Cube : FY2019 Second-Quarter Financial Results

Summary of Consolidated Financial Results

for the Second Quarter of the fiscal year ending December 31, 2019 (Japanese GAAP)

August 14, 2019

Company name: V-cube, Inc.

Securities code: 3681

Stock exchange listings: The First Section of the Tokyo Stock Exchange

URL: (Japanese) http://jp.vcube.com/ (English) http://www.vcube.com/

Quarterly statement filing date (as planned): August 14, 2019

1.Results of the second quarter ended June 30, 2019

(millions of Yen, except per share amounts)

(1) Consolidated quarterly operating results:

		Three months ended	Three months ended
		June 30, 2018		June 30, 2019
		Amount			Change	Amount		Change
	Net sales		¥3,408		+11.1%	¥3,111		－8.7%
	Operating income		107		－%	－146		－%
	Ordinary income		31		－%	－176		－%
	Profit attributable to owners of		－56		－%	187		－%
	parent
	Comprehensive income		－175		－%	158		－%
	Net income per share		－2.33			7.77
	Diluted net income per share		－			7.67
(2) Consolidated financial position:
		As of December 31, 2018	As of June 30, 2019
	Total assets				¥10,585			¥8,145
	Net assets				4,530			3,148
	Capital adequacy ratio				35.0%			38.6%
	Net assets per share				153.23			130.75
	Owner's equity				3,703			3,143

2.Dividends

				(Yen)
	Fiscal Year ended	Fiscal Year ended	Fiscal Year ending
	December 31, 2018	December 31, 2019	December 31, 2019
	(Result)	(Result)	(forecast)
Dividend per share -1st quarter	－	－	－
Dividend per share -2nd	0.00	0.00		0.00
quarter
Dividend per share -3rd quarter	－			－
Dividend per share -fiscal year	0.00			1.00
End
Dividend per share -total	0.00			1.00

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3.Consolidated forecasts

(millions of Yen, except per share amounts)

Fiscal Year ending

December 31, 2019

	Amount	Change
Forecast-net sales	¥6,497	－18.4%
Forecast-operating income	345	0.0%
Forecast-ordinary income	283	+9.2%
Forecast-profit attributable to	717	+57.2%
owners of parent
Forecast-net income per share	29.66

Changes from forecasts previously announced: No

4.Others

(1)Material changes in subsidiaries during this accumulated quarter (Changes in scope of consolidations resulting from change is subsidiaries): Yes

Number of subsidiaries newly consolidated: －

Number of subsidiaries excluded from consolidation: 1

(2)Number of issued and outstanding shares (common stock)

i Number of issued and outstanding shares at the period end (including treasury stock)

As of December 31, 2018	24,184,600 shares	As of June 30, 2019	24,193,800	shares
ii Number of treasury stock at the end of fiscal year
As of December 31, 2018	16,600 shares	As of June 30, 2019	153,500	shares
iii Average number of shares (quarterly period-YTD)
Three months ended	24,058,041 shares	Three months ended	24,163,515	shares
June 30, 2018	June 30, 2019

Note: The number of shares of treasury stock as of December 31, 2018 and June 30, 2019 included the shares held by ESOP (16,600 shares and 9,900 shares, respectively, at the end of the periods).

* Explanation related to appropriate use of results forecasts and other items warranting special mention

The above forecasts are based on the information available as of the date of the release of this document. As a result, a variety of factors in the future may cause actual results to differ from these forecasts.

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Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Balance Sheet

					(Thousands of yen)
			As of December 31, 2018	As of June 30, 2019
	Assets
	Current assets
	Cash and deposits		2,732,368		2,079,754
	Notes and accounts receivable - trade	1,493,193		721,169
	Advance payments - trade		424,570		199,708
	Other	409,838		335,551
	Allowance for doubtful accounts		△200		△1,260
	Total current assets	5,059,770		3,334,924
	Non-current assets
	Property, plant and equipment	162,423		312,215
	Intangible assets
	Software	2,267,347		1,870,470
	Software in progress		240,113		196,377
	Goodwill	1,111,402		904,611
	Other		4,300		62
	Total intangible assets	3,623,164		2,971,521
	Investments and other assets, gross		1,739,799		1,526,350
	Total non-current assets	5,525,386		4,810,087
	Total assets		10,585,157		8,145,011
	Liabilities
	Current liabilities
	Accounts payable - trade	746,739		234,851
	Short-term loans payable		1,183,329		1,010,000
	Current portion of long-term loans	632,309		560,160
	payable
	Provision for bonuses		115,848		85,085
	Income taxes payable	149,689		41,699
	Other		1,193,483		1,169,101
	Total current liabilities	4,021,398		3,100,897
	Non-current liabilities
	Long-term loans payable	2,003,313		1,856,150
	Other		30,333		39,319
	Total non-current liabilities	2,033,647		1,895,469
	Total liabilities		6,055,045		4,996,367
	Net assets
	Shareholders' equity
	Capital stock	3,451,291		31,035

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Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income Valuation difference on available-for-sale securities

Foreign currency translation adjustment Total accumulated other comprehensive income

Share acquisition rights

Non-controlling interests

Total net assets

Total liabilities and net assets

	2,695,522		2,770,679
	△2,437,172	432,365
	△15,651		△88,955
	3,693,989	3,145,123
	－	23,087
	9,381		△25,008
	9,381		△1,921
	2,662		2,662
	824,078	2,779
	4,530,111		3,148,644
	10,585,157	8,145,011

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1. Quarterly Consolidated Statement of Income and Comprehensive Income (Quarterly Consolidated Statement of Income)

						(Thousands of yen)
			Six months ended		Six months ended
			June 30, 2018		June 30, 2019
	Net sales		3,408,571			3,111,796
	Cost of sales	1,813,137		2,066,056
	Gross profit		1,595,434			1,045,739
	Selling, general and administrative expenses	1,487,460		1,192,638
	Operating profit (loss)		107,974			△146,899
	Non-operating income
	Interest income		6,175			4,502
	Foreign exchange gains		－	3,434
	Subsidy income		11,485			7,438
	Insurance income	120		570
	Guarantee commission received		2,114			2,114
	Other	6,606		1,789
	Total non-operating income		26,502			19,850
	Non-operating expenses
	Interest expenses		15,396			11,623
	Foreign exchange losses		46,870			－
	Commission fee		21,664			31,324
	Rents-NOE	18,636		5,580
	Other		574			1,362
	Total non-operating expenses	103,142		49,890
	Ordinary profit (loss)		31,334			△176,939
	Extraordinary income
	Gain on sales of non-current assets		9			－
	Gain on sales of shares of subsidiaries	7,423		791,565
	Total extraordinary income		7,432			791,565
	Extraordinary losses
	Loss on retirement of non-current assets		329			411
	Impairment loss		－	376,277
	Loss on valuation of investment securities		8,049			－
	Outsourcing system failure correspondence	27,223			－
	cost
	Head office transfer cost		－			7,232
	Other	3,010		38
	Total extraordinary losses		38,612			383,960
	Profit before income taxes	154		230,666
	Income taxes - current		28,897			37,074
	Income taxes - deferred	12,354		23,485

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