February 5, 2015

Summary of Consolidated Financial Results for the Third Quarter of the Year Ending March 31, 2015
Company name:

SRA Holdings, Inc.
(URL: http://www.sra-hd.co.jp/)
Stock listing:Tokyo Stock Exchange
Code number:
3817
President:
Toru Kashima
For inquiries, please contact:
Makoto Kitai, General Manager, Finance Department, Administrative HeadquartersTel:(03)-5979-2666
Scheduled date of submission of quarterly securities report:
February 6, 2015―
Scheduled commencement of dividend payment:
Quarterly Results Supplemental Materials
Yes
Quarterly Results Presentation MeetingNo

1. Consolidated results for the third quarter of the fiscal year ending March 2015
(from April 1, 2014 to December 31, 2014)(1) Consolidated Operating Results (cumulative total)
Net Sales

Third quarter of fiscal
2015
Third quarter of fiscal
2014(All amounts rounded down, % change YoY)
Ordinary Profit

Operating Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

25,867

4.4

1,770

14.7

2,422

20.2

945

(17.0)

24,765

9.3

1,543

30.4

2,015

38.0

1,139

41.6

Note：Comprehensive Income
Third quarter of fiscal 2015: ¥ 1,575millions (28.6%)
Third quarter of fiscal 2014: ¥ 1,225millions (82.2%)

Third quarter of fiscal
2015
Third quarter of fiscal
2014

Net Income

Net Income

per Shareper Share after Dilution

Yen

Yen

78.74

－

87.86

87.31

(2) Consolidated Financial Position

Third quarter of fiscal
2015
Fiscal 2014

Shareholders’ Equity Ratio

Total Assets

Net Assets

Millions of yen

Millions of yen%

30,19918,053

59.7

29,527

17,083

57.7

Reference: Shareholders’ equity
Third quarter of fiscal 2015: ¥ 18,036millions
Fiscal 2014: ¥ 17,051millions

2. Dividends
Dividend per Share
End of First Quarter
Fiscal 2014
Fiscal 2015

End of Second QuarterEnd of Third Quarter

Yen

Yen

Yen

Yen

Yen

―
―

0.00
17.00

―

40.00

40.00

―

28.00

45.00

Fiscal 2015 (forecast)
Note: Revision of dividend forecast in this quarter:No
1Year-end

For the Year

3. Consolidated Earnings Forecast for Fiscal 2015 (from April 1, 2014 to March 31, 2015)(% of change from FY2014）
Net Income
Net Sales

Operating Income

Ordinary Profit

Net Income
per Share

FY2015

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

37,300

6.1

3,260

16.1

3,460

4.1

2,230

4.5

185.66

Note: Revision of consolidated results forecast in this quarter:No

4. Others(1) Changes to significant subsidiaries during the current period :No(2) Application of simplified accounting and application of special accounting :No(3) Changes in accounting principles, changes in accounting estimates, and restatements
1. Changes caused by revision of accounting standards, etc. :Yes
2. Changes other than 1. above:No
3. Changes in accounting estimates:
No
4. Restatements:
No(4) Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
Third quarter of fiscal 2015:15,240,000 sharesFiscal 2014:15,240,000 shares
2. Number of treasury stock
Third quarter of fiscal 2015:
3,205,445 sharesFiscal 2014:
3,394,210 shares
3. Average number of shares over period (consolidated total for quarter)
Third quarter of fiscal 2015:
12,010,963 shares
Third quarter of fiscal 2014:
12,963,848 shares*Indication of quarterly review procedure implementation status
This earnings release is not subject to the quarterly review process as required by the Financial Instruments and Exchange Act of Japan.
As of the date when this earning release was issued, the review process on quarterly financial statements as required by the Financial
Instruments and Exchange Act had been finished.

*Explanation relating to the appropriate use of results forecasts, and other noteworthy items
Forward-looking statements in this earnings release, such as forecasts of results of operations, are based on the information currently
available and the certain assumptions that we regard as reasonable and therefore actual results may differ materially from those containedin or suggested by any forward-looking statements.

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

1. Qualitative Information Concerning Third-Quarter Consolidated Business Results(1) Explanation Concerning Business Results
During the third quarter of the fiscal year (April 1, 2014 to December 31, 2014), the Japanese economy continued its
moderate recovery thanks to an increasingly visible pickup in personal consumption, which had previously weakened
in reaction to a last-minute surge in demand prior to the consumption tax increase, as well to the continuation of such
trends as a rise in capital investment and improved corporate earnings.
In the information services industry, despite an ongoing recovery in IT investments, the environment for securing
orders remained severe due to intensifying competition.
Within this business environment, during the final fiscal year of its Medium-Term Management Plan the SRA
Holdings Group implemented the following specific measures as part of efforts to “undertake structural reforms inexisting businesses” as well as promote our “own IP products business” x “overseas business,” which is our mediumand long-term growth strategy.
■Undertake structural reforms in existing businesses
As measures to expand orders and sales by strengthening business capabilities, we created new projects throughproposal-based sales that utilize our strong points and fortified our order management structure. As a result of these
efforts, Software Research Associates, Inc. (SRA) recorded an increase in sales over the same period of the previous
fiscal year. Meanwhile, to build a high-profit production structure we continued working to strengthen our staff
allocation management and realize an appropriate level of production overhead costs.
■“Own IP products business” x “overseas business”
We implemented the following measures for undertaking our “own IP products business” x “overseas business,”(medium- and long-term growth strategy) to promote our own IP products business in China, India, ASEAN andother growth markets.
1) We made additional business investments in Cavirin Systems, Inc. and Proxim Wireless Corporation with the aimof further implementing our medium- and long-term growth strategy.
2) Proxim Wireless fully commenced the licensing business for its leading-edge wireless products in the BRICs.
3) In July 2014, Cavirin Systems commenced U.S. sales of cavirin, an advanced solution for responding toever-larger and increasingly complex data centers and cloud computing. A number of well-known major companies
have already introduced this solution. Backed by this track record, in January 2015 we also began sales of cavirin in
Japan, where cloud computing is rapidly advancing. Going forward, we plan to promote our business in the growthfields of “cloud computing” and “security.”
4) In our own IP products business in Japan, as new products we began supplying TestDepot, an embedded software
automated test support tool that responds to demand in the manufacturing industry; ProjDepot, an integrated
management platform for team development that aims at streamlining systems development; and “UniVision viewing
time management” solution for universities. In conjunction, we are focusing on expanding sales of such products as
our comprehensive education solutions UniVision, our mail archive MailDepot, our digital content service
BELEGA-DC and our EC building service BELEGA-EC.

3

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

5) The SRA Group company CreDist, Inc. has begun providing the ILD Cloud Service, a cloud service for
manufacturing industries developed based on the IBM “Platform Computing Cloud Service.”6) In the healthcare field, where markets are expected to grow, we promoted business for HEALTHPLAYER, aplatform for comprehensive support for the digital health business in collaboration with Practechs, Inc. as an initiative
for building a new business model.
Due to the above initiatives, our consolidated business results for the third quarter of the fiscal year were as
follows.
In terms of net sales, higher sales were recorded in all businesses that include the Systems Development business,
the System Operations and Infrastructure Development business and the Product Sales business. As a result,consolidated net sales amounted to ¥25,867 million, a 4.4% increase from the same period of the previous fiscal year.
At the profit level, operating income rose 14.7% from the same period of the previous fiscal year to ¥1,770
million due to growth in sales and an improvement in the gross profit margin, and ordinary profit increased 20.2%
from the same period of the previous fiscal year to ¥2,422 million.
A loss on valuation of investment securities for shares in SJI Inc. held by the SRA Group was posted as an
extraordinary loss. As a result, net income decreased 17.0% from the same period of the previous fiscal year to ¥945
million.
The Company applied the reversal method (araigae method, which allows for upward revisions at the beginningof the next fiscal period) for the valuation of investment securities. Therefore, depending on the market value of
securities at the end of this fiscal year, there is the possibility that the amount of this extraordinary loss will change orthat no extraordinary loss will be recorded on the valuation of securities.
As detailed above regarding consolidated results for the third quarter of the fiscal year, net sales increased fromthe same period of the previous fiscal year, while operating income and ordinary profit also rose. However, net
income decreased due to the recording of an extraordinary loss.
A summary of consolidated business results for the third quarter by business segment is shown below.
1) Systems Development
The Systems Development business recorded increases in sales to banks, securities companies, universities andmanufacturing industries. As a result, net sales increased 5.2% from the same period of the previous fiscal year to¥13,479 million.
2) System Operations and Infrastructure Development
Although university-related sales were flat, there was a large increase in orders from companies. As a result, net salesof the System Operations and Infrastructure Development business increased 8.6% from the same period of theprevious fiscal year to ¥2,854 million.
3) Product Sales
Although device sales by Advanced Integration Technology, Inc. (AIT) remained flat, SRA posted a sharp increase insales. As a result, net sales of the Product Sales business increased 2.2% from the same period of the previous fiscal
year to ¥9,533 million.
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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

(2) Explanation Concerning Financial Condition
Total assets at the end of the third quarter amounted to ¥30,199 million, an increase of 2.3% from the end of theprevious fiscal year. Total liabilities decreased 2.4% from the end of the previous fiscal year to ¥12,146 million andnet assets increased 5.7% to ¥18,053 million from the end of the previous fiscal year. Details of the principal
increases and decreases from the end of the previous fiscal year are as follows.
(Total Assets)
Work in process increased ¥546 million to ¥1,976 million due to such factors as a rise in contracted development
projects. Cash and deposits increased ¥417 million to ¥8,106 million due to the collection of trade receivables.
Merchandise and finished goods increased ¥323 million to ¥623 million due to a rise in device sales transactions. On

the other hand, notes and accounts receivable—trade decreased ¥1,305 million to ¥5,550 million due to the collectionof trade receivables.
(Total Liabilities)
Accrued consumption taxes increased ¥219 million to ¥474 million and accrued expenses rose ¥141 million to ¥725
million. On the other hand, income taxes payable decreased ¥610 million to ¥272 million owing to the payment ofcorporate income taxes.
(Total Net Assets)
Valuation difference on available-for-sale securities increased ¥429 million to ¥668 million due to changes in themarket prices of marketable and investment securities. On the other hand, retained earnings increased ¥263 million to¥14,596 million.

(3) Explanation Concerning Consolidated Results Forecast and Other Future Projections
No revision has been made to forecasts in Summary of Consolidated Financial Results for the Year Ended March 31,
2014 released on May 8, 2014.

2. Summary Information (Notes)(1) Significant changes involving subsidiaries during the period: None
(2) Application of simplified accounting methods and accounting methods specific to the preparation of the quarterly
consolidated financial statements: None
(3) Changes in accounting principles, changes in accounting estimates and restatements(Change in Accounting Policies)
Effective from the first quarter of the fiscal year ending March 31, 2015, the Company adopted the AccountingStandard for Retirement Benefits (ASBJ Statement No. 26, May 17, 2012, hereafter, “Standard”) and Guidanceon Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012, hereafter, “Guidance”),
as set out in the main clause of paragraph 35 of the Standard and the main clause of paragraph 67 of the5

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

Guidance. Accordingly, the methods for calculating retirement benefit obligations and service costs have beenrevised. The method of attributing expected benefit payments to periods has been changed from a point basis tothe benefit formula basis and the method of determining the discount rate has been changed from a discount rate
based on the approximate number of years of the average remaining service period of employees for the liability
period that serves as the basis for determining the discount rate to a single weighted average discount rate
reflecting the expected timing and amount of benefit payment in each period.
The adoption of the Standard and the Guidance conforms with the transitional treatment stipulated byparagraph 37 of the Standard.
The impact of this change on net defined benefit liability and retained earnings at the beginning of the third
quarter as well as on operating income, ordinary profit and income before income taxes and minority interests inthe third quarter of the fiscal year was immaterial.

6

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)FY2014(as of March 31, 2014)

End of third quarter of FY2015(as of December 31, 2014)ASSETS
Current assets:
Cash and deposits

7,689

8,106

Notes and accounts receivable—trade

6,855

5,550

Short-term investment securities

3,112

3,393

Merchandise and finished goods

300

623

Work in process

1,430

1,976

Deferred tax assets

546

699

Other

2,208

2,504

Allowance for doubtful accounts

(27)

(35)

22,117

22,819Buildings

346

316

Accumulated depreciation

(249)

(227)

Buildings, net

97

89

Machinery, equipment and vehicles

575

566

Accumulated depreciation

(517)

(505)

Machinery, equipment and vehicles, net

58

61

Other

114

111

Accumulated depreciation

(75)

(75)

Other, net

39

35

Total property, plant and equipment

195

186

Other

672

555

Total intangible assets

672

555

Investment securities

3,618

3,833

Deferred tax assets

1,421

1,164

Guarantee deposits

370

324

Net defined benefit asset

42

46

Other

1,206

1,391

Allowance for doubtful accounts

(13)

(14)

Allowance for investment loss

(104)

(108)

Total investments and other assets

6,542

6,639

7,410

7,380

29,52730,199Total current assets
Noncurrent assets:
Property, plant and equipment

Intangible assets

Investments and other assets

Total noncurrent assets
Total assets

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

(Millions of Yen)FY2014(as of March 31, 2014)

End of third quarter of FY2015(as of December 31, 2014)

LIABILITIESCurrent liabilities:
Accounts payable—trade

3,211

3,324

Short-term loans payable

1,509

1,179

Accrued expenses

583

725

Income taxes payable

882

272

Accrued consumption taxes

255

474

Provision for bonuses

550

381

Provision for directors’ bonuses

50

71

Provision for loss on construction contracts

416

553

Asset retirement obligations

18

–

Other

851

1,013

8,329

7,997

9

0

3,926

3,997

Provision for directors’ retirement benefits

161

135

Other

17

15

4,114

4,148

12,443

12,146

Capital stock

1,000

1,000

Capital surplus

4,475

4,468

Retained earnings

14,332

14,596

Treasury stock(2,826)(2,727)

Total shareholders’ equity

16,982

17,337

Valuation difference on available-for-sale securities

238

668

Foreign currency translation adjustments

229

420

Remeasurements of defined benefit plans

(399)

(389)

68

698

32

17

Total net assets

17,08318,053

Total liabilities and net assets

29,52730,199Total current liabilities
Noncurrent liabilities:
Deferred tax liabilities

Net defined benefit liability

Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Total accumulated other comprehensive income
Subscription rights to shares

8

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Cumulative Total for Third Quarter)(Millions of Yen)
Consolidated cumulative total

Consolidated cumulative total

for third quarter of fiscal

for third quarter of fiscal

2014 (from April 1, 2013 to2015 (from April 1, 2014 toDecember 31, 2013)

December 31, 2014)

Net sales

24,76525,867

Cost of sales

20,44021,293Gross profit

4,325

4,574

Selling, general and administrative expenses

2,782

2,804

Operating income

1,543

1,770

Interest received

144

145

Dividends received

44

24

Foreign exchange gains

200

363

Guarantee commission received

61

90

Other

61

69

Total non-operating income

513

692

Interest expenses

20

20

Stock transfer agency service fee

19

18

Other

0

2

Total non-operating expenses

41

40

2,015

2,422

Gain on sales of investment securities

5

18

Gain on reversal of subscription rights to shares

－

21

Other

9

2

Total extraordinary income

1441

Loss on retirement of noncurrent assets

2

14

Loss on valuation of investment securities

－

835

Other

4

20

Total extraordinary loss

7

871

2,022

1,592

Income taxes-current

835

792

Income taxes-deferred

48

(145)

Total income taxes

883

646

Income before minority interests

1,139

945

Net income

1,139

945

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

Income before income taxes and minority interests

9

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Cumulative Total for Third Quarter)
Consolidated cumulative total

Consolidated cumulative total

for third quarter of fiscal

for third quarter of fiscal

2014 (from April 1, 2013 to2015 (from April 1, 2014 toDecember 31, 2013)

December 31, 2014)

Income before minority interests

1,139

945

Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustments

(186)

429

272

190

Remeasurements of defined benefit plans, net of tax－

9Total other comprehensive income

86

629

1,225

1,575

1,225

1,575

－

－

Comprehensive income(breakdown)Comprehensive income attributable to parent
company shareholders
Comprehensive income attributable to minority
shareholders

10

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

(3) Notes Concerning Consolidated Financial Statements for the Third Quarter(Notes Concerning Premise of Going Concern)
None(Notes on Significant Changes in Shareholders’ Equity)
None(Segment Information and others)[Segment Information]
I. Consolidated cumulative total for third quarter of fiscal 2014 (from April 1, 2013 to December 31, 2013)
1. Information concerning net sales and income or losses for each reporting segment(Millions of yen)AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product

Adjustment

Total

Sales

amount*1

the quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

12,814

2,627

9,324

24,765－24,765

26

215

355

597

(597)

－

Total sales

12,841

2,842

9,679

25,363(597)

24,765

Operating income

1,342

537

602

2,483

(939)

1,543

(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥939 million is a company-wide expense not apportioned to any reporting segment.
Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any reporting segment.
2. Segment operating income is adjusted in operating income on the quarterly consolidated statements of income.

2. Information concerning impairment loss on fixed assets or goodwill for each reporting segment
None

11

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

II. Consolidated cumulative total for third quarter of fiscal 2015 (from April 1, 2014 to December 31, 2014)
1. Information concerning net sales and income or losses for each reporting segment(Millions of yen)AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product

Adjustment

Total

Sales

amount*1

the quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

13,479

2,854

9,533

25,867－25,867

8

203

413

625

(625)

－

Total sales

13,488

3,057

9,946

26,492(625)

25,867

Operating income

1,308

630

745

2,683

(913)

1,770

(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥913 million is a company-wide expense not apportioned to any reporting segment.
Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any reporting segment.
2. Segment operating income is adjusted in operating income on the quarterly consolidated statements of income.

2. Information concerning impairment loss on fixed assets or goodwill for each reporting segment
None

12

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

(Significant subsequent events)
1. New loan and extension of loan repayment period
The Board of Directors of Company subsidiary SRA convened on January 15, 2015 and resolved to provide a newloan to Proxim Wireless Corporation, with which it has a business alliance and capital alliance, and provided the loanon the same date with the aim of expanding business with that company.
New loan(1) Amount of loan: US$1,350 thousand(2) Loan period: From January 15, 2015 to January 4, 2017
Also, Company subsidiary SRA provided a loan to Proxim Wireless Corporation with the aim of establishing abusiness alliance and capital alliance with that company. However, the Board of Directors of SRA passed a resolution
and extended the loan repayment period at a meeting of the Board of Directors of SRA convened on January 15,
2015.
Loan amount: US$5,750 thousand
Loan repayment period after change: January 4, 2017

2. Extension of liability guarantee period
Subsidiary SRA provided a liability guarantee for short-term borrowings by SJI Inc., with which it has a businessalliance and capital alliance. However, based upon a request by that company for an extension of the guarantee period,
the Board of Directors of SRA passed a resolution and extended the liability guarantee period as detailed below at a
meeting of the Board of Directors of SRA convened on January 15, 2015.
Amount of liability guarantee: ¥1,500 million
Period of liability guarantee before change: January 30, 2015
Period of liability guarantee after change: February 27, 2015

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

4. Other Information
1. Status of Production, Orders and Sales
 Production amounts
Production by segment in the third quarter of the fiscal year ending March 31, 2015 is as follows.
Consolidated cumulative total for

Segment information by type of businessthird quarter of fiscal 2015 (from% change YoY

April 1, 2014 to December 31, 2014)

Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)

14,266

105.4

2,879

108.8

17,146106.0

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

 Purchase amounts
Purchases by segment in the third quarter of the fiscal year ending March 31, 2015 are as follows.
Consolidated cumulative total for

Segment information by type of businessthird quarter of fiscal 2015 (from% change YoY

April 1, 2014 to December 31, 2014)

Product Sales (Millions of Yen)

6,173

93.6

Total (Millions of Yen)

6,173

93.6

Notes:
1. Amounts are based on purchase price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

14

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2015

 Status of orders
Status of orders by segment in the third quarter of the fiscal year ending March 31, 2015 is as follows.
OrdersSegment information by type of business

Order backlog

received% change YoY(Millions of% change YoY

Yen)

Yen)

Systems Development(Millions of

14,251

103.4

5,181

109.1

2,186

106.9

955

108.4

Product Sales

10,318

95.4

3,513

74.7

Total

26,757

100.4

9,649

93.4

System Operations and Infrastructure
Development

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

 Sales amounts
Sales by segment in the third quarter of the fiscal year ending March 31, 2015 are as follows.
Consolidated cumulative total for

Segment information by type of businessthird quarter of fiscal 2015 (from% change YoY

April 1, 2014 to December 31, 2014)

Systems Development (Millions of Yen)

13,479

105.2

2,854

108.6

Product Sales (Millions of Yen)

9,533

102.2

Total (Millions of Yen)

25,867

104.4

System Operations and Infrastructure
Development (Millions of Yen)

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

15