Disclaimer:
This financial report is solely a translation of the “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.
Consolidated Financial Report for the Second Quarter of the Fiscal Year Ending December 31,
2011
(Six Months Ended June 30, 2011)
[Japanese GAAP]
July 29, 2011
Corporate name listed on the stock exchange
Softbrain Co., Ltd.
Listed on the Tokyo Stock Exchange
Code number
Representative
4779
President & CEO
Hirofumi Toyoda
URL http://www.softbrain.co.jp/
Contact person
Director & CFO
Teppei Kinoshita
Phone: +81-3-6214-1700
Scheduled date for submitting the Quarterly Report
August 12, 2011
Scheduled date of dividend payments
Supplementary materials for quarterly financial results :
－
Yes
Quarterly financial results briefing :
Yes (for institutional investors and securities analysts)
(Round off down to the nearest million yen)
1. Consolidated financial result of first six months of the fiscal year ending in December 2011 (January 1, 2011 to June 30, 2011)
(1) Consolidated financial results (Cumulative)
(Percents are the amount of increase or decrease from the same quarter in the previous fiscal year)
Net sales
Operating income
Ordinary income
Net income
million yen
％
million yen
％
million yen
％
million yen
％
1,619
-5.1
180
-18.1
188
-8.5
147
64.0
1,706 -16.5
220
-22.8
206
-27.8
89
-50.9
Six months ended
June 30, 2011
Six months ended
June 30, 2010
Net income per share
Diluted net income per share
Yen
Yen
Six months ended June 30, 2011
503.77
－
Six months ended June 30, 2010
307.12
－
(2) Consolidated financial position
Total assets
Net assets
Shareholders’
equity ratio
Net assets
per share
million yen
million yen
％
Yen
As of June 3, 2011
2,185
1,516
59.5
4,444.97
As of Decenber 31, 2010
2,159
1,335
53.4
3,939.74
Owned capital
As of June 30, 2011：1,300 million yen As of December 31, 2010：1,152 million yen
2. Dividends
Dividend per share
1Q-end
2Q-end
3Q-end
Year-end
Total
Yen 1/100 yen Yen 1/100 yen Yen 1/100 yen Yen 1/100 yen Yen 1/100 yen
Term ending in December 2010
－
－
Term ending in December 2011
－
－
Quarter ending in December 2011 (forecast)
－
0
00
0
00
－
0
00
0
00
Note: Revisions to the most-recently-announced dividend forecast：None
3. Forecast of financial results for the fiscal year ending in December 2011 (January 1, 2011 to December 31, 2011)
(Percents are the amount of increase or decrease the previous fiscal year)
Net sales
Operating income Ordinary income
million yen ％ million yen
Full year
3,550 3.2
450
％ million yen
％ million yen
8.7
6.0
440
Net income
per share
Net income
300
％
Yen
-9.4
1,025.47
Note: Revisions to the most-recently-announced consolidated financial forecast：None
4. Other (for more information, see the "Other Information on page 3 of the Attached material.)
(1) Changes of important subsidiaries during these six months:
No
New - Company (name), excluded - Company (name)
Note: This is whether there is a specific subsidiary that may cause change of the range of consolidated account during this
quarterly fiscal term.
(2) Application of simple accounting process and specific accounting process: No
Note: This is about whether to apply simplified accounting and specific accounting for creating quarterly consolidated
financial statements.
(3) Change of accounting principles, procedures, and display method
1) Change according to revision of the accounting standards:
Yes
2) Changes other than 1) above:
No
Note: This is about whether there is change of accounting process principle, procedure, or display method regarding creation
of consolidated quarterly financial statement that will be describe don the “change of important item that is base of
creating consolidated quarterly financial statement.”
2nd quarter of the
fiscal year ending
Term ending in
December, 2010
2nd quarter of the
fiscal year ending
in December 2011
2nd quarter of the
fiscal year ending
in December 2011
292,550
December, 2010
in December 2010
309,550
Shares
17,000
in December 2011
17,000
Shares
3) Average number of shares during the 2nd
quarter.
Term ending in
292,550
Shares
2) Number of company-owned shares at the end
of this term.
309,550
Shares
this term (including company-owned shares):
2nd quarter of the
fiscal year ending
Shares
1) Number of outstanding shares at the end of
Shares
(4) Number of shares issued (common stock)
* Displays the status of the implementation of the quarterly review procedures
This brief version of the quarterly financial report has been revised according to the Financial Instruments and Exchange Law,
and the review procedures of for consolidated quarter financial statements, according to the Financial Instruments and Exchange
Law. As it is a brief report, it is not complete.
* Statement regarding the proper use of financial forecasts and other special remarks
The statements in this material discussing possible future events, including performance forecasts, are based on the information
we obtained and certain premises deemed reasonable. Actual results may vary greatly according to a variety of factors. See “1.
(3) Qualitative information regarding consolidated business results forecasts” on page 3 of the quarterly financial result brief
news (attached material) for precautions concerning the conditions underlying the forecasts and result f
Table of Contents for the attached materials
1. Qualitative information regarding the consolidated quarterly business results
2
(1) Qualitative information regarding consolidated management results
2
(2) Qualitative information regarding consolidated financial condition
2
(3) Qualitative information regarding consolidated business result forecast
3
2. Other information
3
(1) Outline of changes at important subsidiaries
3
(2) Outline of the simplified accounting process and special accounting processes
3
(3) Outline of changed accounting principles, procedures, and display methods
3
3. Consolidated quarterly financial statements
4
(1) Consolidated quarterly balance sheet
4
(2) Consolidated quarterly profit and loss statement
6
(First six months consolidated cumulative period)
6
(2nd quarter consolidated accounting period)
7
(3) Consolidated quarterly cash flow statement
8
(4) Notes regarding the premise of a being sustainable company
9
(5) Segment information
9
(6) Note when there is a significant change in the Shareholders' capital
－1－
10
1. Qualitative information regarding the consolidated business results for this first six months
(1) Qualitative information regarding consolidated management results
During our first six months consolidated cumulative period, companies within the Japanese economy are still issuing flat
forecasts due to the impact of the Great East Japan Earthquake and the unstable currency exchange rate. They still tend to be
refraining from investing in facilities and software.
These are the circumstances under which our group of companies has been promoting our “sales problem-solving business.”
We have been especially focusing on our “e-Sales Manager” SFA/CRM packaged software program. We focused on
customizing these tools and providing support to customers in order to integrate the tools and services we provide. We have
promoted our ability to aid in the actual resolution of our customers’ sales problems, together with our education and training
businesses that support process management’s ways of thought and practical application.
Besides pursuing these modes of business, our group companies have also been responding to customers’ needs more broadly
by offering other services with the “e-Sales Manager,” including field marketing that provides indispensable consumer
information for planning effective sales strategies.
As a result, net sales for the first six months consolidated cumulative period totaled 1,619 million yen (down 5.1% year over
year). Turning to profits, our operating income for the first six months consolidated cumulative period totaled 180 million yen
(down 18.1% year over year) from sales and our ordinary incomes was 188 million yen (down 8.5% year-over-year) due to a
decrease in fixed costs. Therefore, our net income for these quarters was 147 million yen (up 64.0% year-over-year).
Looking at the results by segment, the “e-Sales Manager-related business” put effort into the sale of services such as the
consulting service for developing salesperson and the education and training service for seles manager centered on the sale of
the “e-Sales Manager Remix Cloud,” our major product.
Regarding the results of sales efforts, transactions with existing customers were maintained at a firm level. However, due to the
impact of the Great East Japan Earthquake, some business negotiations stagnated. The upshot is that the sales of e-Sales
Manager service totaled 1,092 million yen, and operating income was 123 million yen.
On the other hand, although there was an effect felt by the self-restriction of commercial advertising and promotion by
customers due to the Great East Japan Earthquake, our “field marketing project” gradually started to receive an increase in new
inquiries in response to energetic sales activities, and business our results began to see a better trend. As a result of these
factors, in this segment sales reached 350 million yen, and sales profits reached 60 million yen.
The other segments had sales of 244 million yen and a sales profit of 9 million yen, based on the MVNO business, and book
planning and sales.
(2) Qualitative information regarding consolidated financial condition
1) Assets, liabilities and net assets
In the first six months consolidated term, by the end of the term our total assets as compared with those of the previous
consolidated accounting year had reached 2,185 million yen, an increase of 26 million yen. The main factors here were a
decrease in notes receivable and accounts receivable of 126 million yen, a decrease in investment securities of 48 million yen,
a decrease in works in process of 31 million yen (though there were increases in cash and deposits of 188 million yen) and an
increase in tangible assets of 13 million yen. Debt dropped to 669 million yen, a decrease of 154 million yen as compared with
the end of the previous consolidated fiscal year. The main factors behind this decrease were a decrease in notes payable and
accounts payable of 64 million yen, a decrease in unpaid corporate tax of 51 million yen due to the actual payment of the
corporate tax, and a decrease in short term debts of 39 million yen (though there was an increase of advanced receivable of 49
million yen). Net assets reached 1,516 million yen, an increase of 180 million yen as compared with the end of the previous
consolidated fiscal year. The major factor was an increase in retained earnings of 147 million yen due to the reported profit.
Shareholders’ equity ratio reached 59.5%.
2) Cash flow conditionss
At the end of the second quarter of our consolidated fiscal year, cash and cash equivalents (hereafter referred to as “the fund”)
reached 1,271 million yen, an increase of 188 million yen as compared with the end of the same term of the previous
consolidated fiscal year. The increase or decrease in various flows of cash and the factors behind them are as follows:
(Cash flow through sales activities)
The funds obtained through sales activities was 283 million yen (304 million yen in the same period of last year). This was
mainly due to increases in such factors as a net profit before tax of 183 million yen, collection of trade receivables of 126
million yen, depreciation costs of 68 million yen, and the decrease in the factor of a payment reduction of 68 million yen due
to the actual payment of the corporate tax.
－2－
(Cash flow by investment activities)
54 million yen was spent on investment activities (compared with an expedture of 69 million yen in the same period of the
previous year). This was mainly due to the increased income of 44 million yen from selling investment securities minus the
decrease resulting from expenditures from obtaining intangible fixed assets worth 61 million yen, and tangible fixed assets
worth 33 million yen.
(Cash flow by financing activities)
The amount of the fund spent on financing activities was 40 million yen (thus remaining the same, when compared with the
same period last year). This was due to the repayment of short-term debts.
(3) Qualitative information regarding consolidated business result forecast
We did not modify our earnings statement for the fiscal year ending December 31, 2011 from the forecast made in the fiscal
term consolidated earnings report disclosed on February 4, 2011.
The above reports were created on the basis of currently available information; the effects of potential risks and uncertainties
are not included. Therefore, please note that due to changes in various factors, the actual earning may be significantly different
from the reports given above.
2. Other information
(1) Outline of changes at important subsidiaries
There were no such issues.
(2) Outline of the simplified accounting process and special accounting processes
There are no applicable matters.
(3) Outline of changed accounting principles, procedures, and display methods
1) Application of accounting standards related to asset retirement obligations (AROs)
Starting in the 1st quarter of the consolidated accounting period, we began applying the “Accounting standards regarding asset
retirement obligations” (Corporate Accounting Standard No. 18 of March 31, 2008) and the “Implementation Guidance for
accounting standards for asset retirement obligations” (Corporate Accounting Standard Implementation Guidance No. 21 of
March 31, 2008). This action will cause a decrease of ordinary profit of 1 million yen and a decrease of net profit before taxes
of 8 million yen. Rental deposit will be decreased by 8 million yen by applying this accounting standard at this time.
2) Changes to the method of organizing and listing the consolidated quarterly profit and loss statement
Because we adopted “the cabinet office ordinance on revising some of the regulations regarding terms and forms used for
financial statements, and statement creation methods” (Cabinet Office Ordinance No. 5 of March 24, 2009) and following the
“accounting standards for consolidated financial statements” (Corporate Accounting Standards No. 22 of December 26, 2008),
we are showing our “first six months net profit before adjusting the profits and losses of minor shareholders” both for this first
six months consolidated cumulative period and the 2nd quarter consolidated accounting period.
－3－
3. Consolidated quarterly financial statements
(1) Consolidated quarterly balance sheet
(Thousand yen)
As of June 30, 2011
As of Dec 31, 2010
Assets
Current assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise
Works In Process
Raw materials and supplies
Deferred tax assets
Others
Allowance for doubtful accounts
Total current assets
1,271,421
273,317
1,082,618
399,957
48,249
11,757
44,725
43,281
490
119,070
490
93,122
64,823
-2,790
68,124
-4,080
1,786,340
1,728,239
45,859
-23,275
45,859
-16,647
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings net
Others
Accumulated depreciation
Others net
Total property, plant and equipment
Intangible assets
Software
Good will
Others
Total intangible fixed assets
Investments and other assets
Investment securities
22,584
29,212
296,147
-236,575
266,561
-227,102
59,571
39,459
82,156
68,671
157,894
145,296
3,517
915
4,618
915
162,326
150,830
16,449
64,504
Guarantee deposit
Bankruptcy reorganization claims and so forth
41,857
35,333
50,348
35,333
Deferred tax assets
Others
90,410
6,371
90,026
7,123
Reserve for possible loan losses
-35,333
-35,333
Total investments and other assets
155,089
212,003
399,572
431,504
2,185,913
2,159,744
Total non-current assets
Total assets
－4－
(Thousand yen)
As of June 30, 2011
As of Dec 31, 2010
Liabilities
Current liabilities
Accounts payable-trade
85,975
150,021
Short term loan-payable
Account payable-other
187,482
56,076
227,374
70,683
27,012
－
78,111
12,578
215,664
18,301
166,132
35,136
－
78,937
7,333
76,811
669,450
824,181
669,450
824,181
826,064
826,064
616,734
126,602
616,734
-20,777
Income taxes payable
Provision for directors' bonuses
Advance received
Provision for bonuses
Provision for sales returns
Others
Total current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stocks
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
-263,285
-263,285
1,306,115
1,158,735
-5,738
-6,165
Valuation and translation differences
Foreign currency conversion account
Total evaluation and translation differences
Minority shareholders interest
Total net assets
Total liabilities and net assets
－5－
-5,738
-6,165
216,085
182,992
1,516,462
1,335,563
2,185,913
2,159,744
(2) Consolidated quarterly profit and loss statement
(First six months consolidated cumulative period)
(Thousand yen)
Six months ended
Six months ended
June 30, 2010
June 30, 2011
Net sales
Cost of sales
1,706,432
822,715
1,619,096
813,363
883,716
805,733
1,900
4,800
－
2,294
Subtract gross profit
886,617
808,027
Selling, general and administrative expenses
666,222
627,539
Operating income
220,395
180,488
Interest receivable
Equity method investment profit
249
－
166
1,994
Gains due to favorable foreign exchange rates
Revenue from subsidized projects
56
782
－
6,935
Penalty revenue
Others
114
1,120
－
1,291
Total non-operating income
2,321
10,388
5,686
1,465
10,755
－
－
450
Gross profit
Unrealized profit transfer amount on installment plan
Unrealized profit returned amount on installment plan
Non-operating income
Non-operating expenses
Interest payable
Equity method investment loss
Losses due to negative foreign exchange rates
Others
Total non-operating expenses
Ordinary income
Extraordinary income
Change in equity profit
0
136
16,441
2,052
206,275
188,824
85
－
Amount returned on reserves for possible loan losses
－
1,290
Total extraordinary income
85
1,290
313
110
－
6,931
Extraordinary loss
Loss on retirement of fixed assets
Amount of impact of applying the Accounting
Standard for asset removal
Total extraordinary loss
Quarterly profit before income taxes
313
7,042
206,048
183,072
Income taxes-current
36,176
23,249
Income taxes-deferred
64,581
-26,332
100,757
-3,082
Total income taxes
－
186,155
Minority shareholder profit
15,442
38,775
Quarterly net income
89,848
147,379
Quarterly net income before minority shareholders profit
－6－
(First six months consolidated accounting period)
(Thousand yen)
Three months ended
June 30, 2010
Three months ended
June 30, 2011
Net sales
737,180
767,420
Cost of sales
368,965
362,428
Gross profit
368,214
404,991
3,722
1,102
Subtract gross profit
371,937
406,094
Selling, general and administrative expenses
330,314
313,923
41,622
92,170
Unrealized profit returned amount on installment plan
Selling, general and administrative expenses
Operating income
Non-operating income
Interest receivable
Equity method investment profit
Revenue from subsidized projects
Others
17
13
－
100
886
5,351
12
484
130
6,735
2,349
5,749
714
－
409
0
775
0
8,508
1,489
33,244
97,416
Amount returned on reserves for possible loan losses
－
1,290
Total extraordinary income
－
1,290
46
110
Total non-operating income
Non-operating expenses
Interest payable
Equity method investment loss
Losses due to negative foreign exchange rates
Others
Total non-operating expenses
Ordinary income
Extraordinary income
Extraordinary loss
Loss on retirement of fixed assets
46
110
Profit before income taxes
Total extraordinary loss
33,198
98,596
Income taxes-current
10,745
874
Income taxes-deferred
11,960
-38,540
Total income taxes
22,705
-37,665
－
136,262
Quarterly net income before minority shareholders profit
Minority shareholders’ income
6,999
26,441
Quarterly net profit
3,492
109,821
－7－
(3) Consolidated quarterly cash flow statement
(Thousand yen)
Previous year’s first six months This first six months consolidated
consolidated cumulative term
cumulative term
(From January 1, 2010 to June 30, (From January 1, 2011 to June 30,
2010)
2011)
Cash flow by operating activity
Quarterly net income before taxes and other
adjustments
206,048
183,072
66,421
849
68,327
812
2,654
609
-194,027
-1,290
-15,077
-29,412
-5,475
-249
-7,333
-166
5,686
-85
1,465
－
Investment loss by equity method
Loss on retirement of fixed assets
10,755
313
-1,994
110
Amount of increase or decrease in trade receivables
Amount of increase or decrease in inventory assets
97,687
17,484
126,762
28,051
Change in amount of accounts payable
Others
-21,185
218,665
-64,053
47,947
Subtotal
390,465
352,907
Amounts of interest and dividends received
Amount of interest paid
249
-4,580
166
-1,492
Amount of corporate taxes paid or returned
Relocation cost payment
-46,572
-35,385
-68,523
－
Cash flow by sales activity
304,176
283,058
Depreciation
Long-term prepaid expenses depreciation
Good will depreciation
The change in the amount reserved for possible loan
losses
Change in the amount reserved for employee bonuses
Change in the amount provided for sales returns
Interest and dividends receivable
Interest payable
Loss on equity changes
Cash flow by investment activity
Payment for acquisition of tangible fixed assets
Payment for acquisition of intangible fixed assets
Payment arising from the acquisition of investment
securities
Income from the sale of investment securities
-4,955
-33,367
-20,021
-61,046
－
-5,440
－
44,876
Payment for acquisition of subsidiaries’ shares
Payment for guarantee deposits
-43,092
-485
－
-125
Income from collecting guarantee deposits
138,522
395
69,968
-54,706
Net increase/reduction of short-term debts
－
-40,000
Cash flow by financing activity
－
-40,000
Cash flow by investment activity
Cash flow by financing activity
Exchange differences related to cash and equivalents
-979
450
Increase/decrease of cash and equivalents
373,165
188,802
Beginning balance of cash and equivalents
945,048
1,082,618
1,318,213
1,271,421
Cash and cash equivalents balance at the end of the
quarter
－8－
(4) Notes regarding the premise of a being sustainable company
There were no such matters.
(5) Segment information
Segment information by business type
Previous year’s firs six months consolidated cumulative period (from January 1, 2010 to June 30, 2010)
In the consolidated group’s previous fiscal year, we provided our business in consultation, system construction using the
Internet, as well as the development and sale of software program packages to customer companies. Thus, we were a single
segment business for information services and did not include information for separate segments.
Segment information by location
Previous year’s first six months consolidated cumulative period (from January 1, 2010 to June 30, 2010)
Domestic sales and assets make up over 90% of the total sales and total assets for all segments. Thus, descriptions of segment
information for each location were omitted.
Overseas sales amounts
Previous year’s first six months consolidated cumulative period (from January 1, 2010 to June 30, 2010)
The overseas sales amount was less than 10% of consolidated sales, so the description of overseas sales is omitted.
[Segment information]
1. Outline of the reported segment
The reports of segments of our group are available with separate financial statements from our constituent units, and our
highest decision-making body uses it to examine each segment regularly to determine the distribution of management
resources and evaluate business results.
We promoted business activities for each product and service separately, and two segments -- “e-Sales Manager related
business” and “field marketing business” -- are the segments reported upon. The “e-Sales Manager-related business” chiefly
sells software licenses, customized development, and education & training services. The “field marketing business” chiefly
sells field activity business, and market research services.
The major products and services belonging to each reported segment are shown in the table below.
Reported segment
Major products
e-Sales Manager related business
Software licensing, cloud services, consulting, customization
development, education and training
Field Marketing business
Field activity operation, market research, and manpower dispatch
2. Information about the sales and profits of each reported segment
This year’s first six months consolidated cumulative period (from January 1, 2011 to June 30, 2011)
(Unit: thousand yen)
Amounts
accounted for on
Reported segment
e-Sales
Manager
related
business
Field
Marketing
Others,
Note 1
Total
Adjustment the consolidated
amount quarterly profit
Note 2
Total
business
and loss
statement
Note 3
Sales
Sales to external
1,084,006
321,722
1,405,729
8,472
28,405
36,878
Total
1,092,479
350,128
1,442,608
Segment profits
123,634
60,134
183,769
customers
Internal sales or transfers
between segments
－9－
－
1,619,096
68,196
-68,196
－
244,685 1,687,293
-68,196
1,619,096
-12,730
180,488
213,367 1,619,096
31,317
9,449
193,219
Note 1. The Other category contains segments that are not included among the reported segments. They are the MVNO, book
planning and sales, and recruiting support businesses.
2. The adjusted amount of -12.73 million yen in the segment profit is made up of deleted dealings between segments of
1,841 thousand yen, goodwill depreciation of -609 thousand yen, and a fixed asset adjustment amount of
-13,962 thousand yen.
3. Segment profits are adjusted with the business profits on the consolidated quarterly profit and loss statement.
(Additional information)
Beginning in the 1st quarter of the current consolidated accounting term, we are applying the “accounting standards for the
disclosure of segment information” (Corporate Accounting Standard No. 17 of March 27, 2009) and the “application guideline
for accounting standards for the disclosure of segment information” (Corporate Accounting Standard Application Guideline
No. 20 of March 21, 2008)
(6) Note when there is a significant change in the shareholders' capital
There were no such matters.
－10－