August 5, 2019

Summary of Consolidated Financial Results
for the First Quarter of Fiscal Year Ending March 31, 2020 (FY2019)(Three Months Ended June 30, 2019)[Japanese GAAP]
Company name:
ZUKEN Inc.
Listing: Tokyo Stock Exchange, First Section
Stock code:
6947
URL: https://www.zuken.co.jp
Representative:
Makoto Kaneko, President and Representative Director
Contact:
Susumu Yoshida, General Manager of Finance Department
Tel: +81-45-942-1511
Scheduled date of filing of Quarterly Report:
August 7, 2019
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
None
Holding of quarterly financial results meeting:None(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter Ended June 30, 2019 (April 1, 2019 – June 30, 2019)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%Three months ended
Jun. 30, 2019
6,082
7.8
Jun. 30, 2018
5,640
16.3
Note: Comprehensive income (Millions of yen)

Net income per share
Three months ended
Jun. 30, 2019
Jun. 30, 2018

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen

329
10.9
351
1.6
297
814.6
345
358.6
Three months ended Jun. 30, 2019:(122) (-%)
Three months ended Jun. 30, 2018:
529 (up 99.0%)

259
254%

2.3
868.1

Diluted net income pershareYen

Yen

11.18
10.93

-(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Millions of yen

As of Jun. 30, 201946,417
As of Mar. 31, 201947,190
Reference: Shareholders’ equity (Millions of yen)
As of Jun. 30, 2019:

Millions of yen%

32,582
33,05069.3
69.1
32,60732,176

As of Mar. 31, 2019:

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2019
12.00
Fiscal year ending Mar. 31, 2020
Fiscal year ending Mar. 31, 2020 (forecast)
14.00
Note: Revisions to the most recently announced dividend forecast: None-

14.00

26.00

-14.0028.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2020 (April 1, 2019 – March 31, 2020)
Net sales
Millions of yen

Operating profit%

Millions of yen

Ordinary profit% Millions of yen(Percentages represent year-on-year changes)
Profit attributable toNet income perowners of parentshare
Millions of yen%

Yen

Full year
27,8003.8
2,900(4.9)
3,000(6.0)
2,170Note: Revisions to the most recently announced consolidated forecast: None
Only the full-year forecast is shown because Zuken manages performance on a fiscal year basis.

%2.793.33

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scopeof consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements(a) Changes in accounting policies due to revisions in accounting standards, others:None(b) Changes in accounting policies other than (a) above:None(c) Changes in accounting-based estimates:

None(d) Restatements:

None(4) Number of outstanding shares (common stock)(a) Number of shares outstanding at the end of the period (including treasury shares)
As of Jun. 30, 2019:23,267,169 shares

As of Mar. 31, 2019:23,267,169 shares

As of Mar. 31, 2019:17,480 shares(b) Number of treasury shares at the end of the period
As of Jun. 30, 2019:17,490 shares(c) Average number of shares outstanding during the period
Three months ended Jun. 30, 2019:23,249,686 shares

Three months ended Jun. 30, 2018:23,250,089 shares* The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms .
* Cautionary statement with respect to forward-looking statements and other special items
Forecasts of future performance in this report are based on assumption judged to be valid and information available to theCompany’s management at the time this report was prepared, but are not promises by the Company regarding future performance.
Actual results may differ substantially from the forecasts for a number of reasons. Please refer to “1. Qualitative Information on
Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements”
on page 2 for forecast assumptions and notes of caution for usage.

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019

Contents of Attachments
1.

Qualitative Information on Quarterly Consolidated Financial Performance ........................................................ 2(1) Explanation of Results of Operations ................................................................................................................ 2(2) Explanation of Financial Position ...................................................................................................................... 2(3) Explanation of Consolidated Forecast and Other Forward-looking Statements ................................................. 2

2.

Quarterly Consolidated Financial Statements and Notes ..................................................................................... 3(1) Quarterly Consolidated Balance Sheet .............................................................................................................. 3(2) Quarterly Consolidated Statements of Income and Comprehensive Income ...................................................... 5
Quarterly Consolidated Statement of Income ...................................................................................................... 5
Quarterly Consolidated Statement of Comprehensive Income ............................................................................. 6(3) Notes to Quarterly Consolidated Financial Statements ...................................................................................... 7
Going Concern Assumption................................................................................................................................. 7
Significant Changes in Shareholders’ Equity ....................................................................................................... 7
Segment Information ........................................................................................................................................... 73.

Supplementary Information ................................................................................................................................. 8(1) Sales and Orders ................................................................................................................................................ 81

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the fiscal year ending on March 31, 2020, gradual economic recoveries continued to take placein Japan, Europe and the United States. However, the outlook remained uncertain because of concerns about U.S.
economic policies, slowing economic growth in China and other reasons. In the electronic equipment, automotive andindustrial equipment manufacturing sectors that are the main customer segments of the Zuken Group, a cautious
attitude toward capital investment was evident due to wariness about the prospects for the future. However, thepositive sentiment towards investment continued in the IT sector.
Net sales in the first quarter were 6,082 million yen, 7.8% higher than one year earlier. This was the fourth consecutive
fiscal year of record-high sales for the first quarter. There was steady growth in sales of our core CR-8000 electronics
system design solution series in Japan, Europe and in the United States. In addition to strong expansion in sales ofour domestic subsidiaries’ network systems and 3D solutions for the construction industry also contributed to sales
growth.
Earnings increased due to sales growth, despite the increase in costs resulting from the acceleration of new productdevelopment. Ordinary profit was 351 million yen, 1.6% higher than one year earlier, and profit attributable to ownersof parent was 259 million yen, 2.3% higher than one year earlier.
(2) Explanation of Financial Position
Total assets at the end of the first quarter of the current fiscal year decreased 773 million yen from the end of theprevious fiscal year to 46,417 million yen.
Current assets decreased 276 million yen. The main factors include a decrease of 1,925 million yen in notes andaccounts receivable-trade and an increase of 1,039 million yen in cash and deposits. Non-current assets decreased 497
million yen. The main factors include a decrease of 425 million yen in investments and other assets primarily due toa decrease in investment securities.
Total liabilities decreased 306 million yen from the end of the previous fiscal year to 13,834 million yen. Current
liabilities decreased 300 million yen mainly due to decreases of 551 million yen in income taxes payable, 374 million
yen in provision for bonuses and 293 million yen in accounts payable-trade, while there was an increase of 1,133
million yen in advances received. Non-current liabilities decreased 5 million yen mainly due to a decrease inretirement benefit liability.
Net assets decreased 467 million yen from the end of the previous fiscal year to 32,582 million yen, and theshareholders’ equity ratio was 69.3%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
We currently maintain the consolidated forecast for the fiscal year ending March 31, 2020 that was released on May
13, 2019. Many of the Zuken Group’s customers use a fiscal year that ends in March. As a result, a large percentageof the deliveries and final acceptances of our products occur in March each year. Consequently, sales and profits tend
to be disproportionately concentrated in the fourth quarter in each fiscal year.

2ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2018(As of Mar. 31, 2019)(Thousands of yen)First quarter of FY2019(As of Jun. 30, 2019)

AssetsCurrent assets
Cash and deposits

18,523,202

19,562,598

Notes and accounts receivable-trade

5,870,720

3,944,937

Securities

6,700,000

6,700,000

Merchandise and finished goods

345,764

374,475

Work in process

109,325

245,699

3,761

3,353

Other

2,336,168

2,788,719

Allowance for doubtful accounts(25,786)(32,821)33,863,156

33,586,962

Buildings and structures, net

2,782,237

2,751,698

Land

3,015,103

3,015,103

Raw materials and supplies

Total current assets
Non-current assets
Property, plant and equipment

Other, net

447,471475,991

6,244,812

6,242,793

Goodwill

492,088

447,387

Other

628,999603,874

1,121,088

1,051,262

Investment securities

4,919,667

4,379,906

Other

1,042,243

1,156,703

Total investments and other assets

5,961,910

5,536,609

13,327,811

12,830,665

47,190,967

46,417,627

Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

3ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019

FY2018(As of Mar. 31, 2019)(Thousands of yen)First quarter of FY2019(As of Jun. 30, 2019)

Liabilities
Current liabilities
Accounts payable-trade827,244533,644

Income taxes payable

630,106

78,990

Advances received

5,455,151

6,588,424

Provision for bonuses

846,582

472,557

Other provisions

84,533

11,175Other

2,273,360

2,131,878

Total current liabilities

10,116,979

9,816,669

3,842,064

3,823,596

181,867

194,490

Non-current liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

4,023,931

4,018,087

14,140,911

13,834,756

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,659,016

8,659,034

Retained earnings

12,230,462

12,164,933

Treasury shares
Total shareholders’ equity(16,365)(16,381)

30,990,177

30,924,651

2,022,397

1,646,184

22,984(32,881)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans(428,220)(361,193)

Total accumulated other comprehensive income

1,617,162

1,252,109

442,715

406,11033,050,055

32,582,871

47,190,967

46,417,627

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

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ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)First three months of FY2018(Apr. 1, 2018 – Jun. 30, 2018)(Thousands of yen)First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)

Net sales

5,640,497

6,082,121

Cost of sales

1,502,732

1,705,773

Gross profit

4,137,764

4,376,347

Selling, general and administrative expenses

3,840,622

4,046,821

297,142

329,525

Operating profit
Non-operating income
Interest income

1,277

3,832

Dividend income

17,54041,965

Foreign exchange gains

2,508

-

Other

27,776

16,296

Total non-operating income

49,10362,093-40,076602

248

Non-operating expenses
Foreign exchange losses
Other
Total non-operating expenses

602

40,325

345,643351,293

Gain on sales of non-current assets

171,676

Gain on liquidation of subsidiaries

23,321-

Total extraordinary income

23,338

1,676

147

-

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on disposal of non-current assets

147-

Profit before income taxes

Total extraordinary losses

368,834

352,970

Income taxes-current

46,12471,310

Income taxes-deferred

86,35339,329Total income taxes

132,477

110,640

Profit236,356

242,330

Loss attributable to non-controlling interests(17,668)(17,636)

Profit attributable to owners of parent254,024

259,9665ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY2018(Apr. 1, 2018 – Jun. 30, 2018)(Thousands of yen)First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)236,356

242,330

Valuation difference on available-for-sale securities

280,677(376,213)

Foreign currency translation adjustment(47,827)(55,866)

ProfitOther comprehensive income

Remeasurements of defined benefit plans, net of tax

59,97267,026

Total other comprehensive income

292,822(365,053)

529,178(122,723)

546,847(105,086)(17,668)(17,636)

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment Information
I. First three months of FY2018 (Apr. 1, 2018 – Jun. 30, 2018)
Information about reportable segment net sales and profit or loss
Reportable segment
JapanEurope

3,762,198

1,202,244

362,549
4,124,748

Americas(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)

Asia

Total

334,614

341,440

5,640,497-

5,640,497

181,280

9,739

16,751

570,321(570,321)-

1,383,525

344,353

358,191

6,210,818(570,321)

5,640,497

Net sales
Sales to third parties
Intersegment sales ortransfers
TotalSegment profit (loss)
243,501
19,337(25,963)
100,117336,993(39,850)
297,142
Notes: 1. Adjustment amount in segment profit (loss) includes amount of -39,850 thousand yen eliminated for intersegment
transactions.
2. Segment profit (loss) is adjusted with operating profit in the quarterly consolidated statement of income.

II. First three months of FY2019 (Apr. 1, 2019 – Jun. 30, 2019)
Information about reportable segment net sales and profit or loss
Reportable segment
JapanEurope

4,232,449

1,134,123

273,897
4,506,346

Americas(Thousands of yen)
Appropriated amountAdjustmentin the quarterlyamountconsolidated(Note 1) statement of income(Note 2)

Asia

Total

439,699

275,849

6,082,121-

6,082,121

210,753

10,22918,888513,768(513,768)-

1,344,876

449,928

294,737

6,595,889(513,768)

6,082,121

Net sales
Sales to third parties
Intersegment sales ortransfers
Total

Segment profit (loss)
265,294(6,425)
8,246
69,468336,584(7,059)329,525
Notes: 1. Adjustment amount in segment profit (loss) includes amount of -7,059 thousand yen eliminated for intersegment
transactions.
2. Segment profit (loss) is adjusted with operating profit in the quarterly consolidated statement of income.

7

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019

3. Supplementary Information(1) Sales and Orders(a) Sales
Segment
JapanEurope
Americas
Asia
Total

First three months of FY2018(Apr. 1, 2018 – Jun. 30, 2018)
AmountComposition (%)
3,762,198
66.7
1,202,244
21.3
334,6145.9
341,440
6.1
5,640,497
100.0(b) Orders received and order backlog(Thousands of yen)First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)
AmountComposition (%)
4,232,449
69.61,134,123
18.6
439,6997.2
275,849
4.6
6,082,121
100.0(Thousands of yen)First three months of FY2018First three months of FY2019(Apr. 1, 2018 – Jun. 30, 2018)(Apr. 1, 2019 – Jun. 30, 2019)
Segment
Orders received
Order backlog
Orders received
Order backlog
Japan
5,314,583
7,755,024
6,204,370
8,762,795
Europe1,035,847
1,483,931
906,487
1,394,468
Americas140,800
900,548
193,546
1,086,266
Asia
356,317629,189
401,762
470,198
Total
6,847,549
10,768,694
7,706,166
11,713,729
Notes: 1. Intersegment transactions have been eliminated.
2. The above amounts are based on selling prices and the amounts do not include consumption taxes.

8

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2019(Reference) Results by product category are as follows.
(a) SalesFirst three months of FY2018(Apr. 1, 2018 – Jun. 30, 2018)
Product categoryAmountComposition (%)
Printed Circuit Board design solutions
812,672
14.4
Circuit design solutions
1,131,412
20.1
IT solutions
1,001,576
17.8
Client services
2,694,674
47.7
Others
160
0.0
Total
5,640,497100.0(Thousands of yen)First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)
AmountComposition (%)
883,73814.5
1,326,13021.8
1,203,189
19.8
2,668,010
43.9
1,051
0.0
6,082,121
100.0(b) Orders received and order backlog(Thousands of yen)First three months of FY2018First three months of FY2019(Apr. 1, 2018 – Jun. 30, 2018)(Apr. 1, 2019 – Jun. 30, 2019)
Product category
Orders received
Order backlog
Orders received
Order backlog
Printed Circuit Board design solutions
945,027
808,586
1,081,650
884,308Circuit design solutions
1,508,643
1,234,426
1,839,768
1,694,060
IT solutions
1,292,838
1,142,719
1,502,747
1,349,390
Client services
3,097,980
7,579,896
3,281,584
7,785,561
Others
3,059
3,065
416
407
Total
6,847,549
10,768,694
7,706,166
11,713,729
Notes: 1. The above amounts are based on selling prices and the amounts do not include consumption taxes.
2. Name of major products by product category are as follows.
Major products of Printed Circuit Board designsolutions

Major products of Circuit design solutions

Major products of IT solutions

CR-8000 Design Force
CR-8000 DFM Center
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-8000 System PlannerArchitecture Planner
E3.series
Cabling Designer
Harness Designer
PreSight visual BOM
DS-CR
DS-2 Expresso
DS-E3

CR-5000 Board Designer

CR-5000 System Designer

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been prepar edin accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer
an English translation.

9