Consolidated Summary Report of Operating Results for the Second Quarter of Fiscal 2023
(Year Ending December 31, 2023) [Japan GAAP]
July 27, 2023
Company name:

Future Corporation

Listing: Tokyo Stock Exchange

Securities code:

4722

Representative:

Yasufumi Kanemaru, Chairman and President

Contact:

Yasukazu Matsushita, Executive Officer

URL: https://www.future.co.jp
TEL: 03-5740-5724

Scheduled date for filing the quarterly report:

August 14, 2023

Scheduled date for distributing dividend payments:

September 15, 2023

Creation of supplemental material on quarterly financial results:
Holding of financial results briefing:No

Yes (for institutional investors and analysts)(Amount rounded off to million yen)

1.

Consolidated Results for the Second Quarter of Fiscal 2023 (January 1, 2023, to June 30, 2023)(1)

Consolidated operating results (cumulative)(Percentage figures indicate year-on-year changes.)

Net sales

Profit attributable to owners ofparentOperating income

Million yen%

Million yen%

Million yen%

2Q Fiscal 2023

28,344

9.3

6,324

1.8

4,319

(4.4)

2Q Fiscal 2022

25,940

12.2

6,214

65.9

4,517

67.5

(Note) Comprehensive income

2Q Fiscal 2023:
2Q Fiscal 2022:

5,260 million yen [83.3%]
2,869 million yen [(8.8)%]

Profit per shareYen

2Q Fiscal 2023

48.77

2Q Fiscal 2022

51.03

(2)

Consolidated financial position
Total assets

Shareholders’ equity
ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

2Q Fiscal 2023

61,89548,37278.2

546.05

Fiscal 2022

57,85744,82777.5

506.20(Reference) Shareholders’ equity

2.

2Q Fiscal 2023:
Fiscal 2022:

48,372 million yen
44,827 million yen

Cash dividends
Dividends per share
End of firstquarter

End of second
quarter

End of third
quarter

End of fiscal year

Total

Yen

Yen

Yen

Yen

Yen

Fiscal 2022

-

17.00

-

20.00

37.00

Fiscal 2023

-

20.00
-

20.00

40.00

Fiscal 2023 (forecast)(Note)

Revisions to the most recently announced dividend forecast: None

3.

Projected Consolidated Results for Fiscal 2023 (January 1, 2023, to December 31, 2023)(Percentage figures indicate year-on-year changes.)
Net sales

Full-year(Note)

Profit attributable toowners of parent

Operating income

Profit per
share

Million yen%

Million yen%

Million yen%

Yen

59,50010.7

13,800

12.8

9,660

4.6

109.08

Revisions to the most recently announced earnings forecast: None

*

Notes

(1)

Changes in significant subsidiaries during the quarter under review (changes in specified subsidiaries accompanied by changes
in the scope of consolidation): None

(2)

Application of accounting treatment particular to the preparation of quarterly consolidated financial statements: None

(3)

Changes in accounting policies or estimates and retrospective restatements
1)
Changes in accounting policies in accordance with revisions of accounting standards: Yes
2)
Changes in accounting policies other than item 1) above: None
3)
Changes in accounting estimates: None4)
Retrospective restatements: None
(Note)(4)

Number of outstanding shares (common stock)
1)*

For more information, see “(4) Notes to quarterly consolidated financial statements (Changes in accounting policies)” in “2. Quarterly Consolidated
Financial Statements and Major Notes” on page 9 of the appendix.

Total outstanding shares as of the endof the period (including treasury
shares)2Q Fiscal 2023

95,328,000 shares Fiscal 2022

95,328,000 shares

2)

Total treasury shares as of the end of
the period

2Q Fiscal 2023

6,742,171 shares Fiscal 2022

6,771,952 shares

3)

Average number of outstanding shares
during the period under review

2Q Fiscal 2023

88,563,124 shares 2Q Fiscal 2022

88,534,040 sharesThis summary of quarterly financial results is outside the scope of quarterly reviews by a certified public accountant or an audit
corporation.

* 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 theCompany and assumptions the Company considers to be reasonable, and the Company does not promise to achieve any of them. Actual
results may differ significantly from forecasts due to various uncertain factors.

○ Contents
1.

Qualitative Information Regarding Financial Results for the Second Quarter under Review ....................................................... 2(1) IT Consulting & Service Business .......................................................................................................................................... 2(2) Business Innovation Business ................................................................................................................................................. 2

2.

Quarterly Consolidated Financial Statements and Major Notes.................................................................................................... 4(1) Quarterly consolidated balance sheet ...................................................................................................................................... 4(2) Quarterly consolidated statements of income and comprehensive income ............................................................................. 6(First six-month period) .......................................................................................................................................................... 6(3) Quarterly consolidated statements of cash flows .................................................................................................................... 8(4) Notes to quarterly consolidated financial statements .............................................................................................................. 9(Notes on premise of a going concern) ................................................................................................................................... 9(Notes on any significant change in shareholders' equity) ...................................................................................................... 9(Changes in accounting policies) ............................................................................................................................................ 9(Segment information) .......................................................................................................................................................... 10(Business Combinations) ...................................................................................................................................................... 113.

Supplementary Information ........................................................................................................................................................ 12
Orders received .............................................................................................................................................................................. 12

- 1 -

1.

Qualitative Information Regarding Financial Results for the Second Quarter under Review
Explanation of Operating Results
Looking at the economic environment during the first six months of the fiscal year under review, we saw
companies continue to actively harness the power of IT to change their operations, such as promoting digitaltransformation (DX), implementing business reforms, and developing new digital services, despite global
uncertainty, persistent inflation, and the increase of overseas interest rates. Companies are revamping their work
styles and overall supply chains following the enforcement of the Work Style Reform Law, and accelerating theuse of IT in areas related to ESG and the SDGs. These things boost IT investments in all sectors and fields. In
terms of individual lifestyles, the use of IT-driven services, such as shopping at e-commerce sites, enjoying
entertainment and sports on video and online, and accessing education and self-development services online,
has become common, and various related services are being created.
Working against this backdrop, we won contracts from customers in a wide range of industries and madeprogress with large-scale projects that would contribute to medium-term growth. As a result, consolidated net
sales for the first six months totaled 28,344 million yen (up 9.3% year on year) and operating income was 6,324
million yen (up 1.8% year on year). On the other hand, profit attributable to owners of parent decreased slightly
to 4,319 million yen (down 4.4% year on year), mainly due to the impact of the reversal of deferred tax assets.
Details of the performance (net sales and operating income) of each segment are as follows.
(1) IT Consulting & Service Business
Future Architect, Inc. (including the Technology Division of Future Corporation) continued to move ahead
with various projects of customers in a wide range of industries. They include designs of platforms for
integrated data management of procurement, manufacturing, and quality control in the retail industry,renovations of mission-critical systems in the apparel industry, grand designs for advancing DX of anewspaper company group, and designs/development relating to the revamping of mission-critical systems
and IT infrastructures in the food wholesaling and public service industries. In addition to that, the company
made steady progress with the next-generation banking systems to regional financial institutions, a projectthat would contribute to its medium-term growth, specifically, the loan support system FutureBANK
introduction project, as well as with the provision of DX assistance to various companies in the logistics andother industries. On the other hand, higher-than-planned costs for quality improvement at the design stage
in some large-scale projects arose. Investments in research and development were also made, resulting in an
increase in net sales but a slight decrease in operating income year on year.
Future Inspace, Inc. performed steadily in development for system infrastructure renewal and cloud
migration projects from existing customers, in addition to the provision of regular maintenance and operation
services. As a result, net sales and operating income increased year on year.
Future One, Inc. worked on boosting orders for the sale of its original InfiniOne software package, thecompany’s key product, through industry-specific sales strategies, mainly in the steel industry. As a result,it enjoyed a year-on-year increase in both net sales and operating income.
YDC Corporation saw continuous steady progress in developing new customers as well as expanding
existing customers while developing their demands, particularly in the manufacturing industry. In addition
to these traditional SI, it enjoyed an increase in orders led by the strategic planning phase, such as missioncritical system renovation and grand design consultation for the SmartFactory concept. Furthermore, due toan increase in the license sales of YDC SONAR® and other factors, its net sales and operating income
increased year on year.
Both net sales and operating income of dit Co., Ltd. declined year on year. This was due to a lower-thanexpected increase in orders for cybersecurity-related services, such as vulnerability assessment, incident
response, and network security solutions, lacking product sales orders in large-scale projects, and increased
recruiting costs.
As a result, net sales of the segment increased to 24,425 million yen (up 10.1% year on year) while operating
income slightly decreased to 6,590 million yen (down 0.4% year on year).
(2) Business Innovation Business
The net sales and operating income of YOCABITO Co., Ltd. decreased year on year due to stagnant sales in
its outdoor business caused by a still fiercely competitive market as well as rising logistics costs, while
training gear sales, including private brands, remained strong.

- 2 -While Tokyo Calendar Inc. saw a robust stream of revenue from its online services, such as magazines,
advertising, and Tokyo Calendar Date, its net sales increased but the operating income decreased year on
year due to costs relating to the launch of its new service Gourmet Calendar.
While CodeCamp Co., Ltd. saw a decrease in sales from individual customers, it enjoyed an uptick in its
corporate training business from orders won before the previous quarter and, with significantly reducing
costs, led to an increase in net sales and operating income year on year.
LaiBlitz, Inc. posted an increase in net sales and operating income year on year as a result of starting therollout of Fast Biz, a packaged membership management and e-commerce service for sports teams, andsmartphone app development technologies to other business types, including restaurant and insurance
industries.
As a result, the segment saw an increase in net sales and a decrease in operating income year on year, with
net sales totaling 3,971 million yen (up 3.2% year on year) and an operating loss standing at 291 million yen(up from an operating loss of 206 million yen for the same period last year).
Operating income under adjustment, which records income and expenses of Future Corporation’s holding
company functions and eliminations of intersegment transactions in the reporting segment, was 66 million
yen, an increase of 257 million yen year on year (up from an operating loss of 191 million yen for the same
period last year). This was mainly due to the increased technical support fees that Future Corporation
received through its IT consulting and services business.
(Note) Segment results mentioned above are before adjustment for intersegmental sales or transfers.

- 3 -

2.

Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheet(in millions of yen)Previous consolidated
fiscal year
(December 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade, andcontract assets
Securities
Merchandise and finished goods
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
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 4 -Second quarter of the current
consolidated fiscal year
(June 30, 2023)

26,652

24,076

8,549

9,673

1,000
1,116
22
1,498
(3)
38,835

700
1,098
39
3,782
(13)
39,356

1,815(1,142)673
0
3,107(2,703)
404
1,078

1,842
(1,203)639
0
3,284(2,827)
456
1,096

661
2,992
5
3,659

2,097
3,592
4
5,694

12,856
1,188
244
(4)
14,28419,02257,857

14,356
1,196
1
196
(2)
15,74722,53861,895(in millions of yen)Previous consolidated
fiscal year
(December 31, 2022)
Liabilities
Current liabilities
Accounts payable – trade
Current portion of long-term borrowings
Accounts payable – other
Income taxes payable
Provision for bonuses
Provision for quality assurance
Provision for loss on projects
Other
Total current liabilities
Non-current liabilities
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets- 5 -Second quarter of the current
consolidated fiscal year
(June 30, 2023)

1,067
1,810
2,280
250
60
37
4,354
9,860

979
14
1,665
2,255
278
76
2
4,575
9,848

356
2,682
130
3,169
13,030

357
3,138
179
3,674
13,5234,000
3735,856(2,210)37,6834,000
84
38,404(2,201)40,287

7,123
(5)
25
7,143
44,82757,857

8,046
3
34
8,084
48,372
61,895

(2) Quarterly consolidated statements of income and comprehensive income(First six-month period)(in millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Other salaries
Rents
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Loss on investments in investment partnerships
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit(Breakdown)
Profit attributable to owners of parent

First six months of the previous
consolidated fiscal year
(From January 1, 2022,
to June 30, 2022)
25,94012,85813,081First six months of the current
consolidated fiscal year
(From January 1, 2023,
to June 30, 2023)
28,344
14,692
13,651

282
2,926
147
477
353
364
209
382
5
1,717
6,866
6,214

308
3,124
154
469
385
680
117
490
118
1,479
7,327
6,324

187

160

30

15

7
225

40
216

7
7
6,432

13
1
15
6,526

47
47

-

10
10
6,469
2,095
(143)
1,951
4,517

6,526
2,139
67
2,206
4,319

4,517

4,319

- 6 -

First six months of the previous
consolidated fiscal year
(From January 1, 2022,
to June 30, 2022)(in millions of yen)First six months of the current
consolidated fiscal year
(From January 1, 2023,
to June 30, 2023)(1,665)
5
10

922
8
9

0

(0)

(1,648)
2,869

940
5,260

2,869

5,260

-

-

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
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 7 -(3) Quarterly consolidated statements of cash flows(in millions of yen)First six months of the previous
consolidated fiscal year
(From January 1, 2022,
to June 30, 2022)

First six months of the current
consolidated fiscal year
(From January 1, 2023,
to June 30, 2023)

6,469
556
5
(70)
20
6
(188)
0

6,526
483
118
(1)
27
16
(34)
(161)
0

(30)

(15)

6
(47)
10

13
(56)
--

242

(1,000)

(137)
234
229
96
(647)
6,754
188
(0)
(2,403)
4,540

58
(90)
(241)
(993)
207
4,856
161
(0)
(3,426)
1,591

(900)
1,300
(52)
(825)

100
(57)
(898)

-

(1,410)

(814)
104
200
(11)

(2)
(140)
(9)

1

4

1
(997)

1
(2,412)(78)(1,173)(1,252)

(117)
(3)
(96)
(1,771)(1,988)

34

34

2,324
21,43023,754(2,775)27,552
24,776

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for quality assurance
Increase (decrease) in provision for loss on projects
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on investments in investment partnerships
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable –trade and contract assets
Decrease (increase) in inventories
Increase (decrease) in accounts payable – trade
Increase (decrease) accounts payable – other
Decrease (increase) in other assets
Increase (decrease) in other liabilities
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from redemption of investment securities
Payments for investments in capital
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of short-term loans payable
Repayments of long-term loans payable
Repayments of finance lease obligations
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period- 8 -(4) Notes to quarterly consolidated financial statements(Notes on premise of a going concern)
Not applicable.
(Notes on any significant change in shareholders' equity)
Not applicable.
(Changes in accounting policies)(Application of Accounting Standard for Fair Value Measurement, etc.)
The Group has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021) from the beginning of the first quarter of thecurrent fiscal year, and it has applied the new accounting policy provided for by the Implementation
Guidance on Accounting Standard for Fair Value Measurement prospectively in accordance with thetransitional measures provided for in paragraph 27-2 of the Implementation Guidance on AccountingStandard for Fair Value Measurement. This change has no effect on the quarterly consolidated
financial statements.

- 9 -(Segment information)[Segment information]
I

First six months of the previous consolidated fiscal year (from January 1, 2022, to June 30, 2022)
1. Information on the amounts of net sales, and profit or loss by reportable segment
Reportable segments
IT Consulting Business& Service
Innovation
Business
Business

Total

Other
(Note 1)

Total

(in millions of yen)Amount stated inquarterly
Adjustments
consolidated(Note 2)
financial statements(Note 3)

Net sales(1) Sales to outside
22,113
3,815
25,92910
25,94025,940clients(2) Intersegment sales
78
33
111
184
296
(296)
or transfer
Total
22,192
3,849
26,041
194
26,236(296)
25,940
Segment profit (loss)
6,617
(206)
6,411
(4)
6,406
(191)
6,214
(Notes)1. “Other” is a segment for operations not included in reportable segments. The segment covers investment in, holdingof, and management of securities.
2. Adjustments to segment profit (loss) represent the amount of intersegment transactions eliminated, and income andexpenses of the holding company excluding the technology segment.
3. Segment profit (loss) is adjusted with operating income in quarterly consolidated financial statements.

II

First six months of the current consolidated fiscal year (from January 1, 2023, to June 30, 2023)
1. Information on the amounts of net sales, and profit or loss by reportable segment
Reportable segments
IT Consulting Business& Service
Innovation
Business
Business

Total

Other
(Note 1)

Total

(in millions of yen)Amount stated inquarterly
Adjustments
consolidated(Note 2)
financial statements(Note 3)

Net sales(1) Sales to outside
24,391
3,913
28,30440
28,344
28,344clients(2) Intersegment sales
34
58
93
214
307
(307)
or transfer
Total
24,425
3,971
28,397254
28,652(307)
28,344
Segment profit (loss)
6,590
(291)
6,299
(40)
6,258
66
6,324
(Notes)1. “Other” is a segment for operations not included in reportable segments. The segment covers investment in, holdingof, and management of securities.
2. Adjustments to segment profit (loss) represent the amount of intersegment transactions eliminated, and income andexpenses of the holding company excluding the technology segment.
3. Segment profit (loss) is adjusted with operating income in quarterly consolidated financial statements.

2. Information on the amounts of impairment losses or goodwill, etc. of non-current assets byreportable segment(Significant change in the amount of goodwill)In the Business Innovation Business segment, the Group has acquired CURIOSITY inc., making
it a consolidated subsidiary. The increased amount of goodwill due to such an event is 1,553
million yen during the first six months of the current fiscal year. The amount of goodwill is anamount tentatively calculated since the allocation of acquisition costs has not been completed at
the end of the second quarter of the current fiscal year.

- 10 -

(Business Combinations)
Business combination by acquisition
The Company, at its Board of Directors meeting held on March 23, 2023, resolved that Future
Investment Corp., a subsidiary of the Company, would acquire all shares of CURIOSITY inc. and makeit a subsidiary. Future Investment Corp. entered into a share transfer agreement on April 3, 2023, andacquired all shares on April 21, 2023.
1. Overview of business combination(1) Name and details of business of the acquired company
Name of the acquired company: CURIOSITY inc.
Details of business: Planning and production of commercial and industrial designs, andplanning, development, design, and production of new products(2) Main reasons for the business combination
By combining the Group’s technology and consulting capabilities of designing management
and IT with CURIOSITY’s boundary-less design capabilities cultivated in real space, a
tremendous increase in added value created by the entire Group is expected. Contribution to thedevelopment of new areas, such as business creation, is also anticipated. Furthermore,
CURIOSITY’s potential to significantly expand its design domain will increase by adding new
digital power to its design capabilities in real space.
Judging that the acquisition would significantly contribute to enhancing the Group’s corporate
value over the coming years, the Company decided to acquire shares of the company and make ita subsidiary.
(3) Date of business combination
April 21, 2023 (stock acquisition date)
April 1, 2023 (deemed acquisition date)(4) Legal form of business combination
Acquisition of shares(5) Name of the company after business combination
CURIOSITY inc.
(6) Percentage of voting rights acquired
100%(7) Main basis for determining the company to be acquired
The Company acquired the shares in exchange for cash.
2. Business term of the acquired company included in the quarterly consolidated statement of income forthe first six months of the fiscal year under review
From April 1, 2023, to June 30, 2023
3. Acquisition cost for the acquired company and breakdown of the consideration by type
Consideration for the acquisitionCash2,220 million yen
4. Details and amount of major acquisition-related expenses
Remuneration/fees, etc. for advisory services
96 million yen
5. Amount of goodwill arisen, reasons for it, and method and period of amortization(1) Amount of goodwill arisen
1,553 million yen
The amount of goodwill is an amount tentatively calculated since the allocation of acquisition
costs has not been completed at the end of the second quarter of the current fiscal year.
(2) Reasons for the goodwill arising
Due to the extra earning potential expected from the future development of business(3) Method and period of amortization
Straight-line amortization over eight years- 11 -

3.

Supplementary Information
Orders received(in millions of yen)

Category

First six months of the previous
consolidated fiscal year
(from January 1, 2022, to June 30, 2022)

First six months of the current
consolidated fiscal year
(from January 1, 2023, to June 30, 2023)

Orders received

Orders received

Order backlog

Order backlog

IT Consulting & Service Business

26,602

15,95727,026

16,741Business Innovation Business

1,193

376

2,264

1,377

27,795

16,33429,29018,118

Total

Category

First quarter of the current
consolidated fiscal year
(from January 1, 2023, to March 31, 2023)
Orders received

IT Consulting & Service BusinessBusiness Innovation Business
Total

Order backlog

Second quarter of the current
consolidated fiscal year
(from April 1, 2023, to June 30, 2023)
Orders received

Order backlog

14,415

16,29012,61016,741

721

767

1,542

1,377

15,137

17,05814,152

18,118- 12 -