February ９, 2012

Summary of Consolidated Financial Results for the Third Quarter of the Year Ending March 31, 2012
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 10, 2012―
Scheduled commencement of dividend payment:
Quarterly Results Supplemental Materials
Yes―
Quarterly Results Presentation Meeting
Company name:

1. Consolidated results for the third quarter of the fiscal year ending March 2012
(from April 1, 2011 to December31, 2011)(1) Consolidated Operating Results (cumulative total)
Net Sales

Third quarter of fiscal
2012
Third quarter of fiscal
2011(All amounts rounded down, % change YoY)
Ordinary Profit

Operating Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

23,631

(0.0)

1,234

13.7

1,341

14.2

666

17.6

23,635

(2.9)

1,085

(0.8)

1,174

3.7

566

(1.1)

Note：Comprehensive Income
Third quarter of fiscal 2012: ¥331 million
Third quarter of fiscal 2011: ¥365million

Third quarter of fiscal
2012
Third quarter of fiscal
2011

Net Income

Net Income

per Shareper Share after Dilution

Yen

Yen

48.81

－

40.94

－

(2) Consolidated Financial Position

Third quarter of fiscal
2012
Fiscal 2011

Shareholders’ Equity Ratio

Total Assets

Net Assets

Millions of yen

Millions of yen%

25,922

14,78456.9

26,451

15,522

58.5

Reference: Shareholders’ equity
Third quarter of fiscal 2012 : ¥14,761 million
Fiscal 2011: ¥15,482 million

2. Dividends
Dividend per Share

Fiscal 2011
Fiscal 2012

End of First QuarterEnd of Second QuarterEnd of Third Quarter

Year-end

Yen

Yen

Yen

Yen

Yen

―
―

―
―

―
―

40.00

40.00

40.00

40.00

Fiscal 2012(forecast)
Note: Revision of dividend forecast in this quarter:No
1

For the Year

3. Consolidated Earnings Forecast for Fiscal 2011 (from April 1, 2011 to March 31, 2012)(% of change from FY2011 First Half or FY2011）
Net Income
Net Sales

Operating Income

Ordinary Profit

Net Income
per Share

FY2012Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

33,500

1.0

2,300

2.7

2,300

（3.1）

1,355

3.1

99.24

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 and procedures, presentation, etc.
1. Changes caused by revision of accounting standards, etc. :2. Changes other than 1. above:No

No

Note: Changes in significant accounting policies and procedures, presentation which are stated in “change in important matters in
preparing quarterly consolidated financial statements”(4) Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
Third quarter of fiscal 2012:15,240,000 sharesFiscal 2011:15,240,000 shares
2. Number of treasury stock
Third quarter of fiscal 2012 :
2,101,630 sharesFiscal 2011:
1,400,230 shares
3. Average number of shares over period (consolidated total for quarter)
Third quarter of fiscal 2012 :
13,653,580 shares
Third quarter of fiscal 2011 :
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 Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

1. Qualitative Information Concerning Third-Quarter Consolidated Business Results(1) Qualitative Information Concerning Consolidated Business Results
During the third quarter of the fiscal year (April 1, 2011 to December 31, 2011), the Japanese economy continued to
face harsh conditions that included a decline in corporate earnings and flat exports as well as a decrease in personal
consumption due to the impact of the Great East Japan Earthquake. Nonetheless, there were signs of a moderate
pickup in production and other areas.
Despite hopes for a continued gradual recovery, the economic outlook remains uncertain due to constraints on
power supplies and the effects of the nuclear power disaster as well as the risk of a downturn in overseas economies
amid the government debt crises in Europe.
In the information services industry, the harsh environment persisted as numerous corporate customers take acautious stance toward IT investments, reflecting the uncertain outlook for corporate earnings owing to theearthquake disaster, prolonged strengthening of the yen and flooding in Thailand. At the same time, the uninterrupted
drop in order unit prices is continuing.
Amid this business environment, the SRA Group focused on “undertaking structural reforms in existing
businesses” as well as its medium- and long-term growth strategy of “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.
■Undertaking Structural Reforms in Existing Businesses
1. Expand orders by strengthening project management
Amid a severe business environment, Software Research Associates, Inc. (SRA), a core business company that had
continued to post year-on-year declines, worked to strengthen its project management from identifying projects toreceiving orders. As a result, SRA achieved a turnaround, with positive growth in orders in its Systems Development
business during the quarter, and recorded an increase in orders for the entire consolidated third quarter compared withthe same period of the previous fiscal year.
2. Build a high-profit production structure
The gross profit margin in the Systems Development business exceeded 20% for three consecutive quarters. This was
the result of efforts to achieve an appropriate level of production overhead costs by strengthening the management ofstaff allocation.
3. Transform to a cost structure appropriate for our business scale
We implemented such initiatives as reducing sales expenses by realizing appropriate levels of personnel in sales
divisions.
■Fully promoting our own IP products business and undertaking new business overseas
We took our first step for developing our own IP products business in cloud computing, wireless data
communications and other growth fields in such expanding markets as China. Specifically, we made concreteconsiderations for building a sales channel utilizing the sales networks of Chinese companies to undertake sales in
China of products of Proxim Wireless Corporation, with which our Group company, SRA OSS, Inc., maintains a3

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012business and capital alliance. (Proxim Wireless Corporation is a U.S.-based wireless device manufacturer that
produces and sells cutting-edge products in wireless data communications, and these products have been widely
introduced in countries throughout the world.)
Regarding our consolidated business results for the third quarter of the fiscal year, revenues were on a par with theprevious third quarter and profits increased as described below.
Looking at sales, although sales increased in the Product Sales business, sales declined in the Systems
Development business and in the System Operations and Infrastructure Development business. As a result,consolidated net sales amounted to ¥23,631 million, virtually unchanged from the same period of the previous fiscal
year.
At the profit level, although gross profit remained flat, enhanced efficiency in selling, general and administrative(SG&A) expenses led to a 13.7% year-on-year increase in operating income to ¥1,234 million and a 14.2% increasein ordinary profit to ¥1,341 million. We recorded extraordinary income that included insurance benefits received andextraordinary losses that included company funeral expenses. At the same time, in accordance with a revision to tax
laws, we recorded a reversal of deferred tax assets as income taxes-deferred. As a result, net income for the quarter
increased 17.6% over the same quarter of the previous year to ¥666 million.
As detailed in the aforementioned section on consolidated results for the third quarter, net sales remained level but
operating income, ordinary profit and net income increased and are progressing in line with our assumptions for the
full-year results forecast.
Consolidated business results for the third quarter by business segment are shown below.
1) Systems Development
Although sales to the non-life insurance industry increased, the Systems Development business posted declines insales to electric power industries and manufacturing industries. As a result, net sales declined 8.4% from the same
period of the previous fiscal year to ¥11,706 million.
2) System Operations and Infrastructure Development
System Operations and Infrastructure Development recorded decreases in network operations and infrastructuredevelopment as well as in system operations. By sector, university-related orders continued to decrease slightly while
in corporate-related business there was a particular decrease in orders for system operations. As a result, net sales of
the System Operations and Infrastructure Development business decreased 9.4% from the same period of theprevious fiscal year to ¥2,535 million.
3) Product Sales
Although Software Research Associates, Inc. (SRA) recorded lower sales of devices, Advanced Integration
Technology, Inc. (AIT) posted favorable sales of devices in the financial industry. As a result, net sales of the Product
Sales business rose 16.6% from the same period of the previous fiscal year to ¥9,389 million.
(2) Qualitative Information Concerning Consolidated Financial Condition[1] Assets, Liabilities and Net Assets
Regarding the financial condition for the third quarter, current assets at the end of the third quarter decreased ¥796
million from the end of the previous fiscal year to ¥17,462 million. Within current assets, work in progress increased¥747 million and short-term investment securities rose ¥273 million because of a transfer from investment securities
4

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

to securities redeemable within one year. On the other hand, cash and cash deposits declined ¥1,896 million due topayments for the purchases of investment securities and the payment of bonuses, while notes and accounts
receivable—trade declined ¥1,300 million due to the collection of receivables. Noncurrent assets increased ¥267
million to ¥8,459 million due to such factors as a rise in intangible assets. As a result, total assets decreased ¥529
million to ¥25,922 million.
On the liabilities side, total liabilities increased ¥208 million to ¥11,137 million due to a ¥450 million rise inaccounts payable resulting from an increase in purchases and a ¥300 million increase in long-term loans payable.
Total net assets declined ¥737 million to ¥14,784 million due to the payment of dividends and the purchase oftreasury stock.
(3) Qualitative Information Concerning Consolidated Results Forecast
Regarding the consolidated results forecast, results for the third quarter were generally as planned and no revision has
been made to the forecast announced on May 12, 2011. The direction of the economy is increasingly uncertain andwe will quickly disclose information in the event we deem it necessary to revise our full-year business results
projections due to future movements in the economy.

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

3. Important Matters Regarding Assumptions of a Going Concern
None

5SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

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

Fiscal 2011

fiscal 2012(as of March 31, 2011)(as of December 31, 2011)ASSETS
Current assets:
Cash and deposits

7,940

6,043

Notes and accounts receivable—trade

6,118

4,817

Short-term investment securities

1,504

1,778

Merchandise and finished goods

316

459

Work in process

1,024

1,771

Deferred tax assets

433

444

Other

922

2,162

Allowance for doubtful accounts

(2)

(14)

18,25917,462314

334

Accumulated depreciation

(191)

(212)

Buildings, net

123

122

561

560

(508)

(518)

52

41

Land

0

0

Other

100

100

Accumulated depreciation

(66)

(69)

Other, net

34

31

211

196

Other

629

1,137

Total intangible assets

629

1,137

Investment securities

4,252

4,333

Deferred tax assets

1,579

1,334

Guarantee deposits

460

440

Other

1,145

1,110

Allowance for doubtful accounts

(13)

(14)

Allowance for investment loss

(73)

(78)

Total current assets
Noncurrent assets:
Property, plant and equipment
Buildings

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 Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

Total investments and other assets
Total noncurrent assets
Total assets

7

7,351

7,126

8,192

8,459

26,451

25,922SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

(Millions of Yen)
End of third quarter of

Fiscal 2011

fiscal 2012(as of March 31, 2011)(as of December 31, 2011)

LIABILITIESCurrent liabilities:
Accounts payable—trade

1,986

2,437

Short-term loans payable

1,901

1,674

Current portion of bonds

300－

Accrued expenses

430

710

Income taxes payable

489

108

Accrued consumption taxes

296

199

Provision for bonuses

602

458

0

70

Provision for loss on construction contracts

151

268

Provision for loss on liquidation of subsidiaries
and affiliates
Asset retirement obligations

14

26

－

3

Other

698

1,075

6,872

7,032

Deferred tax liabilities－

2Long-term loans payable

－

300

3,606

3,653

444

148

Negative goodwill

2

－

Other

2

1

4,057

4,105

10,929

11,137

Capital stock

1,000

1,000

Capital surplus

4,483

4,483

Retained earnings

10,963

11,076

Treasury stock(894)(1,393)

Total shareholders’ equity

15,552

15,166

Valuation difference on available-for-sale securities

239

0

Foreign currency translation adjustments

(309)

(405)

Total accumulated other comprehensive income

(69)

(405)

39

23

15,522

14,78426,451

25,922

Provision for directors’ bonuses

Total current liabilities
Noncurrent liabilities:

Provision for retirement benefits
Provision for directors’ retirement benefits

Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Subscription rights to shares
Total net assets
Total liabilities and net assets
8

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

(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

2011 (from April 1,2012 (from April 1,2010 to December 31,

2011 to December 31,

2010)

2011)

Net sales

23,63523,631

Cost of sales

19,706

19,684Gross profit

3,928

3,947

Selling, general and administrative expenses

2,843

2,712

Operating income

1,085

1,234

Interest received

37

88

Dividends received

19

31

Other

91

47

Total non-operating income

149

167

Interest expenses

26

22

Foreign exchange losses

17

12

Transfer agent processing fee

11

14

Other

5

9

Total non-operating expenses

60

60

1,174

1,341

Insurance benefits received

－

141

Other

－

30

Total extraordinary income－

172

Loss on valuation of investment securities

51

1

Loss on valuation of stocks of subsidiaries and affiliates

86－

Loss on liquidation of subsidiaries and affiliates

23

12

Company funeral expenses

－

39

Other

36

4

Total extraordinary loss

198

58

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

9

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

Income before income taxes and minority interests

976

1,454

Income taxes-current

397

508

Income taxes-deferred

12

279

Total income taxes

410

788

Income before minority interests

566

666

Net income

566

666

Income before minority interests

566

666

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

(39)

(239)

(161)

(95)

Total other comprehensive income (loss)

(200)

(335)

365

331

365

331

－

－

(Quarterly Consolidated Statements of Comprehensive Income)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, 2012

(3) Notes Concerning Premise of Going Concern
None(4) Segment Information
I. Consolidated cumulative total for third quarter of fiscal 2011 (from April 1, 2010 to December 31, 2010)
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

12,785

2,798

8,051

23,635－23,635

31

180

302

513

(513)

－

Total sales

12,816

2,978

8,353

24,149(513)

23,635

Operating income

1,375

548

565

2,488

(1,403)

1,085(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥1,403 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, 2012

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

the quarterly
consolidated

amountstatements 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.
3. From the first quarter of fiscal 2011 (from April 1, 2010 to June 30, 2010), the Company changed the measurement method for eachbusiness segment along with a change to its standards for evaluating segment business results in undertaking its business management.
Compared with when applying the previous method, segment income declined by ¥169 million in Systems Development, ¥40 million
in System Operations and Infrastructure Development and ¥156 million in Product Sales.

2. 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 Events
None

12

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012

5. Other Information
1. Status of Production, Orders and Sales(1) Production amounts
Production by segment in the third quarter of the fiscal year ending March 31, 2012 is as follows.
Consolidated cumulative total for
Segment information by type of businessthird quarter of fiscal 2012 (from
April 1, 2011 to December 31,% change YoY

2011)
Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)

12,386

90.1

2,549

90.0

14,93590.1

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, 2012 are as follows.
Consolidated cumulative total for
Segment information by type of businessthird quarter of fiscal 2012 (from
April 1, 2011 to December 31,% change YoY

2011)
Product Sales (Millions of Yen)

6,418

127.9

Total (Millions of Yen)

6,418

127.9

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

13

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2012(3) Status of orders
Status of orders by segment in the third quarter of the fiscal year ending March 31, 2012 is as follows.
OrdersSegment information by type of business

Order backlog

received% change YoY(Millions of% change YoY

Yen)

Yen)
Systems Development(Millions of

12,764

97.7

4,575

104.1

1,882

88.5

773

87.8

Product Sales

10,084

116.7

3,697

114.6

Total

24,731

103.8

9,047

106.4

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.

(4) Sales amounts
Sales by segment in the third quarter of the fiscal year ending March 31, 2012 are as follows.
Consolidated cumulative total for
Segment information by type of businessthird quarter of fiscal 2012 (from
April 1, 2011 to December 31,% change YoY

2011)
Systems Development (Millions of Yen)

11,706

91.6

2,535

90.6

Product Sales (Millions of Yen)

9,389

116.6

Total (Millions of Yen)

23,631

100.0

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.

14