First Half of Fiscal 2015

（Ticker code: 4662）(Six month ended September 2014)

Interim Financial Results
Supplementary Explanation Material
Focus Systems CorporationNovember 2014

This document uses information available as of November 7, 2014, 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 inthese forward-looking statements. The Focus Systems Group does not guarantee the information’s accuracy.
http://www.focus–s.com
1Copyright Focus Systems Corporation

Overview of the Operational Results for the 1st Half of Fiscal Year(¥ million)

1st half of FY
ended March2014
Results

1st half of FY
ending March2015
Results

Amount

6,442

7,286

843

13.1%

Public Sector

2,005

2,518

513

25.6%

Private Sector

3,842

4,248

406

10.6%

Security Equipment595

518(76)-12.8%

Operating Income

248

295

46

18.7%

Ordinary Income

240

270

30

12.5%

Net Income

1151654942.9%Net Sales

Year-on-year change

Ratio

In both the public and private sectors, willingness to invest in information systems continued its recovery trend
from the previous fiscal year.
This recovery trend was especially pronounced for public sector-related business. Sales and profits both madesteady progress.
The decrease in profits for the security equipment-related business is due to significant sales/profits recorded
as a result of special demand from supplemental spending and the like in the first half of the previous year.
There are growing social needs for digital forensics, with the increased number of specialists in government
offices and major private companies.
2Copyright Focus Systems CorporationNon-consolidated Balance Sheets(¥ million)
As of Sep. 30,
2013

As of Mar. 31,2014

As of Sep. 30,
2014

Current Assets

5,469

Non-current Assets

5,507

6,428
5,408

6,586
6,979

Property, Plant and Equipment

3,733

3,741
60
1,606
11,837

3,748
113
3,118
13,566

4,102
2,705
6,807

4,033
3,524
7,557

Item(ASSETS)

Intangible Assets

39

Investments and Other Assets

1,734

Total Assets

10,977(LIABILITIES)Current Liabilities

3,713

Non-current Liabilities

2,485

Total Liabilities

6,198(NET ASSETS)
Capital stock

2,905

Capital surplus

1,468

Retained earnings

379

Treasury shares

(706)

2,905
1,468
719
(706)

4,046

4,386

2,905
1,468
745
(706)
4,413

732

642

1,596

Total Net Assets

4,779

5,029

6,009

Total Liabilities and Net Assets

10,977

11,837

13,566

Total shareholders’ equity
Valuation and Translation
Adjustments

3

Total assets increased by ¥1,729 million
compared with the end of the previous fiscal year.
This was largely because of increases of ¥75
million in work in process, ¥1,481 million in
investment securities, ¥55 million in software inprogress and ¥374 million in cash and deposits
despite a decrease of ¥299 million in notes andaccounts receivable – trade.

Copyright Focus Systems CorporationNon-consolidated Income Statements(¥ million)
First Half of FY2013(ended Sep. 30,2012)

First Half of FY2014(ended Sep. 30,2013)

First Half of FY2015(ended Sep. 30,2014)

5,704

6,442

7,286

Cost of Sales

5,157

5,674

6,392

Gross Profit

547

768

893

SG & A Expenses

577

519

598

Operating Income (Loss)

(30)

248

295

Non-operating Income

4336

26

Non-operating Expenses

454451

Ordinary Income (Loss)

(32)

240

270

Extraordinary Income525－－Extraordinary Losses

705

－

1

Income (Loss) before
Income Taxes

(212)

240

269

Income Taxes－125104

Net Income (Loss)

(212)

115

165

ItemNet Sales

4

Net sales climbed ¥843 million from the same
period of previous fiscal year.
This was due mainly to a ¥513 million increaseof public sector business and a ¥406 million
increase of private sector business.
The Company thus posted a gross profit of ¥893
million, up ¥125 million from the same period ofprevious fiscal year.

The extraordinary income of ¥525 million for thefirst half of fiscal year ended March 2013 wasprimarily comprised of ¥301 million in gain on
sales of investment securities and ¥222 million
in surrender value of insurance.
The extraordinary losses of ¥705 million wereprimarily comprised of ¥704 million in directors’
retirement benefits.

As a result, net income was ¥165 million,increased ¥49 million from the same period ofprevious fiscal year.

Copyright Focus Systems Corporation

Non-consolidated Performance (Last 3 years)(¥ million)

Net sales

Gross profit
893

7,286

8,000

6,442

5,704

800

6,000

547

600

4,000

400

2,0000768

1,000200
1st half ofFY2013

1st half ofFY2014

0

1st half ofFY2015
Operating income (loss)

400

Ordinary income (loss)
295

240

248300

1st half ofFY2013

1st half ofFY2014

1st half ofFY2015

Net income (loss)
270
165

115

200
100
0-100(30)

(32)
(212)

-200-300

1st half of FY2013

1st half of FY2014
5

1st half of FY2015
Copyright Focus Systems Corporation

Non-consolidated Statements of Cash Flows(¥ million)
First Half of FY2014(ended Sep. 30,2013)

First Half of FY2015(ended Sep. 30,2014)

Ⅰ Cash Flows from Operating Activities

300213

Ⅱ Cash Flows from Investing Activities

(48)

(145)

Ⅲ Cash Flows from Financing Activities

(323)

281

IV Net Increase (Decrease) in Cash and Cash Equivalents

(71)

348

V Cash and Cash Equivalents at Beginning of Period

2,395

2,910

VI Cash and Cash Equivalents at End of Period

2,323

3,259

Item

Ⅰ Cash Flows from Operating Activities
Net cash provided by operatingactivities was ¥213 million. The main
factors were ¥299 million of decrease innotes and account payable – trade and¥269 million of income before incometaxes, which offset ¥364 million ofincome taxes paid.

Ⅱ Cash Flows from Investing Activities
Net cash used in investing activities was¥145 million. The main factors were ¥73
million in purchase of intangible assets,¥32 million in purchase of insurance
funds, ¥25 million of increase in time
deposits and ¥17 million in purchase ofproperty, plant and equipment, which
offset ¥6 million of collection of loans
receivable.

Ⅲ Cash Flows from Financing Activities
Net cash provided by financing activitieswas ¥281 million. The main factors were¥588 million in proceeds from issuance ofbonds and ¥500 million in proceeds fromlong-term loans payable, which offset¥735 million in repayments of long-termloans payable.

Ⅵ Cash and Cash Equivalents at End of Period
As a result, cash and cash equivalents at period-end increased ¥348 million from beginning of the period to ¥3,259 million.

6Copyright Focus Systems Corporation

Segment Information(¥ million)
Net sales of first half period (6 month ended September)

FY2012FY2013

FY2014FY2015

2,150

1,951

2,005

2,518

3,262

3,451

3,842

4,248

Public sectorAlthough conditions had remained
harsh since when the Democratic
Party of Japan was in power as it
revised plans and reduced budgets,among other matters, there has
been a pronounced recovery trend
since the first half of the previousyear.
With demand remaining steady, we
have established an order systemthrough both cultivating businesswith existing users and acquiring
new users.

Private sector

175

302

595

Security equipment

7518

Revenue decreased since there wasspecial demand arising fromsupplemental spending in the firsthalf of the previous year, but there
are growing social needs for forensic
technology at both government
offices and major corporations.
Copyright Focus Systems Corporation

Sales to Key Customers
By customer group(¥ million)
3000
2500

NTT DATA related
IBM Japan related
CTC related
OKI related
SoftBank related
Product sales

2000
1500
1000
5000(¥ million)1400

1st half of FY2012

1st half of FY2013

1st half of FY2014

1st half of FY2015

By key customer

There has been a
pronounced public-related
recovery trend since Q4of the previous year.

1200
1000

IBM Japan

800

NTT DATANTT DATA i600

CTC
Ymobile4002000

1st half of FY2012

1st half of FY2013

1st half of FY20148

1st half of FY2015
Copyright Focus Systems Corporation

Projections for Fiscal Year Ending March 2015

Fiscal 2015
(from April 1, 2014 –March 31, 2015)

Projections

Net Sales(¥ million)

Operating Income(¥ million)

Ordinary Income(¥ million)

Net Income(¥ million)

Cash Dividends
per Share (¥)

900

85050020.00

14,5009Copyright Focus Systems Corporation