Digital Information Technologies : Summary of Business Results for the Fiscal Year Ended June 2021 (Consolidated)

Summary of Business Results for the Fiscal Year Ended June 2021

[Japan GAAP] (Consolidated)

August 12, 2021

Company

Digital Information Technologies Corporation

Listed on the TSE

Stock Code

3916

URL:http://www.ditgroup.jp/

Representative

Satoshi Ichikawa, President and Representative Director

Contact

Ken Mochizuki, Director, Executive Officer, General Manager

T E L: [phone]

of Corporate Planning Division

Expected date of annual shareholders' meeting: September 28, 2021 Expected starting date of dividend payment: September 29, 2021

Expected date of filing of annual securities report: September 29, 2021

Preparation of supplementary financial document: Yes

Results briefing: Yes (for institutional investors and analysts)

（Rounded down to million yen）

1. Consolidated business results for the fiscal year ended June 2021

(July 1, 2020 through June 30, 2021)

(1) Consolidated results of operations

(% change from the previous corresponding period)

Net sales

Operating income

Ordinary income

Net income attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Year ended Jun. 2021

14,444

7.0

1,722

27.3

1,730

27.4

1,196

22.3

Year ended Jun. 2020

13,495

9.2

1,352

23.5

1,357

22.7

978

32.6

(Note) Comprehensive income:

Year ended June 2021: 1,189 million yen (20.2%)

Year ended June 2020: 989 million yen (34.5%)

	Net income	Diluted net income	Return on	Ratio of ordinary	Ratio of operating
	income to total
	per share	per share	equity	income to net sales
	assets
	Yen	Yen	%	%	%
Year ended Jun. 2021	78.47	-	29.2	29.4	11.9
Year ended Jun. 2020	64.18	-	29.6	27.1	10.0

(2) Consolidated financial position

		Total assets	Net assets	Shareholders' equity	Net assets
		ratio	per share
		Million yen	Million yen	%	Yen
As of Jun. 2021		6,388	4,526	70.9	296.87
As of Jun. 2020		5,364	3,660	68.2	240.04
(Reference) Shareholders' equity:
As of June 2021: 4,526 million yen
As of June 2020: 3,660 million yen

(3) Consolidated results of cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at the end of period
	Million yen	Million yen	Million yen	Million yen
Year ended Jun. 2021	1,260	5	-334	3,326
Year ended Jun. 2020	927	-80	-287	2,393

2. Dividends

		Annual dividend				Total	Dividend		Rate of total
						dividend to
	End of	End of	End of					dividend	payout ratio
		Year-end	Total			net assets
			(Total)	(Consolidated)
	1Q	2Q	3Q				(Consolidated)
	Yen	Yen	Yen		Yen	Yen		Million yen	%	%
Year ended Jun. 2020	-	9.00	-		11.00	20.00	307	31.4	9.2
Year ended Jun. 2021	-	10.00	-		14.00	24.00	368	30.8	8.9
Year ending Jun. 2022	-	15.00	-		15.00	30.00			35.0
(forecast)

(% change from the previous corresponding period)

3．Forecast of consolidated business results for the fiscal year ending June 2022 (July 1, 2021 through June 30, 2022)

	Net sales		Operating income		Ordinary income	Net income		Net income per
			attributable to owners
			share
							of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Year ending Jun.	15,600	8.0	1,900	10.3	1,900	9.8	1,318	10.2	86.44
2022

*Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of consolidation): None

1. Changes in rules, procedures and indication methods of accounting procedures
   ① Changes in accounting policies associated with revision of accounting standards: ②Changes in accounting policies other than ①
   ③Changes in accounting estimates
   ④Restatement
2. Shares outstanding (common stock)

• Number of shares outstanding at the end of period (treasury stock included)

As of June 2021	15,501,820 shares
As of June 2020	15,501,820 shares

• Treasury stock at the end of period:

As of June 2021	253,489 shares
As of June 2020	253,459 shares

• Average number of stock during period (cumulative period)

Year ended June 2021	15,248,356 shares
Year ended June 2020	15,248,376 shares

• None
• None
• None
• None

(Note) The number of treasury stock to be deducted from the calculation of the number of treasury stock at the end of the period and the number of treasury stock during the period includes the Company's shares held by Asset Management Services Trust Bank, Ltd. (Trust E-Account) as trust assets under the Employees' Benefit Trust (J-ESOP) Plan. Asset Management Services Trust Bank, Ltd. merged with JTC Holdings, Ltd. and Japan Trustee Services Bank, Ltd. on July 27, 2020, and changed its trade name to Custody Bank of Japan, Ltd.

(Reference) Summary of non-consolidated business results

1. Non-consolidated business results for the fiscal year ended June 2021 (July 1, 2020 through June 30, 2021)

(1) Non-consolidated results of operations			(% change from the previous corresponding period)
	Net sales			Operating income	Ordinary income	Net income
	Million yen	%		Million yen	%		Million yen	%	Million yen	%
Year ended Jun. 2021	13,781	8.2	1,653	29.7		1,658	29.8	1,145	25.1
Year ended Jun. 2020	12,736	8.9	1,275	21.6		1,277	20.8	915	29.8
	Net income
	per share
		Yen
Year ended Jun. 2021		75.12
Year ended Jun. 2020		60.06
(2) Non-consolidated financial position
	Total assets			Net assets		Shareholders' equity	Net assets per
				ratio		share
	Million yen			Million yen			%		Yen
As of Jun. 2021		5,912			4,145			70.1	271.88
As of Jun. 2020		4,930			3,332			67.6	218.53

(Reference) Shareholders' equity:

As of June 2021: 4,145 million yen

As of June 2020: 3,332 million yen

*Financial summary is not subject to auditing procedures by certified public accountants or auditing firms.

*Explanation regarding appropriate use of business forecasts and other special instructions

Forecasts regarding future performance in this material are based on information currently available to the Company and certain assumptions that the company deems to be reasonable at the time this report was prepared. The Company does not make promises about the achievements. Actual results may differ significantly from the forecasts due to various factors.

○ Contents

1. Overview of Business Results………………………………………………………………………………………………...	2
(1) Business Results for the Subject Period…………………………………………………………………………………..	2
(2) Financial Position for the Subject Period…………………………………………………………………………………	4
(3) Cash Flows for the Subject Period………………………………………………………………………………………..	4
(4) Future Outlook……………………………………………………………………………………………………………	5
(5) Basic Policy on Profit Distribution and Dividends for the Subject and Next Periods……………………………………	6
2. Overview of the Corporate Group……………………………………………………………………………………………	7
3. Basic Policy on Selection of Accounting Standards………………………………………………………………………….	8
4. Consolidated Financial Statements and Major Notes…………………………………………………………………………	9

1. Consolidated Balance Sheets……………………………………………………………………………………………... 9
2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income………………………….. 11 Consolidated Statements of Income………………………………………………………………………………….. 11

Consolidated Statements of Comprehensive Income…………………………………………………………………	12
(3) Consolidated Statements of Changes in Shareholders' Equity……………………………………………………………	13
(4) Consolidated Statements of Cash Flows………………………………………………………………………………….. 15
(5) Notes to Consolidated Financial Statements………………………………………………………………………………	16
(Notes Regarding Going-Concern Assumptions)……………………………………………………………………….. 16
(Consolidated Statements of Cash Flows)………………………………………………………………………………. 16
(Segment Information)…………………………………………………………………………………………………...	16
(Per Share Information)………………………………………………………………………………………………….	18
(Important Subsequent Events)………………………………………………………………………………………….	18

1

1. Overview of Business Results

(1) Business Results for the Subject Period

During the subject period (July 1, 2020 to June 30, 2021), the business environment remained severe due to COVID-19 both in Japan and overseas. In Japan, the spread of the third and fourth waves of COVID-19 led to the intermittent declaration of the State of Emergency and the spread of damage in many industries. Overseas, while there were signs of recovery in economic activity in developed countries, where vaccinations started earlier, the overall outlook remained uncertain, with many countries still experiencing a spread of infections, such as expansion of new variant.

In the information service industry, to which our company belongs, it has become difficult to avoid the impact of the infection, although the degree of impact varies depending on the business portfolio including customer composition and other aspects. In addition, as working environment has been changing such as many companies introducing remote work and other factors, more efficient way of working is required.

Even in this environment, IT investment by domestic companies continued to grow, although it varied depending on the industry, due to system renewal, cloud computing, and progress in digital transformation (DX), which had been promoted even before the COVID-19 crisis.

For our group as well, the progress in fields such as Artificial Intelligence (AI), Internet of Things (IoT), and Robotic Process Automation (RPA, the automation and efficiency enhancement of tasks using software robots) have led to increased opportunities to enter new businesses and the expansion of business scope.

Under the COVID-19 crisis, the need for strengthening cyber security measures and improving the work efficiency further increased, and this provided a tailwind for our group, which has effective solutions for these issues.

Under such conditions, the DIT Group formulated the following five business strategies, and continues to take proactive measures to achieve them.

• Renovation (Strengthen and stabilize business foundation through reform of existing businesses)
• Innovation (Create new value centered on in-house products)
• Shift from competition to collaboration (Expand business through cooperative efforts)
• Shift from development to services (Expand business from service-oriented perspective)
• Secure and develop human assets (Hire and train personnel)

During FY6/21, the final year of the current medium-term management plan, DIT has promoted our business with focusing on the two axises: "stabilize the business foundation" and "strengthen growth factors." With regard to "stabilize the business foundation," both the Business Solutions Unit and the Embedded Solutions Unit showed strong growth by accurately responding to market changes, which offset the decline in the system sales business due to the loss of special demand. In terms of "strengthen growth factors", DIT achieved steady growth as a result of ongoing efforts to enhance product appeal and strengthen sales for WebARGUS¹, DIT's in-house products built on proprietary technology, and the Excel process innovation platform xoBlos².

With respect to Triple 10(*), which was a medium-term management target by FY6/21, we achieved the target of operating income margin of 10% one year ahead of schedule in FY6/20. We have continued to promote management that emphasizes the operating income margin.

*Triple 10

• Net sales of 10.0 billion yen in FY6/17 (already achieved)
• Operating income of 1.0 billion yen in FY6/19 (already achieved)
• Operating profit margin of 10% in FY6/21 (already achieved in FY6/20)

In addition, in the current fiscal year, operating income margin increased by 1.9 percentage points to 11.9%, due to the combination of higher profit margins resulting from qualitative improvements in business operations and the reduction of cost of goods manufactured (mainly commuting expenses) and SG&A expenses (mainly transportation, entertainment and meeting expenses) due to COVID-19.

As a result, net sales in the subject fiscal year amounted to 14,444,325 thousand yen (up 7.0% year on year), with operating income of 1,722,241 thousand yen (up 27.3%), ordinary income of 1,730,182 thousand yen (up 27.4%), and net income attributable to owners of parent of 1,196,494 thousand yen (up 22.3%).

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