April 27, 2010
Summary Report of Operating Results for the first Quarter of Fiscal 2010
(Year ending December 2010)

Company name:
Future Architect, Inc.
Shares listed on:First Section of Tokyo Stock Exchange
Security code number:
4722
Website:http://www.future.co.jp
Representative:
Shin Yasunobe, President & COO.
Contact:
Yoshihiko Nakajima, Executive OfficerTel:+81-3-5740-5724
Scheduled submit date of quarterly report: May 13, 2010
Scheduled date for distribution of dividend payments: −(Amount rounded off to million yen)

1. Consolidated Results for the first Quarter of Fiscal 2010 (January 1, 2010 to March 31, 2010)(Percentages are year-on-year changes)(1) Consolidated operating results (accumulated total)
Net sales
Operating income
Ordinary income
Quarterly net income
Million yen%
Million yen%
Million yen%
Million yen%
1Q, Fiscal 2010
5,757 (14.0)476 (35.2)
495 (36.2)
255 (39.7)
1Q, Fiscal 2009
6,692
736
776
423
−
−
−
−
Quarterly net income
per share

Quarterly net income
per share (fully diluted)
Yen
−
−

Yen
559.54966.23

1Q, Fiscal 2010
1Q, Fiscal 2009

(2) Consolidated financial position
Total assets
Million yen
1Q, Fiscal 2010
13,047
Fiscal 2009
12,557

Net assets
Million yen
9,358
9,841

Shareholders’ equity ratio
Percent (%)
71.3
77.9

Net assets per share
Yen
20,369.32
21,422.20(Reference) Shareholders’ equity
1Q, Fiscal 2010:
9,301 million yen
Fiscal 2009:
9,782 million yen

2. Dividends

Fiscal 2009
Fiscal 2010
Fiscal 2010 (Forecast)End of the firstquarter dividend
yen−−

Dividends per share (yen)End of the second
End of the third
quarter dividend
quarter dividend
yen
yen
0.00
−

Year-end
dividend−

0.00

Annual dividend

yen
1,600.00

yen
1,600.00

1,200.00

1,200.00

Note: Modification of the projected dividends during the quarter under review: None

3. Projected Consolidated Results for Fiscal 2010 (January 1, 2010 to December 31, 2010)(Percentage figures reflect year-on-year change)

Second quarter
Full year

Net sales

Operating income

Ordinary income

Net income

Million yen%
11,250 (13.4)
24,000
1.4

Million yen%
1,075 (34.5)
3,000
14.6

Million yen%
1,095 (35.9)
3,040
12.4

Million yen%
600 (36.9)
1,550
28.7

Note: Modification of the projected consolidated results during the quarter under review: None

4. Others-1-

Net income
per shareyen
1,313.97
3,394.42

(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries that involved
changes in the scope of consolidation): None
(2) Adoption of simplified accounting method or special accounting method for the preparation of consolidated
quarterly financial statements: Yes
Note: For details, please refer to (page-4) “Qualitative information, financial statements, etc.”- 4. Others.
(3) Changes in principle, procedure, presentation, etc., of the accounting process related to the preparation of
consolidated quarterly financial statements (those stated as changes in important matters to be the basis for the
preparation of consolidated quarterly financial statements)
a. Changes accompanying revision of accounting standards: Yes
b. Changes other than a.: None
Note: For details, please refer to (page-4) “Qualitative information, financial statements, etc.”- 4. Others.
(4) Number of outstanding shares (common stock)a. Total outstanding shares as of the end of the period (including treasury stocks)
1Q, Fiscal 2010:
476,640 sharesFiscal 2009:
476,640 sharesb. Total treasury stocks as of the end of the period
1Q, Fiscal 2010:
20,008 sharesFiscal 2009:
20,008 sharesc. Average number of outstanding stocks during the quarter under review (accumulated period for consolidated
quarter)
1Q, Fiscal 2010:
456,632 shares
1Q, Fiscal 2009:
438,427 shares*Points to note about the proper use of projections, and other noteworthy events
The above projection, representing our best estimate based on information currently available to us, incorporates
uncertain factors. Please refer to (page-4) “Qualitative information, financial statements, etc.”- 3. Qualitative
information about consolidated earnings forecast, regarding the prerequisites for the above forecast and other related
matters.

-2-

Qualitative information, financial statements, etc.
1.

Qualitative information about consolidated operating results
During the first quarter of the consolidated fiscal year under review, Japan’s economy continued to suffer from achallenging environment with employment and consumer spending hovering at low levels, although there weresigns of a slight rebound on the strength of the recoveries of overseas economies, centering on countries in Asia,and the effects of economic stimulus measures implemented by the government.
Under such circumstances, the Group’s net sales for the first quarter of consolidated fiscal year were ¥5,757 million(14.0% down from the corresponding quarter of the previous fiscal year), while operating income decreased by
35.2% to ¥476 million, ordinary income decreased by 36.2% to ¥495 million and net income decreased by 39.7% to¥255 million.
Operating results by business segment are as follows. The operating results by business segment represent values
before adjustment of internal sales or transfers among segments. :In the IT Consulting Business, our core projects progressed almost in line with initial forecasts. However, corporate
IT investments have not yet fully recovered, although we expect new projects and large-scale projects to belaunched from the second quarter. Given these circumstances, net sales decreased to ¥3,678 million (15.7% downfrom the corresponding quarter of the previous fiscal year). Operating income was down 24.4% year-on-year to¥548 million, reflecting the decline of sales, although we continued to streamline expenditure focusing mainly on
outsourcing costs.
The Package & Service Business remained strong because a collaborative project between the Company andAscendia Inc. continued to make smooth progress and other projects were on schedule. However, we continued to
face difficult business conditions; for example, Elm Corporation, the core company of our package & service
business, still requires time to obtain orders through negotiations with well-established small and medium-sizedcompanies. As a result, net sales were ¥969 million (20.4% down from the corresponding quarter of the previous
fiscal year). On the profit front, we posted an operating loss of ¥78 million (operating income of ¥32 million in thecorresponding quarter of the previous fiscal year), as the effects of cost reductions were not large enough to offset
the decrease of net sales.
In the Corporate Revitalization/New Operations Development Business, there was a decrease of supermarket sales(Uoei Shoten Corporation), which constitute a major part of the business. However, this was due to the closing of
unprofitable shops. Sales of existing shops increased from the corresponding quarter of the previous fiscal year. As
a result, net sales of the overall corporate revitalization/new operations development business were ¥1,165 million(2.5% down from the previous corresponding period). In addition, there were effects from a streamlining of thesales strategy through the introduction of information technologies, including the launch of an automatic orderplacement system. Consequently, operating income was ¥1 million (operating loss of ¥15 million in the previous
corresponding period), a profit, albeit marginal, for the first time on a quarterly basis.

2.

Qualitative information about consolidated financial condition
Assets, liabilities and net asset
In the quarter under review, total assets increased by ¥489 million from the end of previous consolidated fiscal yearto ¥13,047 million. The main factors were increases of cash and deposit (an increase of ¥231 million from the endof the previous consolidated fiscal year) and notes receivable and accounts receivable (an increase of ¥182 million
from the end of the previous consolidated fiscal year).
Liabilities increased by ¥973 million from the previous consolidated fiscal year to ¥3,689 million. The main factor
was an increase of short-term borrowings (an increase of ¥900 million from the end of the previous consolidated
fiscal year).
Net assets decreased by ¥483 million from the previous consolidated fiscal year to ¥9,358 million. The main factors
included a decrease of reserved profit, down 475 million from the end of previous consolidated fiscal year, etc.
Analysis of cash flows
Net cash generated from operating activities totaled ¥108 million, primarily due to the posting of net income before
tax for the quarter of ¥445 million, despite an increase of accounts receivable of ¥170 million and a corporate tax
payment of ¥330 million.
Net cash generated from investment activities totaled ¥115 million, due mainly to proceeds from withdrawals oftime deposits of ¥200 million.
Net cash generated from financial activities was ¥207 million, reflecting a net increase of short-term borrowings of-3-

¥900 million and a dividend payment of ¥676 million.
As a result of these operating, investment, and financial activities, the balance of cash and cash equivalents at theend of the consolidated quarter under review was ¥4,017 million.
3.

Qualitative information about consolidated earnings forecast
While we see signs of recovery in the economic environment, we expect IT investments to continue suffering fromdifficult conditions in the short term. Under such circumstances, both net sales and profit of each business of theCompany decreased in the first quarter from the previous corresponding period. However, we have already factored
in a slowdown of business at the beginning of the fiscal year, and there is no revision to the earnings forecast for thesecond quarter and the consolidated fiscal year ending December 2010, which the Company announced on February
4, 2010.

4.

Others(1) Changes in significant subsidiaries during the quarter under review (changes in specified subsidiaries thatinvolved changes in the scope of consolidation)
There is no applicable item.
(2) Adoption of simplified accounting method or special accounting method for the preparation of consolidated
quarterly financial statements:
Income taxes and payables are calculated by appropriately estimating the legal effective tax rate after the
adoption of tax effect accounting which is to be assessed upon net income before tax of the consolidated fiscal
year including the consolidated first quarter under review and multiplying such estimated legal effective tax
rate to the net income before tax of the consolidated first quarter. The adjustment amount for corporate tax, etc.,
is included in the amount of corporate tax, etc.
(3) Changes in principle, procedure, presentation, etc., of the accounting process related to the preparation of
consolidated quarterly financial statements(Accounting Standard for Construction Contracts)
Effective from the first quarter of the consolidated fiscal year under review, the Company has applied“Accounting Standard for Construction Contracts” (ASBJ Statement No.15, issued on December 27, 2007) and“Guidance on Accounting Standard for Construction Contracts” (ASBJ Guidance No.18, issued on December
27, 2007).
There is no impact of the adoption of the above accounting standards on the financial statements for the firstquarter of the consolidated fiscal year under review.

-4-

5.

Quarterly Period Consolidated Financial Statements(1) Quarterly Period Consolidated Balance Sheets(in thousands of yen)
End of consolidated first quarter
under review(March 31, 2010)

Summarized consolidated balance
sheet for the end of previous
consolidated fiscal year
(December 31, 2009)

4,017,272

3,785,549

Notes and accounts receivable
Merchandise and finished goods
Work in process
Accounts receivable-other
Other
Allowance for doubtful accounts

2,483,855
141,172
16,631
1,369,609
777,842(7,432)2,301,382
133,162
38,5291,374,764
516,505(9,302)

Total current assets

8,798,951

8,140,590

2,768,281(2,338,516)

2,779,272(2,339,229)

429,765

440,043

172,662
1,464,615(1,192,437)

172,662
1,446,479(1,174,914)

272,178

271,565874,606

884,271

421,761
91,682439,805
94,016

513,443533,821

Investment securities
Other
Allowance for doubtful accounts

1,853,254
1,077,234(70,301)

1,883,250
1,214,122(98,813)

Total investments and other assets

2,860,188

2,998,559

4,248,238

4,416,652

13,047,190

12,557,243

AssetsCurrent assets
Cash and deposits

Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total tangible fixed assets
Intangible fixed assets
Software
Other
Total intangible fixed assets
Investments and other assets

Total fixed assets
Total assets-5-

(in thousands of yen)
End of consolidated first quarter
under review(March 31, 2010)

Summarized consolidated balance
sheet for the end of previous
consolidated fiscal year
(December 31, 2009)

575,560
930,000
32,000168,916
74,493
66,969591,498
30,00032,000365,079
61,18274,301

Liabilities
Current liabilities
Accounts payable
Short-term borrowings
Long-term borrowings due within one year
Income tax payable, etc.
Reserve for bonuses
Reserve for quality assurance
Other

1,586,227

1,295,848

Total current liabilities

3,434,167

2,449,910

32,00097,93948,000102,027

90,087102,228

Non-current liabilities
Long-term borrowings
Allowance for retirement benefits
Negative goodwill
Others34,911

13,378

Total non-current liabilities

254,938

265,634

3,689,105

2,715,544

Common stock
Capital surplus
Retained earnings

1,421,815
2,495,772
6,500,242

1,421,815
2,495,772
6,975,347

Treasury stock(1,171,668)(1,171,668)

Total shareholders’ equity

9,246,161

9,721,266

56,629(1,507)62,355(1,558)55,12160,797

Minority interests

56,801

59,634

Total net assets

9,358,084

9,841,698

13,047,190

12,557,243

Total liabilities
Net assets
Shareholders’ equity

Valuation, translation adjustments, etc.
Net unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Total valuation, translation adjustments, etc.

Total liabilities and net assets-6-

(2) Quarterly Period Consolidated Statements of Income
Accumulated Period for the Consolidated First Quarter(in thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Officers’ remuneration
Salaries and bonuses
Employee training expenses
Research & development expenditures
Depreciation
Recruitment expenses
Amortization of goodwill
OthersTotal selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Amortization of negative goodwill
Equity in income of non-consolidated subsidiaries & affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sale of investment securities
Total extraordinary income
Extraordinary losses
Losses on sale of fixed assets
Losses on disposal of fixed assets
Losses on devaluation of investment securities
Impairment losses
Litigation expenses
Total extraordinary losses
Net income before taxes for the quarterly period
Income taxes
Minority interests in net income
Quarterly net income

Accumulated period forthe consolidated quarter
under review(from January 1, 2009
to March 31, 2009)
6,692,884
4,481,287
2,211,596

Accumulated period forthe consolidated quarter
under review(from January 1, 2010
to March 31, 2010)
5,757,153
3,620,715
2,136,438

99,272
703,427
23,957
18,46949,56916,42438,260526,076
1,475,458
736,138

86,612
891,624
43,95519,00629,016
15,861
2,013
571,576
1,659,666
476,771

2,842
1,295
14,2909,889
18,572
46,889971
230
14,154280
5,078
20,715

3,051
3,400
6,451
776,576

780
1,314
2,095
495,391

16,89916,899

−
−

3,264
523
11,14331,927−−
20,321−
30,00050,321445,069
192,396(2,833)
255,506−
46,860746,615
324,604(1,611)
423,622-7-

(3) Quarterly Period Consolidated Statements of Cash Flows(in thousands of yen)
Accumulated period forthe consolidated quarter
under review(from January 1, 2009
to March 31, 2009)
Cash flows from operating activities:
Net income before taxes (quarterly period)
Depreciation and amortization
Impairment losses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in reserve for bonuses
Increase (decrease) in reserve for quality assurance
Increase (decrease) in allowance for retirement benefits
Earned interest and dividends
Interest expenses
Equity in income (losses) of subsidiaries & affiliates
Gains (losses) on sale of fixed assets
Losses on disposal of fixed assets
Gains (losses) on sale of investment securities
Gains (losses) on valuation of investment securities
Litigation expenses
Increase (decrease) in accounts receivable
Increase (decrease) in inventories
Increase (decrease) in accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Income and other taxes
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Acquisition of intangible fixed assets
Proceeds from sale of investment securities
Purchases of shares in subsidiaries
Payments for deposits and guarantee
Proceeds from collection of deposits and guarantees
Proceeds from collection of loans
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings
Repayment of long-term borrowings
Purchase of treasury stock
Dividends paid
Dividends paid to minority shareholders

746,615
137,41431,927(5,784)
68,894(132,028)(3,896)(4,137)3,051(9,889)3,264
523(16,899)
11,143−928,147(6,823)(7,173)(94,068)
1,650,280
4,068(3,457)(1,033,278)
617,612445,069
64,066−(382)
13,311(7,332)(4,087)(1,201)
780
(280)
−
−
−
20,321
30,000(179,318)
13,888(15,938)
59,760438,657
1,597(981)(330,523)
108,749(59,363)
58,787(33,598)
1,692(44,730)
20,312(5,400)(181)
44,597105−
200,000(91,075)
−
(220)
−
−
−
6,361
−
705
115,770−(17,778)(302,000)(43,466)(90,845)(648,249)(1,252)

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the quarterly period(1,085,813)
2,364(483,614)
2,612,962
2,129,347-8-

Accumulated period forthe consolidated quarter
under review(from January 1, 2010
to March 31, 2010)

900,000(16,000)−(676,099)−
207,900(696)
431,723
3,585,549
4,017,272

(4) Notes regarding premise of surviving company
Not applicable(5) Segment information[Business segment information]
First quarter of fiscal 2009 (from January 1, 2009 to March 31, 2009)
IT Consulting
Business
I.

Net sales and operating
income (or loss)
Net sales(1) Net sales to outsideclients(2) Inter-segment sales
or transfer
Total

Corporate
Revitalization/
New Operations
Development
Business

Total

Elimination or
corporate

Consolidated

4,361,104

1,157,803

1,173,976

6,692,884−

6,692,884

600

60,79921,54382,943(82,943)−

4,361,704
3,636,243

1,218,603
1,186,293

1,195,519
1,210,595

6,775,828
6,033,132(82,943)(76,385)

6,692,884
5,956,746

Operating income (loss)

725,460

32,310(15,075)

742,695(6,557)736,138

Assets, depreciation,
impairment loss andcapital expenditures
AssetsDepreciation
Impairment loss
Capital expenditures

7,255,768
96,8722,201,227
26,950−4,447

10,464,451
136,856
31,92778,3281,854,765
557−
72,885

1,007,455
13,03331,927995

12,319,216
137,41431,92778,328Operating expenses
II.

Package &ServiceBusiness(in thousands of yen)−−

Notes:
1. Method of classifying business segments
Business segments are classified according to the contents of businesses.
2. Main products in each business segment
Business segment
IT Consulting Business

Package & Service BusinessCorporate Revitalization/
New Operations
Development BusinessBusiness operations
To provide solutions by establishing information systems with cutting-edge IT and practical, advanced
techniques, while sharing clients’ managerial issues from the viewpoint of management and understanding
the essence of clients’ business.
Helping clients improve their operational efficiency by using ASP operations to sell or provide software
packages for highly specialized fields, such as sales management and ERP, and to develop mission-criticalsystems on a commission basis.
To get deeply involved in the management team of client firms, quickly revitalize client firms through drastic
reform focusing on IT, and establish models of success for each industry.
To form an alliance with corporations involved in businesses which the Group does not engage in, or
establish and invest in startups, while using and combining the Company’s overall know-how and technicalcapability about management, operations and IT. By doing this, we aim to maximize these client firms’
value or accelerate their growth, and eventually contribute to the development of the industries concerned.

3. The amount of assets which were included under “Elimination or corporate” was 3,577,063 thousand yen and theseassets consist mainly of surplus funds (cash and securities) and assets relating to the administration sector.

-9-First quarter of fiscal 2010 (from January 1, 2010 to March 31, 2010)
IT Consulting
Business
I.

Net sales and operating
income (or loss)
Net sales(1) Net sales to outsideclients(2) Inter-segment sales
or transfer
Total

Total

Elimination or
corporate

Consolidated

3,678,283

924,292

1,154,467

5,757,043

110

5,757,153

600

45,52011,45057,570(57,570)−3,678,883
3,130,476

969,812
1,048,579

1,165,917
1,164,224

5,814,613
5,343,280(57,460)(62,898)

5,757,153
5,280,382

Operating income (loss)

548,406(78,766)

1,692

471,333

5,438

476,771

Assets, depreciation,and capital expenditures
AssetsDepreciation
Capital expenditures

7,885,129
41,00356,666

1,655,608
12,701
5,596

800,270
9,803
29,033

10,341,008
63,50991,2952,706,182
557

13,047,190
64,06691,295

Operating expenses
II.

Corporate
Revitalization/
New Operations
Development
Business

Package &ServiceBusiness(in thousands of yen)−

Notes:
1. Method of classifying business segments
Business segments are classified according to the contents of businesses.
2. Main products in each business segment
Business segment
IT Consulting Business

Package & Service BusinessCorporate Revitalization/
New Operations
Development Business3.

Business operations
To provide solutions by establishing information systems with cutting-edge IT and practical, advanced
techniques, while sharing clients’ managerial issues from the viewpoint of management and understanding
the essence of clients’ business.
Helping clients improve their operational efficiency by using ASP operations to sell or provide software
packages for highly specialized fields, such as sales management and ERP, and to develop mission-criticalsystems on a commission basis.
To get deeply involved in the management team of client firms, quickly revitalize client firms through drastic
reform focusing on IT, and establish models of success for each industry.
To form an alliance with corporations involved in businesses which the Group does not engage in, or
establish and invest in startups, while using and combining the Company’s overall know-how and technicalcapability about management, operations and IT. By doing this, we aim to maximize these client firms’
value or accelerate their growth, and eventually contribute to the development of the industries concerned.

The amount of assets which were included under “Elimination or corporate” was 3,508,284 thousand yen and theseassets consist mainly of surplus funds (cash and securities) and assets relating to the administration sector.

- 10 -

[Geographical segment information]
First quarter of fiscal 2009 (from January 1, 2009 to March 31, 2009)
Domestic operations accounted for more than 90% of consolidated sales, and thus geographical segment
information is omitted.
First quarter of fiscal 2010 (from January 1, 2010 to March 31, 2010)
Domestic operations accounted for more than 90% of consolidated sales, and thus geographical segment
information is omitted.
[Overseas sales]First quarter of fiscal 2009 (from January 1, 2009 to March 31, 2009)
Sales from overseas operations accounted for less than 10% of consolidated sales.
therefore omitted.

Overseas sales information isFirst quarter of fiscal 2010 (from January 1, 2010 to March 31, 2010)
Sales from overseas operations accounted for less than 10% of consolidated sales.
therefore omitted.
(6) Notes when any significant change to shareholders’ equity takes place
Not applicable- 11 -

Overseas sales information is6.

Others(in thousands of yen)Orders received
Function
IT consulting services
Package & service businessCorporate Revitalization Business/
New Operations Development Business
Total

Quarterly period ended March 2009
(January 1, 2009 – March 31, 2009)
Orders Rcvd
Orders O/SQuarterly period ended March 2010
(January 1, 2010 – March 31, 2010)
Orders Rcvd
Orders O/S

4,212,945

5,120,504

3,707,397

3,160,161

980,911927,096751,263425,645

1,820

1,048

21,331

10,497

5,195,678

6,048,648

4,479,992

3,596,303- 12 -