updated 2/10/2011 7:16:44 AM ET 2011-02-10T12:16:44

TOKYO, Feb. 10, 2011 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (Nasdaq:IIJI) (TSE:3774) today announced its consolidated financial results for the nine months ended December 31, 2010 (from April 1 to December 31, 2010).1

Highlights of Financial Results for the Nine Months Ended Dec 2010

  • Revenues were JPY56,797 million ($695.4 million), up 17.6% YoY. Outsourcing services steadily grew and there were 4 months contribution from IIJ Global Solutions Inc. ("IIJ-GS").
  • Operating income was JPY2,430 million ($29.8 million), up 21.1% YoY. Gross margin of network services increased and operating loss related to ATM operation business decreased.
  • Net income attributable to IIJ was JPY1,997 million ($24.5 million), up 76.2% YoY.
  • FY2010 year-end dividend forecast was revised upward from JPY1,250 to JPY1,500 per share. FY2010 full-year dividend forecast will be JPY2,750, up JPY500 YoY.2
  • Full-year financial targets remain unchanged.

1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with U.S. GAAP. All financial figures are unaudited and consolidated. The translation of Japanese yen into U.S. dollars is solely for the convenience of readers outside of Japan. The rate used for the translation was JPY81.67 per US$1.00, which was the noon buying rate on December 31, 2010.

2 IIJ's 1 common stock is equivalent to 400 ADSs

Overview of FY2010 Nine Months Financial Results and Business Outlook

"With the cloud computing service performing as a door opener to new clients, despite the continued weakness in Japanese economy and corporate spending on network systems, our outsourcing services continued to grow. 4 months additional revenue from IIJ-GS which we acquired from AT&T Japan on September 1, 2010 also contributed to revenue and income growth," said Koichi Suzuki, President and CEO of IIJ.

"Our new cloud computing service is growing at a much faster speed than we expected. It is one of our fastest growing service. As of December 2010, we are servicing over 300 cloud computing projects to both clients we had prior contact with and to those who are new to us and there are over 1,000 prospected cloud computing projects," continued Suzuki.

"In addition, our outsourcing services such as Web-gateway service, SMX service, contents delivery network service and data center related services have also continued its steady growth. We believe it's our long experience in providing outsourcing service and our persistent effort to introduce new services which prevents any internet related security crisis that makes corporate customers choose our services. During the 3rd quarter of this fiscal year, we've launched several new services: IIJ Mobile Biz Plus that provides access restriction features, IIJ Smart Mobile Manager that enables remote management of iPad and other smart phone devices and add on firewall feature for SMF service. All these services give solutions to those critical problems which many corporate customers are facing."

"There's also been progress with IIJ-GS. IIJ and IIJ-GS has strengthened its sales force that cross-sells both IIJ's network outsourcing services and IIJ-GS's WAN services to both corporate customers," said Suzuki.

"For our mid-term business developments, we will introduce new services in addition to further expanding our service facilities for cloud computing such as Japan's first container-unit commercial data center. We will also promote the use of IPv6 address. As many of you may know, the Internet will run out of IPv4 addresses to allocate and internet users, both corporate and individual, eventually will have to start using IPv6 addresses. Our backbones, servers and services are already IPv6 ready and we have solutions, engineering skills and experience to support IPv6. As for IIJ-GS, it is currently preparing to take its business abroad, especially in Asia, by providing global-WAN services mainly to Japanese companies overseas."

FY2010 Nine Months Financial Results Summary
Operating Results Summary
  Nine months ended

Dec 31, 2009
Nine months ended

Dec 31, 2010
YoY %

change
  JPY millions JPY millions  
Total Revenues 48,313 56,797 17.6
Network Services 3 27,601 36,110 30.8
SI 20,165 19,784 (1.9)
Equipment Sales 439 550 25.3
ATM Operation Business 108 353 226.1
Total Costs 38,693 45,257 17.0
Network Services 22,878 29,205 27.7
SI 14,751 14,876 0.8
Equipment Sales 380 473 24.6
ATM Operation Business 684 703 2.9
SG&A Expenses and R&D 7,613 9,110 19.7
Operating Income 2,007 2,430 21.1
Income before Income Tax Expense 1,783 2,175 22.0
Net income attributable to IIJ 1,133 1,997 76.2
3 From the second quarter of FY2010, "Connectivity and Outsourcing Services Revenues" has been renamed to "Network Services Revenues". 
       
 
Segment Summary
  Nine months ended Dec 31, 2009 Nine months ended Dec 31, 2010
  JPY millions JPY millions
Net Revenues 48,313 56,797
Network services and SI business 48,525 56,776
ATM operation business 108 353
Elimination 320 332
Operating Income (Loss) 2,007 2,430
Network service and SI business 2,754 2,922
ATM operation business (731) (465)
Elimination 16 27

We have omitted segment analysis because most of our revenues are dominated by Network services and systems integration business.

FY2010 Nine Months Results of Operation

Revenues

Revenues were JPY56,797 million, up 17.6% YoY. Additional revenue of 4 months related to IIJ-GS was JPY8,652 million.

Network Services revenue were JPY36,110 million, up 30.8% YoY.

Revenues for Internet connectivity services for corporate use were JPY10,433 million, up 0.6% YoY as IIJ mobile service and broadband connectivity services increased. Contracts of over 1Gbps IP service as of end of December 2010 was 127 contracts, up 6 contracts YoY.

Revenues for Internet connectivity services for home use were JPY4,974 million, down 3.1% YoY.

WAN Services revenue were JPY9,702 million, up 408.8% YoY. There were additional revenues related to IIJ-GS of 4 months.

Outsourcing services revenue were JPY11,001 million, up 7.9% YoY. Services such as Web Security, anti-spam email related services, contents delivery services, data center related services and cloud computing related services increased, respectively. Our cloud computing service "IIJ GIO" is growing and its monthly revenue, including revenue which is recognized in systems operation and maintenance, as of end of December 2010 has reached over JPY90 million.

Number of Contracts for Connectivity Services
  as of 

Dec 31, 2009
as of

Dec 31, 2010
YoY

Change
Internet Connectivity Services

 (Corporate Use) 4
60,023 75,287 15,264
 IP Service (-99Mbps) 927 903 (24)
 IP Service (100Mbps-999Mbps) 244 281 37
 IP Service (1Gbps-) 121 127 6
 IIJ Data Center Connectivity Service 299 307 8
 IIJ FiberAccess/F and IIJ DSL/F 27,805 38,034 10,229
 IIJ Mobile Service 5 29,209 34,303 5,094
Others 1,418 1,332 (86)
Internet Connectivity Services

 (Home Use)
404,700 378,985 (25,715)
 Under IIJ Brand 47,718 43,057 (4,661)
 hi-ho 171,511 159,725 (11,786)
 OEM 185,471 176,203 (9,268)
Total Contracted Bandwidth 647.2 Gbps 702.0 Gbps 54.8 Gbps

 

Network Services Revenues Breakdown
  Nine months ended

Dec 31, 2009
Nine months ended

Dec 31, 2010
YoY %

Change
  JPY millions JPY millions  
Internet Connectivity Service

 (Corporate Use)
10,368 10,433 0.6
 IP Service 6 6,957 6,705 (3.6)
 IIJ FiberAccess/F and IIJ DSL/F 2,196 2,265 3.2
 IIJ Mobile Service 7 994 1,268 27.5
Others 221 195 (11.7)
Internet Connectivity Service

 (Home Use)
5,134 4,974 (3.1)
 Under IIJ Brand 775 753 (2.8)
 hi-ho 3,934 3,818 (3.0)
 OEM 425 403 (5.1)
WAN Services 8 1,907 9,702 408.8
Outsourcing Services 10,192 11,001 7.9
Total Network Services 27,601 36,110 30.8
 
4 From the second quarter of FY2010, "Connectivity Services" has been renamed to "Internet Connectivity Services ".
5 Contracts of IIJ Mobile Service are of mobile data communication service for corporate use.
6 IP Service revenues include revenues from the Data Center Connectivity Service.
7 Revenue from mobile data communication service for home use is included in Internet Connectivity service (home use).
8 From the second quarter of FY2010, to reflect the acquisition of IIJ Global on September 1, 2010, "WAN services", which were components of "Outsourcing services revenues" were separately disclosed to clarify the contents of WAN services revenues.

SI revenues were JPY19,784 million, down 1.9% YoY. Systems construction revenues, a one-time revenue, were JPY6,920 million, up 12.8% YoY as there were mid- to small sized network construction projects. Systems operation and maintenance revenues, a recurring revenue, was JPY12,864 million, down 8.3% YoY affected by the scale-down from a certain large client in 1Q10.

The order backlog for systems construction and equipment sales was JPY5,928 million, up 11.9% YoY. The order backlog for systems operation and maintenance was JPY10,883 million, up 12.3% YoY.

Equipment sales revenues were JPY550 million, up 25.3% YoY.

ATM Operation Business revenues were JPY353 million. As of February 10, 2011, 200 ATMs are placed.

Cost and expense

Cost of revenues was JPY45,257 million, up 17.0% YoY. Cost of revenues related to IIJ-GS of 4 months were JPY6,976 million.

Cost of Network Services revenue was JPY29,205 million, up 27.7% YoY mainly due to the increase in circuit related and outsourcing related costs related to IIJ-GS of 4 months. Gross margin for network services was JPY6,905 million, up 46.2% YoY and gross margin ratio was 19.1%.

Cost of SI revenues was JPY14,876 million, up 0.8% YoY. While purchasing cost decreased, network operation related and personnel related costs increased. Gross margin for SI was JPY4,908 million, down 9.3% YoY and gross margin ratio was 24.8%.

Cost of Equipment Sales revenues was JPY473 million, up 24.6% YoY. Gross margin was JPY77 million and gross margin ratio was 13.9%.

Cost of ATM Operation Business revenues was JPY703 million. Outsourcing costs were reduced. We are additionally placing new ATMs and full FY2010 operating loss related to ATM operation business is expected to be around JPY0.6 billion.

SG&A and R&D Expenses

SG&A and R&D expenses were JPY9,110 million, up 19.7% YoY. SG&A expenses related to IIJ-GS of 4 months was JPY1,001 million.

Sales and marketing expenses were JPY4,756 million, up 21.1% YoY mainly due to the additional expenses related to IIJ-GS, personnel related expenses and depreciation and amortization increased. Amortization of customer relationship related to IIJ-GS was JPY129 million.

General and administrative expenses were JPY4,095 million, up 18.9% YoY mainly due to the additional expenses related to IIJ-GS, personnel related expenses and depreciation and amortization increased. In 3Q10, there were restoration expenses, to return the rented office to its original state, of JPY48 million in relation to next fiscal year's new office plan.

Research and development expenses were JPY259 million, up 7.6% YoY.

Operating income

Operating income was JPY2,430 million, up 21.1% YoY as gross margin for network services increased and operation loss related to ATM operation business decreased.

Other income (expenses)

Other income (expenses) was net other expense of JPY255 million (expense of JPY224 million for the nine months ended December 2009) as there were interest expenses and losses on write-down of other investments.

Income before income tax expenses

Income before income tax expenses was JPY2,175 million, up 22.0% YoY (JPY1,783 million for the nine months ended December 2009).

Net Income

Income tax expense was JPY459 million (JPY1,042 million for the nine months ended December 2009). Deferred income tax expenses was JPY242 million (JPY790 million for the nine months ended December 2009).

Equity in net income of equity method investees was JPY129 million (JPY127 million for the nine months ended December 2009).

Net income was JPY1,845 million, up 112.5% YoY (JPY868 million for the nine months ended December 2009).

Net income attributable to IIJ

Net loss attributable to noncontrolling interests was JPY152 million (JPY265 million for the nine months ended December 2009), related to Trust Networks Inc. and GDX Japan Inc.

Net income attributable to IIJ was JPY1,997 million, up 76.2% YoY (JPY1,133 million for the nine months ended December 2009).

FY2010 Nine Months Financial Condition

Balance Sheets

As of December 31, 2010, the balance of total assets was JPY67,145 million, up JPY15,048 million from the balance as of March 31, 2010 as a result of the acquisition of IIJ-GS.

For current assets, as compared to each of the respective balances as of March 31, 2010, accounts receivable increased by JPY4,735 million, prepaid expenses increased by JPY879 million and deferred tax assets decreased by JPY601 million. As of noncurrent assets, other intangible assets (net) increased by JPY4,615 million, property and equipments increased by JPY1,564 million and goodwill increased by JPY494 million. As for current liabilities, as compared to each of the respective balances as of March 31, 2010, short-term borrowings increased by JPY9,000 million mainly for the acquisition of IIJ-GS and accounts payable increased by JPY3,499 million. Noncurrent capital lease obligations decreased by JPY576 million to JPY3,081 million.

As of December 31, 2010, the balance of other investments was JPY2,934 million, an increase of JPY353 million from the balance as of March 31, 2010. The breakdown of other investments were JPY1,843 million in nonmarketable equity securities, JPY892 million in available-for-sale securities and JPY199 million in other.

As of December 31, 2010, the balance of non-amortized intangible assets (excluding telephone rights) such as goodwill was JPY4,306 million and the balance of amortized intangible assets was JPY7,228 million. The breakdown of non-amortized intangible assets were JPY4,114 million in goodwill (JPY594 million related to IIJ-GS) and JPY192 in trademark. The breakdown of amortized intangible assets were JPY7,191 million in customer relationships (JPY4,766 million related to IIJ-GS) and JPY37 million in licenses.

Total IIJ shareholders' equity as of December 31, 2010 was JPY28,696 million, an increase of JPY1,376 million from the balance as of March 31, 2010. IIJ Shareholders' equity ratio (IIJ shareholders' equity/total assets) as of December 31, 2010 was 42.7%.

The measurement of the assets acquired and liabilities assumed related to the acquisition of IIJ-GS is to be completed within a year from the acquisition date. The measurement has not yet been completed as of the end of December 31, 2010 and therefore, the preliminary estimates are subject to revisions.

Cash Flows

Cash and cash equivalents as of December 31, 2010 were JPY10,800 million compared to JPY8,466 million as of December 31, 2009.

Net cash provided by operating activities for the nine months ended December 31, 2010 was JPY8,387 million compared to net cash provided by operating activities of JPY6,261 million for the nine months ended December 31, 2009. While operating income increased YoY due to the increase in gross margin for network services, there were changes in operating assets and liabilities during the nine months ended December 31, 2010, mainly resulting from the Increase in inventories, prepaid expenses and other current and noncurrent assets of JPY722 million, increase in accounts payable of JPY3,950 million, decrease in accrued expenses and other current and noncurrent liabilities of JPY2,031 million.

Net cash used in investing activities for the nine months ended December 31, 2010 was JPY12,629 million compared to net cash used in investing activities of JPY2,798 million for the nine months ended December 31, 2009, mainly due to the acquisition of IIJ-GS for JPY9,170 million and the purchase of property and equipments of JPY3,037 million.

Net cash provided by financing activities for the nine months ended December 31, 2010 was JPY6,321 million compared to net cash used in financing activities of JPY5,163 million for the nine months ended December 31, 2009, mainly due to the net increase in short-term borrowings of JPY9,000 million, principal payments under capital leases of JPY2,210 million and payments of JPY507 million for FY2009 year-end and FY2010 interim dividends.

FY2010 Financial Targets (announced on June 1, 2010)

Generally speaking, our full year target largely depends on the outcome of the 4th quarter revenue and income results which becomes the largest due to seasonal factors. Taking into account our nine months ended December 31, 2010 results, we remain our full FY2010 target unchanged.

Our targets for the fiscal year ending March 31, 2011 are as follows:

         (JPY in millions)
 





Revenues




Operating

Income
Income before

Income Tax

Expense

(Benefit)




Net Income

attributable to IIJ
Full FY2010 Target 84,500 4,800 4,100 3,000

FY2010 Year-end Dividend Forecast

We revised upward our FY2010 year-end dividend forecast from JPY1,250 to JPY1,500 per share. FY2010 full-year dividend forecast will be JPY2,750, up JPY500 YoY.

  Interim Year-end Full-Year
FY2010 Dividend (forecast) JPY1,250 (paid) JPY1,500 (forecast) JPY2,750 (forecast)
FY2009 Dividend JPY1,000 JPY1,250 JPY2,250

Reconciliation of Non-GAAP Financial Measures

The following table summarizes the reconciliation of adjusted EBITDA to net income attributable to IIJ in our consolidated statements of income that are prepared in accordance with U.S. GAAP.

Adjusted EBITDA
  Nine months ended

Dec 31, 2009
Nine months ended

Dec 31, 2010
  JPY millions JPY millions
Adjusted EBITDA 5,942 6,667
Depreciation and Amortization 9 3,935 4,137
Impairment loss on other intangible assets -- 100
Operating Income 2,007 2,430
Other Income (Expense) (224) (255)
Income Tax Expense 1,042 459
Equity in Net Income of Equity

 Method Investees
127 129
Net income 868 1,845
Net loss attributable to

 noncontrolling interests
265 152
Net Income attributable to IIJ 1,133 1,997
9 Depreciation and amortization includes impairment loss on other intangible assets. (See IIJ's consolidated financial statements for details).

 

 

 

CAPEX
  Nine months ended

Dec 31, 2009
Nine months ended

Dec 31, 2010
  JPY millions JPY millions
CAPEX, including capital leases 4,366 4,539
Acquisition of Assets by Entering into

Capital Leases
1,563 1,502
Purchase of Property and Equipment 2,803 3,037

Other Information

From the second quarter of FY2010, to reflect the acquisition of IIJ Global on September 1, 2010, "WAN services", which were components of "Outsourcing services revenues" were separately disclosed to clarify the contents of WAN services revenues. In addition, "Connectivity Services" was renamed to "Internet Connectivity Services".

"During the fiscal years ended March 31, 2007 and 2008, IIJ acquired additional shares of its subsidiary, IIJ Technology Inc. and made it IIJ's 100% owned consolidated subsidiary. In the course of these acquisitions, IIJ recognized indefinite-lived customer relationship intangible asset of JPY2,669,152 thousand in the aggregated. Subsequent to the issuance of its March 31, 2010 financial statements, IIJ's management determined that the deferred tax liabilities associated with the intangible asset should have been recorded with corresponding increase in goodwill at the time of the acquisitions. The amounts for goodwill, deferred tax liabilities (noncurrent) and total assets as of March 31, 2010 as previously reported were JPY2,639,319 thousand, JPY212,773 thousand and JPY51,115,450 thousand, respectively. The amounts for goodwill, deferred tax liabilities (noncurrent) and total assets as of March 31, 2010 as corrected are JPY3,620,342 thousand, JPY1,193,796 thousand and JPY52,096,473 thousand, respectively. The effect on income statement is immaterial.

Presentation

Presentation Materials will be posted on our web site ( http://www.iij.ad.jp/en/IR/ ) on February 10, 2011.

About Internet Initiative Japan Inc.

Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality systems integration and security services, Internet access, hosting/housing, and content design. Moreover, IIJ has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006.

The Internet Initiative Japan Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4613

For inquiries, contact:

YUKO KAZAMA

IIJ Investor Relations Office

Tel: +81-3-5259-6500 E-mail: ir@iij.ad.jp URL: http://www.iij.ad.jp/en/IR

Statements made in this press release 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 about its business and the industry. These forward-looking statements, such as statements regarding FY2008 revenues and operating and net profitability, are subject to various risks, uncertainties and other factors that could cause IIJ's actual results to differ materially from those contained in any forward-looking statement. These risks, uncertainties and other factors include: IIJ's ability to maintain and increase revenues from higher-margin services such as systems integration and outsourcing services; the possibility that revenues from connectivity services may decline substantially as a result of competition and other factors; the ability to compete in a rapidly evolving and competitive marketplace; the impact on IIJ's profits of fluctuations in costs such as backbone costs and subcontractor costs; the impact on IIJ's profits of fluctuations in the price of available-for-sale securities; the impact of technological changes in its industry; IIJ's ability to raise additional capital to cover its indebtedness; the possibility that NTT, IIJ's largest shareholder, may decide to exercise substantial influence over IIJ; and other risks referred to from time to time in IIJ's filings on Form 20-F of its annual report and other filings with the United States Securities and Exchange Commission.

Tables to follow

 
 
Internet Initiative Japan Inc.
Quarterly Consolidated Balance Sheets (Unaudited)
(As of March 31, 2010 and December 31, 2010)
 
  As of March 31, 2010 As of December 31, 2010
  Thousands of

JPY


%
Thousands of

U.S. Dollars
Thousands of

JPY


%
ASSETS          
CURRENT ASSETS:          
Cash and cash equivalents 8,764,415   132,238 10,799,903  
Accounts receivable, net of allowance for

 doubtful accounts of JPY 37,178 thousand and

 JPY 33,315 thousand at March 31, 2010

 and December 31, 2010, respectively
11,396,597   197,524 16,131,816  
Inventories 807,803   11,051 902,539  
Prepaid expenses 1,593,000   30,270 2,472,114  
Deferred tax assets —Current 1,570,746   11,871 969,505  
Other current assets, net of allowance for

doubtful accounts of JPY 720 thousand and

 JPY 48,780 thousand at March 31, 2010 and

 December 31, 2010, respectively
762,081   12,518 1,022,326  
Total current assets 24,894,642 47.8 395,472 32,298,203 48.1
INVESTMENTS IN EQUITY METHOD INVESTEES 1,131,354 2.2 15,415 1,258,954 1.9
OTHER INVESTMENTS 2,581,610 5.0 35,927 2,934,146 4.4
PROPERTY AND EQUIPMENT, net of accumulated

 depreciation and amortization of JPY 17,653,271

 thousand and JPY 20,682,523 thousand at March

 31, 2010 and December 31, 2010, respectively
12,970,152 24.9 177,967 14,534,536 21.6
GOODWILL 3,620,342 6.9 50,372 4,113,857 6.1
OTHER INTANGIBLE ASSETS —Net 2,819,187 5.4 91,023 7,433,843 11.1
GUARANTEE DEPOSITS 2,003,862 3.8 23,945 1,955,567 2.9
DEFERRED TAX ASSETS —Noncurrent 685,370 1.3 13,279 1,084,533 1.6
OTHER ASSETS, net of allowance for doubtful

 accounts of JPY 91,319 thousand and JPY 80,986

 thousand at March 31, 2010 and December 31, 2010,

 respectively, and net of loan loss valuation

 allowance of JPY 16,701 thousand at March 31, 2010

 and December 31, 2010, respectively
1,389,954 2.7 18,749 1,531,260 2.3
TOTAL 52,096,473 100.0 822,149 67,144,899 100.0
     
  As of March 31, 2010 As of December 31, 2010
  Thousands of

JPY


%
Thousands of

U.S. Dollars
Thousands of

JPY


%
LIABILITIES AND SHAREHOLDERS' EQUITY          
CURRENT LIABILITIES:          
Short-term borrowings 4,450,000   164,687 13,450,000  
Capital lease obligations — current portion 2,729,673   31,814 2,598,273  
Accounts payable 6,967,654   128,154 10,466,330  
Accrued expenses 1,184,483   26,542 2,167,714  
Accrued retirement and pension costs — current 14,539   178 14,539  
Deferred income — current 1,445,174   20,467 1,671,496  
Other current liabilities 922,345   11,817 965,056  
Total current liabilities 17,713,868 34.0 383,659 31,333,408 46.7
CAPITAL LEASE OBLIGATIONS — Noncurrent 3,657,657 7.0 37,729 3,081,304 4.6
ACCRUED RETIREMENT AND PENSION COSTS

 — Noncurrent
1,302,054 2.5 18,410 1,503,550 2.2
DEFERRED TAX LIABILITIES — Noncurrent 1,193,796 2.3 14,198 1,159,559 1.7
DEFERRED INCOME — Noncurrent 560,677 1.1 13,194 1,077,516 1.6
OTHER NONCURRENT LIABILITIES 304,718 0.6 3,688 301,247 0.5
Total Liabilities 24,732,770 47.5 470,878 38,456,584 57.3
COMMITMENTS AND CONTINGENCIES          
           
SHAREHOLDERS' EQUITY:          
Common-stock—authorized, 377,600 shares;

 issued and outstanding, 206,478 shares at

 March 31, 2010 and December 31, 2010
16,833,847 32.3 206,120 16,833,847 25.1
Additional paid-in capital 27,443,600 52.7 335,074 27,365,518 40.7
Accumulated deficit (16,720,092) (32.1) (186,476) (15,229,539) (22.7)
Accumulated other comprehensive income  168,769 0.3 1,447 118,188 0.2      
Treasury stock — 3,934 shares and 3,794 shares held

 by the company at March 31, 2010 and

 December 31, 2010
(406,547) (0.8) (4,801) (392,079) (0.6)
Total Internet Initiative Japan Inc. shareholders' equity 27,319,577 52.4 351,364 28,695,935 42.7
NONCONTROLLING INTERESTS 44,126 0.1 (93) (7,620) (0.0)
Total equity 27,363,703 52.5 351,271 28,688,315 42.7
TOTAL 52,096,473 100.0 822,149 67,144,899 100.0
 
(Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York prevailing as of December 31, 2010.
           
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Income (Unaudited)
(For the nine months ended December 31, 2009 and December 31, 2010)
 
  Nine Months Ended

December 31, 2009
Nine Months Ended

December 31, 2010
  Thousands of

JPY
% of total

revenues
Thousands of

U.S. Dollars
Thousands of

JPY
% of total

revenues
REVENUES:          
Network services:          
Internet Connectivity (corporate use) 10,367,448   127,743 10,432,772  
Internet Connectivity (home use) 5,133,887   60,908 4,974,360  
WAN services 1,906,695   118,796 9,702,110  
Outsourcing services 10,192,433   134,696 11,000,562  
Total 27,600,463   442,143 36,109,804  
Systems integration:          
Systems Construction 6,134,986   84,737 6,920,522  
Systems Operation and Maintenance 14,030,403   157,510 12,863,826  
Total 20,165,389   242,247 19,784,348  
Equipment sales 438,710   6,730 549,624  
ATM operation business 108,217   4,321 352,884  
Total revenues 48,312,779 100.0 695,441 56,796,660 100.0
COST AND EXPENSES:          
Cost of network services 22,878,358   357,590 29,204,323  
Cost of systems integration 14,751,253   182,148 14,876,036  
Cost of equipment sales 379,946   5,796 473,345  
Cost of ATM operation business 683,253   8,612 703,366  
Total cost 38,692,810 80.1 554,146 45,257,070 79.7
Sales and marketing 3,927,736 8.1 58,233 4,755,852 8.4
General and administrative 3,444,078 7.1 50,134 4,094,513 7.2
Research and development 240,924 0.5 3,173 259,158 0.4
Total cost and expenses 46,305,548 95.8 665,686 54,366,593 95.7
OPERATING INCOME 2,007,231 4.2 29,755 2,430,067 4.3
OTHER INCOME (EXPENSE):          
Interest income 17,990   208 16,952  
Interest expense (241,172)   (2,369) (193,504)  
Foreign exchange gains (losses) (3,804)   (358) (29,253)  
Net gains on sales of other investments 20,640   660 53,925  
Losses on write-down of other investments (49,441)   (2,105) (171,863)  
Other—net 31,762   837 68,328  
Other expense — net (224,025) (0.5) (3,127) (255,415) (0.5)
INCOME FROM OPERATIONS BEFORE INCOME

 TAX EXPENSE AND EQUITY IN NET INCOME

 OF EQUITY METHOD INVESTEES
1,783,206 3.7 26,628 2,174,652 3.8
INCOME TAX EXPENSE  1,042,191 2.2 5,626 459,409 0.8
EQUITY IN NET INCOME OF EQUITY METHOD

 INVESTEES
127,164 0.3 1,584 129,359 0.2
NET INCOME 868,179 1.8 22,586 1,844,602 3.2
LESS: NET LOSS ATTRIBUTABLE TO

 NONCONTROLLING INTERESTS
265,114 0.5 1,867 152,486 0.3
NET INCOME ATTRIBUTABLE TO INTERNET

 INITIATIVE JAPAN INC.
1,133,293 2.3 24,453 1,997,088 3.5
     
 
  Nine Months Ended

December 31, 2009
Nine Months Ended

December 31, 2010
NET INCOME PER SHARE        
BASIC WEIGHTED-AVERAGE NUMBER OF

 SHARES (shares)
202,544     202,632
DILUTED WEIGHTED-AVERAGE NUMBER

 OF SHARES (shares)
202,544     202,632
BASIC WEIGHTED-AVERAGE NUMBER OF

 ADS EQUIVALENTS (ADSs)
81,017,600     81,052,800
DILUTED WEIGHTED-AVERAGE NUMBER

 OF ADS EQUIVALENTS (ADSs)
81,017,600     81,052,800
BASIC NET INCOME PER SHARE

 (JPY / U.S. Dollars / JPY)
5,595.29   120.68 9,855.74
DILUTED NET INCOME PER SHARE

 (JPY / U.S. Dollars / JPY)
5,595.29   120.68 9,855.74
BASIC NET INCOME PER ADS

 EQUIVALENT (JPY / U.S. Dollars / JPY)
13.99   0.30 24.64
DILUTED NET INCOME PER ADS

 EQUIVALENT (JPY / U.S. Dollars / JPY)
13.99   0.30 24.64
         
(Note 1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New

 York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York

 prevailing as of December 31, 2010.
(Note2) The above presentation for the nine months ended December 31, 2009 has been changed to conform to the presentation for 

 the nine months ended December 31, 2010. 
 
       
Internet Initiative Japan Inc
Quarterly Consolidated Statements of Cash Flows (Unaudited)
(For the nine months ended December 31, 2009 and December 31, 2010)
 
  Nine Months Ended

December 31, 2009
Nine Months Ended

December 31, 2010
  Thousands of

JPY
Thousands of

U.S. Dollars
Thousands of

JPY
OPERATING ACTIVITIES:      
Net income 868,179 22,586 1,844,602
Adjustments to reconcile net income to net cash

 provided by operating activities:
     
Depreciation and amortization 3,934,464 50,653 4,136,853
Impairment loss on other intangible assets -- 1,224 100,000
Provision for retirement and pension costs,

 less payments
238,421 2,467 201,496
Provision for (reversal of) allowance for doubtful

 accounts and advances
27,074 (271) (22,171)
Loss on disposal of property and equipment 22,750 189 15,402
Net gains on sales of other investments (20,640) (660) (53,925)
Losses on write-down of other investments 49,441 2,104 171,863
Gain on receipt of investment securities -- (221) (18,060)
Foreign exchange losses 16,213 354 28,938
Equity in net income of equity method investees (127,164) (1,584) (129,359)
Deferred income tax expense 790,481 2,960 241,704
Others -- 757 61,777
Changes in operating assets and liabilities net of effects

 from acquisition of business and a company:
     
Decrease in accounts receivable 1,657,103 9,079 741,476
Increase in inventories, prepaid expenses

 and other current and noncurrent assets
(638,113) (8,838) (721,771)
Increase (decrease) in accounts payable (669,050) 48,364 3,949,881
Decrease in income taxes payable (113,578) (1,604) (130,985)
Increase (decrease) in accrued expenses, other

 current and noncurrent liabilities
225,018 (24,863) (2,030,560)
Net cash provided by operating activities 6,260,599 102,696 8,387,161
INVESTING ACTIVITIES:      
Purchase of property and equipment (2,802,777) (37,187) (3,037,071)
Proceeds from sales of property and equipment 178,270 51 4,147
Purchase of available-for-sale securities (29,184) (569) (46,468)
Purchase of other investments (250,016) (1,837) (150,000)
Investment in equity method investees (22,834) -- --
Proceeds from sales of available-for-sale securities 67,592 656 53,605
Proceeds from sales and redemption of other investments 56,824 366 29,901
Acquisition of a newly controlled company -- (112,281) (9,170,000)
Payments of guarantee deposits (60,250) (5,247) (428,529)
Refund of guarantee deposits 64,750 1,511 123,425
Payments for refundable insurance policies (41,866) (210) (17,190)
Refund from insurance policies 39,959 363 29,642
Other 1,498 (252) (20,622)
Net cash used in investing activities (2,798,034) (154,636) (12,629,160)
 
  Nine Months Ended

December 31, 2009
Nine Months Ended

December 31, 2010
  Thousands of

JPY
Thousands of

U.S. Dollars
Thousands of

JPY
FINANCING ACTIVITIES:      
Proceeds from issuance of short-term borrowings

 with initial maturities over three months
5,750,000 15,918 1,300,000
Repayments of short-term borrowings with initial

 maturities over three months
(10,450,000) (3,674) (300,000)
Principal payments under capital leases (2,658,062) (27,056) (2,209,641)
Net increase in short-term borrowings with initial

 maturities less than three months
2,450,000 97,955 8,000,000
Proceeds from issuance of subsidiary stock to

 minority shareholders
150,000 -- --
Dividends paid (405,088) (6,202) (506,535)
Proceeds from sales of treasury stock -- 455 37,126
Net cash provided by (used in) financing activities (5,163,150) 77,396 6,320,950
       
EFFECT OF EXCHANGE RATE CHANGES ON

 CASH AND CASH EQUIVALENTS
(21,037) (532) (43,463)
       
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,721,622) 24,924 2,035,488
CASH AND CASH EQUIVALENTS, BEGINNING OF

 THE PERIOD
10,187,724 107,314 8,764,415
CASH AND CASH EQUIVALENTS, END OF

 THE PERIOD
8,466,102 132,238 10,799,903
 
ADDITIONAL CASH FLOW INFORMATION:
Interest paid 243,173 2,363 192,977
Income tax paid 160,263 4,284 349,843
       
NONCASH INVESTING AND FINANCING ACTIVITIES:      
Acquisition of assets by entering into capital leases 1,562,959 18,396 1,502,423
Facilities purchase liabilities 174,722 2,228 181,945
Acquisition of business and a company:      
Assets acquired -- 160,577 13,114,284
Cash paid -- (112,281) (9,170,000)
Liabilities assumed -- 48,296 3,944,284
       
       
(Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in 

 New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York

 prevailing as of December 31, 2010.
 
Going Concern Assumption (Unaudited)
Nothing to be reported.    
     
     
Segment Information (Unaudited)
Business Segments:
Revenues:
 
  Nine Months Ended December 31, 2009 Nine Months Ended December 31, 2010
  Thousands of JPY Thousands of JPY
Network service and systems integration business 48,524,786 56,776,195
Customers 48,204,562 56,443,776
Intersegment 320,224 332,419
ATM operation business 108,217 352,884
Customers 108,217 352,884
Intersegment -- --
Elimination 320,224 332,419
Consolidated total 48,312,779 56,796,660
Segment profit or loss:    
 
  Nine Months Ended December 31, 2009 Nine Months Ended December 31, 2010
  Thousands of JPY Thousands of JPY
Network service and systems integration business 2,753,891 2,922,142
ATM operation business (730,462) (465,460)
Elimination 16,198 26,615
Consolidated operating income 2,007,231 2,430,067
     
Substantially all revenues are from customers operating in Japan. Geographic information is not presented due to immateriality of

revenue attributable to international operations.
     
Material Changes In Shareholders' Equity (Unaudited)
Nothing to be reported.    

3rd Quarter FY2010 Consolidated Financial Results (3 months)

The following tables are highlight data of 3rd Quarter FY2010 consolidated financial results (unaudited, from October 1, 2010 to December 31, 2010).

Operating Results Summary
 

3Q09


3Q10
YoY %

Change
  JPY millions JPY millions  
Total Revenues: 16,038 22,525 40.4
Network Services 9,297 15,424 65.9
SI 6,542 6,797 3.9
Equipment Sales 129 179 38.5
ATM Operation Business 70 125 77.8
Cost of Revenues: 12,656 17,827 40.9
Network Services 7,567 12,402 63.9
SI 4,702 5,017 6.7
Equipment Sales 111 160 44.8
ATM Operation Business 276 248 (10.7)
SG&A Expenses and R&D 2,541 3,469 36.6
Operating Income 841 1,229 46.1
Income before Income Tax Expense 758 1,169 54.3
Net Income attributable to IIJ 418 1,138 172.3
Connectivity and Outsourcing Services Revenues Breakdown and Cost
 

3Q09


3Q10
YoY %

Change
  JPY millions JPY millions  
Internet Connectivity Service (Corporate Use) 3,480 3,492 0.3
 IP Service 2,308 2,227 (3.5)
 IIJ FiberAccess/F and IIJ DSL/F 740 771 4.2
 IIJ Mobile Service 361 430 19.2
Others 71 64 (9.8)
Internet Connectivity Service (Home Use) 1,724 1,622 (5.9)
Under IIJ Brand 262 245 (6.3)
hi-ho 1,322 1,241 (6.1)
OEM 140 136 (3.2)
WAN Services 643 6,405 896.6
Outsourcing Services 3,450 3,905 13.2
Network Services Revenues 9,297 15,424 65.9

Reconciliation of Non-GAAP Financial Measures

The following table summarizes the reconciliation of adjusted EBITDA to net income in our consolidated statements of income that are prepared in accordance with U.S. GAAP.

Adjusted EBITDA
  3Q09 3Q10
  JPY millions JPY millions
Adjusted EBITDA 2,132 2,747
Depreciation and Amortization 1,291 1,518
Operating Income 841 1,229
Other Income (Expense) (84) (60)
Income Tax Expense 514 179
Equity in Net Income (Loss) of Equity Method Investees 85 97
Net income 328 1,087
Net income attributable to noncontrolling interests 90 51
Net Income attributable to IIJ 418 1,138

The following table summarizes the reconciliation of capital expenditures to the purchase of property and equipment in our consolidated statements of cash flows that are prepared and presented in accordance with U.S. GAAP.

CAPEX
  3Q09 3Q10
  JPY millions JPY millions
CAPEX, including capital leases 1,752 1,515
Acquisition of Assets by Entering into

Capital Leases
899 641
Purchase of Property and Equipment 853 874
           
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Income (Unaudited)
(Three Months ended December 31, 2009 and December 31, 2010)
 
  Three Months Ended

December 31, 2009
Three Months Ended

December 31, 2010
  Thousands of

JPY
% of total

revenues
Thousands of

U.S. Dollars
Thousands of

JPY
% of total

revenues
REVENUES:          
Network services:          
Internet Connectivity (corporate use) 3,480,241   42,755 3,491,817  
Internet Connectivity (home use) 1,723,836   19,867 1,622,533  
WAN services 642,668   78,422 6,404,689  
Outsourcing services 3,450,020   47,812 3,904,810  
Total 9,296,765   188,856 15,423,849  
Systems integration:          
Systems Construction 1,986,972   29,653 2,421,784  
Systems Operation and Maintenance 4,554,855   53,576 4,375,565  
Total 6,541,827   83,229 6,797,349  
Equipment sales 129,124   2,190 178,874  
ATM operation business 70,039   1,525 124,508  
Total revenues 16,037,755 100.0 275,800 22,524,580 100.0
COST AND EXPENSES:          
Cost of network services 7,567,089   151,852 12,401,754  
Cost of systems integration 4,701,783   61,434 5,017,343  
Cost of equipment sales 110,631   1,961 160,184  
Cost of ATM operation business 276,736   3,028 247,248  
Total cost 12,656,239 78.9 218,275 17,826,529 79.1
Sales and marketing 1,334,099 8.3 22,932 1,872,826 8.3
General and administrative 1,128,380 7.1 18,253 1,490,717 6.6
Research and development 77,889 0.5 1,292 105,532 0.5
Total cost and expenses 15,196,607 94.8 260,752 21,295,604 94.5
OPERATING INCOME 841,148 5.2 15,048 1,228,976 5.5
OTHER INCOME (EXPENSE):          
Interest income 4,904   55 4,521  
Interest expense (72,983)   (920) (75,156)  
Foreign exchange losses (8,423)   (145) (11,805)  
Net gains on sales of other investments 9,338   262 21,422  
Losses on write-down of other investments (18,269)   (21) (1,772)  
Other—net 1,878   31 2,502  
Other expense — net (83,555) (0.5) (738) (60,288) (0.3)
INCOME FROM OPERATIONS BEFORE INCOME

 TAX EXPENSE AND EQUITY IN NET INCOME

 IN EQUITY METHOD INVESTEES
757,593 4.7 14,310 1,168,688 5.2
INCOME TAX EXPENSE 514,382 3.2 2,194 179,199 0.8
EQUITY IN NET INCOME (LOSS) OF EQUITY

 METHOD INVESTEES
85,017 0.5 1,194 97,538 0.4
NET INCOME 328,228 2.0 13,310 1,087,027 4.8
LESS: NET LOSS ATTRIBUTABLE TO

 NONCONTROLLING INTERESTS
89,678 0.6 622 50,784 0.3
NET INCOME ATTRIBUTABLE TO

 INTERNET INITIATIVE JAPAN INC.
417,906 2.6 13,932 1,137,811 5.1
 
  Three Months Ended

December 31, 2009
Three Months Ended

December 31, 2010
NET INCOME PER SHARE      
BASIC WEIGHTED-AVERAGE NUMBER OF

 SHARES (shares)
202,544   202,684
DILUTED WEIGHTED-AVERAGE NUMBER

 OF SHARES (shares)
202,544   202,684
BASIC WEIGHTED-AVERAGE NUMBER OF

 ADS EQUIVALENTS (ADSs)
81,017,600   81,073,600
DILUTED WEIGHTED-AVERAGE NUMBER

 OF ADS EQUIVALENTS (ADSs)
81,017,600   81,073,600
BASIC NET INCOME PER SHARE

 (JPY / U.S. Dollars / JPY)
2,063.29 68.74 5,613.72
DILUTED NET INCOME PER SHARE

 (JPY / U.S. Dollars / JPY)
2,063.29 68.74 5,613.72
BASIC NET INCOME PER ADS

 EQUIVALENT (JPY / U.S. Dollars / JPY)
5.16 0.17 14.03
DILUTED NET INCOME PER ADS

 EQUIVALENT (JPY / U.S. Dollars / JPY)
5.16 0.17 14.03
       
(Note 1) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in New

 York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York

 prevailing as of December 31, 2010.
(Note2) The above presentation for the three months ended December 31, 2009 has been changed to conform to the presentation for 

 the three months ended December 31, 2010. 
       
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Cash Flows (Unaudited)
(Three Months ended December 31, 2009 and December 31, 2010)
 
  Three Months Ended

December 31, 2009
Three Months Ended

December 31, 2010
  Thousands of

JPY
Thousands of

U.S. Dollars
Thousands of

JPY
OPERATING ACTIVITIES:      
Net income 328,228 13,310 1,087,027
Adjustments to reconcile net income to net cash

 provided by operating activities:
     
Depreciation and amortization 1,290,948 18,583 1,517,730
Provision for retirement and pension

 costs, less payments
92,052 940 76,791
Provision for (reversal of) allowance for doubtful 

 accounts and advances
27,720 (90) (7,328)
Loss on disposal of property and equipment 4,499 121 9,889
Net gains on sales of other investments (9,338) (262) (21,422)
Losses on write-down of other investments 18,269 22 1,772
Foreign exchange losses (gains) (1,999) 37 3,043
Equity in net income of equity method investees (85,017) (1,194) (97,538)
Deferred income tax expense 417,616 955 78,006
Others -- 457 37,319
Changes in operating assets and liabilities net of effects

 from acquisition of business and a company:
     
Decrease in accounts receivable 121,875 18,317 1,495,960
Increase in inventories, prepaid expenses

 and other current and noncurrent assets
(401,483) (9,659) (788,859)
Increase (decrease) in accounts payable (154,017) 50,534 4,127,102
Increase (decrease) in income taxes payable (69,577) 603 49,229
Decrease in accrued expenses, other current

 and noncurrent liabilities -net
(111,391) (52,530) (4,290,134)
Net cash provided by operating activities 1,468,385 40,144 3,278,587
INVESTING ACTIVITIES:      
Purchase of property and equipment (853,726) (10,694) (873,339)
Proceeds from sales of property and equipment 178,270 -- --
Purchase of available-for-sale securities (12,817) -- --
Purchase of other investments (50,000) (612) (50,000)
Proceeds from sales of available-for-sale securities 34,800 314 25,674
Proceeds from sales and redemption of other investments 9,693 121 9,881
Payments of guarantee deposits (15,607) (4) (315)
Refund of guarantee deposits 28,188 10 808
Payments for refundable insurance policies (12,936) (61) (5,015)
Other 1,179 -- --
Net cash used in investing activities (692,956) (10,926) (892,306)
 
  Three Months Ended

December 31, 2009
Three Months Ended

December 31, 2010
  Thousands of

JPY
Thousands of

U.S. Dollars
Thousands of

JPY
FINANCING ACTIVITIES:      
Proceeds from issuance of short-term borrowings

 with initial maturities over three months
650,000 11,632 950,000
Repayments of short-term borrowings with initial

 maturities over three months
(5,100,000) -- --
Principal payments under capital leases (947,971) (8,932) (729,507)
Net Increase (decrease) in short-term borrowings

 with initial maturities less than three months
2,350,000 (11,632) (950,000)
Proceeds from issuance of subsidiary stock to

 minority shareholders
150,000 -- --
Dividends paid (202,544) (3,102) (253,355)
Net cash used in financing activities (3,100,515) (12,034) (982,862)
       
EFFECT OF EXCHANGE RATE CHANGES ON

 CASH AND CASH EQUIVALENTS
2,171 (141) (11,547)
       
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,322,915) 17,043 1,391,872
CASH AND CASH EQUIVALENTS, BEGINNING OF

 THE PERIOD
10,789,017 115,195 9,408,031
CASH AND CASH EQUIVALENTS, END OF

 THE PERIOD
8,466,102 132,238 10,799,903
       
(Note) The U.S. dollar amounts represent translations of yen amounts at the rate of JPY 81.67 which was the noon buying rate in 

 New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of

 New York prevailing as of December 31, 2010.

Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the nine months of Fiscal Year Ending March 31, 2011(from April 1 to December 31, 2010) in the form defined by the Tokyo Stock Exchange.

Consolidated Financial Results for the Nine Months Ended December 31, 2010

[Under accounting principles generally accepted in the United States ("U.S. GAAP")]

                                                February 10, 2011
Company name: Internet Initiative Japan Inc.    Exchange listed: Tokyo Stock Exchange First Section
Stock code number: 3774  URL: http://www.iij.ad.jp/
Representative:  Koichi Suzuki, President and Representative Director
Contact: Akihisa Watai, Managing Director and CFO TEL: (03) 5259-6500
Schedule date for filing of quarterly report:  scheduled on February 14, 2011
Supplemental material on quarterly results: Yes Dividends payment day: -
Presentation on quarterly results: Yes (for institutional investors and analysts)

                                       

                                                                                                                                                                                          (Amounts of less than JPY one million are rounded)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2010

(April 1, 2010 to December 31, 2010)
(1) Consolidated Results of Operations                                                                                                                                                                          (% shown is YoY change)
 

Total Revenues


Operating Income
Income before Income

Tax Expense
Net Income

attributable to IIJ
  JPY millions JPY millions JPY millions JPY millions
Nine months ended December 31, 2010 56,797 17.6 2,430 21.1 2,175 22.0 1,997 76.2
Nine months ended December 31, 2009 48,313 (4.9) 2,007 8.8 1,783 43.6 1,133 219.8
  Basic Net Income

attributable to IIJ per Share
Diluted Net Income

attributable to IIJ per Share
  JPY JPY
Nine months ended December 31, 2010 9,855.74 9,855.74
Nine months ended December 31, 2009 5,595.29 5,595.29
(2) Consolidated Financial Position
 



Total Assets




Total Equity




Shareholders' Equity
Shareholders' Equity

as a percentage

of Total Assets


Shareholders' Equity

per share
  JPY millions JPY millions JPY millions % JPY
December 31, 2010 67,145 28,688 28,696 42.7 141,579.68
March 31, 2010 52,096 27,364 27,320 52.4 134,882.18
 
2. Dividends
  Dividend per Shares
  1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total
  Yen Yen Yen Yen Yen
Fiscal year ended March 31, 2010 -- 1,000.00 -- 1,250.00 2,250.00
Fiscal year ending March 31, 2011 -- 1,250.00 --    
Fiscal year ending March 31, 2011 (Target)       1,500.00 2,750.00
Changes in dividends forecasts during the three months ended December 31, 2010: Yes

                                      

3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2011
(April 1, 2010 through March 31, 2011)             (% shown is YoY change)
  Total Revenues Operating Income Income before Income

Tax Expense (Benefit)
Net Income

Attributable to IIJ
Basic Net Income

attributable to IIJ per Share
  JPY millions % JPY millions % JPY millions % JPY millions % JPY
Fiscal year ending March 31, 2011 84,500 24.3 4,800 40.7 4,100 43.4 3,000 34.3 14,801.37
Changes in earnings forecasts during or after the three months ended December 31, 2010: None
4. Others
 
(1) Change in significant subsidiaries for the three months ended December 31, 2010
 (Change in significant subsidiaries for the three months ended December 31, 2010 which resulted in changes in scope of consolidation): No
Newly Consolidated ( -- ) Excluded: ( -- )
 
(2) Application of simplified or exceptional accounting: None
 (Application of simplified or exceptional accounting for quarterly consolidated financial statements):
 
(3) Changes in Significant Accounting and Reporting Policies for Consolidated Financial Statements
 
  1) Changes duet to the revision of accounting standards: No
  2) Others: Yes
 
(4) Number of Shares Outstanding (Shares of Common Stock)
 
1) The number of shares outstanding (inclusive of treasury stock):
 
As of December 31, 2010:  206,478 shares
As of March 31, 2010:   206,478 shares
 
2) The number of treasury stock:
 
As of December 31, 2010:  3,794 shares
As of March 31, 2010:  3,934 shares
 
3) The weighted average number of shares outstanding:
 
For the nine months ended December 31, 2010:  202,632 shares
For the nine months ended December 31, 2009:  202,544 shares
CONTACT: Internet Initiative Japan Inc.
         YUKO KAZAMA
         Investor Relations Office
         E-mail: ir@iij.ad.jp
         Tel: +81-3-5259-6500
         URL: http://www.iij.ad.jp/en/IR

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