Internet Initiative Japan Inc. · TSE:3774

Internet Initiative Japan — Q1 FY2009 Earnings Presentation

24 slides from Internet Initiative Japan's earnings presentation, Aug 11, 2009

  1. Slide 1: 1st Quarter FY2009 Consolidated Financial Results

    1st Quarter FY2009 Consolidated Financial Results Internet Initiative Japan Inc. 2009.8.11

  2. Slide 2: Agenda

    Agenda Ⅰ. Summary of 1Q FY2009 Financial Results Ⅱ. Consolidated Financial Results for 1Q FY2009 Ⅲ. Reference Materials 1

  3. Slide 3: I. Summary of 1Q FY2009 Financial Results

    I. Summary of 1Q FY2009 Financial Results ≪ 1Q FY2009 Financial Results ≫ ¾ Revenue JPY15,835 million (down 3.0% YoY) ¾ Operating Income JPY 351 million (down 14.7% YoY) ¾ Income before Income Tax Expense JPY 300 million (down 3.1% YoY) ¾ Net Income Attributable to IIJ JPY 180 million (up 6.7% YoY)

  4. Slide 4: II-1. Consolidated Financial Results for 1Q FY2009

    II-1. Consolidated Financial Results for 1Q FY2009 Unit: JPY billion % of Revenues % of Revenues 1Q09 1Q08 YoY （09/04～09/06） （08/04～08/06） ¾Revenue in line with original target ¾Recurring revenues increased YoY Total but systems construction revenues Revenues 15.8 16.3 (3.0%) decreased affected by w

  5. Slide 5: II-2. Revenues

    II-2. Revenues Internet Connectivity Services Unit: JPY million One-time Systems Construction Recurring Revenues Outsourcing Services Revenues Equipment Saleｓ Systems Operation and Maintenance ATM Operation Business 18,486 18,942 18,359 259 6 234 4 17,535 7,535 399 16,926 6 16,294 16,328 6 202 5 286

  6. Slide 6: II-3. Cost of Revenues and Gross Margin Ratio

    II-3. Cost of Revenues and Gross Margin Ratio Cost of Revenues Connectivity and Outsourcing Services SI Equipment Sales ATM Operation Gross Margin Ratio Total Gross Margin Ratio Business Connectivity and Outsourcing Services SI 28.9% Unit: JPY million 25.5% 26.2% 25.7% 24.6% 23.5% 23.3% 21.6% 21.6%

  7. Slide 7: II-4. Connectivity and Outsourcing Services (1) Revenues

    II-4. Connectivity and Outsourcing Services (1) Revenues Outsourcing Services Unit: JPY million Connectivity Services for Home Use Connectivity Services for Corporate Use Total Contracted Bandwidth (Gbps) 584.7 530.5 449.1 476.6 392.4 422.1 330.3 334.9 346.0 35,076 31,303 8,940 9,135 9,126 8,447 8,4

  8. Slide 8: II-4. Connectivity and Outsourcing Services (1) Cost of Revenues

    II-4. Connectivity and Outsourcing Services (1) Cost of Revenues Unit: JPY million Purchasing Costs 7,466 8 7,651 9 Others 7,065 526 12 527 514 Outsourcing Costs 1,244 1,262 1,192 Personnel Related 826 931 Costs 859 Network Operation 1,771 Related Costs 1,758 1,517 Circuit Related Costs 2,971 3,102

  9. Slide 9: II-5. Systems Integration (1) Revenues

    YoY = 1Q09 compared to 1Q08 II-5. Systems Integration (1) Revenues Unit: JPY million QoQ = 1Q09 compared to 4Q08 [Systems construction] Systems construction 9,234 ‹ Revenues: down 40.6% YoY, down 61.2% QoQ ‹ Order Backlog: 7,717 7,409 YoY: down 24.3%, down JPY1,236 million QoQ: up 34.3%, up JPY981 m

  10. Slide 10: II-5. Systems Integration (2) Cost of Revenues

    II-5. Systems Integration (2) Cost of Revenues Unit: JPY million 7,039 Purchasing Costs Others 6,024 2,566 Network Operation Related Costs 1,619 4,876 Outsourcing Costs 351 324 1,235 Personnel Related Costs 1,174 1,139 304 1,078 2,175 2,361 1,541 704 649 718 1Q08 4Q08 1Q09 YoY = 1Q09 compared to 1Q0

  11. Slide 11: II-6. ATM Operation Business

    II-6. ATM Operation Business Unit: JPY million SG&A Expenses (Operating cost and expenses) Cost of Revenues 244 239 240 83 78 49 166 81 72 161 161 192 Trust Networks Inc. 58 85 15 ¾Established July 2007 1Q08 2Q08 3Q08 4Q08 1Q09 •Consolidated subsidiary •Ownership: 72.3% (as of July 2009) ¾Places and

  12. Slide 12: II-7. SG&A Expenses/R&D

    II-7. SG&A Expenses/R&D Unit: JPY million Sales and Marketing Expenses Research and Development General and Administrative Expenses ( ) % of Revenues 2,978 9,193 10,668 （15.7%） 2,614 2,647 2,647 （16.0%） 2,550 2,526 199 2,372 2,458 （15.1%） （16.7%） 2,30 2,301 1 （14.4%） （12.9%） （13.3%） 59 77 （14.1%） 61

  13. Slide 13: II-8. Number of Employees

    II-8. Number of Employees Number of Employees (total of full time and contract worker) [Employee Distribution] 1,800 1,673 Contract worker 1,602 Administration 1,600 Full time worker 228 13.8% 1,373 229 1,400 Sales 1,155 173 18.6% 1,200 Engineers 987 129 1,000 67.6% 127 800 1,373 1,445 600 1,200 1,0

  14. Slide 14: II-9. Operating Income and Net Income

    II-9. Operating Income and Net Income Operating Income Net Income Operating Margin Ratio Unit: JPY million 9.8% 6.9% ‹ Operating income: 6.2% 5.7% 5.0% 4.8% down 14.7% YoY, down 67.3% QoQ 2,907 3.5% 2.2% ¾ Operating income decreased. While 2.5% gross margin for connectivity and outsource service and

  15. Slide 15: II-10. Connectivity and Outsourcing Service and SI

    II-10. Connectivity and Outsourcing Service and SI Unit: JPY million [Gross margin and gross margin ratio] 22.2% Gross Margin Gross Margin Ratio Operating Income Operating Margin Ratio 20.1% 20.1% Gross margin and operating margin of 19.1% connectivity and outsourcing service and 18.6% YoY SI Up 4.8

  16. Slide 16: II-11. Operating Income YoY Change

    II-11. Operating Income YoY Change Unit: JPY million Gross margin of Gross margin of Gross margin of SI SG&A expenses connectivity and equipment sales (excluding ATM) outsourcing service +24 ▲21 ATM Operation (+1.5%) (▲54.9%) ▲42 Business +144 (▲1.6%) (+10.8%) ・Gross Loss: up JPY174 mil ・SG&A expens

  17. Slide 17: II-12. Consolidated Balance Sheets

    II-12. Consolidated Balance Sheets Unit: JPY million June 30, March 31, Changes 2009 2009 Cash and Cash 9,897 10,188 (290) Equivalents ¾ Decreased correspondingly to decreases in SI projects Accounts Receivable 8,532 10,257 (1,724) Inventories 536 530 +6 ¾ Bonus payments and maintenance expenses rel

  18. Slide 18: II-13. Consolidated Cash Flows

    II-13. Consolidated Cash Flows Unit: JPY million Net cash provided by (used in) operating activities Net cash provided by operating activities: JPY2,164 million 4,538 8,631 4,083 ¾Decrease in accounts receivable: JPY1,735 3,280 million 2,018 1,987 2,164 ¾Decrease in inventories, prepaid expenses 1,4

  19. Slide 19: II-14. Other Financial Data (CAPEX etc.)

    II-14. Other Financial Data (CAPEX etc.) Unit: JPY million CAPEX (Include Capital Lease) 6,078 7,006 ¾ CAPEX related to ATM operation 2,685 business: JPY47 million 2,232 1,831 1,832 1,546 1,489 1,242 Adjusted EBITDA 1,058 658 9,534 9,534 8,177 8,177 3,101 2,550 2,316 2,379 1Q07 2Q07 3Q07 4Q07 1Q08 2

  20. Slide 20: II-15. Topics

    II-15. Topics ◆ Contents Delivery Service Image of Solar Eclipse Delivery ¾ Provided HD video distribution platform for solar eclipse project. Encoder Had approx. 20 thousands of simultaneous access ・ Distribution platform for Solar eclipse occurred on July 22, 2009, the first to be viewable from Ja

  21. Slide 21: III-1. Reference: Forecast for FY2009

    Unit: JPY billion III-1. Reference: Forecast for FY2009 (except for Net Income and Cash Dividend per Share) 1H09 Target FY09 Target FY08 Actual YoY （09/4～09/9） （09/4～10/3） （08/4～09/3） Total Revenues 33.5 73.0 69.7 +3.3 4.7% Operating Income 0.8 3.3 2.9 +0.4 13.1% Income before Income Tax 0.6 2.7 2.0

  22. Slide 22: III-2. Reference: IIJ Group Companies

    III-2. Reference: IIJ Group Companies （As of July 31, 2009) Company Name Ownership Main Business Offers a comprehensive suite of systems integration services from IIJ Technology Inc. design, physical installation, operation, and maintenance to monitoring for our customers' diverse network systems. P

  23. Slide 23: III-3. Reference: Press Release

    III-3. Reference: Press Release Date Press Releases IIJ and SkillUpJapan Embark on Proof-of-Concept Testing of Japan's First Streaming 4/9 Distribution of Flash Video with Copyright Protection 4/17 IIJ Adds New URL Filtering Service to High-Performance SEIL Series Routers 4/27 IIJ Releases a Free IP

  24. Slide 24: Forward-looking Statements

    ※ Forward-looking Statements Statements made in this presentation regarding IIJ’s or management’s intentions, beliefs, expectations, or predictions for the future are forward-looking statements that are based on IIJ’s and managements’ current expectations, assumptions, estimates and projections abou

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