August 3, 2018

Summary of Consolidated Financial Results
for the First Quarter of Fiscal Year Ending March 31, 2019
(Three Months Ended June 30, 2018)
Company name: Japan System Techniques Co., Ltd.
Stock code:
4323
Representative:
Takeaki Hirabayashi, President and CEO
Contact:
Noriaki Okado, Director and CFO
Scheduled date of filing of Quarterly Report:
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
Holding of quarterly financial results meeting:[Japanese GAAP]
Listing: Tokyo Stock Exchange, First Section
URL: http://www.jast.jp
Tel: +81-6-4560-1000
August 6, 2018
None
None

Note: The original disclosure in Japanese was released on August 3, 2018 at 16:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter Ended June 30, 2018
(April 1, 2018 – June 30, 2018)(1) Consolidated results of operations
Net sales

Operating income

Million yen%
Million yen%
Three months ended Jun. 30, 2018
4,106
27.6
154
Three months ended Jun. 30, 2017
3,219
15.0
(10)
Note: Comprehensive income (million yen) Three months ended Jun. 30, 2018:
Three months ended Jun. 30, 2017:

Three months ended Jun. 30, 2018
Three months ended Jun. 30, 2017

Net income per share

Diluted net income per
share

Yen

Yen

18.93
(0.55)-(Percentages represent year-on-year changes)
Profit attributable toOrdinary income
owners of parent
Million yen%
Million yen
%
162
99
5
(2)
92 (up 772.6 %)10 (- %)

(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
12,0396,191
As of Jun. 30, 2018
As of Mar. 31, 201812,3086,246
Reference: Shareholders’ equity (million yen)
As of Jun. 30, 2018:
6,146

Equity ratio
%
51.1
50.4
As of Mar. 31, 2018:

Net assets per share
Yen
1,171.23
1,181.54
6,200

2. Dividends
1Q-endYen-

Fiscal year ended Mar. 31, 2018
Fiscal year ending Mar. 31, 2019
Fiscal year ending Mar. 31, 2019 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None

Dividend per share
2Q-end3Q-endYear-end
Yen
Yen
Yen
0.00
28.00
0.00

-

28.00

Total
Yen
28.00
28.00

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)
Net sales

Operating income

Ordinary income

Million yen%
Million yen% Million yen%
Full year
15,765
0.9
865
16.7
875
11.4
Note: Revisions to the most recently announced consolidated earnings forecasts: None

(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillion yen
%
Yen
585
1.0
111.47

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Jun. 30, 2018:

5,612,230 shares

As of Mar. 31, 2018:

5,612,230 shares

As of Mar. 31, 2018:364,210 shares

2) Number of treasury shares at the end of the period
As of Jun. 30, 2018:364,210 shares

3) Average number of shares outstanding during the period
Three months ended Jun. 30, 2018:

5,248,020 shares

Three months ended Jun. 30, 2017:

5,248,020 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forecasts of future performance in these materials are based on assumption judged to be valid and information available to theCompany’s management at the time the materials were prepared, but are not promises by the Company regarding future
performance. Actual results may differ materially from the forecasts. Please refer to “1. Qualitative Information on Quarterly
Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements” on page 3
for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6

Quarterly Consolidated Statement of Income
For the Three-month Period

6

Quarterly Consolidated Statement of Comprehensive Income
For the Three-month Period7(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Additional Information

9

Segment and Other Information

91

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the current fiscal year, the Japanese economy continued to recover at a moderate pacedespite the continuation of geopolitical risk in eastern Asia. The recovery was supported by improvements incorporate profits, the number of jobs and personal income due to the benefits of economic initiatives by theJapanese government.
In the IT industry in Japan, according to the latest statistics in the “Survey of Selected Service Industries” by the
Ministry of Economy, Trade and Industry (the final May figures), net sales continued to climb, rising 2.5% year
on year in Fiscal 2017 (compared with 1.3% annual growth in Fiscal 2016). Despite the higher sales, the outlook
for the IT industry is uncertain because there were some months in fiscal 2017 when sales were lower than one
year earlier.
Consolidated results of operations of the Japan System Techniques Group (Japan System Techniques Co., Ltd.
(JAST) and its consolidated subsidiaries, hereafter “the JAST Group”) were strong in the first quarter of thecurrent fiscal year. Sales and earnings at all levels increased as follows: net sales of 4,106 million yen (up 27.6%
year on year), operating income of 154 million yen (vs. operating loss of 10 million yen in the same period of theprevious fiscal year), ordinary income of 162 million yen (up 2,904.4% year on year), and profit attributable toowners of parent of 99 million yen (vs. loss attributable to owners of parent of 2 million yen in the same period of
the previous fiscal year).
In the first quarter of the current fiscal year, the Package business segment was renamed the GAKUEN businesssegment. Results by segment were as follows.
In the software business (individualized contracted software development), sales in the telecommunicationsindustry and the manufacturing industry, and to educational institutions increased while there was a decrease insales in the service/retail industry and public sector. Net sales in this business totaled 2,644 million yen (up10.5% year on year) and operating income was 154 million yen (up 170.6% year on year).
In the GAKUEN business (development, sale and related services of operational reform packages for schools),
there were increases in IT equipment sales, implementation support sales and end user computing (EUC:
individualized contracted development of related systems) sales. However, there was a decline in sales ofprogram products (PP) to universities, which are a highly profitable category of this business. Net sales in thisbusiness totaled 456 million yen (up 12.6% year on year) and operating loss was 43 million yen (vs. operating
loss of 31 million yen in the same period of the previous fiscal year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), sales to universities
and the public sector increased. Net sales in this business totaled 827 million yen (up 223.9% year on year), andoperating income was 103 million yen (vs. operating loss of 7 million yen in the same period of the previous
fiscal year).
Lastly, in the medical big data business (inspection, analysis and related services of medical information), sales ofautomated inspection services for health insurance claims and services for data analysis and notification of thecost of medical care were strong. However, expenses increased faster than sales growth in order to build astronger organization in this business and for other activities. Net sales in this business totaled 178 million yen(up 8.2% year on year), and operating loss totaled 65 million yen (vs. operating loss of 29 million yen in the same
period of the previous fiscal year).

2Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19(2) Explanation of Financial Position
1) Balance sheet position
The balance of current assets at the end of the first quarter of the current fiscal year was 9,191 million yen, down
249 million yen from the end of the previous fiscal year. This was mainly due to an increase in cash and deposits
resulting from the collection of accounts receivable-trade and advances received, and a decrease in purchased
products. The balance of non-current assets was 2,848 million yen at the end of the first quarter, down 19 million
yen from the end of the previous fiscal year.
The balance of current liabilities at the end of the first quarter was 4,393 million yen, down 171 million yen fromthe end of the previous fiscal year. This was mainly due to increases in advances received and short-term loans
payable, and decreases in accounts payable-trade and provision for bonuses. The balance of non-current liabilities
was 1,454 million yen at the end of the first quarter, down 43 million yen from the end of the previous fiscal year.
The balance of net assets was 6,191 million yen at the end of the first quarter, down 54 million yen from the endof the previous fiscal year. This was mainly due to the payment of dividends and profit attributable to owners ofparent in the first three months.
2) Cash flows
Cash and cash equivalents increased 2,040 million yen from 2,785 million yen at the beginning of the current
fiscal year to 4,825 million yen at the end of the first three months of the current fiscal year.
Cash flows by category were as follows.
Cash flows provided by operating activities totaled 1,885 million yen, an increase of 459 million yen from 1,425
million yen provided in the same period of the previous fiscal year. This increase was mainly due to an increase inproceeds from collection of notes and accounts receivable-trade, a decrease in inventories, an increase in profit
before income taxes, and a decrease in notes and accounts payable-trade.
Cash flows provided by investing activities totaled 211 million yen, an increase of 207 million yen from 4 million
yen provided in the same period of the previous fiscal year. This increase was mainly due to increases in proceedsfrom cancellation of time deposits and sales of real estate for rent.
Cash flows used in financing activities totaled 55 million yen, a decrease of 159 million yen from 104 million yen
provided in the same period of the previous fiscal year. This decrease was mainly due to a decrease in short-termloans payable.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
We maintain the May 11, 2018 forecasts for the fiscal year ending March 31, 2019: net sales of 15,765 million
yen (up 0.9% year on year), operating income of 865 million yen (up 16.7% year on year), ordinary income of
875 million yen (up 11.4% year on year), and profit attributable to owners of parent of 585 million yen (up 1.0%
year on year).

3Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
FY3/18(As of Mar. 31, 2018)(Thousands of yen)First quarter of FY3/19(As of Jun. 30, 2018)

AssetsCurrent assets
Cash and deposits

2,994,700

4,881,226

Notes and accounts receivable-trade

4,991,576

2,786,891

Merchandise and finished goods

576,412429,534

Work in process

711,654931,384

2,272

2,178

Other

201,206

194,391

Allowance for doubtful accounts(36,900)(34,554)

9,440,922

9,191,053

Raw materials and supplies

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

657,805

691,863

Accumulated depreciation(375,281)(384,140)

Buildings and structures, net

282,523

307,722Land

142,361

142,361

Other

381,968

399,017(283,798)(289,445)

98,170109,572

523,055

559,656

Goodwill

29,434

27,170Software

86,99780,199

Other

7,626

7,626

124,058

114,996

Investment securities

705,240

700,660

Net defined benefit asset

535,482

540,508

Deferred tax assets

389,352

441,234

Guarantee deposits

390,110

407,839

Other

245,123

128,204

Allowance for doubtful accounts(44,609)(44,609)

Total investments and other assets

2,220,698

2,173,837

2,867,812

2,848,491

12,308,734

12,039,545

Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

4Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19

FY3/18(As of Mar. 31, 2018)(Thousands of yen)First quarter of FY3/19(As of Jun. 30, 2018)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable

2,040,633

1,004,831

218,592

322,587

8,400

8,400

Income taxes payable271,702

113,063

Advances received

652,455

1,259,874

Provision for bonuses

638,152

298,773

Provision for directors’ bonuses

29,087

6,186

Other

705,120

1,379,419

4,564,144

4,393,135

Long-term loans payable

20,30018,200

Provision for directors’ retirement benefits

426,250

11,138Net defined benefit liability

920,209931,357

Other

131,268

493,862

Total current liabilities
Non-current liabilities

Total non-current liabilities
Total liabilities

1,498,027

1,454,558

6,062,172

5,847,693

1,076,669

1,076,669

Net assets
Shareholders’ equity
Capital stock
Capital surplus

994,621994,621

Retained earnings

4,188,119

4,140,501

Treasury shares(266,539)(266,539)

Total shareholders’ equity

5,992,871

5,945,252

Valuation difference on available-for-sale securities

126,589

123,266

Foreign currency translation adjustment(10,428)(8,828)Remeasurements of defined benefit plans

91,694

86,972

Total accumulated other comprehensive income

207,856

201,41145,83545,187

6,246,562

6,191,851

12,308,734

12,039,545

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

5Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)(Thousands of yen)First three months of FY3/18 First three months of FY3/19(Apr. 1, 2017 – Jun. 30, 2017) (Apr. 1, 2018 – Jun. 30, 2018)
Net sales

3,219,208

4,106,450

Cost of sales

2,561,997

3,209,531

Gross profit

657,210

896,919

Selling, general and administrative expenses

667,551

742,842

Operating income (loss)(10,340)

154,077

Interest income

2,811

2,801

Dividend income

2,777

2,831

Rent income

3,373

1,363

Foreign exchange gains

1,327

-

Insurance premiums refunded cancellation

5,226

-

-

2,825

Non-operating income

Subsidy income
Other

3,331

1,860

Total non-operating income

18,849

11,681

517

615

-

949

2,241

973

332

469

3,091

3,007

Ordinary income

5,417

162,751

Profit before income taxes

5,417

162,751

Income taxes

8,767

63,302

Profit (loss)(3,350)99,449(450)

123(2,899)99,326

Non-operating expenses
Interest expenses
Foreign exchange losses
Rent expenses
Other
Total non-operating expenses

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

6

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY3/18(Apr. 1, 2017 – Jun. 30, 2017)(Thousands of yen)First three months of FY3/19(Apr. 1, 2018 – Jun. 30, 2018)(3,350)99,449Valuation difference on available-for-sale securities

22,755(3,322)Foreign currency translation adjustment(4,962)818

Remeasurements of defined benefit plans, net of tax(3,874)(4,722)

Total other comprehensive income

13,919(7,227)

10,56992,222

11,02592,880

(455)

(658)

Profit (loss)
Other comprehensive income

Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19(3) Quarterly Consolidated Statement of Cash FlowsFirst three months of FY3/18(Apr. 1, 2017 – Jun. 30, 2017)(Thousands of yen)First three months of FY3/19(Apr. 1, 2018 – Jun. 30, 2018)

Profit before income taxes

5,417

162,751

Depreciation

20,836

15,480

Amortization of software

10,591

10,795

Amortization of goodwill

4,264

2,264

Cash flows from operating activities

Increase (decrease) in provision for bonuses(335,114)(339,267)

Increase (decrease) in net defined benefit liability

14,063

11,578Decrease (increase) in net defined benefit asset(4,686)(5,026)

Interest and dividend income(5,589)(5,632)517

615

1,507,750

2,201,499

624,759

620,143

Interest expenses
Decrease (increase) in notes and accounts
receivable-trade
Increase (decrease) in advances received
Decrease (increase) in inventories(391,929)(73,013)

Increase (decrease) in notes and accounts payable-trade(277,661)(1,035,713)

Other, net

488,339563,215

Subtotal

1,661,559

2,129,692

5,929

5,883

Interest and dividend income received
Interest expenses paid

(466)

(613)

Income taxes paid

(241,891)(249,890)

Net cash provided by (used in) operating activities

1,425,131

1,885,073(6)

153,108

Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment(4,189)(11,945)

Proceeds from sales of real estate for rent-

109,183(16,060)(19,777)

(448)

(452)

Proceeds from cancellation of insurance funds

12,275

162

Proceeds from collection of guarantee deposits

11,870377

Payments for guarantee deposits(723)(18,186)

Other, net

1,986

(721)

Net cash provided by (used in) investing activities

4,703

211,748

Net increase (decrease) in short-term loans payable

248,595

104,765

Repayments of lease obligations(10,772)(10,892)

Repayments of long-term loans payable(2,100)(2,100)Cash dividends paid

(131,200)(146,944)

Net cash provided by (used in) financing activities

104,522(55,171)(1,658)(1,037)

1,532,698

2,040,612

Cash and cash equivalents at beginning of period

1,951,458

2,785,193

Cash and cash equivalents at end of period

3,484,157

4,825,806

Purchase of software
Purchase of investment securities

Cash flows from financing activities

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

8Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.

Significant Changes in Shareholders’ Equity
Not applicable.

Additional Information
Application of the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.
Effective from the beginning of the first quarter of the current fiscal year, JAST has applied the “Partial Amendments to
Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February
16, 2018), etc. Accordingly, deferred tax assets are reclassified and included in the investments and other assets section.
Provision for directors’ retirement benefits
The JAST Board of Directors resolved at a meeting held on May 11, 2018 to terminate the current system for directors’
retirement benefits at the end of the 46th Annual General Meeting of Shareholders scheduled for June 26, 2018. At thismeeting, shareholders approved a resolution to make benefit plan termination payments to directors. JAST plans to makethese termination payments when eligible directors reach the end of their final terms or resign or retire.
Accordingly, the entire amount of the provision for directors’ retirement benefits, which was included in non-current
liabilities, has been deleted and there is instead a long-term accounts payable-other of 356 million yen for these benefit plan
termination payments that is included in the “other” item of non-current liabilities.
Some consolidated subsidiaries will maintain a provision for directors’ retirement benefits in non-current liabilities for thepayment of retirement benefits to benefits in accordance with the payment rules of these companies.

Segment and Other Information
Segment information
I. First three months of FY3/18 (Apr. 1, 2017 – Jun. 30, 2017)
1. Information related to net sales and profit or loss for each reportable segment(Thousands of yen)Amounts shown onquarterly
Adjustment
consolidated(Note 1)statement of income(Note 2)

Softwarebusiness

GAKUENbusiness

Systemsales
business

Medicalbig data
business

Total

1. External sales
2. Inter-segment sales
and transfers

2,393,713

405,160

255,491

164,8423,219,208-

3,219,208

16,630

-

3,885

-

20,515(20,515)-

Total

2,410,343

405,160

259,376

164,8423,239,723(20,515)

3,219,208

Segment profit (loss)

57,184(31,959)(7,420)(29,954)(12,150)

1,809(10,340)

Net sales

Notes: 1. Segment profit (loss) in the above adjustment represents eliminations for inter-segment transactions.
2. Segment profit (loss) is consistent with operating loss shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Not applicable.

9Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/19

II. First three months of FY3/19 (Apr. 1, 2018 – Jun. 30, 2018)
1. Information related to net sales and profit or loss for each reportable segment(Thousands of yen)Amounts shown onquarterly
Adjustment
consolidated(Note 1)statement of income(Note 2)

Softwarebusiness

GAKUENbusiness

Systemsales
business

Medicalbig data
business

Total

1. External sales
2. Inter-segment sales
and transfers

2,644,387

456,119

827,513

178,429

4,106,450-

4,106,450

15,691

3,421

1,537

-

20,649(20,649)-

Total

2,660,079

459,541

829,050

178,429

4,127,100(20,649)

4,106,450

Segment profit (loss)

154,743(43,147)

103,215(65,668)

149,143

4,934

154,077

Net sales

Notes: 1. Segment profit (loss) in the above adjustment represents eliminations for inter-segment transactions.
2. Segment profit (loss) is consistent with operating income shown on the quarterly consolidated statement of income.
3. In the first quarter of the current fiscal year, the Package business segment was renamed to the GAKUEN businesssegment. The change does not influence the segment information. The segment information for the first three months of theprevious fiscal year is prepared and disclosed using the new segment name.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Not applicable.

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

10