August 9, 2012

Summary of Consolidated Financial Results for the First 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:
August 10, 2011―
Scheduled commencement of dividend payment:
Quarterly Results Supplemental Materials
Yes
Quarterly Results Presentation Meeting
No
Company name:

1. Consolidated results for the first quarter of the fiscal year ending March 2013 (from April 1, 2012 to June30, 2012)(1) Consolidated Operating Results (cumulative total)
Net SalesFirst quarter of fiscal
2013
First 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

%

7,282

(3.3)

334

5.8

376

3.7

189

(22.7)

7,528

(4.1)

316

45.7

363

36.0

245

506.7

Note：Comprehensive Income
First quarter of fiscal 2013: ¥190 million((31.1)%)
First quarter of fiscal 2012: ¥276million

First quarter of fiscal
2013
First quarter of fiscal
2012

Net Income

Net Income

per Shareper Share after Dilution

Yen

Yen

14.43

－

17.72

－

(2) Consolidated Financial Position

First quarter of fiscal
2013
Fiscal 2012

Shareholders’ Equity Ratio

Total Assets

Net Assets

Millions of yen

Millions of yen%

27,02915,34956.7

27,47815,67857.0

Reference: Shareholders’ equity
First quarter of fiscal 2013: ¥15,315 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 First Half or FY2012）
Net Income
Net Sales

Operating Income

Ordinary Profit

Net Income
per Share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

FY2013 First Half
(for the six months ending
September 30, 2012)

16,370

3.0

920

13.1

970

9.4

600

(1.2)

45.67

FY201334,900

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 3 of the attached documents “2.Summary information(others)(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)
First quarter of fiscal 2013:15,240,000 sharesFiscal 2012:15,240,000 shares
2. Number of treasury stock
First quarter of fiscal 2013:
2,101,651 sharesFiscal 2012:
2,101,630 shares
3. Average number of shares over period (consolidated total for quarter)
First quarter of fiscal 2013:13,138,359 sharesFirst quarter of fiscal 2012:
13,839,770 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 First-Quarter Consolidated Financial Results for the Year Ending March 31, 2013

1. Qualitative Information Concerning First-Quarter Consolidated Business Results(1) Qualitative Information Concerning Consolidated Business Results
During the first quarter of the fiscal year (April 1, 2012 to June 30, 2012), although conditions in the Japanese
economy remained harsh due to the impact of the Great East Japan Earthquake, personal consumption increased
moderately while production, exports and corporate earnings showed signs of a pickup.
In the information services industry, despite signs of a recovery in IT investments by corporate customers, theuninterrupted drop in order unit prices continues and the environment for securing orders remained severe.
Amid this business environment, in the second year of its Medium-Term Management Plan, the SRA HoldingsGroup continued to make group-wide efforts to “increase and strengthen profitability by undertaking structuralreforms 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 business overseas.”*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 focusing efforts on such areas as strengthening project management, from identifying projects tosecuring orders, Software Research Associates, Inc. (SRA), a core business, achieved a year-on-year increase inorders for the third consecutive quarter, mainly in its Systems Development business.
2. Build a high-profit production structure
SRA’s gross profit margin rose from the same quarter of the previous fiscal year in Systems Development and System
Operations and Infrastructure Development. This was the result of efforts to achieve an appropriate level ofproduction overhead costs by strengthening the management of staff allocation.
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 Holdings Group is implementing our “own IP products business” x “overseas business” for leveraging ourown IP products business in the United States in wireless data communications, cloud computing and other growthfields, and developing this business in China and other growth markets.
As part of efforts to promote its China business, SRA acquired 50,000 additional shares of SJI Inc. held by King Tech
Service HK Limited, with the aim of strengthening business and capital alliances with SJI. As a result, the SRAGroup increased its shareholdings in SJI from 50,500 shares (6.1% equity stake) to 100,500 shares (12.1% equity
stake).
SRA also provided SJI with loans (¥2.5 billion) for a portion of the funds needed for acquiring shares of SinoCom
Software Group Ltd., which is working to expand offshore development business for Japanese companies in China.
3

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

Regarding our consolidated business results for the first quarter of the fiscal year, due to the above initiatives, interms of sales, although sales increased in the Systems Development business, sales were virtually flat in the System
Operations and Infrastructure Development business while sales in the Product Sales business declined. As a result,consolidated net sales amounted to ¥7,282 million, a decrease of 3.3% from the same period of the previous fiscal
year.
At the profit level, despite a decline in gross profit due to a decrease in net sales, efforts to raise profit margins andpromote efficiency in SG&A expenses led to a 5.8% year-on-year increase in operating income to ¥334 million and a
3.7% rise in ordinary profit to ¥376 million. We recorded extraordinary income that included gain on sale ofinvestment securities but posted a decline in income taxes-deferred along with a revision to the tax law. As a result,net income for the first quarter declined 22.7% from the same period of the previous fiscal year to ¥189 million.
As detailed above in the section on consolidated results for the first quarter, although net sales declined slightly
from the same period of the previous fiscal year, operating income and ordinary profit increased. Moreover, operating
income and ordinary profit are also moving in line with the assumptions of our plan.
A summary of consolidated business results for the first quarter by business segment is shown below.
1) Systems Development
Although sales to banks and manufacturing industries declined, the Systems Development business recorded
increases in sales to universities and the real estate industry. As a result, net sales increased 5.5% from the same
period of the previous fiscal year to ¥3,723 million.
2) System Operations and Infrastructure Development
Despite 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 declined 1.8% from the same period of the previous
fiscal year to ¥811 million.
3) Product Sales
Advanced Integration Technology, Inc. (AIT) recorded declines mainly in distribution and financial sectors, while
SRA posted a decline in package sales. As a result, net sales of the Product Sales business declined 13.4% from thesame period of the previous fiscal year to ¥2,746 million.
(2) Qualitative Information Concerning Consolidated Financial Condition
With regard to financial condition for the first quarter, although work in process rose ¥369 million, current assets
declined ¥781 million from the end of the previous fiscal year to ¥18,496 million due to a ¥1,867 million decrease innotes and accounts receivable—trade accompanying the collection of trade accounts receivable. Despite a ¥58 million
decline in intangible assets due to depreciation, noncurrent assets increased ¥333 million to ¥8,533 million due tosuch factors as a ¥352 million increase in investment securities. As a result, total assets decreased ¥448 million to¥27,029 million.
On the liabilities side, provision for bonuses rose ¥343 million, but accounts payable—trade declined ¥306 million
due to the payment of accounts payable and income taxes payable decreased ¥303 million due to the payment ofincome taxes. As a result, total liabilities decreased ¥119 million to ¥11,680 million. Total net assets decreased ¥335
4

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

million to ¥15,349 million due to the payment of dividends.
(3) Qualitative Information Concerning Consolidated Results Forecast
No revision has been made to forecasts in Summary of Consolidated Financial Results for the Year Ended March 31,
2012 released on May 10, 2012.

2. Summary Information (Others)(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: None

(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 andits 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 the firstquarter was immaterial.

3. Important Matters Regarding Assumptions of a Going Concern
None

5SRA Holdings, Inc. (3817) Summary of First-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 first quarter of

Fiscal 2012fiscal 2013(as of March 31, 2012)(as of June 30, 2012)ASSETS
Current assets:
Cash and deposits

8,697

7,213

Notes and accounts receivable—trade

6,444

4,576

Short-term investment securities

1,529

801

Merchandise and finished goods

349

464

Work in process

982

1,351

Deferred tax assets

498

649

Other

804

3,473

Allowance for doubtful accounts

(28)

(35)

19,277

18,496

331

331

(215)

(221)

115

110

568

564

(517)

(518)

50

46

Land

0

0

Other

100

102

Accumulated depreciation

(69)

(71)

Other, net

31

31

197

188

Other

1,104

1,046

Total intangible assets

1,104

1,046

Investment securities

4,082

4,434

Deferred tax assets

1,289

1,272

Guarantee deposits

413

407

Other

1,205

1,282

Allowance for doubtful accounts

(14)

(14)

Allowance for investment loss

(78)

(84)

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

6

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

Total investments and other assets
Total noncurrent assets
Total assets

7

6,897

7,297

8,200

8,533

27,47827,029

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

(Millions of Yen)
End of first quarter of

Fiscal 2012fiscal 2013(as of March 31, 2012)(as of June 30, 2012)

LIABILITIESCurrent liabilities:
Accounts payable—trade

2,804

2,498

Short-term loans payable

1,609

1,669

Accrued expenses

661

742

Income taxes payable

568

264

Accrued consumption taxes

290

136

Provision for bonuses

616

960

Provision for directors’ bonuses

58

0Provision for loss on construction contracts

167

196

Provision for loss on liquidation of subsidiaries
and affiliates
Other

41

41

865

1,038

7,682

7,547

Long-term loans payable

300

300

Deferred tax liabilities

1

3

3,659

3,681

154

146

1

1

4,116

4,132

11,799

11,680Capital stock

1,000

1,000

Capital surplus

4,483

4,483

Retained earnings

11,642

11,306

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

Total shareholders’ equity

15,732

15,396

Valuation difference on available-for-sale securities

290

257

Foreign currency translation adjustments

(373)

(338)

Total accumulated other comprehensive income

(83)

(81)

29

34

Total net assets

15,67815,349Total liabilities and net assets

27,47827,029Total 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

8

SRA Holdings, Inc. (3817) Summary of First-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 forfirst quarter of fiscal

first quarter of fiscal

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

2011 to June 30, 2011)2012 to June 30, 2012)

Net sales

7,528

7,282

Cost of sales

6,285

6,071

Gross profit

1,242

1,211

Selling, general and administrative expenses

925

876

Operating income

316

334

Interest received

28

41

Dividends received

23

19

Other

12

19

Total non-operating income

6481Interest expenses

77Foreign exchange losses

4

20

Other

4

11

Total non-operating expenses

17

39

363

376

Gain on sales of investment securities–

11

Gain on reversal of subscription rights to shares

29–

Total extraordinary income

29

11

Loss on retirement of noncurrent assets

10Loss on sales of investment securities–

0

Loss on valuation of investment securities

1

0

Other

9

–

Total extraordinary loss

130

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

9

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

Income before income taxes and minority interests

379

388

Income taxes-current

374

346

Income taxes-deferred

(240)

(147)

Total income taxes

134

198

Income before minority interests

245

189

Net income

245

189

Income before minority interests

245

189

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

21

(33)

9

34

31

1

276

190

276

190

－

－

(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(3) Notes Concerning Premise of Going Concern
None

10

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2013(4) Segment Information
I. Consolidated cumulative total for first quarter of fiscal 2012 (from April 1, 2011 to June 30, 2011)
1. Information Concerning Net Sales and Income or Losses for each Reporting Segment(Millions of yen)AmountSystemrecorded on

Operations

Systems
Development

Product

andInfrastructure

Adjustment

Total

Sales

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

3,529

826

3,172

7,528

－

7,528

7

58

100

166

(166)

－

3,537

884

3,272

7,694

(166)

7,528

358

125

178

663

(346)

316

(2) Intersegment
sales ortransfers
Total sales
Operating income

Notes:
1. The segment income adjustment of minus ¥346 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 first quarter of fiscal 2013 (from April 1, 2012 to June 30, 2012)
1. Information Concerning Net Sales and Income or Losses for each Reporting Segment(Millions of yen)AmountSystemrecorded on

Operations

Systems
Development

Product

andInfrastructure

Adjustment

Total

Sales

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers(2) Intersegment
sales ortransfers

3,723

811

2,746

7,282

－

7,282

6

80

135

222

(222)

－

11

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

Total sales

3,729

892

2,882

7,504

(222)

7,282

338

142

160

641

(306)

334

Operating income

Notes:
1. The segment income adjustment of minus ¥306 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 first quarter was immaterial.
3. Information concerning impairment loss on fixed assets or goodwill for each reporting segment
None(5) Notes on Significant Changes in Shareholders’ Equity
None(6) Significant subsequent eventsNone

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

April 1, 2012 to June 30, 2012)
Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (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.
12

4,176

104.8

840

100.9

5,017

104.1

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

(2) Purchase amounts
Purchases by segment in the first quarter of the fiscal year ending March 31, 2013 are as follows.
Consolidated cumulative total for
Segment information by type of businessfirst quarter of fiscal 2013 (from% change YoY

April 1, 2012 to June 30, 2012)
Product Sales (Millions of Yen)

1,851

66.2

Total (Millions of Yen)

1,851

66.2

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 first 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

4,268

103.2

4,409

106.9

654

115.4

1,244

106.6

Product Sales

2,678

69.7

3,481

94.9

Total

7,601

89.0

9,134

101.9

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.

(4) Sales amounts
Sales by segment in the first quarter of the fiscal year ending March 31, 2013 are as follows.
Consolidated cumulative total for
Segment information by type of businessfirst quarter of fiscal 2013 (from% change YoY

April 1, 2012 to June 30, 2012)
Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Product Sales (Millions of Yen)
13

3,723

105.5

811

98.2

2,746

86.6

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

Total (Millions of Yen)

7,282

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

14

96.7