Consolidated financial resultSIOS Corporation
Consolidated Financial Result | ||||||||||||||
(For the 9-month period ended September 30, 2023) | ||||||||||||||
November 9, 2023 | ||||||||||||||
Company name: | SIOS Corporation | |||||||||||||
Address: | 2-12-3 Minami Azabu, Minato-ku, Tokyo 106-0047 Japan | |||||||||||||
Stock exchange listings: | Tokyo Stock Exchange (TSE) | |||||||||||||
Code number : | 3744 | |||||||||||||
URL: | https://www.sios.com/ | |||||||||||||
Representative: | Nobuo Kita, Representative Director | |||||||||||||
Contact: | Tokutaro Kobayashi, S.V.P. of Finance & Accounting | |||||||||||||
Phone: +81-3-6401-5111 | ||||||||||||||
Scheduled date for filing of quarterly financial report: November 13, 2023 | ||||||||||||||
(Note) All figures in the financial statements are rounded down to the nearest millionth. | ||||||||||||||
'-' indicates a loss or negative figure. | ||||||||||||||
1. Consolidated results (January 1, 2023 through September 30, 2023) | (% of change from previous third quarter) | |||||||||||||
(1) Consolidated business results | ||||||||||||||
Net sales | Operating income | Ordinary income | Net income | |||||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | |||||||
9-month period(2023/9) | 11,701 | 9.5 | -194 | - | -139 | - | -186 | - | ||||||
9-month period(2022/9) | 10,686 | -8.7 | -468 | - | -419 | - | -566 | - | ||||||
(Note)Comprehensive income | ||||||||||||||
As of Sep. 30, 2023: -122 million yen/ -% | As of Sep. 30, 2022: -435 million yen/ | -% | ||||||||||||
Net income per share | Net income per share | |||||||||||||
- Basic | - Diluted | |||||||||||||
Yen | Yen | |||||||||||||
9-month period(2023/9) | -21.49 | - | ||||||||||||
9-month period(2022/9) | -65.31 | - |
- Consolidated financial position
Total assets | Net assets | Equity ratio | |
Million yen | Million yen | % | |
9-month period(2023/9) | 6,118 | 1,049 | 15.7 |
FY2022 | 6,022 | 1,243 | 19.4 |
(Reference) Equity | |||
As of Sep. 30, 2023: 958 million yen | As of Dec. 31, 2022: 1,168 million yen |
2. Cash dividends
Dividend per share | ||||||
Record Date | End of Q1 | Interim | End of Q3 | Year-end | Annual | |
Yen | Yen | Yen | Yen | Yen | ||
FY2022 | - | 0.00 | - | 10.00 | 10.00 | |
FY2023 | - | 0.00 | - | |||
FY2023 (expected) | - | - | ||||
(Note) 1. The dividend forecast for the fiscal year ending December 31, 2023 is undecided.
2. Revisions to recent dividend forecast: None
3. Forecast of consolidated results for FY2023 (January 1, 2023 through December 31, 2023)
(% of change from previous year)
Net sales | Operating income | Ordinary income | Net income | Net income | |||||
per share | |||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |
FY2023 | - | - | - | - | - | - | - | - | - |
(Note)1. Regarding the consolidated earnings forecast for the fiscal year ending December 31, 2023, it is extremely difficult to reasonably calculate at this time. Since then, it is undecided. In the future, we will promptly announce it when it becomes possible to make a reasonable calculation.
2. Revisions to recent business forecast: None
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Consolidated financial result | SIOS Corporation |
4. Others
- Reclassification of significant subsidiaries during the period (Reclassification due to change in scope of consolidation): None
- Application of special accounting methods for the preparation of the consolidated quarterly financial statements: None
- Change in accounting policies, accounting estimates and restatement
- Change in accounting policies associated with revision of accounting standards: None
- Change arising from other factors: None
- Change in accounting estimates: None
- Restatement: None
- Number of outstanding shares (common shares)
- Number of outstanding shares (including treasury stock)
- Number of treasury stock
- Average number of outstanding shares (9-month period)
Third quarter of | 8,874,400 shares | FY2022 | 8,874,400 shares |
FY2023 | |||
Third quarter of | 205,838 shares | FY2022 | 205,838 shares |
FY2023 | |||
Third quarter of | 8,668,562 shares | Third quarter of | 8,668,562 shares |
FY2023 | FY2022 | ||
Explanation about proper use of forecasts of consolidated financial results and other special notes
- Information Regarding the Audit Review Procedure: This report is outside the scope of the procedures for quarterly review of financial statements as required under the financial instruments and Exchange Act of Japan. The aforementioned procedures have not been completed as of the time of disclosure of this document.
- Net income per share was calculated by the number of outstanding shares (excluding treasury stocks) at the end of fiscal year.
- Forecasts announced by the company referred to above were prepared based on management's assumption with information available at this time and therefore involve known and unknown risks and uncertainties. Please note such risks and uncertainties may cause the actual results to be materially different from the forecasts.
-
This information to above is an UNOFFICIAL English-language translation of the original Japanese-language version. The format and contents of this document are defined by the requirements of the Tokyo Stock Exchange's Standard.
To the extent that there are discrepancies between this translation and the original version, the original version shall be definitive.
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Consolidated financial result | SIOS Corporation |
○Table of Contents of the Attached Document
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Consolidated financial result | SIOS Corporation |
1. Qualitative Information on Quarterly Results
(1) Results of Operations
During the nine months ended September 30, 2023, while the COVID-19 pandemic was settling down, the global economy continued to face lingering uncertainty due to soaring materials prices amid rising geopolitical risks, and volatile foreign-exchange markets caused by a global monetary-tightening trend.
In this business environment, the SIOS Group ("the Group") continued to restructure its business operations to make its revenue and profit base more robust, and expanded its offerings of cloud-based products and services, including SaaS¹, to better assist corporate clients in implementing DX² solutions.
The Group achieved consolidated business results by segment for the period under review as follows:
(i) Open System Infrastructure Business Segment
Sales of our products and services for on-premise application picked up, as chip shortages were resolved and the supply of hardware products started to clear a backlog of orders. As a result, sales of Red Hat Enterprise Linux³ and other software products sourced from Red Hat Inc.4, increased compared to the same period the previous year. We also enjoyed strong sales of LifeKeeper5, which is one of our core products, for both on-premise and cloud application. As a result, net sales in this segment increased 12.0% year on year to 7,165 million yen. The segment income was 62 million yen, compared with a loss of 20 million yen the year before.
(ii) Application Business Segment
Sales of the management support system to financial institutions were slow. In contrast, revenues from the provision of support for system development and implementation were up year on year, especially from the support provided for API6 projects and business management systems of stock brokerage firms. The Gluegent series7 also achieved a year-on-year increase in sales. As a result, net sales in this segment increased 5.7% to 4,526 million yen.
The Company posted a segment loss of 266 million yen, compared with a loss of 455 million yen the year before, due to rising personnel expenses and more aggressive investments in developing and marketing new products and services, mainly in the Med Tech8 business.
The Group's combined net sales in these two segments for the period under review were up 9.5% year on year, to 11,701 million yen. The Company posted a consolidated operating loss of 194 million yen, compared with a loss of 468 million yen the year before, and an ordinary loss of 139 million yen, which reflected a favorable impact of the share of profit of entities accounted for using the equity method, compared with an ordinary loss of 419 million yen a year earlier. As a result of posting an impairment loss and a loss on sales of businesses, the loss attributable to owners of parent amounted to 186 million yen, compared with a loss of 566 million yen the previous year.
The Group's key management metrics EBITDA (the sum of operating profit, depreciation, and amortization of goodwill) and ROIC (ratio obtained by dividing operating profit after tax by the sum of shareholders' equity and interest-bearing debts) for the period under review are as follows:
EBITDA: -147 million yen, compared with -383 million yen for the same period the previous year
ROIC (annualized): -14.0%, compared with -26.1% for the year before
1 SaaS
Software as a Service. A software licensing and distribution model that allows users to connect to and use cloud-based software applications over the internet.
2 Digital transformation(DX)
A process in which a company uses data and digital technology to transform its products, services, and business models to more effectively respond to constantly changing business environments and deliver greater value to customers and society as well as to transform its business processes and organizational structure and culture to gain greater competitive advantage.
3 Red Hat Enterprise Linux
Linux OS developed by the open solution provider Red Hat, Inc. 4 Red Hat, Inc. Related Items
Linux OS product developed by Red Hat, Inc., a provider of open source solutions.
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Consolidated financial result | SIOS Corporation | |
5 | LifeKeeper | |
A failover software product that automatically switches a failed primary server to a backup server. | ||
6 | API | |
A mechanism for software and applications to exchange information with each other. | ||
7 | Gluegent series | |
Service products designed to assist corporate clients in achieving greater operational efficiency using cloud solutions. The | ||
series includes the Gluegent Gate cloud-based management of user IDs, the Gluegent Flow cloud-based workflow system, | ||
and the Gluegent Apps Group Scheduler, which incorporated a function to manage schedules of team members into Google | ||
Calendar. | ||
8 | Med Tech | |
Short for medical technology. | ||
It refers to technology that delivers medical services through software applications. |
- Financial Position
- Assets
Current assets amounted to 5,215 million yen as of September 30, 2023, up 0.4% from the end of the previous fiscal year, reflecting primarily an increase of 220 million yen in cash and deposits.
Non-current assets amounted to 902 million yen, up 9.2%, reflecting primarily an increase of 35 million yen in investment securities.
As a result, total assets increased 1.6% to 6,118 million yen.
(ii) Liabilities
Current liabilities amounted to 4,672 million yen, up 7.7% from the previous fiscal year-end, reflecting primarily an increase of 223 million yen in contract liabilities.
Non-current liabilities amounted to 395 million yen, down 10.3%, reflecting primarily a decrease of 49 million yen in long-term borrowings.
As a result, total liabilities amounted to 5,068 million yen, up 6.1% from the previous fiscal year-end.
(iii) Net assets
Total net assets amounted to 1,049 million yen, down 15.6% from the previous fiscal year-end, reflecting primarily a decrease of 272 million yen in retained earnings.
- Forward-lookingStatements Including Consolidated Business Forecasts
As stated in the Consolidated Financial Result for the fiscal year ended December 31, 2022, announced on February 2, 2023, the Group has been restructuring its business operations and bolstering its cloud-based business in order to make its revenue and profit base more robust.
During the nine months ended September 30, 2023, the Group reallocated internal human resources and chose to focus on businesses that offered a greater chance of growth and success. As we are still in the middle of restructuring and are unable to make reasonable assumptions or estimates of forecasts, we are not disclosing at this time the Group's business forecasts for the fiscal year ending December 31, 2023. As soon as we are able to make reasonable assumptions and estimates, we will announce updated forecasts.
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Consolidated financial resultSIOS Corporation
2. Quarterly Consolidated Financial Statements
(1) Quarterly Consolidated Balance Sheet
(Unit: thousand yen)
FY 2022 | FY 2023 Q3 | |||
(as of September 30, | ||||
(as of December 31, 2022) | ||||
2023) | ||||
Assets | ||||
Current assets | ||||
Cash and deposits | 2,505,766 | 2,726,679 | ||
Notes and accounts receivable - trade, and | 2,028,395 | 1,929,861 | ||
contract assets | ||||
Merchandise | 13,558 | 2,830 | ||
Work in progress | 13,267 | 3,512 | ||
Advance payments to suppliers | 272,047 | 362,429 | ||
Other | 362,291 | 190,601 | ||
Allowance for doubtful accounts | -200 | -200 | ||
Total current assets | 5,195,125 | 5,215,715 | ||
Fixed assets | ||||
Tangible fixed assets | ||||
Buildings (net) | 50,131 | 42,267 | ||
Other (net) | 62,699 | 102,347 | ||
Total tangible fixed assets | 112,830 | 144,615 | ||
Intangible fixed assets | ||||
Software | 48,496 | 38,700 | ||
Software in progress | 29,879 | 10,107 | ||
Other | 1,441 | 1,441 | ||
Total intangible fixed assets | 79,817 | 50,249 | ||
Investment and other assets | ||||
Investment securities | 380,634 | 416,160 | ||
Retirement benefit asset | 50,635 | 56,072 | ||
Guarantee deposits | 127,063 | 122,324 | ||
Other | 76,225 | 113,491 | ||
Total investment and other assets | 634,558 | 708,049 | ||
Total fixed assets | 827,206 | 902,913 | ||
Total assets | 6,022,332 | 6,118,629 | ||
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Consolidated financial result | SIOS Corporation | |||
(In thousands of yen) | ||||
December 31, 2022 | September 30, 2023 | |||
Liabilities | ||||
Current liabilities | ||||
Accounts payable-trade | 1,084,110 | 937,086 | ||
Current portion of long-term borrowings | 66,000 | 66,000 | ||
Lease liabilities | 29,700 | 67,526 | ||
Income taxes payable | - | 11,742 | ||
Contract liabilities | 2,760,665 | 2,983,981 | ||
Other | 396,729 | 606,594 | ||
Total current liabilities | 4,337,206 | 4,672,930 | ||
Non-current liabilities | ||||
Long-term borrowings | 115,500 | 66,000 | ||
Retirement benefit liability | 302,712 | 309,229 | ||
Lease liabilities | 11,746 | 7,888 | ||
Long-term deposits received | 11,632 | 11,632 | ||
Other | - | 1,159 | ||
Total non-current liabilities | 441,591 | 395,910 | ||
Total liabilities | 4,778,798 | 5,068,840 | ||
Net assets | ||||
Shareholders' equity | ||||
Share capital | 1,481,520 | 1,481,520 | ||
Legal retained earnings | -130,975 | -403,909 | ||
Treasury shares | -87,254 | -87,254 | ||
Total shareholders' equity | 1,263,289 | 990,356 | ||
Accumulated other comprehensive income | ||||
Valuation difference on available-for-sale | 5,147 | 18,575 | ||
securities | ||||
Deferred gains or losses on hedges | -100,273 | -50,052 | ||
Total accumulated other comprehensive income | -95,125 | -31,476 | ||
Subscription rights to shares | 75,369 | 90,908 | ||
Total net assets | 1,243,534 | 1,049,788 | ||
Total liabilities and net assets | 6,022,332 | 6,118,629 | ||
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Consolidated financial result | SIOS Corporation |
- Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income
Nine months ended September 30
(In thousands of yen) | ||
Nine months ended September Nine months ended September | ||
30, 2022 | 30, 2023 | |
Net sales | 10,686,284 | 11,701,456 |
Cost of sales | 7,285,377 | 7,788,206 |
Gross profit | 3,400,907 | 3,913,250 |
Selling, general and administrative expenses | 3,869,156 | 4,107,411 |
Operating profit (loss) | -468,249 | -194,161 |
Non-operating income
Interest income
Gain on valuation of derivatives
Share of profit of entities accounted for using equity method
4,231 | 10,301 |
135,244 | 56,898 |
40,415 | 43,025 |
Other | 9,550 | 5,915 | |
Total non-operating income | 189,441 | 116,141 | |
Non-operating expenses | |||
Interest expenses | 1,235 | 747 | |
Loss on investments in investment | 4,450 | 5,601 | |
partnerships | |||
Foreign exchange losses | 135,444 | 53,161 | |
Other | - | 1,639 | |
Total non-operating expenses | 141,130 | 61,149 | |
Ordinary profit (loss) | -419,939 | -139,170 | |
Extraordinary income | |||
Gain on sale of non-current assets | - | 90 | |
Total extraordinary income | - | 90 | |
Extraordinary losses | |||
Loss on valuation of shares of subsidiaries | - | 10,435 | |
and associates | |||
Impairment losses | 29,909 | 30,201 | |
Loss on retirement of non-current assets | 2,409 | 123 | |
Loss on transfer of business | - | 27,933 | |
Total extraordinary losses | 32,319 | 68,693 | |
Profit (loss) before income taxes | -452,258 | -207,773 | |
Income taxes - current | 36,381 | 15,741 | |
Income taxes - deferred | 77,489 | -37,266 | |
Total income taxes | 113,870 | -21,525 | |
Profit (loss) | -566,128 | -186,247 | |
Profit (loss) attributable to owners of parent | -566,128 | -186,247 | |
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Consolidated | financial result | SIOS Corporation | |||
Quarterly Consolidated Statements of Comprehensive Income | |||||
Nine months ended September 30 | |||||
(Unit: thousand yen) | |||||
Nine months ended | Nine months ended | ||||
September 30, 2022 | September 30, 2023 | ||||
(From January 1, 2022 | (From January 1, 2023 | ||||
through September 30, | through September 30, | ||||
2022) | 2023) | ||||
Profit (loss) | -566,128 | -186,247 | |||
Other comprehensive income | |||||
Valuation difference on available-for-sale | 4,564 | 13,428 | |||
securities | |||||
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted for using equity method
52 | - |
125,147 | 48,498 |
510 | 1,722 |
Total other comprehensive income | 130,276 | 63,649 | |
Quarterly comprehensive income | -435,852 | -122,598 | |
(Comprehensive income attributable to) | |||
Quarterly comprehensive income attributable | -435,852 | -122,598 | |
to owners of the parent | |||
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Consolidated financial result | SIOS Corporation |
- Notes to Quarterly Consolidated Financial Statements (Notes to Going Concern Assumption)
Not applicable
(Notes on significant changes in the amount of shareholders' equity)
Not applicable
(Segment Information)
【Segment Information】
I. For the nine months ended September 30, 2022 (From January 1, 2022 through September 30, 2022) 1. Information on the amount of sales and income/loss by reportable segment
(Unit: thousand yen) | ||||||
Reportable segment | Amount recorded | |||||
in quarterly | ||||||
Open system | Adjustments | consolidated | ||||
Application | statements of | |||||
infrastructure | Total | |||||
business | income | |||||
business | ||||||
(Note) | ||||||
Net sales | ||||||
Sales to external customers | 6,395,070 | 4,282,653 | 10,677,723 | 8,561 | 10,686,284 | |
Inter-segment sales and transfers | - | 5,342 | 5,342 | -5,342 | - | |
Total | 6,395,070 | 4,287,995 | 10,683,065 | 3,219 | 10,686,284 | |
Segment profit (loss) | -20,999 | -455,811 | -476,810 | 8,561 | -468,249 | |
Note: The total amount of segment losses is the same as the amount of operating loss presented on the Consolidated Statements of Income for the period under review.
(Supplementary Information)
Information by region
In addition to the disclosure required by "Accounting Standard for Quarterly Financial Statements," information (Sales) by region is disclosed in accordance with "Accounting Standard for the Disclosure of Segment Information" for the purpose of providing users of financial statement with valuable information.
Net sales
Nine months ended September 30, 2022
(From January 1, 2022 through September 30, 2022)
(Unit: thousand yen) | ||||
Japan | Americas | Europe | Other regions | Total |
10,112,955 | 380,692 | 125,305 | 67,331 | 10,686,284 |
Note: Sales are classified by country or region in which customers are located.
2. Information on impairment loss of fixed assets or goodwill by reportable segment (Significant impairment loss on non-current assets)
The Company posted an impairment loss of 29.909 million yen on non-current assets in the Application Business Segment.
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SIOS Technology Inc. published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 November 2023 04:48:08 UTC.