Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Year Ended March 31, 2018
(Based on Japanese GAAP)May 11, 2018
Company name:

Digital Garage, Inc.

Stock exchange listing: Tokyo
Stock code:
4819
Representative:

Inquiries:

URL

http://www.garage.co.jp/

Representative Director,President Executive
Kaoru Hayashi
Officer and Group CEO
Member, Board of Directors, Senior
Executive Officer, in charge of the Corporate Makoto Soda

TEL

Strategy Division
Scheduled date of ordinary general meeting of shareholders:June 22, 2018

Scheduled date to file Securities Report:
Scheduled date to commence dividend payments:

June 22, 2018
June 25, 2018

Preparation of supplementary material on financial results:
Holding of financial results meeting:

Yes
Yes

03-6367-1111(for institutional investors and analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(1) Consolidated operating results
Net salesYear ended March 31, 2018Year ended March 31, 2017

Operating profit

Millions of yen
60,16836,451%––Earnings per share

Diluted earnings pershare%––

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%
114.95
15.3
5.0
3.8
90.68
13.5
4.4
2.0

Yen
115.8091.11

Year ended March 31, 2018Year ended March 31, 2017

Millions of yen
2,310723

Percentages indicate year-on-year changes
Profit attributable toOrdinary profitowners of parent
Millions of yen% Millions of yen%
5,017–
5,460–
3,678–
4,289–(2) Consolidated financial position
Total assets
As of March 31, 2018
As of March 31, 2017

Net assets

Equity ratio

Millions of yen
108,791
91,686

Millions of yen
39,017
34,371

Cash flows fromoperating activities
Millions of yen
14,293
4,148

Cash flows frominvesting activities
Millions of yen
1,008(1,452)

Net assets per share%
34.7
36.6

Yen
801.11713.08(3) Consolidated cash flows

Year ended March 31, 2018Year ended March 31, 2017

Cash flows fromCash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(2,307)
38,248
4,176
25,335

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2017
Year ended March 31, 2018Year ending March 31, 2019
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen

%%

––

0.00
0.00

––

20.00
24.00

20.00
24.00

942
1,132

22.0
20.7

3.0
3.2–0.00

–

28.00

28.00

121.3

3. Forecast of consolidated financial results for the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019)
Percentages indicate year-on-year changes
Profit attributable toRevenue
Profit before tax
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen%Yen
Full year
33,500–9,000–
6,200–
131.49
Digital Garage, Inc. plans to apply IFRS from the end of fiscal year ended March 31, 2019. The above forecast is based on IFRS. There is noyear-on-year comparison given that the forecast is IFRS based.
4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2018(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Yes
Changes in accounting policies due to other reasons:
Changes in accounting estimates:

NoNo

Restatement of prior period financial statements:

No(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2018

47,312,800 shares As of March 31, 201747,291,800 shares

Number of treasury shares at the end of the period
As of March 31, 2018

123,821 shares As of March 31, 2017

185,882 shares

47,153,489 shares Year ended March 31, 2017

47,076,299 shares

Average number of shares during the period
Year ended March 31, 20182

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2017

As of March 31, 2018

AssetsCurrent assets
Cash and deposits
Money held in trust

23,0292,264

32,922
5,307

Notes and accounts receivable - trade
Operational investment securities

7,056
11,856

7,741
12,364

Allowance for investment loss
Merchandise(1,045)0(1,235)
269

Work in process
Raw materials and supplies

206
1221
8

Deferred tax assets
Accounts receivable - other140
15,422320
16,889

714
(23)

718
(32)

59,62475,496

1,244(323)

1,455(438)

Buildings and structures, net

921

1,017

Machinery, equipment and vehicles
Accumulated depreciation

22(3)26(11)

19

15

1,409(988)

1,596(984)

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

Machinery, equipment and vehicles, netTools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation

420

611

712
14693
–

(11)

–

Leased assets, net

2–Construction in progress

168

02,245

2,338

Intangible assets
SoftwareTotal property, plant and equipment

1,784

2,019

Goodwill
Other

5,411
27

7,822
28

Total intangible assets

7,224

9,869

Investments and other assets
Investment securities

18,357

16,552Long-term loans receivable
Deferred tax assets

15
13

15
82

Real estate for investment
Other

3,830
407

3,617
850

Allowance for doubtful accounts

(31)

(31)

Total investments and other assets

22,592

21,087

Total non-current assets
Total assets

3

32,06133,29591,686

108,791(Millions of yen)
As of March 31, 2017

As of March 31, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade

3,713

5,018

3,800
3,137

1,700
2,437

Income taxes payable
Provision for bonuses

435
202

1,008
291

Deposits received
Deferred tax liabilities

25,12760

36,499246

Short-term loans payable
Current portion of long-term loans payable

Other

2,338

2,339

Total current liabilities

38,81549,54017,207488

18,890
551

803

792

18,49920,23357,31569,774

Capital stock
Capital surplus

7,437
2,946

7,464
3,104

Retained earnings
Treasury shares

21,300(50)

25,819(26)

Total shareholders' equity

31,63336,363644

339

Foreign currency translation adjustment

1,312

1,100

Total accumulated other comprehensive income

1,956

1,440

Share acquisition rights

648

844

Non-controlling interests

132

369

Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total net assets
Total liabilities and net assets

434,371

39,017

91,686

108,791

Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Net sales

36,45160,168

Cost of sales

29,83848,524Gross profit

6,613

11,644

Directors' compensations
Salaries and allowances

330
1,998

481
3,178

Bonuses
Provision for bonuses

0181

8267

Legal welfare expenses
Welfare expenses

306
74

496
105

Retirement benefit expenses
Advertising expenses

49127

72
180

Entertainment expenses
Traveling and transportation expenses

78125

86
212

Communication expenses
Office supplies expenses

368664
152

Taxes and dues
Commission fee

131
228

217
478

Business consignment expenses
maintenance expenses

258
19416
52

Research and development expenses
Rent expenses

114
447

252
658

Depreciation
Provision of allowance for doubtful accounts

120–

153
7

Amortization of goodwill
Other353
818

570
1,219

5,889

9,333

723

2,310

5
29

90

2,528
331

2,768
359

Selling, general and administrative expenses

Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Real estate rent
Other352

167

3,246

3,305

Interest expenses
Commission fee

56
07966

Foreign exchange losses
Rent cost of real estate

–223

160
259

Total non-operating income
Non-operating expenses

Other

1031

Total non-operating expenses

292

597

3,678

5,017

Ordinary profit

5

(Millions of yen)

Extraordinary income
Gain on change in equity

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
4733

1,829
386

1,032
1,471

2131

2,265

2,669

Loss on sales of non-current assets
Loss on retirement of non-current assets

316–
31

Loss on valuation of investment securities
Impairment loss–104

1025–0Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Other
Total extraordinary income
Extraordinary losses

Other

124

67

Profit before income taxes

Total extraordinary losses

5,819

7,619

Income taxes - current
Income taxes - deferred

1,647
(121)

2,028
104

Total income taxes

1,525

2,133

Profit4,293

5,486

425

4,289

5,460

Profit attributable to non-controlling interests
Profit attributable to owners of parent

6

Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
4,293

5,486

497
(48)

(312)
(212)

78456

(516)

4,750

4,969

4,746

4,944

325

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7Consolidated statements of changes in equity
Fiscal year ended March 31, 2017
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

7,435

Retained earnings

2,825

18,419Cumulative effects ofchanges in accounting
policies
Restated balance

Total shareholders'equity

Treasury shares(69)

28,610

(3)
7,435

2,825

22(3)

18,416(69)

28,607

Changes of items during period
Issuance of new shares

4

Change arising fromchanges of surplus in entities
accounted for using equity
method66

Dividends of surplus(1,410)(1,410)

Profit attributable to ownersof parent

4,289

4,289

Purchase of treasury shares
Disposal of treasury shares

118

(0)

(0)

19137

Net changes of items otherthan shareholders' equity–

Total changes of items during
periodBalance at end of current
period

2120

2,884

19

3,026

7,437

2,946

21,300(50)

31,633

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
income138

1,363

1,502(3)

(3)

1,360

1,498

Cumulative effects ofchanges in accounting
policies
Restated balance138

Share acquisitionrightsNon-controllinginterests

Total net assets

431

119

30,664

(6)
431

119

30,657

Changes of items during period
Issuance of new shares

4

Change arising fromchanges of surplus in entities
accounted for using equity
method6

Dividends of surplus(1,410)

Profit attributable to ownersof parent

4,289

Purchase of treasury shares(0)

Disposal of treasury shares

137

Net changes of items otherthan shareholders' equity

505

(48)

457

216

12687

Total changes of items during
period

505

(48)

457

216

123,713

Balance at end of current
period

644

1,312

1,956

648

132

34,371

8

Fiscal year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

7,437

Retained earnings

2,946

Total shareholders'equityTreasury shares

21,300(50)

31,633Cumulative effects ofchanges in accounting
policies
Restated balance

–
7,437

2,946

21,300(50)

31,633272755(72)(72)

Changes of items during period
Issuance of new shares
Change arising fromchanges of surplus in entities
accounted for using equity
methodDividends of surplus

(942)

(942)

Profit attributable to ownersof parent

5,460

5,460

Purchase of treasury shares
Disposal of treasury shares

204(0)(0)24229

Net changes of items otherthan shareholders' equity–

Total changes of items during
periodBalance at end of current
period

27

158

4,518

24

4,729

7,464

3,104

25,819(26)

36,363Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
income

644

1,312

1,956

Share acquisitionrightsNon-controllinginterests

Total net assets

648

132

34,371

Cumulative effects ofchanges in accounting
policies
Restated balance–
644

1,312

1,956

648

132

34,371

Changes of items during period
Issuance of new shares

55

Change arising fromchanges of surplus in entities
accounted for using equity
method(72)

Dividends of surplus(942)

Profit attributable to ownersof parent

5,460

Purchase of treasury shares(0)

Disposal of treasury shares229

Net changes of items otherthan shareholders' equity

(304)

(212)

(516)

196

236

(83)

Total changes of items during
period

(304)

(212)

(516)

196

236

4,646

Balance at end of current
period

339

1,100

1,440

844

369

39,017

9Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
5,8197,619

Depreciation
Amortization of software

264
392

351
612

Impairment loss
Amortization of goodwill

10435325570

Interest and dividend income
Interest expenses

(34)
56

(9)
79

Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using equity

(222)

139

(2,528)(2,768)methodLoss (gain) on change in equity

(47)

(33)

Loss (gain) on sales of investment securities
Loss (gain) on sales of shares of subsidiaries and associates(1,829)(386)(1,032)(1,471)

Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in investment securities for sale(808)
(66)

(907)
(1,100)

Increase (decrease) in allowance for investment loss
Decrease (increase) in inventories

45(110)189(27)(1,025)
950

(411)
1,126

700
49(448)(98)

Increase (decrease) in deposits received
Other, net

3,247
483

11,365540

Subtotal

5,407

14,312

528
(49)

1,145
(89)

Income taxes paid
Income taxes refund(1,789)51(1,228)153

Net cash provided by (used in) operating activities

4,148

14,293

(223)

(308)

(630)

(833)

–(538)

Decrease (increase) in accounts receivable - other
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes

Interest and dividend income received
Interest expenses paid

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Purchase of investment securities(223)(1,190)(2,334)

(14)

(600)

(500)

2,427

2,863

Proceeds from sales of shares of subsidiaries and associates
Payments for lease and guarantee deposits–(35)

1,763(374)Proceeds from collection of lease and guarantee deposits
Payments for investments in real estates

0(19)

2(57)

Proceeds from transfer of business
Other, net

63
124

65
131(1,452)

1,008

Purchase of shares of subsidiaries and associates
Payments for investments in capital of subsidiaries andassociates
Proceeds from sales of investment securities

Net cash provided by (used in) investing activities

10(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
2,800(2,200)

Proceeds from long-term loans payable
Repayments of long-term loans payable

4,500(1,713)

5,600(4,879)

Proceeds from issuance of common shares
Cash dividends paid0(1,407)38(943)

7(10)

81(4)

4,176(2,307)

Proceeds from share issuance to non-controlling shareholders
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

141(81)

Net increase (decrease) in cash and cash equivalents

7,013

12,913

Cash and cash equivalents at beginning of period

18,321

25,335

Cash and cash equivalents at end of period

25,33538,24811