,600

%

(0.9)

Yen

168.20(Note) Adjustment for the most recent forecasts of dividends: Yes

See Announcement Concerning Revisions to Earning Forecasts (Japanese only), published on October 29, 2018, for moreconcerning consolidated earnings forecasts.
* 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－

1 －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 quarterly business results” on page 3 of the attached materials.

－

2 －1. Qualitative information on quarterly business results(1) Overview of business results
The Japanese economy was in recovery throughout the cumulative consolidated second quarter, mainly due to a rebound in personal
consumption, which was pushed by steadily improving corporate earnings, employment, and wages. At the same time, U.S.-Chinese
trade frictions and other overseas risks have given rise to concerns about the future of the global economy.
Overall IT-related market demand was robust throughout the period. Factors included the rising use of cloud services via
smartphones, tablets, and other mobile devices; expanding business applications for the internet of things (IoT), artificial intelligence(AI), and other technologies; and the use of robotic process automation (RPA) to achieve the type of work-style reforms promoted by
the Japanese government.
The e-book market returned to a growth phase due to the waning impact of pirate sites, which had risen sharply August 2017.
In this operating environment, the Infocom Group medium-term management plan (April 2016 to March 2020) emphasized two
fundamental policies: (1) pursue growth and (2) continue strengthening our management foundation to support growth. To this end,
we have identified e-comics and healthcare as priority businesses. In these areas, we pursued M&A opportunities actively, whiledeveloping businesses that leverage AI and IoT.
As a result, the Infocom Group generated net sales of ¥23,128 million for the three months ended September 30, 2018, up 9.1% year
on year. Operating profit rose 9.8% to ¥2,596 million, while ordinary profit decreased 0.7% to ¥720 million. Profit attributable toowners of the parent decreased 27.1% to ¥1,877 million.
* The decrease in profit attributable to owners of the parent for the cumulative consolidated second quarter was mainly due to the gain on sale of non-current
assets associated with the sale of a data center during the second quarter of the prior fiscal year.

Group sales and profit tend to be relatively low during the first and third quarters of the fiscal year, concentrated mainly in the
fourth quarter. This trend stems from the concentration product and service deliveries to companies and hospitals in March during
Japan’s fiscal year-end.

(i) Business Solution Group
Despite strong performance in our Healthcare business, the IT Services Segment experienced a 2.4% decline in sales, whichamounted to ¥10,299 million yen for the first nine months of FY03/19. Up-front investments in AI and our Healthcare businessresulted in operating profit of ¥403 million, down 36.0% year on year.
Our Health IT subsegment strengthened sales promotions related to goods and services for hospitals and pharmaceutical companies.
The subsegment also experienced growth in sales of clinical information management systems, stemming from medical treatment fee
revisions. Sales of employment management systems, effective for tracking work hours, were strong, as hospitals and other healthcareorganizations began considering work-style reforms. Additionally, we launched care-ring, a search engine for medical institutions andnursing care facilities and 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 care workers. We began a pilot shopping service with Sompo Holdings.
To meet full-year FY03/19 sales targets, we are increasing up-front investment to expand the subsegment's product lineup and continuebuilding up its sales structure.
In our corporate IT services business, in addition to the new version of the company's integrated business management software
package, GRANDIT3.0, and optional product RPA Solution for GRANDIT, Infocom expanded the support service for new users of RPA
with partner companies. Infocom also began providing at score, an AI-based deferred payment service, as well as a food temperature
management IoT service that improves the efficiency of food hygiene management.
(ii) Digital Entertainment Group
Segment sales were ¥12,828 million (+20.5% year on year). Operating profit for the segment was ¥2,188 million (+26.5%). The ecomics distribution business continued to post strong returns with both increased sales and profits.
In the e-comics distribution business, we began a second joint project with Shueisha, Inc. to secure exclusive first-run distributionof comics published in the magazine Grand Jump simultaneously with the release of the print version. In addition, we expanded our
lineup of comic properties with the launch of comics published by KADOKAWA. The company posted record monthly andquarterly sales as a result of these initiatives.
With an eye toward meeting FY03/19 segment sales targets, Infocom is striving to further enhance service content. In an effort tocombat pirate sites and promote a healthy market, our consolidated subsidiary Amutus Corporation established the Japan EBookstore Association in cooperation with four other e-bookstores.

－

3 －(2) Explanation of financial condition(i) Consolidated financial condition
Total assets amounted to ¥40,153 million, an increase of ¥1,915 million compared to the end of the prior consolidated fiscal year.
This increase was mainly due to increases in the fair value of investment securities and increases in inventories, offsetting decreases innotes and accounts receivable-trade.
Total liabilities fell ¥680 million to ¥9,196 million, mainly due to declines in provision for bonuses and income taxes payable. Net
assets were up ¥2,596 million compared with the end of the previous consolidated fiscal year, reaching ¥30,957 million.
As a result, our equity ratio rose to 76.7% from 73.8% at the end of the previous consolidated fiscal year.
(ii)Consolidated cash flows
Cash and cash equivalents as of September 30, 2018, amounted to ¥17,172 million, up ¥542 million compared to the end of theprevious consolidated fiscal year.
[Cash flows from operating activities]
Net cash provided by operating activities amounted to ¥2,018 million (compared to ¥2,390 million in the same quarter of the previous
fiscal year). Principal sources of cash were profit before income taxes of ¥ 2,726million (compared to ¥3,773 million) and a decreasein notes and accounts receivable of ¥1,809 million (compared to ¥1,048million). The reason for this decrease was a ¥769 million
increase in inventories (compared to ¥298million) and income taxes paid of ¥1,687 million (compared to ¥1,006 million).
[Cash flows from investing activities]
Net cash used in investing activities amounted to ¥686 million (compared to ¥1,822 million income in the same quarter of the previous
fiscal year). Primary uses of cash included ¥429 million (compared to ¥129million) for the purchase of investment securities.
[Cash flows from financing activities]
Net cash used in financing activities amounted to ¥796 million (compared to ¥437million in the same quarter of previous fiscal year),mainly due to cash dividends paid of ¥765 million (compared to ¥410 million).

(3) Explanation of consolidated earnings forecasts and other forward-looking information
Given our performance for the cumulative consolidated second quarter and recent performance trends, we have made an upwardrevision to the fiscal year earnings forecast published on April 26, 2018. For more, see Announcement Concerning Revisions to
Earning Forecasts (Japanese only), published on October 28, 2018.
Please note that the above forecasts are based on information available as of the publication date of this document. Actual results
may differ from forecasts due to various factors in the future.

－

4 －2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Software
Other
Total 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
Total 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－

5 －As of September 30, 2018

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

17,167
7,898
850
1,518
(1)
27,433

1,004

948

1,968
42
2,010

1,880
40
1,921

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

9,955
(105)
9,850
12,71940,153

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

3,569
818
887
3,082
8,357

209
209
9,876

838
838
9,196

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

1,590
1,449
26,201(816)
28,424

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

2,422
－
(59)
2,363
157
12
30,95740,153

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Second Quarter(Unit: million yen)
For the six months ended
September 30, 2018

For the six months ended
September 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
methodForeign exchange gains
Partnership 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 non-current assets
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent－

6 －21,203
11,134
10,0697,703
2,365

23,12812,07011,058
8,461
2,596

48

58

5

5

0
214
1
269

－
－
0
63

0
－
－
0
0
2,634

0
0
41
0
43
2,616

1,138
2
48
1,189

－
114
－
114

2
7
39
50
3,773
1,199
2,574
(0)
2,574

－
1
3
4
2,726
841
1,884
6
1,877

Quarterly Consolidated Statements of Comprehensive Income
Second Quarter(Unit: million yen)
For the six months ended
September 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 ofparentComprehensive income attributable to non-controllinginterests－

7 －For the six months ended
September 30, 2018

2,574

1,884

373
1
(50)
324
2,899

1,457
(0)
(9)
1,447
3,331

2,900

3,325

(0)

6

(3) Quarterly Consolidated Statements of Cash Flow
(Unit: Million yen)
For the six months ended
September 30, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in provisionInterest and dividend income
Interest expenses
Loss (gain) on sales of investment securities
Loss (gain) on sales of non-current assets
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
Income taxes refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Net 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－

8 －For the six months ended
September 30, 2018

3,773
564
2
34
5
(296)
(48)

2,726
540
－
29
－
(322)
(58)

0
(2)
(1,138)

0
(114)
－

1,048

1,809

(298)

(579)

3

112

(221)
3,427
45
(0)
(346)
(1,006)
270
2,390

(500)
3,642
63
(0)
－
(1,687)
－
2,018

(117)
(375)
2,432
(129)
2
(0)
8
1,822

(173)
(314)
－
(429)
231
(0)
1
(686)

(29)
(410)

(31)
(765)

1

1

(0)
(437)

(0)
(796)

(2)

6

3,772
12,40816,180542
16,63017,172

(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. Second quarter of FY2017 (from April 1, 2017 to September 30, 2017)
1. Information on net sales and profit or loss for each reporting segment(Unit: million yen)Amounts stated in thequarterly consolidated
statements of income(Notes) 2

Reportable segment
Adjustments(Notes) 1

Total
Business solution

Digital entertainment

Sales to external customers

10,553

10,64921,203－

21,203

Intersegment sales or transfers

295

0

296

(296)

－

10,84910,65021,500(296)

21,203

630

1,729

2,360

4

2,365

Net sales

Total
Segment profit(Notes)1. The ¥4 million adjustment in segment profit is due to the elimination of intersegment transactions and corporate expenses.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statements of income
II. Second quarter of FY2018 (from April 1, 2018 to September 30, 2018)
1. Information on net sales and profit or loss for each reporting segment(Unit: million yen)Amounts stated in thequarterly consolidated
statements of income(Notes) 2

Reportable segment
Adjustments(Notes) 1

Total
Business solution

Digital entertainment

10,29912,82823,128－23,128

49

1

50

(50)

－

10,34912,82923,179(50)

23,128

403

2,188

2,591

5

2,596

Net sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit(Notes)1. The ¥5 million adjustment in segment profit is due to the elimination of intersegment transactions and corporate expenses.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statements of income.

－9 －