August 9 2017

Summary of Consolidated Financial Results for the First 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:
August 10, 2017―
Scheduled commencement of dividend payment:
Quarterly Results Supplemental Materials
Yes
Quarterly Results Presentation MeetingNo

1. Consolidated results for the first quarter of the fiscal year ending March 2018 (from April 1, 2017 to June30, 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

First quarter of fiscal
2017
First quarter of fiscal
2016

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

9,415

1.0

665

(17.0)

632

19.0

429

30.8

9,325

7.9

801

46.0

531

(23.1)

328(19.1)

Note：Comprehensive Income
First quarter of fiscal 2017
First quarter of fiscal 2016

First quarter of fiscal
2017
First quarter of fiscal
2016¥1,101 million(-%)¥(488) million(-%)

Net Income

Net Income

per Shareper Share after Dilution

Yen

Yen

35.17

35.00

27.09

26.96

(2) Consolidated Financial Position

First quarter of fiscal
2017
Fiscal 2016

Total Assets

Net Assets

Shareholders’ Equity Ratio

Millions of yen

Millions of yen%

35,841

20,11856.0

34,781

19,674

56.5

Reference: Shareholders’ equity
First quarter of fiscal 2017: ¥20,086 million
Fiscal 2016: ¥19,640 million

12. Dividends
Dividend per Share

Fiscal 2016
Fiscal 2017

End of First QuarterEnd of Second QuarterEnd of Third Quarter

Year-end

Yen

Yen

Yen

Yen

Yen

―
―

30.00

―

60.00

90.00

40.00

―

70.00

110.00Fiscal 2017(forecast)
Note: Revision of dividend forecast in this quarter:

For the YearNo

60 yen of year-end dividend for FY 2016 includes 5 yen of special dividend,
and 70 yen of year-end dividend for FY 2017 includes 10 yen of memorial dividend for the 50th anniversary of business establishment.

3. Consolidated Earnings Forecast for Fiscal 2017 (from April 1, 2017 to March 31, 2018)(% of change from FY2016 First Half or FY2016）

Net Sales

Operating Income

Ordinary Profit

Profit attributableto owners of the parent

Net Income
per Share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

FY2017 First Half
(for the six months ending
September 30, 2017)19,240

2.1

1,760

(1.2)

1,760

19.2

1,106

18.4

90.54

FY201740,500

3.5

4,155

(0.6)

4,155

(1.3)

2,611

(1.4)

213.74

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)
First quarter of fiscal 2017:15,240,000 sharesFiscal 2016:15,240,000 shares
2. Number of treasury stock
First quarter of fiscal 2017:
2,992,234sharesFiscal 2016:
3,036,175shares
3. Average number of shares over period (consolidated total for quarter)
First quarter of fiscal 2017:12,215,544 sharesFirst quarter of fiscal 2016:
12,127,654 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.

*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 First-Quarter Consolidated Financial Results for the Year Ending March 31, 20181) Qualitative Information Concerning First-Quarter Consolidated Business Results(1) Explanation Concerning Business Results
During the first quarter of the fiscal year (April 1, 2017 to June 30, 2017), the Japanese economy continued amoderate recovery due to an improvement in corporate earnings and a pickup in capital investment.
In the information services industry, despite an increase in IT investments, mainly in manufacturing industries,
the environment for securing orders remained severe due to intensifying competition.
Within this business environment, the SRA Holdings Group formulated a Medium-Term Management Strategy.
Under this medium-term strategy, we will seek to enhance corporate and shareholder value, promote earnings
structure reform and establish a high-income model, while working to further enhance shareholder returns.

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 indoing 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
in existing operations.” At the same time, we will strive to provide SRA’s proprietary IP products and new services
in such growth sectors as the Internet of Things (IoT), mobile computing, security, cloud computing, Big Data andsocial 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.

3

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

Due to the above initiatives, our consolidated business results for the first quarter of the fiscal year were as
follows.
Sales of the Systems Development business and the System Operations and Infrastructure Development
business increased. Therefore, consolidated net sales amounted to ¥9,415 million, a 1.0% increase from the same
period of the previous fiscal year.
At the profit level, operating income decreased 17.0% from the same period of the previous fiscal year to ¥665
million due to such factors as the recording of a provision for loss on construction contracts. However, ordinary profit
increased 19.0% from the same period of the previous fiscal year to ¥632 million and profit attributable to ownersof the parent amounted to ¥429 million, a 30.8% increase from the same period of the previous fiscal year.
Orders received and the order backlog both increased significantly in all segments from the same period of theprevious fiscal year.

A summary of consolidated business results for the first quarter by business segment is shown below.
1) Systems Development
The Systems Development business recorded increases in sales to manufacturing industries. As a result, net sales
increased 3.0% from the previous fiscal year to ¥4,786 million.

2) System Operations and Infrastructure Development
University-related orders were flat, but orders from companies increased sharply. As a result, net sales of the
System Operations and Infrastructure Development business increased 16.2% from the previous fiscal year to¥1,142 million.

3) Product Sales
Although device sales by SRA increased, Advanced Integration Technology, Inc. recorded a decrease in device sales.
As a result, net sales of the Product Sales business decreased 5.7% from the same period in the previous fiscal yearto ¥3,486 million.

(2) Explanation Concerning Financial Condition
Total assets at the end of the first quarter amounted to ¥35,841 million, an increase of 3.0% from the end of theprevious fiscal year. Total liabilities increased 4.1% from the end of the previous fiscal year to ¥15,722 million andnet assets increased 2.3% to ¥20,118 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 ¥1,053 million to ¥8,783 million due to the purchase of shares of an affiliated4SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

company. Long-term loans receivable increased ¥720 million to ¥3,669 million. Work in process increased ¥453
million to ¥1,893 million due to such factors as a rise in contracted development projects. On the other hand, notes
and accounts receivable—trade decreased ¥1,899 million to ¥5,515 million due to the collection of trade receivables.

(Total Liabilities)
Advances received increased ¥390 million to ¥3,059 million. Accounts payable—trade increased ¥383 million to¥3,625 million due to an increase in trade payables and provision for bonuses increased ¥352 million to ¥951
million. On the other hand, accrued consumption taxes decreased ¥754 million to ¥301 million due to the paymentof consumption taxes.

(Total Net Assets)
Valuation difference on available-for-sale securities increased ¥750 million to ¥853 million due to changes in themarket prices of marketable and investment securities. Retained earnings decreased ¥302 million to ¥16,224
million.

(3) Explanation Concerning Consolidated Results Forecast and Other Future Projections
No revision has been made to forecasts in Summary of Consolidated Financial Results for the Year Ending March
31, 2017 released on May 11, 2017.

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

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

As of June 30, 2017

ASSETS
Current assets:
Cash and deposits

6,794

7,326

Notes and accounts receivable—trade

7,414

5,515

Short-term investment securities

126

232

Merchandise and finished goods

609

991

1,439

1,893

Short-term loans receivable

412

109

Accounts receivable—other

2,644

2,954

646

716

Other

1,475

1,421

Allowance for doubtful accounts

(17)

(16)

21,545

21,144

Buildings

360

364

Accumulated depreciation

(253)

(257)

Buildings, net

106

107

Machinery, equipment and vehicles

510

511

Accumulated depreciation

(469)

(472)

Machinery, equipment and vehicles, net

41

39

Other

129

129

Accumulated depreciation

(82)

(84)

Other, net

46

45

Total property, plant and equipment

194

191

27

20

1,265

1,300

1,293

1,321

Investment securities

7,729

8,783

Long-term loans receivable

2,948

3,669

Deferred tax assets

1,413

1,106

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

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

Guarantee deposits

377

378

Net defined benefit asset

46

46

Other

559

557

Allowance for doubtful accounts(1,308)(1,339)Allowance for investment loss

(19)

(19)

Total investments and other assets

11,747

13,182

Total noncurrent assets

13,235

14,696

Total assets

34,78135,841

7

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

(Millions of Yen)
As of March 31, 2017

As of June 30, 2017

LIABILITIESCurrent liabilities:
Accounts payable-trade

3,242

3,625

Short-term loans payable

1,179

1,179

950

774

1,056

301

467

242

Advances received

2,669

3,059

Provision for bonuses

598

951

Provision for directors’ bonuses

97

44

Provision for loss on construction contracts

419

532

Other

167

684

10,84911,396

5

7

4,097

4,156

154

160

4,257

4,325

15,107

15,722

Capital stock

1,000

1,000

Capital surplus

4,589

4,620

Retained earnings

16,527

16,224

Treasury stock(2,545)(2,497)

Total shareholders’ equity

19,571

19,347

Valuation difference on available-for-sale securities

103

853

Foreign currency translation adjustments

313

233

Remeasurements of defined benefit plans

(349)

(347)

68

739

Subscription rights to shares

34

31

Non-controlling interests–0

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

8

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

Total net assets

19,674

20,118

Total liabilities and net assets

34,78135,841

9

SRA Holdings, Inc. (3817) Summary of First-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 First Quarter)(Millions of Yen)
Three months
ended June 30, 2016

Three months
ended June 30, 2017

Net sales

9,325

9,415

Cost of sales

7,484

7,583

Gross profit

1,841

1,832

Selling, general and administrative expenses

1,039

1,166

801

665

Interest received

28

16

Dividends received

12

25

Refunded consumption taxes–

8

Foreign exchange gains

–

10

Other

18

8

Total non-operating income

59

70

8

9

306

–

Stock transfer agency service fee2

3Provision of allowance for doubtful accounts–

33

Equity in losses of affiliates

–

56

Other

12

0

Total non-operating expenses

330

103

531

632

Gain on sales of investment securities

0

118

Other

–

1

Total extraordinary income

0119

Loss on retirement of noncurrent assets

00Loss on sales of investment securities

–

0

Other

0

–

Operating income
Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses

Ordinary profit
Extraordinary income

Extraordinary loss

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

Total extraordinary loss

00Income before income taxes

530

751

Income taxes-current

268

416

Income taxes-deferred

(66)

(93)

Total income taxes

202

322

Net income

328

429

Profit attributable to owners of the parent

328

429

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

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Cumulative Total for First Quarter)(Millions of Yen)
Three months

Three months

ended June 30, 2016

ended June 30, 2017

328

429

(751)

750

(67)

(80)

2

2

(817)

671

(488)

1,101

(488)

1,101

－

－

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests

12

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

(3) Notes Concerning Consolidated Financial Statements for the First 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 first 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

Adjustment

Total

Sales

amount*1

the quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers(2) Intersegment
sales ortransfers
Total sales
Segment income

4,645

983

3,697

9,325

－

9,325

1

56

81

139

(139)

－

4,646

1,039

3,778

9,465

(139)

9,325

656

217

315

1,189

(387)

801

Notes:
1. The segment income adjustment of minus ¥387 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 First-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

II. Consolidated cumulative total for first 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

Adjustment

Total

Sales

amount*1

the quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers(2) Intersegment
sales ortransfers
Total sales
Segment income

4,786

1,142

3,486

9,415

－

9,415

2

53

96

152

(152)

－

4,789

1,196

3,583

9,568

(152)

9,415

637

297

188

1,123

(457)

665

Notes:
1. The segment income adjustment of minus ¥457 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 First-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

(Significant subsequent events)
Not applicable

15

SRA Holdings, Inc. (3817) Summary of First-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 first quarter of the fiscal year ending March 31, 2018 is as follows.
Segment information by type of business

Three months ended
June 30, 2017

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

% change YoY

5,293

107.4

1,179

116.7

6,472

109.0

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

 Purchase amounts
Purchases by segment in the first quarter of the fiscal year ending March 31, 2018 are as follows.
Segment information by type of business

Three months ended
June 30, 2017

% change YoY

Product Sales (Millions of Yen)

2,529

117.0

Total (Millions of Yen)

2,529

117.0

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 First-Quarter Consolidated Financial Results for the Year Ending March 31, 2018

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

Order backlog

received% change YoY(Millions of% change YoY

Yen)

Yen)
Systems Development(Millions of

5,510

111.3

5,814

119.1

752

112.1

1,622

123.8

Product Sales

4,146

108.2

3,855

117.4

Total

10,409110.1

11,292

119.2

System Operations and Infrastructure
Development

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

 Sales amounts
Sales by segment in the first quarter of the fiscal year ending March 31, 2018 are as follows.
Segment information by type of business

Three months ended
June 30, 2017

Systems Development (Millions of Yen)

% change YoY

4,786

103.0

1,142

116.2

Product Sales (Millions of Yen)

3,486

94.3

Total (Millions of Yen)

9,415

101.0

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.

17