TRANSLATION FOR REFERENCE ONLYFY2017Q1

Consolidated Financial Results
Aplix Corporation
11th May 2017

Disclaimer: This English translation is for reference purposes only. In theevent of any discrepancy between the Japanese original and this English
translation, the Japanese original shall prevail. We assume noresponsibility for this translation or for direct, indirect or any other form ofdamage arising from the translation.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

1

Change of Management and Corporate NameOn decision of 32nd Annual Shareholders Meeting held on 28th Mar. 2017,
new management has been approved.
In addition, Corporate Name has been changed from Aplix IP Holdings
Corporation to Aplix Corporation effective from 1st April 2017.
Board Member
Representative Director
Director of the Board
Outside Director of the Board
Audit & Supervisory Board Member
Outside Audit & Supervisory Board Member
Outside Audit & Supervisory Board Member

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

Kengo Nagahashi
Kunihiro Ishiguro
Kozo Hiramatsu
Shinobu Nemoto
Yoshio Nitta
Masato Yamada

2FY2017Q1 P/L Statement（Consolidated）
Revenues

OperatingProfitRecurring
Profit

Net income
attributable toparentcompany
shareholders

FY16Q1
Actual (A)305-369-375-375

FY17Q1
Actual (B)351-123-134-621

Change（B－A）+46+246+241-246

15.1%－－－(Million Yen)

Change（％）

 Operating Loss improved +246mil. Yen by continuous cost reduction
 Net loss decreased by -246mil. Yen due to extra loss of 463mil. Yen ofstock transfer loss of 3 publishing companies

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

3

FY2017Q1 Revenues by Segment
Mil. Yen

600（Million Yen）

500
400

FY16FY17Q1Q1

Change300Technology11542-63.5%

200Publishing

189

309

63.5%

（Total Revenues）

304

351

-15.5%

1000
Q1

Q2

Q3

Q4

2016

TechnologyPublishing

Q1
2017
493

 Royalty income related previous software business has been terminated.
Several projects related IoT solution did not meet with our order and revenue
recognition criteria in Q1 and will be recognized after Q2
 Publishing business related Stock of Aplix IP Publishing, Flex Comix and HOLPSHUPPAN, Publishing has been all transferred on 31st Mar 2017

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

4FY2017Q1 Operating Cost by Segment
Mil. Yen（Million Yen）

1200
1000
800
600
400

Q1Q2Q3Q4TechnologyPublishing2017493

CompanyQ1Q1Change

304

124 -59.2%

Publishing

194267Company176

82 -53.4%（Total Cost）

675

475 -29.6%

Q1

2016

FY17Technology

2000

FY1637.6％

By reducing fixed cost such as cancel a part of office rent, operating
cost decreased yoy -29.6%

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

5

FY17Q1 Received Orders and Orders Backlog
Mil. Yen

200（Million Yen）
150

100

50

FY16FY171Q1Q

ChangeReceived Orders

1138-92.9%

Orders Backlog

822-97.6％0
2016Q1
Received Orders

2017Q1
Orders Backlog

Main reason to decrease Received orders and orders backlog is someprojects about IoT solution do not to recognize our received orderstandard. Those projects will be turned to received orders after Q1

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

6

FY2017 Forecast（Consolidated）（Million Yen）

Revenues

Operating
Profit

FY2016（A）

1,526-929

FY2017
Forecast (B)

1,054

12

Change (B－A)

-472

+941

-30.9%－Change (％)

Total revenues will decrease by transferring all stocks of 3 publishing businesscompanies.
IoT solutions will increase yoy +60% due to expansions of our IoT solutions
such as water purifier, air purifier and app/cloud solution.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

7

Business Strategy

IoT Solution Business
Revenues＝ Region × Category
Japan

BeaconServiceUSA

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

Revenue Share

8

Japan Business Strategy

BeaconProviding Location Beacon as MyBeacon®
Increase Price in Dec. 2016 (1,200Yen -> 2,500Yen)
Notification beacon is for Consumer Electronics

ServiceProviding App & Cloud solution
Retails： To meet demands by understanding customer
behavior using IoT Solution
Telematics：Tie up with Car Insurance company totrack driver’s situation

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

9USA/EU Business Strategy
Aplix Corporation of America (California USA) providing IoT solutions mainlyfor USA and EU region

BeaconExpanding existing customer and new customer mainly
water purifier , air purifier and consumer electronics

ServiceWater Purifier：Already shipment e.g. Aquasana and expanding
solutions to new customers
Pet and Air Purifier： Continues business from existing customers
e.g. OurPetʼs, Guardian Technologies and expanding customers toadapt new technologies e.g. Alexa Skill on Amazon.com

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

10

Cost Reduction

Focus on IoT Solution Business Focusing on IoT solution business and transferring 3
publishing companies stock (Aplix IP Publishing, Flex Comixand HOLP SHUPPAN, Publishing) on 31st Mar 2017 and closed
oversea department excluding USA and also closedIntellectual Property division and Semiconductor division

Cost Reduction
 Drastic cost reduction for all fixed cost e.g. office rent andsubcontracted fees

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

11

BLE module shipment
Accumulated 380 thousands BLE modules shipment in Jan. 2017
（Unit）

45000040000035000030000025000020000015000010000050000

201703

201701

201611

201609201607

201605

201603

201601

201511

201509201507

201505201503

201501

201411

201409201407

201405201403

201401

201311

201309201307

201305201303

2013010Source: Company Data
BLE modules include JM Series MyBeacon Series and Others.
Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

12Appendix

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

13

Corporate Overview
Company Name
Aplix Corporation
Headquarter Address
2-20-9, Nishi-waseda, Shinjuku-ku, Tokyo
169-0051, JapanFoundedFebruary 22, 1986
Capital1,861 million yen (as of March 31, 2017）
Revenue
1,526 million yen (Consolidated, As of Dec.
31, 2016)
Number of Employees
72 (Consolidated, as of March 31, 2017）MarketTokyo Stock Exchange Mothers
CodeJP:3727Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

Board member- Representative Director
Kengo Nagahashi- Director of the Board
Kunihiro Ishiguro- Outside Director of the Board
Kozo Hiramatsu- Audit & Supervisory Board Member
Shinobu Nemoto- Outside Audit & Supervisory Board Member
Yoshio Nitta- Outside Audit & Supervisory Board Member
Masato Yamada
Business Services
IoT Solution(Security, Hardware, Software, Cloud)Group Company
Aplix Corporation of America
14Management Team

Kengo Nagahashi (Representative Director)
Received BA and MS from Keio University and Ph.D in Computer Science from theUniversity of Tokyo. He experienced Visiting Researcher at Computer Laboratory in
University of Cambridge UK and joined Nikko Citigroup as a sell side analyst
covering IT service software in 2006. After leaving Citigoup, he launched Future
Bridge Partners Corporation and became Director CFO of Aplix from Mar. 2015 andRepresentative Director from Feb. 2017 of Aplix.

Kunihiro Ishiguro (Director, CTO)

After graduating from Hokkaido University's Faculty of Agriculture, after
going through SRA Corporation by development of UNIX software,
operation of Internet routing control, realizing route control by open source
ware GNU Developed "Zebra". In October 1999, he founded IP Infusion in
the US in order to develop and sell "ZebOS" which is commercial software
based on "Zebra". "ZebOS" is adopted by routers and switch makers all overthe world. After working as CTO Director of ACCESS Co., Ltd., he became
CTO of Aplix from Apr. 2015 and Director from Mar. 2016.

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15

Aplix Corporation
http://www.aplix.co.jp/
Note: The materials are provided to share information about Aplix business activities, and it is not intended tosolicit investment in Aplix shares. While the materials may describe information such as forecasts related tofuture business performance, this information has been created based on the judgment of Aplix at the time thematerials were created.
As a result, Aplix offers no guarantee that the conditions described will come to pass, and any of theinformation described is subject to change without notice in the future.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.