Consolidated Summary Report of Operating Results for First Quarter of Fiscal 2019(Year Ending December 2019) [Japan GAAP]
April 26, 2019
Company name:
Future Corporation
Shares listed on:
Security code number: 4722
URL https://www.future.co.jp/hd
Representative:
Yasufumi Kanemaru, Chairman and President
Contact:
Yoshihiko Nakajima, Executive Officer
Tel. 03-5740-5724
Scheduled date for filing the quarterly report:
May 14, 2019
Scheduled date for distribution of dividend payments:
Creation of supplemental material on quarterly financial results:
No
Holding of quarterly financial results briefing:No

First Section of Tokyo Stock Exchange(Amount rounded off to million yen)

1.

Consolidated Results for First Quarter of Fiscal 2019 (January 1, 2019 to March 31, 2019)(1) Consolidated operating results (cumulative)(Percentage figures indicate year-on-year changes)

Net salesFirst quarter, fiscal 2019
First quarter, fiscal 2018
(Note)

Comprehensive income

Quarterly profit attributable toowners of parent

Operating income

Million yen%

Million yen%

Million yen%

10,850
9,218

17.7
5.8

1,791
1,364

31.3
42.0

1,063
1,374

(22.6)
124.2

First quarter, fiscal 2019: 1,938 million yen (31.2%)
First quarter, fiscal 2018: 1,477 million yen (137.9%)

Quarterly profit per share
YenFirst quarter, fiscal 2019
First quarter, fiscal 2018

23.79
30.74

(2) Consolidated financial position
Total assets

Net assets

Million yen

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

2.

Shareholders’ equity ratio

Million yen

39,05829,28937,24028,108First quarter, fiscal 2019: 29,177 million yen

Net assets per share

%

Yen

74.7
75.2
Fiscal 2018: 28,008 million yen

652.67626.53

Dividends
Dividends per share
End of first quarterEnd of second quarter End of third quarter

Yen

Yen

Yen

17.00

32.00

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

21.00

39.00

―

Fiscal 2019

―

15.00

Yen

Total

―

Fiscal 2018

Yen

Year end(Note) 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 are year-on-year changes.)

Net sales
Million yen

Profit attributable to ownersof parent

Operating income%

Million yen

First six months
20,8809.7
2,920(accumulated total)
Full year
43,5008.2
6,400(Note) Changes from the previous release of earnings forecasts: None

Profit per share%

Million yen

%

Yen

11.8

2,037

(0.4)

45.47

9.9

4,355

6.4

97.42

* Notes(1) Changes in significant subsidiaries during the quarter under review (changes in specified subsidiaries that involved changes in thescope 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: None
2) Change in accounting policies other than item 1) above:None3) Change in accounting estimates:
None4) Retrospective restatements:
None(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 theperiod3) Average number of outstanding shares during
the quarter

First quarter,
fiscal 2019
First quarter,
fiscal 2019
First quarter,
fiscal 201947,664,000 shares Fiscal 2018

47,664,000 shares

2,959,049 shares Fiscal 2018

2,959,049 sharesFirst quarter,
fiscal 2018

44,705,093 shares

44,704,951 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
the Company considers as reasonable, and the Company does not promise to achieve any of them. Actual outcomes may differ significantly from forecasts due tovarious uncertain factors.

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

Contents
1.

Qualitative Information Regarding Quarterly Financial Results ................................................................................................................... 2
Explanation on Business Performance .......................................................................................................................................................... 22.

Consolidated Quarterly Financial Statements and Key Remarks .................................................................................................................. 3(1)

Consolidated quarterly balance sheet .................................................................................................................................................... 3(2)

Consolidated quarterly statements of income and comprehensive income ........................................................................................... 5(For three months ended March 31, 2019)............................................................................................................................................ 5(3)

Notes to consolidated quarterly financial statements ............................................................................................................................ 6(Note on premise of a going concern)................................................................................................................................................... 6(Significant changes in shareholders’ equity) ....................................................................................................................................... 6(Additional information)....................................................................................................................................................................... 6(Segment information) .......................................................................................................................................................................... 7

3.

Additional Information .................................................................................................................................................................................. 8
Status of orders received ............................................................................................................................................................................... 8-1-

Future Corporation (4722): Consolidated Summary Report of Operating Results for First Quarter, Fiscal 20191.

Qualitative Information Regarding Quarterly Financial Results
Explanation on Business Performance
The group’s consolidated net sales in the first quarter came to 10,850 million yen, up 17.7% from a year ago, while operating income grew
31.3% on year to 1,791 million yen and quarterly profit attributable to owners of parent fell 22.6% to 1,063 million yen over the same
period.
During the three-month period, net sales and operating income of IT Consulting & Service Business increased significantly as revenue andprofit grew significantly from a-year-ago levels for Future Architect, Inc. and the technology division of Future Corporation. Operating
results for many subsidiaries in Business Innovation Business also improved, reducing the segment operating loss. As a result of the above,group consolidated net sales and operating income grew 17.7% and 31.3% from a year ago, respectively. Operating margin expanded to
16.5% from a-year-ago level of 14.8%, although quarterly profit attributable to owners of parent decreased due to litigation-related
extraordinary profit booked in the same period a year ago.
Details of the performance of each segment are as follows.
1) IT Consulting & Service Business
Sales from next generation system development projects, ordered by growth companies mainly in apparel, media and distribution industries,
which view IT systems spending as strategic investment necessary for business operation rather than mere costs, increased from a year ago
for Future Architect, Inc. and the technology division of Future Corporation. Project margins and employee utilization rates improved
thanks to enhanced quality control, flexible staff assignment, etc., leading to a year-on-year growth in operating income. The segment also
worked on projects with new customers, including development of a system for the retail industry that automatically issues orders based on
expected demand and another that can offer optimum makeup suggestions using an image analysis technology.
Future Inspace, Inc. increased both its sales and operating income year-on-year as maintenance and operation service deals for projects
completed by Future Architect, Inc. and new development orders expanded.
Net sales at FutureOne, Inc. increased significantly as orders from relatively larger medium-sized companies for InfiniOne, its original sales
management software package, and other products increased. This and improved employee utilization rates pushed up operating income
significantly over the year-ago period.
YDC Corporation’s net sales and operating income dropped from a year ago in the first quarter as it had a large deal involving YDC Sonar,a software program for analyzing product quality information, in the same period a year ago, but business-reform consulting service in thedevelopment and design field, logistics-related development projects, etc. remained brisk.
As a result, net sales of the segment increased 19.8% from a year ago to 9,287 million yen, while operating income came to 1,763 million
yen, up 22.7% from a year ago. Margin for the segment also expanded to 19.0% from 18.5% a year ago.
2) Business Innovation Business
eSports Co., Ltd. struggled in winder products due to a warm winter, but net sales largely held steady from the year-ago level, supported bybrisk sales of outdoor-related products. Operating result improved from the same period a year ago as goodwill amortization expired, despite
IT system investment made during the period.
CodeCamp, Inc., which had operating loss in the year-ago period, turned operating profit thanks to a steady growth of the online
programming course targeting individuals. LaiBlitz, Inc.’s net sales and operating income increased compared to the year-ago level as it
gained a new customer, who is a professional baseball team.
A subsidiary, Tokyo Calendar Inc., which continued to enjoy popularity among users in their 30s and 40s who are highly interested in urban
lifestyles, had high levels of page views and video access counts. However, while its services, including “Tokyo Calendar date,” had larger
net sales and income, but revenue from online advertisement underperformed the target. The company’s net sales rose from the year-ago
level but its operating loss increased slightly.
As a result, Business Innovation Business’s operating results improved year-on-year, with net sales rising 4.8% to 1,581 million yen andoperating loss shrinking to 66 million yen from the year-ago level of 85 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 First Quarter, Fiscal 20192.

Consolidated Quarterly Financial Statements and Key Remarks(1) Consolidated quarterly balance sheet(in thousands of yen)Previous consolidated fiscal year For three months ended March 31, 2019
(December 31, 2018)(March 31, 2019)

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

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

14,162,846
6,413,895
912,347
106,031
241,156
1,364,544(3,011)

22,632,457

23,197,811

1,375,460(882,265)

1,543,050(899,647)

493,194

643,403855
2,505,394(2,024,762)

855
2,582,299(2,070,029)

480,631512,270

974,681

1,156,528

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

37,986
1,815,716
780,000
3,143

2,583,458

2,636,847

9,257,039
1,439,195
84,777

10,361,845
1,438,903

Other
Allowance for doubtful accounts

290,373(21,441)

287,413(20,715)

Total investments and other assets

11,049,944

12,067,447

14,608,084

15,860,824

37,240,542

39,058,636

Total property, plant and equipment
Intangible assets
Goodwill
Software
Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets

Total non-current assets
Total assets-3-－Future Corporation (4722): Consolidated Summary Report of Operating Results for First Quarter, Fiscal 2019(in thousands of yen)Previous consolidated fiscal year For three months ended March 31, 2019
(December 31, 2018)(March 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

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

1,516,111
158,577
52,000956,205
295,681811,339
59,12364,6002,728,135

Total current liabilities

6,148,629

6,641,773

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

71,000179,493405,146
2,379,769
92,170Total non-current liabilities

2,983,490

3,127,580

Total liabilities

9,132,120

9,769,354

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
2,507,763
20,543,130(1,499,778)

22,669,379

22,972,931

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)

6,191,318
91
13,384

Total accumulated other comprehensive income

5,339,439

6,204,795

Non-controlling interests
Total net assets
Total liabilities and net assets-4-

99,602

111,555

28,108,422

29,289,281

37,240,542

39,058,636

Future Corporation (4722): Consolidated Summary Report of Operating Results for First Quarter, Fiscal 2019(2) Consolidated quarterly statements of income and comprehensive income(For three months ended March 31, 2019)(in thousands of yen)Three months ended March 31,
2018

Three months ended March 31,
2019

Net sales
Cost of sales

9,218,194
5,491,468

10,850,850
6,394,196

Gross profit

3,726,726

4,456,654

Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Other

102,327
941,273
20,79068,901
86,942
82,567
1,059,165

112,383
1,068,469
27,19685,43983,64382,2581,205,463

2,361,968

2,664,855

1,364,757

1,791,799

337

264
40

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

48,965－

19,128
6,577

Other

4,755

1,774

Total non-operating income

54,05927,785

1,743
1,397

1,791

Non-operating expenses
Interest expenses
Foreign exchange losses
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on litigation
Total extraordinary income
Extraordinary losses
Loss on realized foreign currency translation adjustment

－

3,141

1,791

1,415,675

1,817,793

809,765－

809,765－－

175,312

Litigation expenses

130,000－

Total extraordinary losses

130,000

175,312

Quartely Profit before income taxes

2,095,441

1,642,481

Income taxes

674,070567,045

Quartely Profit

1,421,371

1,075,435

1,374,069
47,301

1,063,535
11,90069,455(1,462)(11,961)(186)

753,076
1,332
108,88376

55,845

863,368

Quarterly Comprehensive income

1,477,216

1,938,804(Comprehensive income attributable to)
Quarterly Comprehensive income attributable to owners of parent
Quarterly Comprehensive income attributable to non-controlling interests

1,429,881
47,334

1,926,883
11,921(Profit attributable to)
Quarterly profit attributable to owners of parent
Quarterly profit attributable to non-controlling interests
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-5-Future Corporation (4722): Consolidated Summary Report of Operating Results for First Quarter, Fiscal 2019(3) Notes to consolidated quarterly financial statements(Note on premise of a going concern)
Not applicable.
(Significant changes 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.

-6-

Future Corporation (4722): Consolidated Summary Report of Operating Results for First Quarter, Fiscal 2019
(Segment information)
Segment information
I.

Three months ended March 31, 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

Total

Other
(Note 1)

Total

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

Net sales(1) Net sales to outsideclients

7,710,318

1,507,876

9,218,194–

9,218,194–

9,218,194(2) Inter-segment sales
or transfer

41,9492,006

43,956–

43,956(43,956)–

Total

7,752,268

1,509,883

9,262,151–

9,262,151(43,956)

9,218,194

1,437,423(85,070)

1,352,352(371)

1,351,980

12,777

1,364,757

Segment income/loss(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 represent the amount of inter-segment transactions eliminated and income and expensesof the holding company excluding the technology segment.
(Note 3) Segment income/loss is adjusted with operating income in consolidated quarterly financial statements.
II.

Three months ended March 31, 20191.

Information on amounts of net sales and income or loss by reportable segment(in thousands of yen)
Reportable segments
IT Consulting &Service BusinessBusinessInnovation
Business

Total

Other
(Note 1)

Total

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

Net sales(1) Net sales to outsideclients

9,272,620

1,578,229

10,850,850–

10,850,850–

10,850,850(2) Inter-segment sales
or transfer

14,866

3,464

18,331–

18,331(18,331)–

Total

9,287,486

1,581,694

10,869,181–

10,869,181(18,331)

10,850,850

1,763,187(66,006)

1,697,180(2,087)

1,695,092

96,706

1,791,799

Segment income/loss(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 represent the amount of inter-segment transactions eliminated and income and expensesof the holding company excluding the technology segment.
(Note 3) Segment income/loss is adjusted with operating income in consolidated quarterly financial statements.

-7-

Future Corporation (4722): Consolidated Summary Report of Operating Results for First Quarter, Fiscal 20193.

Additional Information
Status of orders received

Segment
IT Consulting & Service BusinessBusiness Innovation Business
Total

Three months ended March 31, 2018

(in thousands of yen)Three months ended March 31, 2019

Orders received

Orders received

Order backlog

Order backlog

8,725,632

10,637,064

10,116,580

12,742,761

588,041

503,415454,325

379,348

9,313,673

11,140,480

10,570,905

13,122,109-8-