(Ticker code: 4662)

Put Our Heart into Technologies

Fiscal 2016
(Year ended March 2016)

Financial Results Presentation
Focus Systems Corporation
Tuesday May 31, 2016
This document uses information available as of March 31, 2016, and contains forward-looking statements that represent management’s
expectations or beliefs relating to future events. Actual results could differ materially from those stated or implied in these forwardlooking statements. The Focus Systems Group does not guarantee the information’s accuracy.
http://www.focus-s.com
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Financial Results for Fiscal 2016
Ended March 31, 2016

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Topics for Fiscal 2016

(1) Changed listing market from the Second Section to the First Sectionof the Tokyo Stock Exchange (TSE)(March 4, 2016)(2) Delivered commemorative cash dividend (3.5 yen per share) inassociation with designation to the First Section of TSE
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Topics for Fiscal 2016(3) Posted new record highs for net sales and net income
16,482

Net sales (¥ million)

Net income (¥ million)

15,081
13,783

FY2002458

14,146FY2014FY2015

FY2001FY2016738592FY2015FY2016(4) Launched a new product (beacon) under the Focus Systems brand
Boosting IoT business with its thinness and lightness
Focus Systems
Thin-type beacon for business4

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Overview of Financial Results
Changes comparedwith plan㻌Year-on-yearchangeYear ended
March 2015
Results㻌

Year ended
March 2016
Plans

Year ended
March 2016
Results㻌

AmountRatio

Amount15,081

15,300

16,482

1,401

9.3%

1,182

7.7%

Public Sector

5,372

5,370

5,734

362

6.7%

364

6.7%

㻌㻌㻌 㻌 Private Sector
㻌㻌

8,633

8,802

9,738

1,105

12.8%

936

10.6%

1,075

1,128

1,009

(66)

-6.1%

(119)

-10.5%

Operating income

940

950

953

13

1.4%

30.3%

Ordinary income

897

920

950

53

5.9%

30

3.2%

Net income

592

600

738

146

24.6%

13823.0%(¥ million)

Net sales

Security Equipment

Ratio䞉㻌 Achieved net sales significantly surpassing plans in the private-sector business, but failed㻌 㻌 to attain the planned figure in the security equipment business䞉㻌 Cash dividend per share (planned): 16 yen (including 3.5 yen as commemorative dividend)(Note) The Company made a modification on March 7, 2016 to its cash dividend forecast, deciding to deliver 3.5 yen per share as commemorative㻌 㻌 㻌 㻌 dividend in addition to the ordinary dividend of 12.5 yen per share.

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Segment Information(¥ million)
Net sales
FY2014FY2015FY2012FY2013

FY2016

4,717

4,311

4,668

5,372

5,734



7,461

8,440

8,633

9,738

Publicsector

Net sales increased steadily due to an increase inorders received in the social security and air traffic
control areas.
In terms of profits, profit margin decreased due tofailure to receive orders on an assumed scale in thesocial security and tax number-related businessbecause of the impact of a security incident that
occurred on the end user side in part of thebusiness.

Steady progress was made in infrastructure building
and operation services primarily for major
customers, as well as in customization, design anddevelopment of ERP (enterprise resourcesplanning) products.
Moreover, the Company accumulated businessachievements in regional areas focusing on Osakaand Nagoya, securely expanding net sales.

Privatesector



580

1,037

1,075

Securityequipment

61,009For cyber forensics related products, the Company
focused on increasing sales to large companies in
the private sector, expanding such service
businesses as training of engineers and analyticalinvestigations for products, and reinforcing
marketing by opening a website dedicated to theproducts as well as through other measures.
Moreover, the Company worked to commercialize
optimization technologies and enter the nursing
care/medical field as new business developments
for security equipment. Nevertheless, both net sales
and profits decreased year-on-year in this segment.

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Sales to Key Customers(¥ million 

By customer group

7,000
6,000NTT DATA related
IBM Japan related
CTC related
OKI related
SoftBank related
Product sales

5,000
4,000
3,000
2,000
1,0000FY2012FY2013

FY2014FY2015FY2016(¥ million 
4,000Orders received
from major
customers (IBMJapan and NTTData) grew strongly

3,500
3,000

IBM Japan

2,500

NTT DATA

2,000

NTT DATA i

1,500

CTC
SoftBank

1,0005000

FY2012FY2013

FY2014FY20157FY2016
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Nonconsolidated Balance Sheets(¥ million)
As of Mar. 31,2014

As of Mar. 31,2015

As of Mar. 31,2016

Noncurrent Assets

6,428
5,408

6,897
7,443

7,597
7,339

Property, Plant and Equipment

3,741

3,747

3,473

60

188

234

1,606
11,837

3,507
14,3403,631
14,936

Current Liabilities

4,102

4,141

4,064

Noncurrent Liabilities

2,705

3,429

3,456

Total Liabilities

6,807

7,571

7,520

Capital stock

2,905

2,905

2,905

Capital surplus

1,468
719

1,468
1,173

1,468
1,739

(706)

(706)

(706)

Total Net Assets

642
5,029

1,928
6,769

2,009
7,415

Total Liabilities and Net Assets

11,837

14,34014,936Item(ASSETS)
Current Assets

Intangible Assets
㻌 Investments and Other Assets
Total Assets

Total assets were up ¥596 million from a year earlier,largely because of increase of ¥909 million in accounts
receivable – trade, against a decrease of ¥177 million inland.

(LIABILITIES)(NET ASSETS)

Retained earnings
Treasury stock
Valuation difference on availablefor-sale securities

8

Total liabilities were down ¥50 million from a year earlier,principally because of decreases of ¥282 million incurrent portion of long-term loans payable and ¥255
million in short-term loans payable, against increase of¥291 million in bonds payable and ¥177 million in incometaxes payable.

Net assets were up ¥646 million from a year earlier,mainly due to an increase of ¥565 million in retained
earnings brought forward and ¥81 million in the valuationdifference on available-for-sale securities.

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Nonconsolidated Income Statements(¥ million)
FY2014(ended Mar. 31,2014)㻌

FY2015(ended Mar. 31,2015)㻌

FY2016(ended Mar. 31,2016)㻌

Net Sales

14,14615,081

16,482

Cost of Sales

12,181

12,976

14,285Gross Profit

1,965

2,104

2,197

SG & A Expenses

1,077

1,164

1,243

Operating Income

887

940

953

Non-operating Income

54

49

69

Non-operating Expenses

92

92

72

Ordinary Income

849

897

950

Extraordinary Income

㸫22235Extraordinary Loss

3101

Income before Income Taxes

846

908

1,184

Income Taxes

390

316

445

Net Income

455

592

738

Item9Net sales climbed ¥1,401 million from the previousfiscal year.
This was due to a ¥362 million increase of public
sector business and a ¥1,105 million increase ofprivate sector business, against a ¥66 million
decrease of security equipment business.
Cost of sales increased ¥1,308 million, with grossprofit rising by ¥92 million.

Operating income increased ¥13 million from theprevious fiscal year.

Increase of extraordinary income was mainly due
to gain on sales of investment securities.

The Company thus posted a net income of ¥738
million, up ¥146 million from the previous fiscalyear.
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Operating Results (Last 4 years)(¥ million)

Net Sales

18,000

16,482

15,081

2,200

2,1042,197

FY2015FY2016

1,965

2,000

16,00014,000Gross Profit

14,146

1,800

1,557

1,600

12,3531,400

12,000

1,200
1,000

10,000FY2013

FY2014FY2015FY2013

FY2016

Operating income
887

1000

Ordinary income
940 897849

Net income
953 950
738
592

800

600

FY2014455

439 416

400

241

2000
FY2013

FY2014FY2015
10FY2016
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Statements of Changes in Shareholders’ equity(¥ million)
Valuation andtranslation
adjustments

Shareholders’ equity
Capital surplus
Capital stock

Balance as of March 31,
2015

2,905

Legal capital Other capitalsurplussurplus749

718

Retained earnings

Total capitalsurplus

1,468

Other retained
earnings

Treasury
stock

Total
shareholders’equity(706)4,841Retained earnings
brought forward

1,173

Total
Valuation
net assets
difference on
available-forsale securities

1,928

6,769

Changes of items during theperiodDividends from surplus

(173)

(173)

(173)

Net income

738

738738(0)(0)

Purchase of treasury
stock(0)Net changes of items otherthan shareholders' equity
Total changes of items during
the period

Balance as of March 31,2016

8181

䠉

䠉

䠉

䠉

565

(0)

565

81

646

2,905

749

718

1,468

1,739

(706)

5,406

2,009

7,415

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Nonconsolidated Statements of Cash Flows(¥ million)

FY2014(ended Mar. 31,2014)㻌

FY2015(ended Mar. 31,2015)㻌

FY2016(ended Mar. 31,2016)㻌

Ϩ㻌 Cash Flows from Operating Activities

667

567

42ϩ㻌 Cash Flows from Investing Activities

(119)

(334)

293

Ϫ㻌 Cash Flows from Financing Activities

(32)

(36)

(512)

IV㻌 Net Increase (Decrease) in Cash and Cash Equivalents

514

196

(176)

V Cash and Cash Equivalents at Beginning of Period

2,395

2,910

3,106

VI㻌 Cash and Cash Equivalents at End of Period

2,910

3,106

2,930

Item

Ϩ Cash Flows from Operating Activitiesϩ Cash Flows from Investing Activities

Ϫ Cash Flows from Financing Activities

Net cash provided by operating activitieswas ¥42 million. The main factors were
¥1,184 million of income before incometaxes, which offset ¥875 million ofincrease in notes and accounts receivable- trade and ¥287 million of income tax
paid.

Net cash provided by investing activitieswas ¥293 million. The main factors were¥272 million in proceeds from sales ofproperty, plant and equipment.

Net cash used in financing activities was¥512 million. The main factors included¥1,274 million in repayment of long-termloans payable, which offset ¥789 million inproceeds from long-term loans payable.ϭ Cash and Cash Equivalents at End of PeriodAs a result, cash and cash equivalents at year-end increased ¥176 million from beginning of period to ¥2,930 million.

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Management Target: Improvement Cash Flows(¥ billion)

7.0
Interest-bearing debt

Balance of cash and deposit

6.0
Successfully reduced net interest-bearing debt to zero in April 2016

5.0
4.0

¥4.2 billion

3.0
2.0

1.0
0.0

Mar.
2005Mar.
2008

Mar.
2011

13Mar.
2014

Mar.
2016

Apr.
2016

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Changes in the Number of Employees(Number of persons)
Number of employees

Number of business partners

2,500
Number of employees surpassed the threshold of 1,000 people in April 2015
Combined with business partners, the workforce reached 2,000 in April 2016

2,000

1,500

1,000500

0Apr. 2007 Apr. 2008 Apr. 2009 Apr. 2010 Apr. 2011 Apr. 2012 Apr. 2013 Apr. 2014 Apr. 2015 Apr. 2016
As a company listed on the First Section of TSE, the Company needs to establish a business management
system to suit the growing number of employees and business partners, with an eye on 3 to 5 years ahead.

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Changes in Share Price and Dividend
Implemented a two-for-one
share split on October 1, 2015

1000
900
800
700
600
500
400
300
200
Apr. 2011

Apr. 2012

Apr. 2013

Apr. 2014

Apr. 2015

Apr. 2016

Mar. 2012

Mar. 2013

Mar. 2014

Mar. 2015

Mar. 2016

Net income per share (¥)

9.7617.02

32.91

42.81

53.36

Cash dividend per share (¥)

5

7.5

10

12.5

16

Payout ratio

51.2

44.1

30.4

29.2

30.0

Number of shareholders

3,196

2,917

3,023

3,303

4,253

*The Company implemented a two-for-one split of its common shares with October 1, 2015 as the effective date. Accordingly,
figures before the split have been converted in accordance with the number of shares after the split.ᩘ್䛷⟬ᐃ䛧䛶䛚䜚䜎䛩䚹

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Projections for Fiscal 201716Copyright䑷Copyririighght䑷 FoFocusocu
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Fiscal 2017 Projections
Year ended March2016(¥ million )Results㻌

Year ending
March 2017
Projections

Year-on-yearchange16,482

17,000518

Operating Income

953

800-153

Ordinary Income

950

770-180

Net Income

738

490-248

Net Sales

In order to further secure anticipated business opportunities, the Company will endeavor to enhance its
capabilities as an enterprise.
(1) Investments in hiring to secure more capable human resources, with an eye on 3 to 5 years ahead(2) Investments in educating engineers in order to further enhance the added-value of existing employees(3) Investments in systems and human resources for the internal control system, aiming to enhance
corporate governanceYear ended March2016(¥)Results㻌
16.00

Cash Dividends per ShareYear ending
March 2017
Projections

PayoutRatio

12.50

35.3%

Cash dividend per share for fiscal year ended March 2016 (forecast):¥12.5 of ordinary dividend and ¥3.5 as commemorative dividend
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