February 7, 2013

Summary of Consolidated Financial Results for the Third Quarter of the Year Ending March 31, 2013
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 8, 2013―
Scheduled commencement of dividend payment:
Quarterly Results Supplemental Materials
Yes
Quarterly Results Presentation Meeting
No
Company name:

1. Consolidated results for the third quarter of the fiscal year ending March 2013
(from April 1, 2012 to December 31, 2012)(1) Consolidated Operating Results (cumulative total)
Net Sales

Third quarter of fiscal
2013
Third quarter of fiscal
2012(All amounts rounded down, % change YoY)
Ordinary Profit

Operating Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

22,663

(4.1)

1,183

(4.1)

1,460

8.9

804

20.7

23,631

(0.0)

1,234

13.7

1,341

14.2

666

17.6

Note：Comprehensive Income
Third quarter of fiscal 2013: ¥ 672million(103.0%)
Third quarter of fiscal 2012: ¥ 331million(（9.4）%)

Third quarter of fiscal
2013
Third quarter of fiscal
2012

Net Income

Net Income

per Shareper Share after Dilution

Yen

Yen

61.23

61.22

48.81

－

(2) Consolidated Financial Position

Third quarter of fiscal
2013
Fiscal 2012

Shareholders’ Equity Ratio

Total Assets

Net Assets

Millions of yen

Millions of yen%

26,50915,83459.6

27,47815,67857.0

Reference: Shareholders’ equity
Third quarter of fiscal 2013: ¥15,796 million
Fiscal 2012: ¥15,649 million

2. Dividends
Dividend per Share

Fiscal 2012
Fiscal 2013

End of First QuarterEnd of Second QuarterEnd of Third Quarter

Yen

Yen

Yen

Yen

Yen

―
―

―
―

―
―

40.00

40.00

40.00

40.00

Fiscal 2013 (forecast)
Note: Revision of dividend forecast in this quarter:No
1Year-end

For the Year

3. Consolidated Earnings Forecast for Fiscal 2013 (from April 1, 2012 to March 31, 2013)(% of change from FY2012）
Net Income
Net Sales

Operating Income

Ordinary Profit

Net Income
per Share

FY2013

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

34,900

4.4

2,600

4.4

2,700

1.7

1,660

34.6

126.35

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

4. Others(1) Changes to significant subsidiaries during the current period :No

Note: Changes in specified subsidiaries during the current period that caused changes in the scope of consolidation(2) Application of simplified accounting and application of special accounting :No

Note: Application of simplified and special accounting for quarterly consolidated financial statements(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:
Yes
4. Restatements:
No
Notes: Corresponds to “a case having difficulty in distinguishing changes in accounting principles from changes in accounting
estimates ”.
The details are referred to page 4 of the attached documents “2.Summary information(Note)(3)Changes in accounting principles,changes in accounting estimates, and restatements”.

(4) Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
Third quarter of fiscal 2013:15,240,000 sharesFiscal 2012:15,240,000 shares
2. Number of treasury stock
Third quarter of fiscal 2013:
2,101,709 sharesFiscal 2012:
2,101,630 shares
3. Average number of shares over period (consolidated total for quarter)
Third quarter of fiscal 2013:13,138,331 shares
Third quarter of fiscal 2012:
13,653,580 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.

2

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

1. Qualitative Information Concerning Third-Quarter Consolidated Business Results(1) Qualitative Information Concerning Consolidated Business Results
Although during the third quarter of the fiscal year (April 1, 2012 to December 31, 2012) the Japanese economy
showed a moderate recovery, reflecting such factors as demand for reconstruction following the Great East Japan
Earthquake, the economy has been weak since the second quarter, as personal consumption generally remained flatand production and exports declined due to the impact of a slowdown in the world economy.
In the information services industry, despite an ongoing recovery in IT investments by customers, theenvironment for securing orders remained severe due to intensifying competition.
Amid this business environment, in the second year of its Medium-Term Management Plan, the SRA
Holdings Group continued to make group-wide efforts to “increase and strengthen profitability by undertaking
structural reforms in existing businesses” as well as implemented our medium- and long-term growth strategy of“securing growth potential by fully promoting our own IP products business* and undertaking new businessoverseas.”*Own IP products business: Business for our extremely high-profit own-brand products covered by intellectual property rights■Increase and strengthen profitability by undertaking structural reforms in existing businesses
1. Expand orders and sales by strengthening business capabilities
As a result of efforts to further strengthen project management from creating projects to securing orders, Software
Research Associates, Inc. (SRA) and Software Science Inc. achieved year-on-year increases in sales. Despite adecline in sales as opposed to large-scale orders received in the same period of the previous year, Advanced
Integration Technology, Inc. (AIT) posted a year-on-year increase in inquiries for business for the fourth quarter andcontinued to post robust orders. SRA (Europe) B.V. recorded lower sales due to the effects of restructuring at
principal customers. SRA Tohoku, Inc. posted lower sales owing to the impact of the earthquake.
2. Build a high-profit production structure
The gross profit margin rose from the same period of the previous fiscal year. This was the result of continuing tostrengthen the management of staff allocation and efforts to achieve an appropriate level of production overhead costs.
Additionally, we maintained a gross profit margin exceeding 20% for the second consecutive quarter in the mainstay
Systems Development business.
3. Transform to a cost structure appropriate for our business scale
We continued making efforts to realize appropriate production costs and selling, general and administrative (SG&A)
expenses.
■Secure growth potential by fully promoting our own IP products business and undertaking new businessoverseas (“own IP products business” x “overseas business”)
The SRA Group is implementing our “own IP products business” x “overseas business” by identifying opportunities
for our advanced products in the United States in cloud computing, wireless data communications and other fields,
and deploying these as our own IP products in China, India, ASEAN and other growth markets. During the third
3

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

quarter, we achieved progress in these efforts as detailed below.
1. Initiatives in cloud computing
Cavirin Systems, Inc.*1, a new company, will work to further strengthen its sales structure and carry out its own IP
products business centered on NOVATM data center automation products and services and vNOVATM for cloudcomputing, targeting the United States as well as growth markets (China, India, ASEAN and others).
2. Initiatives in wireless data communications
SRA invested in Shenzhen Kingnet Technology Co., Ltd. (KINGNET), which has powerful sales channels in China
and manufactures and sells wireless devices. Through this investment, SRA has secured sales channels in China andis utilizing these channels to sell products of Proxim Wireless Corporation*2, with which the SRA Group has businessand capital alliances.
3. Initiatives in China businessWith the aim of further strengthening our business and capital alliances with SJI, Inc. and expanding our China
business, SRA accepted that company’s callable unsecured convertible bond-type corporate bonds with shareacquisition rights. To establish an industry top-level share in offshore development, SJI made the SinoCom SoftwareGroup Ltd. a subsidiary and is striving to strengthen profitability. In the event that SRA exercises the shareacquisition rights, SJI would become an SRA equity-method affiliate and SJI’s results would be included in SRA’s
consolidated results.
*1

Cavirin Systems, Inc.: This company was established in the United States in September 2012 to take over all assets, including

intellectual property rights, of nSolutions, Inc., a leading company in data center automation services.
*2

Proxim Wireless Corporation: U.S.-based wireless device manufacturer that produces and sells cutting-edge products in wirelessdata communications. The company’s products have been widely introduced in countries throughout the world.

Regarding our consolidated business results for the third quarter of the fiscal year, due to the above initiatives, interms of net sales, although sales of the Systems Development business remained level, sales of the System
Operations and Infrastructure Development business decreased slightly while sales of the Product Sales businessdeclined. As a result, consolidated net sales amounted to ¥22,663 million, a 4.1% decrease from the same period of
the previous fiscal year.
At the profit level, operating income declined 4.1% to ¥1,183 million due to a decrease in gross profit
accompanying the decline in net sales. Meanwhile ordinary profit rose 8.9% to ¥1,460 million due to the impact of aforeign exchange gain owing to the weakening of the yen while net income increased 20.7% to ¥804 million.
As detailed above regarding consolidated results for the third quarter, although net sales and operating income
declined from the same period of the previous fiscal year, ordinary profit and net income both increased. Moreover,ordinary profit and net income are moving virtually in line with our full-year forecast of consolidated results.
Although operating income is slightly below our forecast, we aim to maintain the forecast amount by promoting
measures to increase profits that include focusing on our Product Sales business and further enhancing the efficiency
of costs.
4

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

A summary of consolidated business results for the third quarter by business segment is shown below.
1) Systems Development
Despite declines in sales to banks and securities companies, the Systems Development business achieved increases insales to manufacturing industries and the real estate industry. As a result, net sales increased 0.4% from the same
period of the previous fiscal year to ¥11,752 million.
2) System Operations and Infrastructure Development
Although there was an increase in university-related orders, there was a decline in orders from companies. As a result,net sales of the System Operations and Infrastructure Development business decreased 2.0% from the same period of
the previous fiscal year to ¥2,485 million.
3) Product Sales
AIT did not record orders comparable to the large orders in distribution sectors received in the same period of theprevious fiscal year. As a result, net sales of the Product Sales business declined 10.3% from the same period of theprevious fiscal year to ¥8,425 million.
(2) Qualitative Information Concerning Consolidated Financial Condition
Financial Position
Total assets at the end of the third quarter decreased 3.5% from the end of the previous fiscal year to ¥26,509 million,
total liabilities declined 9.5% to ¥10,675 million and total net assets increased 1.0% to ¥15,834 million.
Details of increases and decreases from the end of the previous fiscal year are as follows.
Total Assets
Notes and accounts receivable—trade declined ¥1,398 million to ¥5,045 million due to the collection of receivables.
Total intangible assets decreased ¥139 million to ¥965 million due to depreciation.
Total Liabilities
Accounts payable—trade declined ¥477 million to ¥2,326 million due to the payment of operating payables.
Income taxes payable decreased ¥475 million to ¥92 million due to the payment of income taxes.
Total Net Assets
Valuation difference on available-for-sale securities decreased ¥159 million to ¥131 million because of the impact ofstock markets. On the other hand, retained earnings increased ¥278 million to ¥11,921 million.
(3) Qualitative Information Concerning Consolidated Results Forecast
No revision has been made to forecasts in the Summary of Consolidated Financial Results for the Year Ended March
31, 2012 released on May 10, 2012.

2. Summary Information (Notes)(1) Significant changes involving subsidiaries during the period: None
5

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

(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 policy that is difficult to distinguish from change in accounting estimate)
Along with the revision of the Corporation Tax Act of Japan, from the first quarter of the fiscal year the Company
and its domestic consolidated subsidiaries have changed their method of depreciation based on the revised
Corporation Tax Act for tangible fixed assets acquired on or after April 1, 2012.
The impact of this change on operating income, ordinary profit and net income before income taxes in thethird quarter was immaterial.

3. Important Matters Regarding Assumptions of a Going Concern
None

6SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

4. Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of Yen)
End of third quarter of

Fiscal 2012fiscal 2013(as of March 31, 2012)(as of December 31, 2012)ASSETS
Current assets:
Cash and deposits

8,697

5,948

Notes and accounts receivable—trade

6,444

5,045

Short-term investment securities

1,529

1,104

Merchandise and finished goods

349

394

Work in process

982

1,606

Deferred tax assets

498

401

Short-term loans

139

438

Other

664

907

Allowance for doubtful accounts

(28)

(25)

19,277

15,820

331

331

(215)

(232)

115

98

568

573

(517)

(513)

50

59

Land

0

–

Other

100

101

Accumulated depreciation

(69)

(71)

Other, net

31

29

197

188

Other

1,104

965

Total intangible assets

1,104

965

Investment securities

4,082

6,813

Deferred tax assets

1,289

1,274

Guarantee deposits

413

405

Other

1,205

1,135

Allowance for doubtful accounts

(14)

(14)

Total current assets
Noncurrent assets:
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net

Total property, plant and equipment
Intangible assets

Investments and other assets

7

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

Allowance for investment loss

(78)

(78)

Total investments and other assets

6,897

9,535

8,200

10,68927,47826,509Total noncurrent assets
Total assets

8

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

(Millions of Yen)
End of third quarter of

Fiscal 2012fiscal 2013(as of March 31, 2012)(as of December 31, 2012)

LIABILITIESCurrent liabilities:
Accounts payable—trade

2,804

2,326

Short-term loans payable

1,609

1,674

Accrued expenses

661

681

Income taxes payable

568

92

Accrued consumption taxes

290

178

Provision for bonuses

616

401

Provision for directors’ bonuses

58

71

Provision for loss on construction contracts

167

167

Provision for loss on liquidation of subsidiaries
and affiliates
Other

41

–

865

954

7,682

6,547

Long-term loans payable

300

300

Deferred tax liabilities

1

4

3,659

3,663

154

158

1

1

4,116

4,127

11,79910,675

Capital stock

1,000

1,000

Capital surplus

4,483

4,483

Retained earnings

11,642

11,921

Treasury stock(1,393)(1,393)

Total shareholders’ equity

15,732

16,011

Valuation difference on available-for-sale securities

290

131

Foreign currency translation adjustments

(373)

(346)

Total accumulated other comprehensive income

(83)

(215)

29

37

Total net assets

15,67815,834

Total liabilities and net assets

27,47826,509Total current liabilities
Noncurrent liabilities:

Provision for retirement benefits
Provision for directors’ retirement benefits
OthersTotal noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Subscription rights to shares

9

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Millions of Yen)
Consolidated

Consolidated

cumulative total for

cumulative total forthird quarter of fiscal

third quarter of fiscal

2012 (from April 1,2013 (from April 1,

2011 to December 31,

2012 to December 31,

2011)

2012)

Net sales

23,631

22,663

Cost of sales

19,68418,758Gross profit

3,947

3,904

Selling, general and administrative expenses

2,712

2,720

Operating income

1,234

1,183

Interest received

88

143

Dividends received

31

34

Foreign exchange gains

–

87

Other

47

62

Total non-operating income

167

327

Interest expenses

22

21Transfer agent processing fee

14

16

Other

22

13

Total non-operating expenses

60

51

1,341

1,460

Gain on sales of investment securities

1

11

Reversal of allowance for investment loss

–

3

Other

170

0

Total extraordinary income

172

16

Loss on retirement of noncurrent assets

2

0

Other

56

0

Total extraordinary loss

580

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

10

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

1,454

1,475

Income taxes-current

508

582

Income taxes-deferred

279

88

Total income taxes

788

670

Income before minority interests

666

804

Net income

666

804

Income before minority interests

666

804

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

(239)

(159)

(95)

27

(335)

(131)

331

672

331

672

－

－

Income before income taxes and minority interests(Quarterly Consolidated Statements of Comprehensive Income)

Total other comprehensive income
Comprehensive income(breakdown)Comprehensive income attributable to parent
company shareholders
Comprehensive income attributable to minority
shareholders

11

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

(3) Notes Concerning Premise of Going Concern
None(4) Notes on Significant Changes in Shareholders’ Equity
None(5) Segment Information
II. Consolidated cumulative total for third quarter of fiscal 2012 (from April 1, 2011 to December 31, 2011)
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

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales tocustomers

11,706

2,535

9,389

23,631－

23,631

23

216

315

555

(555)

－

Total sales

11,729

2,751

9,705

24,186(555)

23,631

Operating income

1,422

410

387

2,219

(985)

1,234

(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥985 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
II. Consolidated cumulative total for third quarter of fiscal 2013 (from April 1, 2012 to December 31, 2012)
1. Information concerning net sales and income or losses for each reporting segment(Millions of yen)AmountSystemSystems
Development

Operations
andInfrastructurerecorded on
Product
Sales

Total

Adjustment*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

12

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

Sales(1) Sales to
Customers

11,752

2,485

8,425

22,663－

22,663

36

254

380

670

(670)

－

Total sales

11,788

2,740

8,805

23,333(670)

22,663Operating income

1,294

462

367

2,123

(940)

1,183

(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥940 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. Matters concerning change in reportable segments
As stated in “Change in accounting policy that is difficult to distinguish from change in accounting estimate,”
along with the revision of the Corporation Tax Act of Japan, from the first quarter of the fiscal year theCompany and its domestic consolidated subsidiaries have changed their method of depreciation based on therevised Corporation Tax Act for tangible fixed assets acquired on or after April 1, 2012. Accordingly, their
method of depreciation for reportable segments has been changed to a method based on the revised Corporation
Tax Law.
The impact of this change on profit in each segment in the third quarter was immaterial.
3. Information concerning impairment loss on fixed assets or goodwill for each reporting segment
None(6) Significant Subsequent Events
1. The Board of Directors of Company subsidiary SRA convened on January 15, 2013 and resolved to provide loans
to Proxim Wireless Corporation with the aims of strengthening the capital alliance between that company and the
SRA Group and of promoting the global development of our own IP products business in Japan, China, India and
ASEAN. A payment of US$1,400 thousand was made on January 16, 2013, with the repayment date set at January 31,
2014.
2. The Board of Directors of Company subsidiary SRA convened on January 15, 2013 and resolved to provide aguarantee of liabilities for ¥1.5 billion in financing from Mizuho Bank, Ltd. for funds for use by SJI for the purchaseof shares of SinoCom Software Group Ltd. A guarantee of liabilities contract was signed on January 31, 2013. The
period of guarantee of liabilities is up to March 29, 2013.

13

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

5. Other Information
1. Status of Production, Purchases, Orders and Sales(1) Production amounts
Production by segment in the third quarter of the fiscal year ending March 31, 2013 is as follows.
Consolidated cumulative total for
Segment information by type of businessthird quarter of fiscal 2013 (from
April 1, 2012 to December 31,% change YoY

2012)
Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)

12,669

102.3

2,530

99.3

15,200101.8

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

(2) Purchase amounts
Purchases by segment in the third quarter of the fiscal year ending March 31, 2013 are as follows.
Consolidated cumulative total for
Segment information by type of businessthird quarter of fiscal 2013 (from
April 1, 2012 to December 31,% change YoY

2012)
Product Sales (Millions of Yen)

5,387

83.9

Total (Millions of Yen)

5,387

83.9

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

(3) Status of orders
Status of orders by segment in the third quarter of the fiscal year ending March 31, 2013 is as follows.
OrdersSegment information by type of business

Order backlog

received% change YoY(Millions of% change YoY

Yen)

Yen)
Systems Development(Millions of

12,357

14

96.8

4,468

97.7

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

System Operations and Infrastructure

1,931

102.6

848

109.6

Product Sales

8,444

83.7

3,569

96.5

Total

22,733

91.9

8,885

98.2

Development

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

(4) Sales amounts
Sales by segment in the third quarter of the fiscal year ending March 31, 2013 are as follows.
Consolidated cumulative total for
Segment information by type of businessthird quarter of fiscal 2013 (from
April 1, 2012 to December 31,% change YoY

2012)
Systems Development (Millions of Yen)

11,752

100.4

2,485

98.0

Product Sales (Millions of Yen)

8,425

89.7

Total (Millions of Yen)

22,663

95.9

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