August 8 2019

Summary of Consolidated Financial Results for the First Quarter of the Year Ending March 31, 2020

Company name:

SRA Holdings, Inc.
(URL: https://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 9, 2019―
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 2020
(from April 1, 2019 to June 30, 2019)(1) Consolidated Operating Results (cumulative total)(All amounts rounded down, % change YoY)
Profit attributable

Net Sales

Ordinary Profit

Operating Profit

to owners of the parent

First quarter offiscal 2020
First quarter offiscal 2019

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

10,012

2.5

824

11.6

674

(32.1)

53(89.3)

9,766

3.7

738

10.9

993

56.9

499

16.2

Note：Comprehensive Income
First quarter of fiscal 2020
First quarter of fiscal 2019

First quarter offiscal 2020
First quarter offiscal 2019¥(588) million (-%)¥ 202 million ((81.6)%)

Earnings

Earnings

per Shareper Share after Dilution

YenYen4.34-

40.57-(2) Consolidated Financial Position
Total Assets

Net Assets

Shareholders’ Equity Ratio

Millions of yen

Millions of yen%First quarter offiscal 2020

35,93519,898

55.4

Fiscal 201936,852

21,375

57.9

Reference: Shareholders’ equity
First quarter of fiscal 2020: ¥19,898 million
Fiscal 2019: ¥21,349 million

2. Dividends
Dividends per Share

Fiscal 2019
Fiscal 2020End of First QuarterEnd of Second QuarterEnd of Third Quarter

Year-endYenYenYenYenYen――

40.00

―

70.00

110.00

40.00

―

70.00

110.00Fiscal 2020(forecast)
Note: Revision of dividend forecast in this quarter:

For the YearNo

3. Consolidated Earnings Forecast for Fiscal 2020 (from April 1, 2019 to March 31, 2020)(Percentage indicate year-to-year changes)

Net Sales

Operating Profit

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

Six months ending
September 30, 201920,200

1.2

1,950

12.9

2,000(6.5)

1,070

25.7

86.73

Fiscal 2020

41,700

2.2

4,500

10.3

4,600

2.9

2,500

23.5

202.65

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:
NoNo

No

(4) Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
First quarter of fiscal 2020:
15,240,000 sharesFiscal 2019:15,240,000 shares
2. Number of treasury stock
First quarter of fiscal 2020:
2,903,279sharesFiscal 2019:
2,903,279shares
3. Average number of shares over period (consolidated total for quarter)
First quarter of fiscal 2020:
12,336,721 sharesFirst quarter of fiscal 2019:12,308,753 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.

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 20201) Qualitative Information Concerning First-Quarter Consolidated Business Results(1) Explanation Concerning Business Results
Our consolidated business results for the first quarter of the fiscal year were as follows.
Although sales of the Systems Development business decreased, sales of the System Operations andInfrastructure Development and the Products Sales businesses increased. Therefore, consolidated net sales amounted
to ¥10,012 million, a 2.5% increase from the same period of the previous fiscal year.
At the profit level, we achieved an increase in gross profit while the gross profit margin also improved as aresult of measures to improve the profit margin. Despite recording selling expenses of an overseas subsidiary thatcame into the scope of consolidation from the third quarter of the previous fiscal year, we made efforts to enhance
efficiency that also included the selling expenses of Cavirin Systems, Inc. As a result, sales, general andadministrative (SG&A) (sales administrative) expenses decreased year on year and operating profit increased 11.6%
from the same period of the previous year to ¥824 million. Ordinary profit decreased 32.1% year on year to ¥674
million due to the recording of non-operating expenses (foreign exchange losses) and profit attributable to ownersof parent decreased 89.3% from the same period of the previous fiscal year to ¥53 million due the recording ofextraordinary losses (loss on valuation of investment securities).

A summary of consolidated business results for the first quarter by business segment is shown below.

1) Systems Development
The Systems Development business recorded a decrease in sales to some service industries. As a result, net sales
decreased 4.2% year on year to ¥4,711 million.

2) System Operations and Infrastructure Development
Orders from companies and university-related orders increased. As a result, net sales of the System Operations andInfrastructure Development business increased 13.5% from the same period in the previous fiscal year to ¥1,282
million.

3) Product Sales
SRA and overseas subsidiaries posted increases in device sales. As a result, net sales of the Product Sales businessincreased 8.1% from the same period in the previous fiscal year to ¥4,017 million.

Based on the Medium-Term Management Strategy (year ending March 31, 2020 to year ending March 31, 2022),
the SRA Group aims to improve corporate value and enhance shareholder returns and will strive to strengthen thefoundation of its existing businesses while also vigorously promoting new businesses as the Group works in unison
toward 1) achieving sustainable growth, 2) improving profitability and 3) furthering enhancing shareholder returns.
We have positioned fiscal 2020 (year ending March 31, 2020) as a “year for building a foundation” to promote ourgrowth strategies (Transforming the SRA business model, Expanding our global business and Responding to digital1SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

transformation (DX)) and we will focus on attaining the targets for the final fiscal year of this strategy.

(2) Explanation Concerning Financial Condition
Total assets at the end of the first quarter amounted to ¥35,935 million, a decrease of 2.5% from the end of the previous
fiscal year. Total liabilities increased 3.6% from the end of the previous fiscal year to ¥16,037 million and net assets
decreased 6.9% to ¥19,898 million from the end of the previous fiscal year. Details of the principal increases anddecreases from the end of the previous fiscal year are as follows.

(Total Assets)
Deferred tax assets increased ¥492 million to ¥2,552 million, work in process increased ¥370 million to ¥1,327
million, and accounts receivable - other increased ¥368 million to ¥3,182 million. On the other hand, notes andaccounts receivable—trade decreased ¥1,172 million to ¥5,782 million due to the collection of trade receivables andinvestment securities decreased ¥843 million to ¥9,802 million due to such factors as changes in market prices.

(Total Liabilities)
Advances received increased ¥582 million to ¥4,031 million, provision for bonuses increased ¥396 million to ¥961
million and accounts payable—trade increased ¥286 million to ¥3,907 million due to an increase in trade payables.
On the other hand, income taxes payable decreased ¥862 million to ¥266 million owing to the payment of incometaxes.

(Total Net Assets)
Foreign currency translation adjustments increased ¥112 million to ¥332 million due to fluctuations in exchange
rates. On the other hand, retained earnings decreased ¥810 million to ¥17,223 million. Valuation difference on
available-for-sale securities decreased ¥770 million to minus ¥693 million due to changes in the market prices ofsecurities and investment securities.

(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,
2020 released on May 9, 2019.

2

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of March 31, 2019

As of June 30, 2019ASSETS
Current assets:
Cash and deposits

5,121

5,149

Notes and accounts receivable - trade

6,955

5,782

95

90

1,103

1,030

957

1,327

Short-term loans receivable

2,935

2,830

Accounts receivable - other

2,814

3,182

Other

622

647

Allowance for doubtful accounts

(16)

(16)

20,58920,024

Buildings

432

432

Accumulated depreciation

(289)

(291)

Buildings, net

142

141

Machinery, equipment and vehicles

547

545

Accumulated depreciation

(505)

(506)

Machinery, equipment and vehicles, net

41

39

Other

164

183

Accumulated depreciation

(101)

(117)

Other, net

6366

Total property, plant and equipment

247

246

1,543

1,570

1,543

1,570

Investment securities

10,645

9,802

Long-term loans receivable

1,144

1,114

Deferred tax assets

2,059

2,552

Guarantee deposits

383

385

Retirement benefit asset

47

47

Other

218

218

Allowance for doubtful accounts

(9)

(9)

Securities
Merchandise and finished goods
Work in process

Total current assetsNon-current assets:
Property, plant and equipment

Intangible assets
Other
Total intangible assets
Investments and other assets

3

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

Allowance for investment loss

(17)

(18)

Total investments and other assets

14,471

14,093

Total non-current assets

16,263

15,911

Total assets

36,85235,935

4

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

(Millions of Yen)
As of March 31, 2019

As of June 30, 2019

LIABILITIESCurrent liabilities:
Accounts payable – trade

3,621

3,907

Short-term borrowings

198

195

Accrued expenses

1,119

898

Income taxes payable

1,129

266

537

292

Advances received

3,448

4,031

Provision for bonuses

565

961

Provision for bonuses for directors (and other75

45

Provision for loss on construction contracts

340

338

Other

313

910

11,34911,848

923

3,926

3,965

182

190

10

9

4,128

4,189

15,477

16,037

Share capital

1,000

1,000

Capital surplus

4,704

4,704

Retained earnings

18,033

17,223

Treasury shares(2,402)(2,402)

Total shareholders’ equity

21,335

20,525

Valuation difference on available-for-sale securities

76(693)Foreign currency translation adjustment

219

332

Remeasurements of defined benefit plans

(282)

(266)

14(627)25-

Accrued consumption taxesofficers)

Total current liabilities
Non-current liabilities:
Deferred tax liabilities
Retirement benefit liability
Provision for retirement benefits for directors (andother officers)
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equityAccumulated other comprehensive income

Total accumulated other comprehensive income
Share acquisition rights

5

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

Total net assets

21,37519,898

Total liabilities and net assets

36,85235,935

6

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

(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, 2018

Three months ended
June 30, 2019

Net sales

9,766

10,012

Cost of sales

7,763

7,928

Gross profit

2,002

2,084

Selling, general and administrative expenses

1,263

1,259

738

824

Interest income

2444

Dividend income

3033

Foreign exchange gains

189-

Other

23

14

Total non-operating income

267

92

1012

Foreign exchange losses-222

Stock transfer agency service fee

22

Other

04

Total non-operating expenses

13242

993

674

Gain on sales of investment securities-14

Gain on reversal of share acquisition rights

5425

Other0-Total extraordinary income

5439

Loss on valuation of investment securities-383

Loss on litigation

5--0

Total extraordinary losses

5384

Profit before income taxes

1,041

330

Income taxes-current

359

420

Income taxes-deferred

182

(143)

Operating profit
Non-operating income

Non-operating expenses
Interest expenses

Ordinary profit
Extraordinary income

Extraordinary losses

Other7

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

Total income taxes

542276

Profit499

53

Profit attributable to owners of parent

499

53

8

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

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

ProfitThree months ended

Three months ended

June 30, 2018

June 30, 2019
499

53

Valuation difference on available-for-sale securities

(57)

(770)

Foreign currency translation adjustments(238)

112(0)

16(0)-(296)(641)

202(588)

202

(588)

--

Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

9

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

(3) Notes Concerning Consolidated Financial Statements for the First Quarter(Notes Concerning Premise of Going Concern)
None(Notes on Significant Changes in Shareholders’ Equity)
None10SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

(Segment Information and others)[Segment Information]
I. Consolidated cumulative total for first quarter of the previous fiscal year (April 1, 2018 to June 30, 2018)
1. Information concerning net sales and income or losses for each reporting segment(Millions of Yen)
AmountSystemOperations

SystemsDevelopmentandInfrastructurerecorded onProductTotalSales

Adjustment

the quarterly

amount*1

consolidated
statements ofDevelopment

income*2Sales(1) Sales toCustomers(2) Intersegment
sales ortransfers
Total sales
Segment income

4,919

1,130

3,716

9,766

－

9,766

2

5167

121(121)

－

4,922

1,181

3,783

9,887

(121)

9,766

751

276

115

1,143(404)738

Notes:
1. The segment income adjustment of minus ¥404 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
None11SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

II. Consolidated cumulative total for first quarter of the fiscal year under review (April 1, 2019 to June 30, 2019)
1. Information concerning net sales and income or losses for each reporting segment(Millions of Yen)
AmountSystemOperations

Systems
DevelopmentandInfrastructurerecorded onProductTotalSales

Adjustment

the quarterly

amount*1

consolidatedstatements ofDevelopment

income*2

Sales(1) Sales toCustomers(2) Intersegment
sales ortransfers
Total sales
Segment income

4,711

1,282

4,017

10,012－

10,012

157

3796(96)

－

4,713

1,340

4,055

10,109(96)10,012

670

320

243

1,233(409)824

Notes:
1. The segment income adjustment of minus ¥409 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
None12SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

(Significant subsequent events)
Not applicable

13

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

3. Other Information
1. Status of Production, Orders and Sales Production amounts
Production by segment in the first quarter of the fiscal year under review is as follows.
Segment information by type of business

Three months ended% change YoY

June 30, 2019

Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)5, 146

(3.7)

1,299

11.6

6,446

(0.9)

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 under review are as follows.
Segment information by type of business

Three months ended% change YoY

June 30, 2019

Product Sales (Millions of Yen)

2,193

(10.7)

Total (Millions of Yen)

2,193

(10.7)

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

14

SRA Holdings, Inc. (3817) Summary of First-Quarter Consolidated Financial Results for the Year Ending March 31, 2020

 Status of orders
Status of orders by segment in the first quarter of the fiscal year under review is as follows.
OrdersSegment information by type of businessreceived(Millions ofOrder backlog% change YoY% change YoYYen)

Yen)
Systems Development(Millions of5,515(1.6)

4,824(12.4)

788

9.7

1,717(3.4)

Product Sales

3,475(5.4)

3,444(2.9)

Total

9,779(2.2)

9,986(7.8)

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 under review are as follows.
Segment information by type of business

Three months ended% change YoY

June 30, 2019

Systems Development (Millions of Yen)

4,711

(4.2)

1,282

13.5

Product Sales (Millions of Yen)

4,017

8.1

Total (Millions of Yen)

10,0122.5

System Operations and Infrastructure
Development (Millions of Yen)

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

15