Nippon New Market – “Hercules”
25 July 2003
Company Name:
Representative director:
Location of Headquarter:
Contact:

SHL-JAPAN Ltd. (code #: 4327)
Yuzo Shimizu
5-38-16 Chuo, Nakano-Ku, Tokyo
Naohiro Nakamura, Director,
Office Management Team Leader
Tel: 03-5385-8781(URL: http://www.shl.co.jp/)

Summary of results for the nine months ended 30 June 2003
The Company’s results for the nine months ended 30 June 2003 are summarized below. Somefigures in the financial information included in this report have not been prepared as part of aformal closing of accounts. The financial information has not been audited.
1． Operations(1) Summary of results for the nine months ended 30 June 2003
(Figures are rounded down at million)
ReferenceTurnover
Operating
ProfitOrdinary
ProfitNine months ended
30 June 2003
JPY million
929

Increase ordecrease
ratio to prior Nine months ended
30 June 2002
year％
JPY million
3.0902

Year ended 30
September 2002
JPY million
1,173

313

0.8

311

385

313

13.7

276350(2) Turnover by service delivery
Nine months ended 30 Increase or Nine months ended
June 2003
decrease
30 June 2002
ratio to prioryear

Products
Training
Consultancy
TotalJPY
million
404
23501
929%

%

43.5
2.5
54.0
100.0

△4.0
61.3
7.4
3.0

-1-JPYmillion
421
14466
902%
46.7
1.6
51.7
100.0

ReferenceYear ended 30
September 2002

JPY
million507
17647
1,173%
43.3
1.5
55.2
100.0

(3) Major fluctuations in significant assets and liabilities
Account（Assets）
Cash
Accounts Receivable
Investment（Liabilities）
Income taxes payable
Deposits received(Equity)
Share capital
Retained earnings

As at 30 June 2003
JPY in million
791
303
99

Increase(Decrease)
JPY in million
(53)
1299

As at 30 September
2002
JPY in million
844291-1413(70)1085
356248114120548361（Notes）
1. Only accounts with over JPY 10 million fluctuation from the 2002 year-end balance areincluded above and explained below.
2. “Cash” decreased mainly due to payments of investment, corporate taxes and dividends.
3. “Accounts receivable” increased due to increase in sales for the quarter ended 30 June
2003, compared to the quarter ended 30 September 2002.
4. “Investment” increased as a result of investment in an investment business limited
liability association for venture businesses.
5. “Income taxes payable” decreased as a result of the final payment of the previous year’s
tax and the interim payment for the current year.
6. “Deposits received” increased by the amounts of taxes withheld on interim dividends
and bonuses.
7. “Share capital” increased as a result of the exercise of warrant rights and stock options.
8. “Retained earnings” increased since cumulative net income for the nine months ended
30 June 2003 exceeded profit appropriations.
2． Summary of operations
In the current period (from 1 October 2002 to 30 June 2003), Japanese economic conditions
have remained difficult with the prolonged problems from lack of recovery in personal
consumption and plant and equipment investment, in addition to increased tensions
concerning Iraq and North Korea, although there have been same positive signs since June
2003.
Under such economic conditions, many companies are hesitating to expand employment
significantly. This trend is particularly apparent in the IT industry, trading companies andthe wholesale industry, which normally employ a large number of graduates.
However, we aggressively developed new products such as “Terakoyakun”,“Kitsutsukikun” and “Donnamondai”, and actively marketed them to acquire new, large
customers with our strengths in information technology and energy derived from ouryounger employees.
As a result, turnover increased to JPY 929 million for the nine months ended 30 June 2003,(3.0% increase from the same period in the prior year). Turnover from Products was JPY
404 million (4.0% decrease from the same period in the prior year), turnover fromConsultancy was JPY 501 million (7.4% increase from the same period in the prior year),and turnover from Training was JPY 23 million (61.3% increase from the same period in theprior year).
-2-The decrease in turnover from Products was mainly caused by a decrease in sales of oldstyle written examinations due to decrease in adoption by middle to small size customers.
The increase in turnover from Consultancy was due to the continuous progress in market
development to large customers who wish to adopt Internet based services and customer
specification (customization) for aptitude testing. The turnover from Training was derived
from the introduction of a new service “Competency Measurement Center”, used for theassessment of company management, and “e-learning interview training”.
Operating profit for the current period increased to JPY 313 million (0.8% increase from thesame period in the prior year). Gross margin increased JPY 33 million compared with thesame period last year due to the increase in sales of 27 million and a JPY 6 million
reduction in cost of sales. Operating profit increased JPY 2 million compared with thesame period last year because of a JPY 31 million increase in selling and generaladministrative expenses, compared with the same period last year. This mainly resulted
from an increase in personnel expenses of JPY 15 million to strengthen the sales andmanagement departments, and an increase in research and development expenses for next
generation products of JPY 11 million.
Ordinary profit for the current period is JPY 313 million (13.7% increase from the same
period in the prior year), which is a JPY 37 million increase in profits compared with thesame period last year. This is mainly because expenses of JPY 33 million for listing were
accounted for as other expenses in the same period last year.
(Note) Reference to Products, Training, and Consultancy used above indicate the service
forms to be provided. The Company provides integrated personnel assessment services. It
is not possible to distinguish and present operating expenses by service form because at theproduction stage the products are not allocated to a specific service and therefore only
turnover by service form is presented.
3． New service information
During the current quarter, development of “Tamatebako III”, which is the Internet-enabled
version of our best-selling product “Images”, and Web- CAB, which is the Internet-enabled
version of “CAB” (Computer job aptitude test) was completed and sales commenced
through agencies. In addition, operation of a “Competency Measurement Center” has beendeveloped.
4． Research and development activities
Research and development activities were focused on developments such as “Terakoyakun”,
which is an e-learning tool used for management ability improvement, “Kitsutsukikun”,
which is an automatic evaluation system for assessment of group discussion and“Donnamonndai”, which is software that customers are able to edit in order to customize
tests for their company. All of these are expected to be core products for our business inthe future and we regard them as the momentum for the growth of our company.

5． Office circumstances
No significant movements occurred during the quarter.

-3-

6． Prospects for the current period(1) Adjustment of the forecast for the year ending 30 September 2003
(Unit price: JPY million)
TurnoverOrdinary profit

Current net profit

Previously announced forecast
(A)

1,440

470

272

Current adjusted forecast (B)

1,340

470

272

Increase or decrease (B – A)

△100----350

202Increase or decrease (%)
Actual for prior year (ended30 September 2002)△6.9
1,173(2) Reasons for the adjustment
Since the sales forecast for the year ending 30 September 2003 is likely to fall short ofthe previously announced forecast based on the actual sales result for the current quarterand forecast for the fourth quarter (the period from 1 July 2003 to 30 September 2003),
the sales forecast for the year ending 30 September 2003 has been adjusted. There are
no changes in ordinary profit and net profit for the current year. In addition, there is
no change in the year-end proposed dividend.

(3) Forecast for the year ending 30 September 2003
TurnoverOrdinary Net profit
profit
JPY million
Year ending 30
1,340470272September
2003

-4-

Annual dividend per share
InterimYear End
Total
JPY
5,000.00 5,000.00
10,000.00

7． Others(1) Summary of issued shares and dilution of shares.
Issued shares

Share capital

Share premium

ChangeinnumberEndingbalance

Change inamountEndingbalance

Change inamountEndingbalance

SharesSharesJPY
thousand

JPYthousand

JPYthousand

JPYthousand

At 30 September 2002

-8,259-548,067-309,820

In November 2002

108,269

1,500549,567-

309,820

1.

In December 2002

76

8,345

10,860560,427

1,285

311,105

1.

In June 2003

16

8,361

2,130562,557

642

311,748

1.

Notes（Notes）
1. Due to the exercise of warrant rights and stock options under the Japanese Commercial
Code article 280-19 (before amendment)(2) Summary of dilution of shares

At 30 September
2002
In November 2002
In December 2002
In June 2003

Warrants
Decrease inEnding balance
numberShares
Shares1061261069488

Stock options
Decrease inEnding balancenumberShares
Shares1501064101407666（Notes）
The decrease in number and the ending balances are disclosed on the basis of the number ofshares which can be issued through the exercise of rights.

(3) Change in directors
Two directors, Shigeru Kiyota and Paul Basil, and a Corporate Auditor, Akinori Okata, wereappointed at the shareholders’ meeting on 20 December 2002. A director, Scott Lufas,
resigned from the board on 15 November 2002. A director, Tan Suee Chieh, wasappointed at the extraordinary shareholders’ meeting held on 27 June 2003. A director, Paul
Basil, resigned from the board on 27 June 2003.

-5-