Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019(Year ending December 2019) [Japan GAAP]
October 30, 2019

Company name:
Future Corporation
Shares listed on: First Section of Tokyo Stock Exchange
Security code number: 4722
URL: https://www.future.co.jp
Representative:
Yasufumi Kanemaru, Chairman and President
Contact:
Yoshihiko Nakajima, Executive Officer
Tel. 03-5740-5724
Scheduled submit date of quarterly report:
November 13, 2019
Scheduled date for distribution of dividend payments:
Creation of supplemental material on quarterly financial results:
No
Holding of quarterly results briefing:No(Amount rounded off to million yen)

1. Consolidated Results for the Third Quarter of Fiscal 2019 (January 1, 2019 to September 30, 2019)(1) Consolidated operating results (cumulative)(Percentage figures indicate year-on-year changes)

Net sales
Million yen

Third quarter, fiscal 2019
Third quarter, fiscal 2018
(Note) Comprehensive income

Quarterly profit attributable toowners of parent

Operating income%

Million yen%

Million yen%

33,879
17.7
4,883
19.7
28,794
8.7
4,080
27.9
Third quarter, Fiscal 2019: 2,868 million yen (-38.1%)
Third quarter, Fiscal 2018: 4,635 million yen (103.6%)
Quarterly profit per share

3,199
3,164

1.1
31.4

Yen

Third quarter, fiscal 2019
Third quarter, fiscal 2018

71.55
70.78

(2) Consolidated financial position
Total assets
Million yen

Third quarter, fiscal 2019
Fiscal 2018
(Reference) Shareholders’ equity

Shareholders’ equity
ratio

Net assets
Million yen

Net assets per share%

37,69829,31937,24028,108
Third quarter, fiscal 2019: 29,319 million yen

Yen

77.8
655.6675.2
626.53Fiscal 2018: 28,008 million yen

2. Dividends
End of first quarter

Dividends per share
End of second quarter End of third quarter

Yen

Yen

Fiscal 2018–
15.00
Fiscal 2019–
18.00
Fiscal 2019 (Forecast)(Note) Changes from the previous release of dividends-per-share forecasts: None
(Note)

Year end

Yen

–
–

Total
Yen

Yen

17.00

32.00

21.00

39.00

The year-end dividend of 21 yen for Fiscal 2019 comprises an ordinary dividend of 18 yen and a dividend of 3 yen to commemorate the 30th anniversary of
the Company’s foundation.

3. Projected Consolidated Results for Fiscal 2019 (January 1, 2019 to December 31, 2019)(Percentage figures indicate year-on-year changes)

Net sales
Million yen

Profit attributable toowners of parent

Operating income%

Million yen

Full year
43,5008.2
6,400(Note) Changes from the previous release of earnings forecasts: None

Profit per share%

Million yen

%

Yen

9.9

4,355

6.4

97.42

* 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

Third quarter,
fiscal 2019
Third quarter,
fiscal 2019
Third quarter,
fiscal 2019

None
None
None
None

47,664,000 sharesFiscal 2018

47,664,000 shares

2,946,587 sharesFiscal 2018

2,959,049 shares

44,708,613 shares

Third quarter,
fiscal 2018

44,705,065 shares* Quarterly financial results reports are outside thescope 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 the Third Quarter of Fiscal 2019

 Contents

1.

Qualitative Information Regarding Quarterly Financial Results ............................................................................................... 2(1) Explanation on business performance ............................................................................................................................... 2(2) Explanation on qualitative information about consolidated earnings forecast .................................................................. 3

2.

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(Notes on premise of a going concern) .............................................................................................................................. 8(Significant change in shareholders’ equity)...................................................................................................................... 8(Additional information) .................................................................................................................................................... 8(Segment information) ....................................................................................................................................................... 93.

Additional Information ............................................................................................................................................................ 10
Status of orders received ......................................................................................................................................................... 10-1-

Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019

1. Qualitative Information Regarding Quarterly Financial Results(1)

Explanation on business performance
The group’s consolidated net sales for the first nine months were 33,879 million yen, up 17.7% from a year ago, while operating income
grew 19.7% to 4,883 million yen and quarterly profit attributable to owners of parent increased 1.1% to 3,199 million yen over the same
period of the previous fiscal year.
During the first nine-month period, net sales and operating income of the IT Consulting & Service Business increased significantly
year-on-year due to the strong performance of Future Architect, Inc., the technology division of Future Corporation and othersubsidiaries, while the Business Innovation Business’s operating loss declined. As a result of the above, the group posted record-highconsolidated net sales and operating income for the first nine months.
Details of the performance of each segment are as follows.

1) IT Consulting & Service Business
Future Architect, Inc. and the technology division of Future Corporation increased sales in the apparel, distribution and service
industries that are promoting strategic IT investment using big data and AI and also from new customers such as a media company, realestate company and railway company with which no transactions have been made in the past. These new customers are trying toachieve zero-based management reforms through digital strategies using the world’s cutting-edge strategies. In addition, an increasing
number of regional banks have introduced “FutureBANK,” a business-support and lending-support system. As a result, net sales andoperating income increased year on year.
Future Inspace, Inc. increased both its net sales and operating income year on year as maintenance and operation service deals for
projects completed by Future Architect, Inc. and original development deals increased, as was the case last year.
Net sales and operating income of FutureOne, Inc. rose thanks to increased orders from relatively larger medium-sized companies (e.g.,
subsidiaries of listed companies) mainly for InfiniOne, its original sales management software package, and thanks to development deals
related to the reduced tax rate system for the consumption tax.
YDC Corporation’s net sales and operating income decreased from a year ago in the first nine months as it had a large deal involving
YDC Sonar, a software program for analyzing product quality information, in the same period a year ago.
As a result, net sales of the segment increased 19.4% from a year ago to 28,067 million yen, while operating income came to 4,658
million yen, up 15.0% from a year ago.
2) Business Innovation BusinessNet sales of eSPORTS Co., Ltd. increased year on year owing to strong sales of private-brand outdoor wagons, fitness equipment, andnational-brand outdoor-related products. It also improved its gross margin ratio by making strategic purchases based on strengthened
relationships with suppliers, turning around from a loss last year to an operating profit.
CodeCamp, Inc. increased its net sales and operating income from the same period a year ago due to steadily increased monthly orders
for its online programming course targeting individuals.
LaiBlitz, Inc.’s net sales and operating income increased compared with the level a year ago as it developed a system for strengthening a
new professional baseball team, as well as fan club and e-commerce sites of another professional baseball team and an e-commerce siteof eSPORTS Co., Ltd.
Tokyo Calendar Inc. posted an operating loss in the first half as its magazine and online advertising revenues underperformed the target
figures, but turned around to an operating profit due to third-quarter advertising revenues that surpassed those for the first and second
quarters and due to efforts for cost reduction. Its sales for the first nine months increased year on year thanks to increased sales ofservices such as “Tokyo Calendar Date,” but its operating loss increased.
As a result, Business Innovation Business’s operating results improved year-on-year, with net sales rising 9.8% to 5,878 million yen andoperating loss shrinking to 53 million yen from the year-ago level of 176 million yen.

(Note) Segment result figures mentioned above are before adjusting for intersegmental sales and transfers.
-2-

Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019(2)

Explanation on qualitative information about consolidated earnings forecast
Forecasts for consolidated earnings results for the full fiscal year remain unchanged from those announced in in the Consolidated
Summary Report of Operating Results for the Second Quarter as of July 30, 2019.

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Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019

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

Consolidated quarterly balance sheets

Previous consolidated
fiscal year
(December 31, 2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Accounts receivable - other
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(in thousands of yen)
Consolidated third quarter
under review(September 30, 2019)

13,984,071
6,234,600
847,865
168,574
182,123
1,218,228(3,007)

13,296,504
6,922,981
1,099,699
93,72963,9881,363,650(3,008)22,632,457

22,837,545

1,375,460(882,265)

1,714,633(946,729)

493,194

767,903855
2,505,394(2,024,762)

855
2,818,490(2,178,576)

480,631639,914974,681

1,408,673

Intangible assets
Goodwill
Software
Customer-related assets
Other

40,516
1,707,624
832,000
3,316

32,927
1,736,052
676,000
2,801

Total intangible assets

2,583,458

2,447,781

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

9,257,039
1,439,195
84,777290,373(21,441)

9,338,658
1,432,623
7,814
245,787(20,252)

Total investments and other assets

11,049,944

11,004,632

14,608,084

14,861,086

37,240,542

37,698,631

Total property, plant and equipment

Total non-current assets
Total assets-4-Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019(in thousands of yen)
Consolidated third quarter
under review(September 30, 2019)

Previous consolidated
fiscal year
(December 31, 2018)
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

1,285,569
161,449
52,0001,129,613
1,093,327
210,913
11,182
26,0582,178,516

1,383,260
7,592
8,000
920,358
478,652
856,843
63,041
176,619
2,099,456

Total current liabilities

6,148,629

5,993,825

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

92,000222,674
354,965
2,233,019
80,831–
4,442
407,273
1,833,077
140,581

Total non-current liabilities

2,983,490

2,385,374

Total liabilities

9,132,120

8,379,199

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

1,421,815
2,507,763
20,239,578(1,499,778)

1,421,815
2,525,165
21,873,967(1,493,579)

22,669,379

24,327,369

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

Total shareholders’ equity

5,438,242(1,220)(97,582)

4,979,348
597
12,116

Total accumulated other comprehensive income

5,339,439

4,992,062

99,602–

28,108,422

29,319,431

37,240,542

37,698,631

Non-controlling interests
Total net assets
Total liabilities and net assets-5-Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019(2)

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

Net sales
Cost of sales

First nine months of the previous
consolidated fiscal year
(from January 1, 2018
to September 30, 2018)
28,794,172
17,073,043(in thousands of yen)First nine months of the consolidated
fiscal year under review(from January 1, 2019
to September 30, 2019)33,879,841
20,126,358

Gross profit

11,721,128

13,753,482

Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Other311,949
2,876,074
310,292
256,954269,305
255,174
3,361,166

356,929
3,182,596
280,060
332,579
284,750
341,713
4,091,243

7,640,917

8,869,873

4,080,211

4,883,609

438
104,662
60,192
870
4,461

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

170,625

127,308

5,472

5,004

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
Ordinary income
Extraordinary income
Gain on litigation
Gain on change in equity
Gain on step acquisitions
Total extraordinary income
Extraordinary losses
Loss on realized foreign currency translation adjustment
Loss on change in equity
Loss on retirement of intangible assets
Litigation expenses
Total extraordinary losses

5,472

5,004

4,245,364

5,005,912

809,510
100,434
19,482–––

929,427–––
315,274
130,000

175,3121,848––

445,274

177,160

Quarterly profit before income taxes

4,729,516

4,828,752

Income taxes

1,515,612

1,612,811

Quarterly profit

3,213,904

3,215,940(Profit attributable to)
Quarterly profit attributable to owners of parent
Quarterly profit attributable to non-controlling interests

3,164,414
49,4893,199,109
16,831-6-

Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019

First nine months of the previous
consolidated fiscal year
(from January 1, 2018
to September 30, 2018)
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 forusing equity method
Total other comprehensive income(in thousands of yen)First nine months of the consolidated
fiscal year under review(from January 1, 2019
to September 30, 2019)

1,423,541(143)(1,875)(458,894)
2,110
109,963

(335)

(264)

1,421,186(347,084)

Quarterly comprehensive income

4,635,091

2,868,855(Comprehensive income attributable to)
Quarterly comprehensive income attributable to owners ofparentQuarterly comprehensive income attributable tonon-controlling interests

4,585,596

2,851,988

49,494

16,867-7-

Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019(3)

Notes to consolidated quarterly financial statements(Notes on premise of a going concern)
Not applicable.
(Significant change in shareholders’ equity)
Not applicable.
(Additional information)(Implementation of Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.)
The Company has implemented the Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28,
February 16, 2018), etc. starting in the first three months ended March 31, 2019. Deferred tax assets and deferred tax liabilities are shown
under investments and other assets and non-current liabilities, respectively.

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Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019
(Segment information)
I. First nine months of the previous consolidated fiscal year (from January 1, 2018 to September 30, 2018)
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)Adjustment(Note 2)

Net sales(1) Net sales tooutside clients

23,459,115

5,335,056

28,794,172–

28,794,172–

28,794,172(2) Inter-segment
sales or transfer

54,01718,088

72,106–

72,106(72,106)–

Total

23,513,133

5,353,145

28,866,278–

28,866,278(72,106)

28,794,172

Segment income/loss

4,050,665(176,729)

3,873,936

726

3,874,662

205,548

4,080,211(Note 1) “Other,” a segment not included in the reportable segments, 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, 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)Adjustment(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)–

Total

28,067,337

5,878,133

33,945,471–

33,945,471(65,629)

33,879,841

Segment income/loss

4,658,595(53,210)

4,605,385

1,504

4,606,889

276,719

4,883,609(Note 1) “Other,” a segment not included in the reportable segments, 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.

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Future Corporation (4722): Consolidated Summary Report of Operating Results for the Third Quarter of Fiscal 2019

3. Additional Information
Status of orders received

Segment

First nine months of the previous
consolidated fiscal year
(from January 1, 2018 to September 30, 2018)
Orders received

Order backlog(in thousands of yen)First nine months of the consolidated
fiscal year under review(from January 1, 2019 to September 30, 2019)
Orders received

Order backlog

IT Consulting & Service Business

26,164,145

12,326,780

27,684,440

11,565,937

Business Innovation Business

1,182,690

311,370

1,313,316

362,381

27,346,835

12,638,150

28,997,757

11,928,319

Total* Orders received and order backlog for the first nine months of the previous consolidated fiscal year show revised figures.

Segment

IT Consulting & Service BusinessBusiness Innovation Business
Total

Consolidated second quarter under review(from April 1, 2019 to June 30, 2019)

Consolidated third quarter under review(from July 1, 2019 to September 30, 2019)

Orders received

Orders received

Order backlog

Order backlog

7,867,123

11,378,484

9,700,736

11,565,937

361,594

317,498497,397362,3818,228,718

11,695,983

10,198,134

11,928,319- 10 -