Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020
(Year Ending December 2020) [Japan GAAP]
October 28, 2020

Company name:
Future Corporation
Security code number: 4722
URL: https://www.future.co.jp
Representative:
Yasufumi Kanemaru, Chairman and President
Contact:
Shinichi Iwata, Head of Financial & Accounting Group
Scheduled date for filing the quarterly report:
Scheduled date for distribution of dividend payments:
Creation of supplemental material on quarterly financial results:
Holding of quarterly results briefing:

Shares listed on: First Section of Tokyo Stock Exchange

Tel. 03-5740-5724
November 13, 2020–
No
No
(Amount rounded off to million yen)

1. Consolidated Results for Third Quarter of Fiscal 2020 (January 1, 2020 to September 30, 2020)(1) Consolidated operating results (cumulative)(Percentage figures indicate year-on-year changes)

Net sales
Million yen

Third quarter, fiscal 2020
Third quarter, fiscal 2019
(Note) Comprehensive income

Quarterly profit attributable toowners of parent

Operating income%

Million yen%

32,410(4.3)
3,934(19.4)
33,879
17.7
4,883
19.7
Third quarter, fiscal 2020: 9,167 million yen (219.6%)
Third quarter, fiscal 2019: 2,868 million yen (-38.1%)%

Million yen

2,832
3,199

(11.5)
1.1

Quarterly profit per share
Yen

Third quarter, fiscal 2020
Third quarter, fiscal 2019

63.73
71.55

(2) Consolidated financial position
Total assets
Million yen

Third quarter, fiscal 2020
Fiscal 2019
(Reference) Shareholders’ equity

Shareholders’ equity
ratio

Net assets
Million yen

Net assets per share%

48,382
36,91939,03930,296
Third quarter, fiscal 2020: 36,871 million yen

Yen

76.2
833.4377.6
677.50Fiscal 2019: 30,296 million yen

2. Dividends
End of first quarter

Dividends per share
End of second quarter End of third quarter

Yen

Yen

Year-end

Yen

Fiscal 2019
–
18.00
–
Fiscal 2020
–
20.00
–
Fiscal 2020 (Forecast)(Note) Changes from the previous release of dividends-per-share forecasts: None

Total
Yen

Yen

21.00

39.00

20.00

40.00

3. Projected Consolidated Results for Fiscal 2020 (January 1, 2020 to December 31, 2020)(Percentage figures indicate year-on-year changes)

Net sales
Million yen

Profit attributable toowners of parent

Operating income%

Million yen

Full year
44,000(3.1)
5,000(Note) Changes from the previous release of earnings forecasts: Yes

Profit per share%

Million yen%

Yen(23.4)

3,500(23.2)

78.84

* Notes(1) Changes in significant subsidiaries during the consolidated period under review (changes in specified subsidiaries that involved changes
in the scope of consolidation): None
(2) Application of accounting treatment peculiar to quarterly consolidated financial statement preparation: None
(3) Change in accounting policies or estimates and retrospective restatements
1) Change in accounting policies in accordance with revision of accounting standards:
2) Change in accounting policies other than item 1) above:3) Change in accounting estimates:
4) Retrospective restatements:(4) Number of outstanding shares (common stock)1) Total outstanding shares as of the end of theperiod (including treasury shares)
2) Total treasury shares as of the end of the period
3) Average number of outstanding shares during
the period under review (cumulative total)

Third quarter,
fiscal 2020
Third quarter,
fiscal 2020
Third quarter,
fiscal 2020

None
None
None
None

47,664,000 shares Fiscal 201947,664,000 shares

3,422,611 shares Fiscal 2019

2,946,587 shares

44,442,242 shares

Third quarter,
fiscal 201944,708,613 shares* Quarterly financial results reports are outside the scope of auditing by Certified Public Accountants or audit firms.
* Points to note about the proper use of projections, and other noteworthy events
Any forward-looking statement, including earnings forecasts, contained in this document is based on information currently held by the Company and assumptions theCompany considers as reasonable, and the Company does not promise to achieve any of them. Actual results may differ significantly from forecasts due to various
uncertain factors.

Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020

 Contents

1.

2.

Qualitative Information Regarding Quarterly Financial Results ............................................................................................................. 2(1)

Explanation on business performance ............................................................................................................................................ 2(2)

Explanation on qualitative information about consolidated earnings forecast ............................................................................... 3

Consolidated Quarterly Financial Statements and Key Remarks ............................................................................................................ 4(1)

Consolidated quarterly balance sheets ........................................................................................................................................... 4(2)

Consolidated quarterly statements of income and comprehensive income .................................................................................... 6(First nine-month period) ............................................................................................................................................................... 6(3)

Notes to consolidated quarterly financial statements ..................................................................................................................... 8(Note on premise of a going concern) ............................................................................................................................................ 8(Significant changes in shareholders’ equity)................................................................................................................................. 8(Segment information) ................................................................................................................................................................... 83.

Additional Information ............................................................................................................................................................................ 9
Status of orders received ......................................................................................................................................................................... 9- 1 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020

1. Qualitative Information Regarding Quarterly Financial Results(1)

Explanation on business performance
The group’s consolidated net sales for the first nine months were 32,410 million yen, down 4.3% from a year ago; operating income was3,934 million yen, down 19.4% year on year; and quarterly profit attributable to owners of parent came to 2,832 million yen, down 11.5%
from a year ago.
During the first nine months of the consolidated fiscal year under review, the economic environment remained highly uncertain, due to theunclear impact of the spread of the novel coronavirus. Under these circumstances, in our IT Consulting & Services Business, costs
increased due to factors such as the addition of incremental personnel in conjunction with the delay in the delivery of some projects, on
top of the reduction and postponement of IT investments by some client companies, which pushed down sales.
As a result of the above, during the first nine-month period, both the net sales and operating income of our IT Consulting & Service
Business decreased due mainly to lower sales and earnings of Future Architect, Inc. (including the technology division of Future
Corporation) compared to the results of the same period of the previous fiscal year. Meanwhile, in Business Innovation Business, allcompanies improved their operating income/loss, which resulted in posting operating income as a business segment. As a result, thegroup’s consolidated net sales and operating income declined 4.3% and 19.4%, respectively, from the same period of the previous fiscal
year. In addition, quarterly profit attributable to owners of parent decreased 11.5% year on year.
Details of the performance of each segment are as follows.

1) IT Consulting & Service Business
Future Architect, Inc. (including the technology division of Future Corporation) received a steady stream of orders from the financial
industry, which is working to improve its operations, and retailers, which are trying to digitize their stores. In addition, orders for coresystem enhancements, grand designs for the promotion of DX and others increased. However, both net sales and operating income
declined due to delays in the start of new projects, delays in the delivery of existing projects, and increased testing costs for some of themore difficult existing projects.
Future Inspace, Inc. posted lower net sales and operating income year on year due to a decrease in new development orders although themaintenance and operation service deals for projects set by Future Architect, Inc. were favorable thanks to the collaboration with the saidfirm.
At FutureOne, Inc., both net sales and operating income declined significantly from the same period of the previous fiscal year due to theprioritized allocation of personnel in response to the delays in the delivery of certain projects.
At YDC Corporation, while net sales decreased year on year due to the impact of revisions made by some business partners to theirinvestment stance, operating income increased from a year earlier mainly due to the favorable sales of its original software, “YDCSONAR,” which integrates and analyzes quality information in the manufacturing industry.
At dit Co., Ltd., both net sales and operating income significantly increased year on year thanks to the strong performance of
security-related services as well as the rise in orders related to the development of a network environment for GIGA School.
As a result, net sales of the segment amounted to 25,982 million yen, down 7.4% from a year earlier, and operating income came to 3,659
million yen, down 21.4% from a year ago.
2) Business Innovation Business
At eSPORTS Co., Ltd., both net sales and operating income increased from the same period of the previous fiscal year, due to factors
such as the growth of private brand products resulting from increased demand for indoor training associated with the spread of the novel
coronavirus and the steady sales of private brand products also in the outdoor products field, among others, thanks to the effect of
campaigns that had been implemented from before to raise brand awareness.
CodeCamp, Inc. saw a significant increase in both net sales and operating income compared with the results of a year earlier. This wasdue to a growing need among individuals to take online courses, which promoted a continuous rise in people taking courses, as well as tocapturing the demand for online training among companies that are reviewing working styles by installing an online training support desk
and taking other steps.

- 2 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020

Tokyo Calendar Inc. posted higher net sales year on year as a result of focusing on capturing the needs of new lifestyles through the
deployment of monthly magazines and online services via web-based media on top of maintaining the stable performance of its online
services, such as “Tokyo Calendar Date.” As a result, the firm posted operating income in contrast to the operating loss recorded in thesame period of the previous fiscal year.
LaiBlitz, Inc.’s net sales and operating income increased from a year earlier due primarily to the launch of services for amateur sports inaddition to the steady provision of existing services for professional baseball teams, among others.
As a result, Business Innovation Business managed to be in the black as a segment, with net sales rising 10.2% year on year to 6,477
million yen and operating income coming to 349 million yen (in contrast to an operating loss of 53 million yen in the same period of theprevious fiscal year).
(Note) Segment result figures mentioned above are before adjustment for intersegmental sales and transfers.
(2)

Explanation on qualitative information about consolidated earnings forecast
At the meeting of the Board of Directors held on October 28, 2020, the Company decided, in light of recent business performance trends
and other factors, to revise its consolidated earnings forecasts for the full year ending December 2020 (January 1, 2020 to December 31,2020), which were disclosed at the time of the July 31, 2020 announcement of the financial results for the second quarter of the fiscal year
ending December 2020. For details, please refer to the “Notice Regarding Revision to the Full-Year Earnings Forecast” released today.

- 3 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020

2. Consolidated Quarterly Financial Statements and Key Remarks(1)

Consolidated quarterly balance sheets(in thousands of yen)Previous consolidated
fiscal year
(December 31, 2019)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Securities
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment

Consolidated third quarter
under review(September 30, 2020)

14,929,901
7,087,190–
995,544351,639
1,363,881(3,007)

15,113,438
6,105,387
200,000
1,125,434
1,358,589
1,346,959(3,000)24,725,149

25,246,810

1,710,429(965,749)

1,732,780(1,026,585)

744,679

706,194855
2,888,097(2,247,982)

855
2,786,872(2,203,745)

640,115583,126

1,385,650

1,290,177

Intangible assets
Goodwill
Software
Customer-related assets
Other

178,023
1,673,554
624,000
5,608

148,289
1,644,790
468,000
5,623

Total intangible assets

2,481,186

2,266,703

Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts

8,779,498
1,433,233
16,680237,322(19,502)

17,940,824
1,447,630
9,727
192,034(11,001)

Total investments and other assets

10,447,232

19,579,216

14,314,070

23,136,096

39,039,219

48,382,907

Total non-current assets
Total assets- 4 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020
(in thousands of yen)Previous consolidated
fiscal year
(December 31, 2019)
Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term loans payable
Current portion of bonds
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for quality assurance
Provision for loss on projects
Other

Consolidated third quarter
under review(September 30, 2020)

1,305,448
11,4728,000
1,326,754
854,922238,574
65,617
254,804
2,487,069

1,264,470
4,432–
861,999
808,367
929,357
69,844805,3122,211,563

Total current liabilities

6,552,663

6,955,346

Non-current liabilities
Long-term loans payable
Asset retirement obligations
Deferred tax liabilities
Other

3,320
406,303
1,635,440
145,237–
407,947
3,923,263
176,828

Total non-current liabilities

2,190,301

4,508,039

Total liabilities

8,742,965

11,463,386

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

1,421,815
2,525,165
23,232,499(1,493,579)

4,000,000
21,33324,187,759(2,235,662)

25,685,901

25,973,430

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment

Total shareholders’ equity

4,598,333
586
11,432

10,887,018(1,069)12,611

Total accumulated other comprehensive income

4,610,352

10,898,560–

47,52930,296,254

36,919,520

39,039,219

48,382,907

Non-controlling interests
Total net assets
Total liabilities and net assets- 5 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020
(2)

Consolidated quarterly statements of income and comprehensive income(First nine-month period)(in thousands of yen)First nine months of the previous
consolidated fiscal year
(from January 1, 2019
to September 30, 2019)

First nine months of the consolidated
fiscal year under review(from January 1, 2020
to September 30, 2020)

Net sales
Cost of sales

33,879,841
19,814,349

32,410,144
19,071,018

Gross profit

14,065,492

13,339,126

Selling, general and administrative expenses
Directors' compensation
Salaries and bonuses
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Other

356,9293,494,606
280,060
332,579
284,750
341,713
4,091,243

395,4113,638,347
397,494438,805
291,457
340,3903,902,235

9,181,883

9,404,141

4,883,609

3,934,984

1,053
74,73742,951
5,975
2,589

572
74,855
1,731
1,210
12,205

127,308

90,575

5,004

230

Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Total non-operating expenses

5,004

230

5,005,912

4,025,329–

93,318–93,318

175,312
1,848

–
683

Total extraordinary losses

177,160

683

Quarterly profit before income taxes

4,828,752

4,117,964

Income taxes

1,612,811

1,238,263

Quarterly profit

3,215,940

2,879,701(Quarterly profit attributable to)
Quarterly profit attributable to owners of parent
Quarterly profit attributable to non-controlling interests

3,199,109
16,831

2,832,171
47,529Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on realized foreign currency translation adjustment
Loss on change in equity- 6 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020
(in thousands of yen)First nine months of the previous
consolidated fiscal year
(from January 1, 2019
to September 30, 2019)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Quarterly comprehensive income(Quarterly comprehensive income attributable to)
Quarterly comprehensive income attributable to owners ofparentQuarterly comprehensive income attributable tonon-controlling interests- 7 -First nine months of the consolidated
fiscal year under review(from January 1, 2020
to September 30, 2020)(458,894)
2,110
109,963

6,288,685(1,655)
243

(264)

934

(347,084)

6,288,207

2,868,855

9,167,909

2,851,988

9,120,379

16,86747,529Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020(3)

Notes to consolidated quarterly financial statements(Note on premise of a going concern)
Not applicable.

(Significant changes in shareholders’ equity)
Not applicable.

(Segment information)[Segment information]
I. First nine months of the previous consolidated fiscal year (from January 1, 2019 to September 30, 2019)
1. Information on amounts of net sales and income or loss by reportable segment(in thousands of yen)
Reportable segments
IT Consulting &Service BusinessBusinessInnovation
Business

Other(Note 1)

Total

Total

Amount stated infinancialstatements(Note 3)Adjustments(Note 2)

Net sales(1) Net sales tooutside clients

28,029,361

5,850,480

33,879,841–

33,879,841–

33,879,841(2) Inter-segment
sales or transfer

37,97527,65365,629–65,629(65,629)–

28,067,337

5,878,133

33,945,471–

33,945,471(65,629)

33,879,841

4,658,595(53,210)

4,605,385

1,504

4,606,889

276,719

4,883,609

Total
Segment income(loss)(Note 1) “Other” is a segment not included in the reportable segments and includes securities investment, holding, and management activities.
(Note 2) Adjustments to segment income (loss) represents the amount of inter-segment transactions eliminated and income and expenses of theholding company excluding the technology segment.
(Note 3) Segment income (loss) is adjusted with operating income in the consolidated quarterly financial statements.

II. First nine months of the consolidated fiscal year under review (from January 1, 2020 to September 30, 2020)
1. Information on amounts of net sales and income or loss by reportable segment(in thousands of yen)
Reportable segments
IT Consulting &Service BusinessNet sales(1) Net sales tooutside clients(2) Inter-segment
sales or transfer
Total
Segment income(loss)

BusinessInnovation
Business

Other(Note 1)

Total

Total

Amount stated infinancialstatements(Note 3)Adjustments(Note 2)25,961,616

6,445,183

32,406,800

3,343

32,410,144–

32,410,144

21,181

32,71653,89827,333

81,231(81,231)–

25,982,798

6,477,900

32,460,698

30,67632,491,375(81,231)

32,410,144

3,659,649

349,817

4,009,467(14,028)

3,995,438(60,454)

3,934,984(Note 1) “Other” is a segment not included in the reportable segments and includes securities investment, holding, and management activities.
(Note 2) Adjustments to segment income (loss) represents the amount of inter-segment transactions eliminated and income and expenses of theholding company excluding the technology segment.
(Note 3) Segment income (loss) is adjusted with operating income in the consolidated quarterly financial statements.

- 8 -Future Corporation (4722) Consolidated Summary Report of Operating Results for Third Quarter of Fiscal 2020

3. Additional Information
Status of orders received

Segment

First nine months of the previous
consolidated fiscal year
(from January 1, 2019 to September 30, 2019)(in thousands of yen)First nine months of the consolidated
fiscal year under review(from January 1, 2020 to September 30, 2020)

Orders received

Orders received

Order backlog

Order backlog

IT Consulting & Service Business

27,684,440

11,565,937

22,982,443

9,544,549

Business Innovation Business

1,313,316

362,381

1,617,194364,669

28,997,757

11,928,319

24,599,637

9,909,218

Total

Segment

Second quarter of the consolidated
fiscal year under review(from April 1, 2020 to June 30, 2020)
Orders received

IT Consulting & Service BusinessBusiness Innovation Business
Total

Order backlog

7,964,900

10,428,710

Third quarter of the consolidated
fiscal year under review(from July 1, 2020 to September 30, 2020)
Orders received
7,061,040

Order backlog
9,544,549

450,180

335,636

577,692

364,669

8,415,081

10,764,347

7,638,732

9,909,218- 9 -