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March 26,2010 |
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To: Parties concerned |
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Corporate Name: I-Net Corp.
Representative: President Shigemasa Kajimoto
(Code No. 9600 Tokyo Stock Exchange 1st Section)
Contact: Senior Manager,Finance and Accounting Department Masahiro Matsumoto
Phone #:+81-(0)45-682-0801 |
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Notification regarding revision of anticipated performance in the term ending
March 2010 and Emergence of a Non-Operating Loss/Special Loss
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1. I-NET Corp. hereby announces that it has revised anticipated performance for the term ending March 2010 (April 1, 2009 – March 31, 2010), released on October 30, 2009 and appropriation of non-operating loss/special loss, as indicated below. |
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Revision of anticipated performance for the term(April 1, 2009-March 31, 2010) |
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(1) Revision of anticipated consolidated performance |
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Net sales |
Operating
income
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Ordinary
income
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Net income for the term |
Net income
per share for
the term |
Previously announced forecast (A) |
￥mil.
22,130
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￥mil.
620
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￥mil.
670
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￥mil.
280
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￥--.--
19.74
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Present revised forecast (B) |
21,140 |
460 |
430 |
130 |
9.16 |
Difference (B-A) |
(990) |
(160) |
(240) |
(150) |
－ |
Fluctuation rate (%) |
(4.5) |
(25.8) |
(35.8) |
(53.6) |
－ |
Performance in the previous term
(March 2009 term) |
25,385 |
1,277 |
1,168 |
415 |
29.23 |
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(2)Revision of anticipated individual performance |
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Net sales |
Operating
income
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Ordinary
income
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Net income for the term |
Net income
per share for
the term |
Previously announced forecast (A) |
￥mil.
15,560
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￥mil.
720
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￥mil.
710
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￥mil.
410
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￥--.--
28.90
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Present revised forecast (B) |
15,140 |
660 |
700 |
220 |
15.51 |
Difference (B-A) |
(420) |
(60) |
(10) |
(190) |
－ |
Fluctuation rate (%) |
(2.7) |
(8.3) |
(1.4) |
(46.3) |
－ |
Performance in the previous term
(March 2009 term) |
17,097 |
1,123 |
1,012 |
483 |
33.99 |
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(3)Reason for the revision
In contrast to bullish sales in the area of information processing services, sales of system development services have continued to stagnate due to client companies' strict suppression of IT investment. In order to deal with this worsening business environment and the quickening of structural changes surrounding the IT industry, I-NET group is as a whole striving to reduce costs, and at the same time has instituted the following business reconstruction-oriented policies.
As a result of these issues, a possibility has arisen in which sales and profits may be less than those predicted in the full-year results outlook announced October 30, 2009. For this reason these figures will be revised. |
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(Policies Implemented)
(1) Consolidation and abolishment of enterprise centers
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The concentration of system development services bases previously scattered throughout the Tokyo area into a single, new facility in Kamata, Ota Ward.
Implementation Period : May 2010 (Anticipated) |
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Covered Centers : |
1) The Tokyo office of I-NET CORP., 2) the headquarters and the Shinagawa Systems Development Division of IST-Software Co., Ltd. (a consolidated subsidiary) |
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The closing of I-NET CORP.'s Ibaraki Office and IST-Software Co., Ltd.'s Sendai Office. |
(2) The incorporation of all business from the 3D Incorporated (a consolidated subsidiary) into I-NET CORP. and the dissolution of the 3D Incorporated.
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Systems development business utilizing 3D computer graphics will be consolidated into I-NET CORP. |
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Sharing of management resources, reduction of duplicate costs, optimization and rationalization of enterprises. |
(3) Recruitment of early retirement volunteers from IST-Software Co., Ltd.
(4) Batch amortization of goodwill of the Runexy Corporation, an equity method affiliate of I-NET CORP.
Through the implementation of these policies, earnings will be suppressed in this consolidated fiscal year. However, it is expected that from the next consolidated fiscal year the burden of these policies will have abated, and they will contribute to increased profits.
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2. Appropriation of Non-Operating Loss/Special Loss
It is planned that through the implementation of these policies the following non-operating losses/special losses will be appropriated. |
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(1) Costs accompanying business reconstruction
It is planned to appropriate a special loss of 227 million yen (85 million yen individual) as expenses accompanying business reconstruction.
The major components of this are as follows. |
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Consolidated |
Individual |
In the area of consolidating and abolishing enterprise centers: Expenses related to the restoration of offices formerly used by I-NET CORP. and IST-Software Co., Ltd. (rental properties) to their original condition. |
￥mil.
71
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￥mil.
49
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Extraordinary amortization cost associated with the removal of facility equipment at I-NET CORP. and IST-Software Co., Ltd. |
52 |
36 |
Special additional costs associated with voluntary retirement at IST-Software Co., Ltd. |
104 |
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Total |
227 |
85 |
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(2) Losses accompanying the liquidation of related company
I-NET CORP. has accepted the transferer of all business from 3D Incorporated indicated in news release dated February 19, 2010. Accompanying this, 77 million yen (212 million yen individual) special loss is planned to be appropriated as "Losses accompanying the liquidation of related company". Furthermore, as corporate taxes and deferred income taxes accompanying this loss will decrease by 213 million yen, a positive impact of 135 million yen (1 million yen individual) is expected on net income. |
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(Special Loss Component and the Effect on net income)
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Consolidated |
Individual |
Losses accompanying the liquidation of related company |
￥mil.
77
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￥mil.
212
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Corporate taxes and deferred income taxes accompanying the above loss |
(213) |
(213) |
Effect on net income |
135 |
1 |
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(3) Equity in losses of affiliates and impairment Losses on investments insecurities
The Runexy Corporation, an equity method affiliate of I-NET CORP., has been strongly affected by the impact of IT investment suppression and experienced a worsening in business performance. Because of this, it is planned to appropriate a non-operating expenses of 171 million yen (consolidated) as "Equity in losses of affiliates ", and a special loss of 188 million yen (individual) as "Impairment Losses on investments insecurities".
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Consolidated |
Individual |
Equity in losses of affiliates (batch amortization of goodwill, etc.) |
￥mil.
171
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￥mil.
－
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impairment Losses on investments insecurities |
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188 |
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3. Forecast of dividend distribution for the term ending March 2010.
In addition, anticipated annual dividend distribution will also remain unchanged at ￥20.00 as announced on May 11, 2009 (￥10.00 at interim, ￥10.00 at term-end).
<Note regarding performance Forecasts>
The above performance forecast was calculated from information available at the time; please bear in mind that actual performance may differ from the forecast figures due to various factors in the future. |
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