February 8, 2018

Summary of Consolidated Financial Results for the Third Quarter of the Year Ending March 31, 2018
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:
Toshiaki Kobayashi, General Manager, Finance Department, Administrative HeadquartersTel:(03)-5979-2666
Scheduled date of submission of quarterly securities report:
February 9, 2018
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 2018(from April 1, 2017 to December 31, 2017)(1) Consolidated Operating Results (cumulative total)(All amounts rounded down, % change YoY)
Profit attributable

Net Sales

Ordinary Profit

Operating Income

to owners of the parent

Third quarter of fiscal
2018
Third quarter of fiscal
2017

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

29,241

3.4

2,759

（2.2）

2,772

(10.6)

697(64.6)

28,293

(0.9)

2,820

10.8

3,100

11.3

1,971

17.1

Note：Comprehensive Income
Third quarter of fiscal 2018
Third quarter of fiscal 2017

Third quarter of fiscal
2018
Third quarter of fiscal
2017¥ 1,340 million (66.3%)¥ 806 million ((54.1)%)

Net Income

Net Income

per Shareper Share after Dilution

Yen

Yen

56.96

56.65

162.53161.78(2) Consolidated Financial Position

Third quarter of fiscal
2018
Fiscal 2017

Shareholders’ Equity Ratio

Total Assets

Net Assets

Millions of yen

Millions of yen%

35,765

19,94055.6

34,781

19,674

56.5

Reference: Shareholders’ equity
Third quarter of fiscal 2018: ¥19,893 million
Fiscal 2017: ¥19,640 million

12. Dividends
Dividend per Share

Fiscal 2017
Fiscal 2018

End of First QuarterEnd of Second QuarterEnd of Third Quarter

Year-end

Yen

Yen

Yen

Yen

Yen

―
―

30.00
40.00

―

60.00

90.00

―

70.00

110.00Fiscal 2018(forecast)
Note: Revision of dividend forecast in this quarter:

For the YearNo

60 yen of year-end dividend for FY 2017 includes 5 yen of special dividend,
and 70 yen of year-end dividend for FY 2018 includes 10 yen of memorial dividend for the 50th anniversary of business establishment.

3. Consolidated Earnings Forecast for Fiscal 2018 (from April 1, 2017 to March 31, 2018)(% of change from FY2017）

Net Sales

FY2018Operating Income

Ordinary Profit

Profit attributable

Net Income

to owners of the parent

per Share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

40,500

3.5

4,155

(0.6)

4,155

(1.3)

1,779

(32.8)

145.26

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 :(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

No

(4) Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
Third quarter of fiscal 2018: 15,240,000 sharesFiscal 2017:15,240,000 shares
2. Number of treasury stock
Third quarter of fiscal 2018: 2,962,297 sharesFiscal 2017:
3,036,175 shares
3. Average number of shares over period (consolidated total for quarter)
Third quarter of fiscal 2018: 12,247,095 shares
Third quarter of fiscal 2017: 12,132,906 shares*This earnings release is not subject to the quarterly review process as required by the Financial Instruments and Exchange Act of Japan.
*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, 2018

1. Qualitative Information Concerning Third-Quarter Consolidated Business Results(1) Explanation Concerning Business Results
During the third quarter of the fiscal year (April 1, 2017 to December 31, 2017), the Japanese economy continued amoderate recovery due to an improvement in corporate earnings and a slight increase in capital investment.
In the information services industry, despite an increase in IT investments, mainly in manufacturing industries, theenvironment for securing orders remained severe due to intensifying competition.
Within this business environment, the SRA Holdings Group formulated a Medium-Term Management Strategy
that covers the three-year period from fiscal 2015 through fiscal 2017 (from the fiscal year ending March 2016 to thefiscal year ending March 2018). Under this plan, we will seek to enhance corporate and shareholder value, promoteearnings structure reform and establish a high-income model, while working to further enhance shareholder returns.
Accordingly, we will implement the following measures under the Medium-Term Management Strategy.
1) Improving profitability in existing operations･Further raise the gross profit margin
We are working to raise profitability by enhancing and strengthening project management, continuously reduce
production overhead costs, carry out SRA’s proprietary IP product business and promote the appropriate level ofproduction staff.
･Improve SG&A expenses-to-sales ratio
We will strive to raise operation efficiency by introducing an account manager system while working to reduce
operational costs of Head Office staff departments and SRA Professional Service, Co., Ltd., which handles a sharedservice.
･Expand orders and sales
A priority measure will be to increase customer share of wallet by deeply cultivating existing customers, and in doing
so, we will work to expand orders and sales.
2) Transforming the SRA business model･We will work to promote a convergence between “SRA’s proprietary IP product business and higher added value inexisting operations.” At the same time, we will strive to provide SRA’s proprietary IP products and new services insuch growth sectors as the Internet of Things (IoT), mobile computing, security, cloud computing, Big Data andsocial networking technology fields.
3) Strengthening linkages between SRA’s proprietary IP product business and overseas operations･We intend to expand and upgrade the line of SRA’s proprietary IP products for growth fields as well as promotebusiness that targets overseas markets, which are growth markets.
Due to the above initiatives, our consolidated business results for the third quarter of the fiscal year were as
follows.
Despite a decrease in sales of the Product Sales business, sales of the Systems Development business and the
System Operations and Infrastructure Development business increased. As a result, consolidated net sales amounted
to ¥29,241 million, a 3.4% increase from the same period of the previous fiscal year.
At the profit level, due to an increase in sales administrative expenses, operating income decreased 2.2% fromthe same period of the previous fiscal year to ¥2,759 million and ordinary profit decreased 10.6% from the same
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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

period of the previous fiscal year to ¥2,772 million. Profit attributable to owners of the parent decreased 64.6% fromthe same period of the previous fiscal year to ¥697 million due to the recording of an extraordinary loss that included
a loss on litigation with Happinet Corporation.
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 some manufacturing industries and service
industries. As a result, net sales increased 8.5% from the previous fiscal year to ¥15,502 million.
2) System Operations and Infrastructure Development
University-related orders and orders from companies both increased. As a result, net sales of the System Operations
and Infrastructure Development business increased 8.8% from the previous fiscal year to ¥3,440 million.
3) Product Sales
Sales by SRA were level, but device sales by Advanced Integration Technology, Inc. decreased. As a result, net salesof the Product Sales business decreased 5.1% from the previous fiscal year to ¥10,298 million.
(2) Explanation Concerning Financial Condition
Total assets at the end of the third quarter amounted to ¥35,765 million, an increase of 2.8% from the end of theprevious fiscal year. Total liabilities increased 4.8% from the end of the previous fiscal year to ¥15,825 million andnet assets increased 1.4% to ¥19,940 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)
Investment securities increased ¥803 million to ¥8,533 million due to the purchase of shares. Work in processincreased ¥674 million to ¥2,114 million due to such factors as a rise in contracted development projects. Short-termloans receivable increased ¥522 million to ¥935 million. On the other hand, notes and accounts receivable—tradedecreased ¥1,074 million to ¥6,340 million due to the collection of trade receivables.
(Total Liabilities)
Provision for loss on litigation of ¥1,198 million was recorded. On the other hand, income taxes payable decreased¥734 million to ¥322 million owing to the payment of corporate income taxes.
(Total Net Assets)
Valuation difference on available-for-sale securities increased ¥621 million to ¥725 million due to changes in themarket prices of short-term investment securities and investment securities. On the other hand, retained earnings
decreased ¥525 million to ¥16,002 million due to such factors as the payment of cash dividends.
(3) Explanation Concerning Consolidated Results Forecast and Other Future Projections
No revision has been made to forecasts in the Announcement Regarding Extraordinary Loss and Revision ofConsolidated Results Forecast for the Year Ending March 31, 2018 released on December 27, 2017.

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of March 31, 2017

As of December 31, 2017

ASSETS
Current assets:
Cash and deposits

6,794

4,746

Notes and accounts receivable—trade

7,414

6,340

Short-term investment securities

126

129

Merchandise and finished goods

609

531

1,439

2,114

Short-term loans receivable

412

935

Accounts receivable—other

2,644

2,897

646

976

Other

1,475

2,755

Allowance for doubtful accounts

(17)

(37)

21,545

21,389Buildings

360

372

Accumulated depreciation

(253)

(264)

Buildings, net

106

108

Machinery, equipment and vehicles

510

528

Accumulated depreciation

(469)

(487)

Machinery, equipment and vehicles, net

41

41

Other

129

136

Accumulated depreciation

(82)

(88)

Other, net

46

47

Total property, plant and equipment

194

197

27

6

1,265

1,425

1,293

1,432

Investment securities

7,729

8,533

Long-term loans receivable

2,948

3,361

Deferred tax assets

1,413

1,166

Guarantee deposits

377

379

Net defined benefit asset

46

48

Other

559

560

Allowance for doubtful accounts(1,308)(1,284)

Allowance for investment loss

(19)

(19)

Work in process

Deferred tax assets

Total current assets
Noncurrent assets:
Property, plant and equipment

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets

5SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

Total investments and other assets

11,747

12,746

Total noncurrent assets

13,235

14,376

Total assets

34,78135,765

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

(Millions of Yen)
As of March 31, 2017

As of December 31, 2017

LIABILITIESCurrent liabilities:
Accounts payable—trade

3,242

2,668

Short-term loans payable

1,179

1,179

950

852

1,056

322

467

418

Advances received

2,669

2,933

Provision for bonuses

598

382

Provision for directors’ bonuses

97

134

Provision for loss on construction contracts

419

871

Provision for loss on litigation

(–)

1,198

Other

167

451

10,84911,411

5

16

4,097

4,224

154

172

4,257

4,413

15,107

15,825

Capital stock

1,000

1,000

Capital surplus

4,589

4,645

Retained earnings

16,527

16,002

Treasury stock(2,545)(2,465)

Total shareholders’ equity

19,571

19,182

Valuation difference on available-for-sale securities

103

725

Foreign currency translation adjustments

313

328

Remeasurements of defined benefit plans

(349)

(342)

68

710

34

47

Total net assets

19,674

19,940Total liabilities and net assets

34,78135,765

Accrued expenses
Income taxes payable
Accrued consumption taxes

Total current liabilities
Noncurrent liabilities:
Deferred tax liabilities

Net defined benefit liability
Provision for directors’ retirement benefits
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Total accumulated other comprehensive income
Subscription rights to shares

7

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

(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)
Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

Net sales

28,29329,241

Cost of sales

22,42023,070Gross profit

5,873

6,171

Selling, general and administrative expenses

3,053

3,411

Operating income

2,820

2,759

Interest received

61

61

Dividends received

26

63

Refunded consumption taxes–

9

Foreign exchange gains

194

86

Other

45

31

Total non-operating income

329

252

Interest expenses

30

30

Stock transfer agency service fee

13

14

Equity in losses of affiliates

–

185

Other

5

9

Total non-operating expenses

48

239

3,100

2,772

Gain on sales of investment securities

0245

Reversal of loss on valuation of investment
securities

3

2

Other

–

1

Total extraordinary income

3

248

Loss on retirement of noncurrent assets

10Loss on valuation of golf club membership

9–

Provision for allowance for investment loss

3–

Loss on litigation

–

1,612

Other

0

18

Total extraordinary loss

14

1,631

Income before income taxes

3,089

1,389

Income taxes-current

1,043

1,044

Income taxes-deferred

73

(353)

Total income taxes

1,117

691

Net income

1,971

697

–

(0)

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

Profit (loss) attributable to non-controlling interests
8

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

1,971

Profit attributable to owners of the parent

9697

SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Cumulative Total for Third Quarter)(Millions of Yen)
Nine months ended
December 31, 2016
Net income

Nine months ended
December 31, 2017

1,971

697

Valuation difference on available-for-sale securities

(721)

621

Foreign currency translation adjustments

(450)

(33)

Remeasurements of defined benefit plans, net of tax

6

7

Share of other comprehensive income of entities
accounted for using the equity method–

48(1,165)

642

806

1,340

806

1,340

–

(0)

Other comprehensive income

Total other comprehensive income
Comprehensive income(breakdown)Comprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

(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 the fiscal year ended March 31, 2017
1. Information Concerning Net Sales and Income or Losses for each Reporting Segment(Millions of Yen)
AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product
Sales

Adjustment

Total

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

14,285

3,161

10,84628,293–28,293

11

164

265

440

(440)

–

Total sales

14,296

3,325

11,112

28,734(440)

28,293

Segment income

2,193

745

953

3,892

(1,072)2,820(2) Intersegment
sales or transfers

Notes:
1. The segment income adjustment of minus ¥1,072 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 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

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

II. Consolidated cumulative total for third quarter of the fiscal year ending March 31, 2018
1. Information Concerning Net Sales and Income or Losses for each Reporting Segment(Millions of Yen)
AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product
Sales

Adjustment

Total

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

15,502

3,440

10,29829,241–

29,241

17

151

285

454

(454)

–

Total sales

15,5203,591

10,58329,696(454)

29,241

Segment income

2,406

860

668

3,934

(1,175)2,759(2) Intersegment
sales or transfers

Notes:
1. The segment income adjustment of minus ¥1,175 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 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

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

(Significant subsequent events)
Not applicable

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

3. 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, 2018 is as follows.
Segment information by type of business

Nine months ended
December 31, 2017

% change YoY

Systems Development (Millions of Yen)

16,241

108.7

System Operations and Infrastructure
Development (Millions of Yen)

3,477

108.2

Total (Millions of Yen)

19,718108.6

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, 2018 are as follows.
Segment information by type of business

Nine months ended
December 31, 2017

% change YoY

Product Sales (Millions of Yen)

5,887

91.1

Total (Millions of Yen)

5,887

91.1

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

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SRA Holdings, Inc. (3817) Summary of Third-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

 Status of orders
Status of orders by segment in the third quarter of the fiscal year ending March 31, 2018 is as follows.
OrdersSegment information by type of business

Order backlog

received(Millions of% change YoY(Millions of% change YoY

Yen)

Yen)
Systems Development

16,114

107.1

5,702

106.7

System Operations and Infrastructure
Development

2,704

102.2

1,276

115.3

Product Sales

10,008

91.2

2,905

88.6

Total

28,827

100.5

9,884

101.6

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, 2018 are as follows.
Segment information by type of business

Nine months ended
December 31, 2017

% change YoY

Systems Development (Millions of Yen)

15,502

108.5

System Operations and Infrastructure
Development (Millions of Yen)

3,440

108.8

Product Sales (Millions of Yen)

10,298

94.9

Total (Millions of Yen)

29,241

103.4

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

15