Internet Initiative Japan

www.iij.ad.jp
Tokyo, Japan

Internet Initiative Japan Inc. is a telecommunications company based in Tokyo, Japan. Established on December 3, 1992, it employs 1,715 people and has a capitalization of ¥14,295,000,000. They provide internet connectivity and network-related services, network systems construction, operation and maintenance, development and sales of telecommunication equipment. They are an IPv6 Tunnel Broker providing IP tunneling between the U.S. and Japan. Wikipedia.

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SAN FRANCISCO, CA--(Marketwired - May 4, 2017) - The Latin American and Caribbean Network Operators Group (LACNOG) has chartered a new working group to serve as a regional voice in the global anti-abuse community. The new LAC Anti-Abuse Working Group (LAC-AAWG) will convene experts from regional network operator communities and the global Messaging, Malware and Mobile Anti-Abuse Working Group to encourage industry dialogue, develop recommendations and advance best practices for safeguarding online activities. LAC-AAWG will hold its first face-to-face meeting at LACNIC 27 in Foz do Iguaçu, Brazil, May 22-26, where it is partnering with M3AAWG to organize trusted, open-discussion sessions on anti-abuse issues and best practices. These sessions are being coordinated by LAC-AAWG founding chairs Lucimara Desiderá, security analyst at CERT.br (Brazilian National Computer Emergency Response Team) which is maintained by the Brazilian Network Information Center (NIC.br), and Christian O'Flaherty, ISOC senior development manager for Latin America and the Caribbean. "LAC-AAWG was created to be a place where regional network operators and anti-abuse experts can share their concerns about current and emerging online threats, discuss processes validated by their peers to reduce abuse, and develop best practices that address both local and global issues. The concept is that local involvement is essential to consider our specificities and global engagement is necessary to stay abreast of the latest threats traversing the internet and to help develop operations that will mitigate them," Desiderá said. Since its founding in 2004, M3AAWG has emphasized the importance of global cooperation within the online community in fighting spam, phishing, fraud and other cybercrime and has worked to provide a trusted venue where security and policy experts can share information. Participants from 26 countries attended the four-day M3AAWG 39th General Meeting in San Francisco in February and its annual European meeting will be June 12-15 in Lisbon, Portugal. Last year, M3AAWG began to explore means to improve collaboration with the LAC operator communities. As a result, LACNIC (the LAC Network Information Center) and M3AAWG formed a partnership to share expertise and information that could reduce regional and global abuse. The development of LAC-AAWG as an independent working group within LACNOG is one outcome of those efforts. The partnership also has paved the way for M3AAWG members to provide training on hosting anti-abuse operations and to work with the regional community on anti-abuse best practices. M3AAWG Chairman Severin Walker said, "Because cyber criminals ignore borders and only care about scamming the targeted victims, the reality is that we all face similar threats and malware. There is no question that online security and abuse are both local and international issues. We applaud LACNOG, and appreciate the efforts of LACNIC, in creating this new forum as a model of local participation and global engagement. It is a resourceful approach that could be effectively applied in other regions." About the Messaging, Malware and Mobile Anti-Abuse Working Group (M3AAWG) The Messaging, Malware and Mobile Anti-Abuse Working Group (M3AAWG) is where the industry comes together to work against bots, malware, spam, viruses, denial-of-service attacks and other online exploitation. M3AAWG (www.m3aawg.org) members represent more than one billion mailboxes from some of the largest network operators worldwide. It leverages the depth and experience of its global membership to tackle abuse on existing networks and new emerging services through technology, collaboration and public policy. It also works to educate global policy makers on the technical and operational issues related to online abuse and messaging. Headquartered in San Francisco, Calif., M3AAWG is driven by market needs and supported by major network operators and messaging providers. M3AAWG Board of Directors: AT&T; CenturyLink; Cloudmark, Inc.; Comcast; dotmailer; Endurance International Group; Facebook; Google; LinkedIn; Mailchimp; Microsoft Corp.; Orange; Rackspace; Return Path; SendGrid, Inc.; Vade Secure; and Yahoo Inc. M3AAWG Full Members: 1&1 Internet AG; Adobe Systems Inc.; Agora, Inc.; AOL; Campaign Monitor Pty.; Cisco Systems, Inc.; CloudFlare; Dyn; Exact Target, Inc.; IBM; iContact; Intel Security; Internet Initiative Japan; Liberty Global; Listrak; Litmus; Mimecast; Nominum, Inc.; Oracle Marketing Cloud; OVH; PayPal; Proofpoint; Spamhaus; Sparkpost; Sprint; Symantec; and USAA. A complete member list is available at http://www.m3aawg.org/about/roster.


SAN FRANCISCO, Kalifornien, USA--(Marketwired - May 5, 2017) - Die Latin American and Caribbean Network Operators Group (LACNOG) hat eine neue Arbeitsgruppe gegründet, die als regionale Stimme in der weltweiten Community zur Missbrauchsbekämpfung fungieren wird. Die neue LAC Anti-Abuse Working Group (LAC-AAWG) wird Experten aus den Communitys der regionalen Netzbetreiber und der global agierenden Messaging, Malware and Mobile Anti-Abuse Working Group zusammenrufen, um den Branchendialog zu fördern, Empfehlungen zu erarbeiten und die Verbreitung bewährter Vorgehensweisen zu unterstützen. LAC-AAWG wird das erste persönliche Treffen vom 22. bis zum 26. Mai in LACNIC 27 in Foz do Iguaçu, Brasilien, abhalten Bei diesem Treffen wird die Arbeitsgruppe gemeinsam mit M3AAWG in einem vertrauenswürdigen Rahmen offene Gesprächsrunden über Probleme und bewährte Vorgehensweisen in der Missbrauchsbekämpfung organisieren. Koordiniert werden diese Gesprächsrunden von den LAC-AAWG-Gründungsvorständen Lucimara Desiderá, Wertpapieranalystin bei CERT.br (brasilianische Computer Emergency Response Team), das vom brasilianischen Network Information Center (NIC.br) unterhalten wird, und Christian O'Flaherty, ISOC Senior Development Manager für Lateinamerika und die Karibik. „LAC-AAWG wurde als ein Ort geschaffen, an dem regionale Netzbetreiber und Experten im Bereich Missbrauchsbekämpfung sich über ihre Befürchtungen in Bezug auf aktuelle und aufkommende Online-Bedrohungen austauschen, von ihren Kollegen validierte Verfahren zur Eindämmung von Missbrauch diskutieren und bewährte Vorgehensweisen entwickeln können, die sich sowohl lokalen als auch globalen Problemen widmen. Die zugrunde liegende Idee ist, dass lokale Mitwirkung unerlässlich ist, um unsere regionalen Eigenheiten zu berücksichtigen, und globales Engagement ist erforderlich, um über die neuesten, im Internet kursierenden Bedrohungen auf dem Laufenden zu bleiben und die Entwicklung von Aktionen zu ihrer Abwehr zu unterstützen“, so Desiderá. Seit ihrer Gründung im Jahr 2004 hat die M3AAWG betont, wie wichtig eine globale Zusammenarbeit innerhalb der Online-Community im Kampf gegen Spam, Phishing, Betrug und sonstige Cyberkriminalität ist, und hat daran gearbeitet, einen sicheren Veranstaltungsort bereitzustellen, wo Sicherheits- und Richtlinienexperten Informationen austauschen können. Teilnehmer aus 26 Ländern nahmen im Februar an dem viertägigen 39. General Meeting der M3AAWG in San Francisco teil, und vom 12. bis zum 15. Juni wird in Lissabon, Portugal, ihr jährliches europäisches Treffen stattfinden. Die Messaging, Malware and Mobile Anti-Abuse Working Group (M3AAWG) ist die Schnittstelle, an der die Branche zusammenkommt, um gemeinsam gegen Bots, Malware, Spam, Viren, Denial-of-Service-Attacken und andere Online-Angriffe vorzugehen. Die Mitglieder der M3AAWG (www.m3aawg.org) repräsentieren über eine Milliarde Mailboxen einiger der größten Netzbetreiber weltweit. Dabei nutzt die Vereinigung die Fachkenntnis und Erfahrung ihrer weltweiten Mitglieder, um mithilfe von Technologie, Zusammenarbeit und Ordre public gegen den Missbrauch bereits bestehender Netzwerke und neuer Dienste vorzugehen. Sie informiert darüber hinaus Entscheidungsträger weltweit über technische und operative Probleme im Zusammenhang mit Online-Missbrauch und Messaging. Die M3AAWG hat ihren Hauptsitz in San Francisco im US-Bundesstaat Kalifornien und wird durch die Anforderungen des Marktes gelenkt sowie von den führenden Netzwerkbetreibern und Anbietern von Messaging-Services unterstützt. M3AAWG-Vorstand: AT&T, CenturyLink; Cloudmark, Inc.; Comcast; dotmailer; Endurance International Group; Facebook; Google; LinkedIn; Mailchimp; Microsoft Corp.; Orange; Rackspace; Return Path; SendGrid, Inc.; Vade Secure und Yahoo Inc. M3AAWG-Vollmitglieder: 1&1 Internet AG; Adobe Systems Inc.; Agora, Inc.; AOL; Campaign Monitor Pty.; Cisco Systems, Inc.; CloudFlare; Dyn; Exact Target, Inc.; IBM; iContact; Intel Security; Internet Initiative Japan; Liberty Global; Listrak; Litmus; Mimecast; Nominum, Inc.; Oracle Marketing Cloud; OVH; PayPal; Proofpoint; Spamhaus; Sparkpost; Sprint; Symantec und USAA.


TOKYO, May 15, 2017 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (NASDAQ:IIJI) (TSE:3774) today announced its full year (“FY2016”) and fourth quarter (“4Q16”) consolidated financial results for the fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017).1 Overview of FY2016 Financial Results and Business Outlook “In FY2016, a number of business developments, ranging from cloud, mobile, security and CDN2 carried out in recent years, led to make our business growth fundamentals stronger. Our total revenue hit strong annual growth rate of 12.2%,” said Eijiro Katsu, President and COO of IIJ. “For cloud, more and more large-scale core enterprise systems of Japanese blue-chips are starting to make visible accumulation. Such projects include service platform for an online-ticketing company, unified business operation platform for a global manufacturing company’s group and local governments’ “Information Security Cloud.” We’ve been also continuously expanding service functions for “IIJ GIO Infrastructure P2 (“GIO P2”)”3 to meet complex cloud demands of Japanese blue-chips. Our FY2016 cloud revenue was JPY15.7 billion and we expect it to increase to JPY18.0 billion in FY2017 with these undergoing transactions and further order accumulation.” “For mobile, while the competition has been severe, we continue to accumulate subscription mainly through sales partners and MVNE.4 As of March 31, 2017, our total mobile subscription grew to 1.86 million, annual increase of 628 thousand subscriptions. Our mobile revenue also grew by 71.3% year over year to JPY26.7 billion. Our market share among MVNOs on net addition-base in Japan was approx. 24%.5 We’re very excited about becoming Japan’s first full-MVNO service provider6 as it will enable us to develop our own embedded SIMs which is a critical element for IoT7 and preparing service cut-over in 4Q17.” “As for security, we continue to see strong demands especially for Sandbox and DDoS protection services which led our FY2016 security services revenues to grow by 10.9% year over year. In addition to the existing security services, we launched Security Operation Center services by leveraging our massive network log data and an ability to analyze them. For CDN, we established a joint venture8 with 15 major Japanese broadcasting companies to provide reliable CDN platform. As we expect to be their primary IT provider, we should benefit from their requirement for significantly wide bandwidth.” “In terms of financial results, FY2016 operating income decreased year over year due to the overall cost increase along with the continuous business investments and a deterioration of SI gross margin.9 However in the latter half, the revenue and income accumulated accordingly with our revised plan announced in November 2016 and SI profitability recovered in 4Q16 by mainly improving the productivity of outsourcing personnel and with the absence of large-scale unprofitable projects.” “For FY2017, we target the total revenue of JPY176.0 billion, 11.5% annual increase, with continuous expansion of monthly recurring revenue services including mobile, many flagship GIO P2 projects, security and more. With the accumulation of recurring network services revenues and improvement of SI profitability should absorb increasing costs; thus FY2017 operating income should turn to increase to JPY6.5 billion, up by 26.6% year over year,” continued Katsu. “IT systems requiring IoT and BigData should significantly increase in the middle-to-long term. We believe that the value IIJ can offer as a total platform provider covering, network, cloud, mobile, security, and SI should become significant,” concluded Koichi Suzuki, Founder, Chairman and CEO of IIJ. 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. 2 CDN (Contents Distribution Network) is an optimized network to distribute contents such as pictures and videos over Internet. 3 “IIJ GIO Infrastructure P2” was launched in November 2015 as a renewed service platform to further meet Japanese enterprises IT needs are certainly contributing to promote cloud shift. The services offer public and private cloud resources seamlessly and provide closed connectivity between our cloud services to Amazon’s AWS and Microsoft Azure services to meet hybrid and multi cloud systems needs. 4 MVNE (Mobile Virtual Network Enabler) provides business and service infrastructure to MVNOs. 5 Out of 5.9 hundred thousand total net addition for all MVNOs subscription from October to December 2016 in Japan, our net addition was 1.4 hundred thousand, making approx. 24% shares. These figures are according to the report published by the Ministry of Internal Affairs and Communications in March 2017. 6 For details, please refer to our press release titled “IIJ Begins to Engage in a Full MVNO for Enhanced MVNO Business” announced in August 2016. 7 IoT (Internet of Things) enables not only physical objects but also any “things” connected to network to exchange information automatically. 8 JOCDN Inc. which is our equity method investee with a 20% ownership. 9 As we disclosed in our financial target revision for FY2016 (announced in November 2016), low productivity of systems engineers in 1H16 and some unprofitable large-scale projects led to a sharp decline in systems integration profitability. We have omitted segment analysis because most of our revenues are dominated by network services and systems integration (SI) business. Total revenues were JPY157,789 million, up 12.2% YoY (JPY140,648 million for FY2015). Network services revenue was JPY92,996 million, up 17.3% YoY (JPY79,296 million for FY2015). Revenues for Internet connectivity services for enterprise were JPY22,634 million, up 28.6% YoY from JPY17,597 million for FY2015, mainly due to an increase in mobile-related services revenues along with an expansion of MVNE business clients’ business transaction. Revenues for Internet connectivity services for consumers were JPY21,735 million, up 42.5% YoY from JPY15,256 million for FY2015, mainly due to the revenue growth of “IIJmio Mobile Services,” consumer mobile services which offer inexpensive data communication and voice services with SIM cards. Revenues for WAN services were JPY26,460 million, up 5.1% YoY compared to JPY25,177 million for FY2015. Revenues for Outsourcing services were JPY22,167 million, up 4.2% YoY from JPY21,266 million for FY2015, mainly due to an increase in security-related services revenues. SI revenues were JPY57,749 million, up 6.6% YoY (JPY54,188 million for FY2015). Systems construction revenue, a one-time revenue, was JPY22,626 million, up 7.0% YoY, mainly due to an increase and an expansion of the business transactions. Systems operation and maintenance revenue, a recurring revenue, was JPY35,123 million, up 6.3% YoY, mainly due to an increase in private cloud services’ revenues and an increase of operation and maintenance which was shifted from systems construction projects. Orders received for SI and equipment sales totaled JPY68,599 million, up 10.5% YoY; orders received for systems construction and equipment sales were JPY26,721 million, up 3.7% YoY and orders received for systems operation and maintenance were JPY41,877 million, up 15.4% YoY. Order backlog for SI and equipment sales as of March 31, 2017 amounted to JPY41,501 million, up 23.3% YoY; order backlog for systems construction and equipment sales was JPY7,179 million, up 18.1% YoY and order backlog for systems operation and maintenance was JPY34,322 million, up 24.5% YoY. Equipment sales revenues were JPY2,994 million, down 8.6% YoY (JPY3,275 million for FY2015) mainly due to the fluctuation in sales of devises such as mobile devices. ATM operation business revenues were JPY4,050 million, up 4.1% YoY (JPY3,889 million for FY2015). As of March 31, 2017, 1,066 ATMs have been placed. Total cost of revenues was JPY132,542 million, up 14.3% YoY (JPY115,993 million for FY2015). Cost of network services revenue was JPY76,387 million, up 18.9% YoY (JPY64,239 million for FY2015). There were an increase in outsourcing-related costs with our mobile infrastructure enhancement along with our mobile-related revenue increase, an increase in circuit-related costs along with our WAN services revenue increase, and an increase in network operation-related costs. Regarding NTT Docomo’s interconnectivity charge for MVNO-related services, the charge based on their FY2015 actual cost was revised in March 2017 and it decreased by 14% (excluding the cost for borrowing SIM cards which arrangement took place during FY2016) year over year. Our estimate of 12% decrease, which rate had been applied to our mobile interconnectivity cost calculation from 1Q16, ended up in line with our initial estimate together with the cost for borrowing SIM. Gross margin was JPY16,609 million, up 10.3% YoY and gross margin ratio was 17.9% compared to 19.0% in FY2015. Cost of SI revenues was JPY50,992 million, up 10.3% YoY (JPY46,226 million for FY2015). There were an increase in outsourcing-related and personnel-related costs along with an increase of large-scale SI transactions and an increase in network operation-related costs mainly along with the launch of “IIJ GIO Infrastructure P2.” Gross margin was JPY6,756 million, down 15.2% YoY and gross margin ratio was 11.7% compared to 14.7% in FY2015. It was mainly due to profit deterioration resulted from low productivity of systems engineers and the delay in offering some functions of our ASP-type foreign exchange system, especially in 1H16. Cost of equipment sales revenues was JPY2,735 million, down 7.9% YoY (JPY2,969 million for FY2015) along with the revenue decrease. Gross margin was JPY260 million (JPY306 million for FY2015) and gross margin ratio was 8.7% compared to 9.4% in FY2015. Cost of ATM operation business revenues was JPY2,428 million, down 5.1% YoY (JPY2,559 million for FY2015). Gross margin was JPY1,622 million (JPY1,330 million for FY2015) and gross margin ratio was 40.1% compared to 34.2% in FY2015. SG&A and R&D expenses in total were JPY20,113 million, up 8.6% YoY (JPY18,515 million for FY2015). Sales and marketing expenses were JPY11,432 million, up 8.0% YoY (JPY10,589 million for FY2015) mainly due to increases in sales commission expenses of mobile-related services and advertising expenses. General and administrative expenses were JPY8,215 million, up 10.0% YoY (JPY7,471 million for FY2015) mainly due to increases in office rent expenses. Research and development expenses were JPY466 million, up 2.4% YoY (JPY455 million for FY2015). Operating income was JPY5,134 million, down 16.4% YoY (JPY6,140 million for FY2015). Other income (expenses) was an income of JPY293 million (an income of JPY53 million for FY2015), mainly because of net gain on sales of other investments of JPY217 million (JPY24 million for FY2015), distribution from fund investment of JPY321 million (included in other-net of JPY315 million, JPY209 million for FY2015), dividend income of JPY118 million from other investments (JPY93 million for FY2015), interest expense of JPY304 million (JPY241 million for FY2015) and foreign exchange losses of JPY45 million (JPY71 million for FY2015). Income before income tax expenses was JPY5,427 million, down 12.4% YoY (JPY6,193 million for FY2015). Equity in net income of equity method investees was JPY130 million (JPY180 million for FY2015) mainly due to net income of Internet Multifeed Co. As a result of the above, net income was JPY3,332 million, down 20.5% YoY (JPY4,190 million for FY2015). Net income attributable to non-controlling interests was JPY165 million mainly related to net income of Trust Networks Inc. (JPY152 million for FY2015). Net income attributable to IIJ was JPY3,167 million, down 21.6% YoY (JPY4,038 million for FY2015). As of March 31, 2017, the balance of total assets was JPY137,395 million, increased by JPY19,560 million from the balance as of March 31, 2016 of JPY117,835 million. As of March 31, 2017, the balance of current assets was JPY63,722 million, increased by JPY10,316 million from the balance as of March 31, 2016 of JPY53,406 million. The major breakdown of current assets was an increase in accounts receivable by JPY3,637 million to JPY27,384 million, an increase in cash and cash equivalents by JPY2,389 million to JPY21,959 million, an increase in prepaid expenses by JPY2,841 million to JPY7,611 million and an increase in inventories by JPY794 million to JPY2,798 million. As of March 31, 2017, the balance of noncurrent assets was JPY73,673 million, increased by JPY9,244 million from the balance as of March 31, 2016 of JPY64,429 million. The major breakdown of noncurrent assets was an increase in property and equipment by JPY5,451 million to JPY39,775 million, an increase in other investments by JPY1,976 million to JPY7,925 million mainly due to an increase in the fair value of available-for-sale securities and increase in prepaid expenses-noncurrent by JPY1,620 million to JPY6,607 million. Other investments as of March 31, 2017, consisted of JPY5,780 million in available-for-sale securities (including JPY5,464 million of strategic shareholdings), JPY1,124 million in nonmarketable equity securities and JPY1,021 million in investments in funds, including some through a trust. As of March 31, 2017, the balance of non-amortized intangible assets was JPY6,220 million, decreased by JPY82 million from the balance as of March 31, 2016 of JPY6,302 million. The major breakdown of non-amortized intangible assets was JPY6,170 million in goodwill and a decrease by JPY81 million to JPY15 million in trademark. The balance of amortized intangible assets, which was customer relationships, was JPY3,036 million, decreased by JPY380 million from the balance as of March 31, 2016 of JPY3,417 million. As of March 31, 2017, the balance of current liabilities was JPY39,983 million, increased by JPY3,917 million from the balance as of March 31, 2016 of JPY36,066 million. The major breakdown of current liabilities was an increase in accounts payable (trade and other) by JPY1,557 million to JPY16,962 million and an increase in capital lease obligations-current portion by JPY864 million to JPY4,819 million. As of March 31, 2017, the balance of noncurrent liabilities was JPY30,032 million, increased by JPY13,607 million from the balance as of March 31, 2016 of JPY16,425 million. The major breakdown of noncurrent liabilities was an increase in long-term borrowings by JPY8,500 million to JPY8,500 million and an increase in capital lease obligations-noncurrent by JPY2,605 million to JPY10,385 million. As of March 31, 2017, the balance of total IIJ shareholders’ equity was JPY66,742 million, increased by JPY1,897 million from the balance as of March 31, 2016 of JPY64,845 million. There were an increase in retained earnings by JPY2,041 million to JPY4,512 million, an increase in accumulated other comprehensive income by JPY1,303 million to JPY2,500 million mainly due to an increase the fair value of available-for-sale securities and an increase in treasury stock by JPY1,505 million to JPY1,897 million due to the repurchase of own shares, authorized at the meeting of IIJ’s Board of Directors held on November 4, 2016. IIJ shareholders’ equity ratio (total IIJ shareholders’ equity divided by total assets) as of March 31, 2017 was 48.6%. Cash and cash equivalents as of March 31, 2017 were JPY21,959 million (JPY19,569 million as of March 31, 2016). Net cash provided by operating activities for FY2016 was JPY7,368 million (net cash provided by operating activities of JPY12,052 million for FY2015.) There were net income of JPY3,332 million, depreciation and amortization of JPY10,894 million and net cash out flow of JPY7,026 million from changes in operating assets and liabilities. As for changes in operating assets and liabilities, there were an increase in accounts receivable mainly due to revenue growth, an increase in prepaid expenses (including prepaid expenses-noncurrent) and payments in relation to up front payment for software licenses and maintenance cost for service facilities. Net cash used in investing activities for FY2016 was JPY7,376 million (net cash used in investing activities of JPY8,377 million for FY2015), mainly due to payments for purchase of property and equipment of JPY10,624 million (JPY10,899 million for FY2015) and proceeds from sales of property and equipment, which include sales and leaseback, of JPY3,046 million (JPY2,574 million for FY2015). Net cash provided by financing activities for FY2016 was JPY2,492 million (net cash used in financing activities of JPY5,201 million for FY2015), mainly due to proceeds from long-term borrowings of JPY8,500 million, proceeds from financing in relation to procurement of software license of JPY1,498 million, principal payments under capital leases of JPY4,820 million (JPY4,194 million for FY2015), payments for purchase of treasury stock of JPY1,505 million and FY2015 year-end and FY2016 interim dividend payments of JPY1,126 million (JPY1,011 million for FY2015). Our financial targets for the fiscal year ending March 31, 2018 (FY2017) are as follows: With the continuous expansion of Japanese economy, Japanese enterprises’ ICT-related investment and spending should continuously grow during FY2017. Regarding consumer market in Japan, we expect the inexpensive SIM card services market to further penetrate. Based on these, we expect our operating income to improve with continuous expansion of revenue and gross margin. We target total revenue of JPY176.0 billion, up 11.5% year over year. We expect both enterprise and consumer mobile services to further increase, cloud-related revenue to reach to JPY18.0 billion, revenue contribution from a large-scale local government’s information security cloud project and other monthly recurring revenue services such as Internet connectivity, outsourcing, WAN and systems operation and maintenance revenue to continuously accumulate. We target operating income of JPY6.5 billion, up 26.6% year over year. While SG&A expenses such as sales commission, advertisement, and personnel related fees are to increase continuously, we expect network services gross margin continuous expansion and systems integration gross margin improvement, approximately 1 point increase from FY2016, should absorb such increase in SG&A and lead to an operating income increase. We target income before income tax expense of JPY6.5 billion, up 19.8% year over year. We target net income attributable to IIJ of JPY4.0 billion, up 26.3% year over year, considering taxes calculated by a normal statutory rate and income of equity method investees and non-controlling interests. Our FY2017 dividend forecast is as follows: 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. Presentation materials will be posted on our web site (http://www.iij.ad.jp/en/ir/) on May 15, 2017. Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. 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 FY2016 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. The following tables are highlight data of fourth quarter FY2016 (3 months) consolidated financial results (unaudited, for the three months ended March 31, 2017). 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. 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. Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the fiscal year ended March 31, 2017 (“FY2016”) in the form defined by the Tokyo Stock Exchange. Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 [Under accounting principles generally accepted in the United States ("U.S. GAAP")] Company name: Internet Initiative Japan Inc. Exchange listed: Tokyo Stock Exchange First Section Stock code number: 3774 URL: http://www.iij.ad.jp/  Representative: Eijiro Katsu, President and Representative Director Contact: Akihisa Watai, Managing Director and CFO TEL: (03) 5205-6500 Scheduled date for annual general shareholder’s meeting: June 28, 2017 Scheduled date for dividend payment: June 29, 2017 Scheduled date for filing of annual report (Yuka-shoken-houkokusho) to Japan’s regulatory organization: June 30, 2017 Supplemental material on annual results: Yes Presentation on quarterly report: Yes (for institutional investors and analysts) 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 (April 1, 2016 to March 31, 2017) (Note1) Total comprehensive income attributable to IIJ              Fiscal year ended March 31, 2017: JPY4,470 million (up 35.6% YoY) Fiscal year ended March 31, 2016: JPY3,296 million (down 7.1% YoY) (Note2) Income before income tax expense represents income from operations before income tax expense and equity in net income in equity method investees, respectively, in IIJ's consolidated financial statements. (Note) Change from the latest released dividend forecasts: No. 3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2018 (Note1) Changes from the latest forecasts released: No Company representative: Eijiro Katsu, President and Representative Director (Stock Code Number: 3774 The First Section of the Tokyo Stock Exchange) 1. About Our Largest Shareholder (As of March 31, 2017) 2. Position of the Listed Company (IIJ) within NTT Group and other relationships The ownership percentage by NTT, which is IIJ's largest shareholder, was 26.9% as of March 31, 2017, including its indirect ownership. However, IIJ's business activities are not affected by NTT's ownership in IIJ and IIJ is maintaining its management independence. IIJ uses services provided by Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation for a significant portion of IIJ’s access circuits, services provided by NTT Communications Corporation for a significant portion of IIJ’s domestic and international backbone circuits, and services provided by NTT DOCOMO, INC for a significant portion of IIJ’s mobile infrastructure, to provide Internet connectivity and other services to IIJ’s customers. IIJ also leases a part of Internet data center facilities from NTT Group companies to provide Internet data center services. The aggregate amount paid to for these services was JPY23,005 million for the fiscal year ended March 31, 2017. 4. Policy Concerning Measures to Protect Minority Shareholders in Transactions with NTT Group Business transactions with the NTT Group are within the scope of normal business practices and there is no special contract made in relation to the investment by NTT Group.


News Article | May 25, 2017
Site: globenewswire.com

TOKYO, May 25, 2017 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (NASDAQ:IIJI) (TSE1:3774) announced that IIJ’s Board of Directors today resolved upon the dividends to be paid from retained earnings to shareholders on the record date of March 31, 2017, as indicated below. The distribution of retained earnings is subject to the approval of IIJ’s 25th Ordinary General Meeting of Shareholders that will be held on June 28, 2017 in Tokyo. IIJ’s basic policy for the return of profit to shareholders is to maintain stable and continuous dividends to shareholders while giving full consideration to securing its funds to strengthen its financial position and to prepare for its operation and business development. Considering the basic policy, we decided to pay JPY13.50 per common share as FY2016 year-end dividend. This matter is scheduled to be resolved at IIJ’s 25th Ordinary General Meeting of Shareholders scheduled for June 28, 2017. About IIJ Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. The statements within this release contain forward-looking statements about our future plans that involve risk and uncertainty. These statements may differ materially from actual future events or results. Readers are referred to the documents furnished by Internet Initiative Japan Inc. with the SEC, specifically the most recent reports on Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.


News Article | May 25, 2017
Site: globenewswire.com

TOKYO, May 25, 2017 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ", “the Company”) (NASDAQ:IIJI) (TSE1:3774) today announced that at the meeting of the Board of Directors held on May 25, 2017, IIJ resolved to propose the partial amendments to its Articles of Incorporation at the 25th Ordinary General Meeting of Shareholders scheduled to be held on June 28, 2017 in Japan, as described below: 1. Reasons for the amendments In order to handle the Company’s recent business diversification, the Company has determined to add to the content of business objects in its Articles of Incorporation. 2. Content of the amendments The content of the amendments is as follows: 3. Schedule for the amendments Scheduled date of the 25th Ordinary General Meeting of Shareholders: Wednesday, June 28, 2017 Scheduled effective date: Wednesday, June 28, 2017 About IIJ Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. The statements within this release contain forward-looking statements about our future plans that involve risk and uncertainty. These statements may differ materially from actual future events or results. Readers are referred to the documents furnished by Internet Initiative Japan Inc. with the SEC, specifically the most recent reports on Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.


News Article | May 25, 2017
Site: globenewswire.com

TOKYO, May 25, 2017 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ", “the Company”) (NASDAQ:IIJI) (TSE1:3774) today announced that at the meeting of the Board of Directors held on May 25, 2017, IIJ resolved to propose the partial amendments to its Articles of Incorporation at the 25th Ordinary General Meeting of Shareholders scheduled to be held on June 28, 2017 in Japan, as described below: 1. Reasons for the amendments In order to handle the Company’s recent business diversification, the Company has determined to add to the content of business objects in its Articles of Incorporation. 2. Content of the amendments The content of the amendments is as follows: 3. Schedule for the amendments Scheduled date of the 25th Ordinary General Meeting of Shareholders: Wednesday, June 28, 2017 Scheduled effective date: Wednesday, June 28, 2017 About IIJ Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. The statements within this release contain forward-looking statements about our future plans that involve risk and uncertainty. These statements may differ materially from actual future events or results. Readers are referred to the documents furnished by Internet Initiative Japan Inc. with the SEC, specifically the most recent reports on Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.


News Article | May 25, 2017
Site: globenewswire.com

TOKYO, May 25, 2017 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (NASDAQ:IIJI) (TSE1:3774) announced that IIJ’s Board of Directors today resolved upon the dividends to be paid from retained earnings to shareholders on the record date of March 31, 2017, as indicated below. The distribution of retained earnings is subject to the approval of IIJ’s 25th Ordinary General Meeting of Shareholders that will be held on June 28, 2017 in Tokyo. IIJ’s basic policy for the return of profit to shareholders is to maintain stable and continuous dividends to shareholders while giving full consideration to securing its funds to strengthen its financial position and to prepare for its operation and business development. Considering the basic policy, we decided to pay JPY13.50 per common share as FY2016 year-end dividend. This matter is scheduled to be resolved at IIJ’s 25th Ordinary General Meeting of Shareholders scheduled for June 28, 2017. About IIJ Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. The statements within this release contain forward-looking statements about our future plans that involve risk and uncertainty. These statements may differ materially from actual future events or results. Readers are referred to the documents furnished by Internet Initiative Japan Inc. with the SEC, specifically the most recent reports on Forms 20-F and 6-K, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.


TOKYO, May 15, 2017 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ") (NASDAQ:IIJI) (TSE:3774) today announced its full year (“FY2016”) and fourth quarter (“4Q16”) consolidated financial results for the fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017).1 Overview of FY2016 Financial Results and Business Outlook “In FY2016, a number of business developments, ranging from cloud, mobile, security and CDN2 carried out in recent years, led to make our business growth fundamentals stronger. Our total revenue hit strong annual growth rate of 12.2%,” said Eijiro Katsu, President and COO of IIJ. “For cloud, more and more large-scale core enterprise systems of Japanese blue-chips are starting to make visible accumulation. Such projects include service platform for an online-ticketing company, unified business operation platform for a global manufacturing company’s group and local governments’ “Information Security Cloud.” We’ve been also continuously expanding service functions for “IIJ GIO Infrastructure P2 (“GIO P2”)”3 to meet complex cloud demands of Japanese blue-chips. Our FY2016 cloud revenue was JPY15.7 billion and we expect it to increase to JPY18.0 billion in FY2017 with these undergoing transactions and further order accumulation.” “For mobile, while the competition has been severe, we continue to accumulate subscription mainly through sales partners and MVNE.4 As of March 31, 2017, our total mobile subscription grew to 1.86 million, annual increase of 628 thousand subscriptions. Our mobile revenue also grew by 71.3% year over year to JPY26.7 billion. Our market share among MVNOs on net addition-base in Japan was approx. 24%.5 We’re very excited about becoming Japan’s first full-MVNO service provider6 as it will enable us to develop our own embedded SIMs which is a critical element for IoT7 and preparing service cut-over in 4Q17.” “As for security, we continue to see strong demands especially for Sandbox and DDoS protection services which led our FY2016 security services revenues to grow by 10.9% year over year. In addition to the existing security services, we launched Security Operation Center services by leveraging our massive network log data and an ability to analyze them. For CDN, we established a joint venture8 with 15 major Japanese broadcasting companies to provide reliable CDN platform. As we expect to be their primary IT provider, we should benefit from their requirement for significantly wide bandwidth.” “In terms of financial results, FY2016 operating income decreased year over year due to the overall cost increase along with the continuous business investments and a deterioration of SI gross margin.9 However in the latter half, the revenue and income accumulated accordingly with our revised plan announced in November 2016 and SI profitability recovered in 4Q16 by mainly improving the productivity of outsourcing personnel and with the absence of large-scale unprofitable projects.” “For FY2017, we target the total revenue of JPY176.0 billion, 11.5% annual increase, with continuous expansion of monthly recurring revenue services including mobile, many flagship GIO P2 projects, security and more. With the accumulation of recurring network services revenues and improvement of SI profitability should absorb increasing costs; thus FY2017 operating income should turn to increase to JPY6.5 billion, up by 26.6% year over year,” continued Katsu. “IT systems requiring IoT and BigData should significantly increase in the middle-to-long term. We believe that the value IIJ can offer as a total platform provider covering, network, cloud, mobile, security, and SI should become significant,” concluded Koichi Suzuki, Founder, Chairman and CEO of IIJ. 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. 2 CDN (Contents Distribution Network) is an optimized network to distribute contents such as pictures and videos over Internet. 3 “IIJ GIO Infrastructure P2” was launched in November 2015 as a renewed service platform to further meet Japanese enterprises IT needs are certainly contributing to promote cloud shift. The services offer public and private cloud resources seamlessly and provide closed connectivity between our cloud services to Amazon’s AWS and Microsoft Azure services to meet hybrid and multi cloud systems needs. 4 MVNE (Mobile Virtual Network Enabler) provides business and service infrastructure to MVNOs. 5 Out of 5.9 hundred thousand total net addition for all MVNOs subscription from October to December 2016 in Japan, our net addition was 1.4 hundred thousand, making approx. 24% shares. These figures are according to the report published by the Ministry of Internal Affairs and Communications in March 2017. 6 For details, please refer to our press release titled “IIJ Begins to Engage in a Full MVNO for Enhanced MVNO Business” announced in August 2016. 7 IoT (Internet of Things) enables not only physical objects but also any “things” connected to network to exchange information automatically. 8 JOCDN Inc. which is our equity method investee with a 20% ownership. 9 As we disclosed in our financial target revision for FY2016 (announced in November 2016), low productivity of systems engineers in 1H16 and some unprofitable large-scale projects led to a sharp decline in systems integration profitability. We have omitted segment analysis because most of our revenues are dominated by network services and systems integration (SI) business. Total revenues were JPY157,789 million, up 12.2% YoY (JPY140,648 million for FY2015). Network services revenue was JPY92,996 million, up 17.3% YoY (JPY79,296 million for FY2015). Revenues for Internet connectivity services for enterprise were JPY22,634 million, up 28.6% YoY from JPY17,597 million for FY2015, mainly due to an increase in mobile-related services revenues along with an expansion of MVNE business clients’ business transaction. Revenues for Internet connectivity services for consumers were JPY21,735 million, up 42.5% YoY from JPY15,256 million for FY2015, mainly due to the revenue growth of “IIJmio Mobile Services,” consumer mobile services which offer inexpensive data communication and voice services with SIM cards. Revenues for WAN services were JPY26,460 million, up 5.1% YoY compared to JPY25,177 million for FY2015. Revenues for Outsourcing services were JPY22,167 million, up 4.2% YoY from JPY21,266 million for FY2015, mainly due to an increase in security-related services revenues. SI revenues were JPY57,749 million, up 6.6% YoY (JPY54,188 million for FY2015). Systems construction revenue, a one-time revenue, was JPY22,626 million, up 7.0% YoY, mainly due to an increase and an expansion of the business transactions. Systems operation and maintenance revenue, a recurring revenue, was JPY35,123 million, up 6.3% YoY, mainly due to an increase in private cloud services’ revenues and an increase of operation and maintenance which was shifted from systems construction projects. Orders received for SI and equipment sales totaled JPY68,599 million, up 10.5% YoY; orders received for systems construction and equipment sales were JPY26,721 million, up 3.7% YoY and orders received for systems operation and maintenance were JPY41,877 million, up 15.4% YoY. Order backlog for SI and equipment sales as of March 31, 2017 amounted to JPY41,501 million, up 23.3% YoY; order backlog for systems construction and equipment sales was JPY7,179 million, up 18.1% YoY and order backlog for systems operation and maintenance was JPY34,322 million, up 24.5% YoY. Equipment sales revenues were JPY2,994 million, down 8.6% YoY (JPY3,275 million for FY2015) mainly due to the fluctuation in sales of devises such as mobile devices. ATM operation business revenues were JPY4,050 million, up 4.1% YoY (JPY3,889 million for FY2015). As of March 31, 2017, 1,066 ATMs have been placed. Total cost of revenues was JPY132,542 million, up 14.3% YoY (JPY115,993 million for FY2015). Cost of network services revenue was JPY76,387 million, up 18.9% YoY (JPY64,239 million for FY2015). There were an increase in outsourcing-related costs with our mobile infrastructure enhancement along with our mobile-related revenue increase, an increase in circuit-related costs along with our WAN services revenue increase, and an increase in network operation-related costs. Regarding NTT Docomo’s interconnectivity charge for MVNO-related services, the charge based on their FY2015 actual cost was revised in March 2017 and it decreased by 14% (excluding the cost for borrowing SIM cards which arrangement took place during FY2016) year over year. Our estimate of 12% decrease, which rate had been applied to our mobile interconnectivity cost calculation from 1Q16, ended up in line with our initial estimate together with the cost for borrowing SIM. Gross margin was JPY16,609 million, up 10.3% YoY and gross margin ratio was 17.9% compared to 19.0% in FY2015. Cost of SI revenues was JPY50,992 million, up 10.3% YoY (JPY46,226 million for FY2015). There were an increase in outsourcing-related and personnel-related costs along with an increase of large-scale SI transactions and an increase in network operation-related costs mainly along with the launch of “IIJ GIO Infrastructure P2.” Gross margin was JPY6,756 million, down 15.2% YoY and gross margin ratio was 11.7% compared to 14.7% in FY2015. It was mainly due to profit deterioration resulted from low productivity of systems engineers and the delay in offering some functions of our ASP-type foreign exchange system, especially in 1H16. Cost of equipment sales revenues was JPY2,735 million, down 7.9% YoY (JPY2,969 million for FY2015) along with the revenue decrease. Gross margin was JPY260 million (JPY306 million for FY2015) and gross margin ratio was 8.7% compared to 9.4% in FY2015. Cost of ATM operation business revenues was JPY2,428 million, down 5.1% YoY (JPY2,559 million for FY2015). Gross margin was JPY1,622 million (JPY1,330 million for FY2015) and gross margin ratio was 40.1% compared to 34.2% in FY2015. SG&A and R&D expenses in total were JPY20,113 million, up 8.6% YoY (JPY18,515 million for FY2015). Sales and marketing expenses were JPY11,432 million, up 8.0% YoY (JPY10,589 million for FY2015) mainly due to increases in sales commission expenses of mobile-related services and advertising expenses. General and administrative expenses were JPY8,215 million, up 10.0% YoY (JPY7,471 million for FY2015) mainly due to increases in office rent expenses. Research and development expenses were JPY466 million, up 2.4% YoY (JPY455 million for FY2015). Operating income was JPY5,134 million, down 16.4% YoY (JPY6,140 million for FY2015). Other income (expenses) was an income of JPY293 million (an income of JPY53 million for FY2015), mainly because of net gain on sales of other investments of JPY217 million (JPY24 million for FY2015), distribution from fund investment of JPY321 million (included in other-net of JPY315 million, JPY209 million for FY2015), dividend income of JPY118 million from other investments (JPY93 million for FY2015), interest expense of JPY304 million (JPY241 million for FY2015) and foreign exchange losses of JPY45 million (JPY71 million for FY2015). Income before income tax expenses was JPY5,427 million, down 12.4% YoY (JPY6,193 million for FY2015). Equity in net income of equity method investees was JPY130 million (JPY180 million for FY2015) mainly due to net income of Internet Multifeed Co. As a result of the above, net income was JPY3,332 million, down 20.5% YoY (JPY4,190 million for FY2015). Net income attributable to non-controlling interests was JPY165 million mainly related to net income of Trust Networks Inc. (JPY152 million for FY2015). Net income attributable to IIJ was JPY3,167 million, down 21.6% YoY (JPY4,038 million for FY2015). As of March 31, 2017, the balance of total assets was JPY137,395 million, increased by JPY19,560 million from the balance as of March 31, 2016 of JPY117,835 million. As of March 31, 2017, the balance of current assets was JPY63,722 million, increased by JPY10,316 million from the balance as of March 31, 2016 of JPY53,406 million. The major breakdown of current assets was an increase in accounts receivable by JPY3,637 million to JPY27,384 million, an increase in cash and cash equivalents by JPY2,389 million to JPY21,959 million, an increase in prepaid expenses by JPY2,841 million to JPY7,611 million and an increase in inventories by JPY794 million to JPY2,798 million. As of March 31, 2017, the balance of noncurrent assets was JPY73,673 million, increased by JPY9,244 million from the balance as of March 31, 2016 of JPY64,429 million. The major breakdown of noncurrent assets was an increase in property and equipment by JPY5,451 million to JPY39,775 million, an increase in other investments by JPY1,976 million to JPY7,925 million mainly due to an increase in the fair value of available-for-sale securities and increase in prepaid expenses-noncurrent by JPY1,620 million to JPY6,607 million. Other investments as of March 31, 2017, consisted of JPY5,780 million in available-for-sale securities (including JPY5,464 million of strategic shareholdings), JPY1,124 million in nonmarketable equity securities and JPY1,021 million in investments in funds, including some through a trust. As of March 31, 2017, the balance of non-amortized intangible assets was JPY6,220 million, decreased by JPY82 million from the balance as of March 31, 2016 of JPY6,302 million. The major breakdown of non-amortized intangible assets was JPY6,170 million in goodwill and a decrease by JPY81 million to JPY15 million in trademark. The balance of amortized intangible assets, which was customer relationships, was JPY3,036 million, decreased by JPY380 million from the balance as of March 31, 2016 of JPY3,417 million. As of March 31, 2017, the balance of current liabilities was JPY39,983 million, increased by JPY3,917 million from the balance as of March 31, 2016 of JPY36,066 million. The major breakdown of current liabilities was an increase in accounts payable (trade and other) by JPY1,557 million to JPY16,962 million and an increase in capital lease obligations-current portion by JPY864 million to JPY4,819 million. As of March 31, 2017, the balance of noncurrent liabilities was JPY30,032 million, increased by JPY13,607 million from the balance as of March 31, 2016 of JPY16,425 million. The major breakdown of noncurrent liabilities was an increase in long-term borrowings by JPY8,500 million to JPY8,500 million and an increase in capital lease obligations-noncurrent by JPY2,605 million to JPY10,385 million. As of March 31, 2017, the balance of total IIJ shareholders’ equity was JPY66,742 million, increased by JPY1,897 million from the balance as of March 31, 2016 of JPY64,845 million. There were an increase in retained earnings by JPY2,041 million to JPY4,512 million, an increase in accumulated other comprehensive income by JPY1,303 million to JPY2,500 million mainly due to an increase the fair value of available-for-sale securities and an increase in treasury stock by JPY1,505 million to JPY1,897 million due to the repurchase of own shares, authorized at the meeting of IIJ’s Board of Directors held on November 4, 2016. IIJ shareholders’ equity ratio (total IIJ shareholders’ equity divided by total assets) as of March 31, 2017 was 48.6%. Cash and cash equivalents as of March 31, 2017 were JPY21,959 million (JPY19,569 million as of March 31, 2016). Net cash provided by operating activities for FY2016 was JPY7,368 million (net cash provided by operating activities of JPY12,052 million for FY2015.) There were net income of JPY3,332 million, depreciation and amortization of JPY10,894 million and net cash out flow of JPY7,026 million from changes in operating assets and liabilities. As for changes in operating assets and liabilities, there were an increase in accounts receivable mainly due to revenue growth, an increase in prepaid expenses (including prepaid expenses-noncurrent) and payments in relation to up front payment for software licenses and maintenance cost for service facilities. Net cash used in investing activities for FY2016 was JPY7,376 million (net cash used in investing activities of JPY8,377 million for FY2015), mainly due to payments for purchase of property and equipment of JPY10,624 million (JPY10,899 million for FY2015) and proceeds from sales of property and equipment, which include sales and leaseback, of JPY3,046 million (JPY2,574 million for FY2015). Net cash provided by financing activities for FY2016 was JPY2,492 million (net cash used in financing activities of JPY5,201 million for FY2015), mainly due to proceeds from long-term borrowings of JPY8,500 million, proceeds from financing in relation to procurement of software license of JPY1,498 million, principal payments under capital leases of JPY4,820 million (JPY4,194 million for FY2015), payments for purchase of treasury stock of JPY1,505 million and FY2015 year-end and FY2016 interim dividend payments of JPY1,126 million (JPY1,011 million for FY2015). Our financial targets for the fiscal year ending March 31, 2018 (FY2017) are as follows: With the continuous expansion of Japanese economy, Japanese enterprises’ ICT-related investment and spending should continuously grow during FY2017. Regarding consumer market in Japan, we expect the inexpensive SIM card services market to further penetrate. Based on these, we expect our operating income to improve with continuous expansion of revenue and gross margin. We target total revenue of JPY176.0 billion, up 11.5% year over year. We expect both enterprise and consumer mobile services to further increase, cloud-related revenue to reach to JPY18.0 billion, revenue contribution from a large-scale local government’s information security cloud project and other monthly recurring revenue services such as Internet connectivity, outsourcing, WAN and systems operation and maintenance revenue to continuously accumulate. We target operating income of JPY6.5 billion, up 26.6% year over year. While SG&A expenses such as sales commission, advertisement, and personnel related fees are to increase continuously, we expect network services gross margin continuous expansion and systems integration gross margin improvement, approximately 1 point increase from FY2016, should absorb such increase in SG&A and lead to an operating income increase. We target income before income tax expense of JPY6.5 billion, up 19.8% year over year. We target net income attributable to IIJ of JPY4.0 billion, up 26.3% year over year, considering taxes calculated by a normal statutory rate and income of equity method investees and non-controlling interests. Our FY2017 dividend forecast is as follows: 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. Presentation materials will be posted on our web site (http://www.iij.ad.jp/en/ir/) on May 15, 2017. Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in 2006. 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 FY2016 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. The following tables are highlight data of fourth quarter FY2016 (3 months) consolidated financial results (unaudited, for the three months ended March 31, 2017). 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. 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. Note: The following information is provided to disclose Internet Initiative Japan Inc. ("IIJ") financial results (unaudited) for the fiscal year ended March 31, 2017 (“FY2016”) in the form defined by the Tokyo Stock Exchange. Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 [Under accounting principles generally accepted in the United States ("U.S. GAAP")] Company name: Internet Initiative Japan Inc. Exchange listed: Tokyo Stock Exchange First Section Stock code number: 3774 URL: http://www.iij.ad.jp/  Representative: Eijiro Katsu, President and Representative Director Contact: Akihisa Watai, Managing Director and CFO TEL: (03) 5205-6500 Scheduled date for annual general shareholder’s meeting: June 28, 2017 Scheduled date for dividend payment: June 29, 2017 Scheduled date for filing of annual report (Yuka-shoken-houkokusho) to Japan’s regulatory organization: June 30, 2017 Supplemental material on annual results: Yes Presentation on quarterly report: Yes (for institutional investors and analysts) 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 (April 1, 2016 to March 31, 2017) (Note1) Total comprehensive income attributable to IIJ              Fiscal year ended March 31, 2017: JPY4,470 million (up 35.6% YoY) Fiscal year ended March 31, 2016: JPY3,296 million (down 7.1% YoY) (Note2) Income before income tax expense represents income from operations before income tax expense and equity in net income in equity method investees, respectively, in IIJ's consolidated financial statements. (Note) Change from the latest released dividend forecasts: No. 3. Target of Consolidated Financial Results for the Fiscal Year Ending March 31, 2018 (Note1) Changes from the latest forecasts released: No Company representative: Eijiro Katsu, President and Representative Director (Stock Code Number: 3774 The First Section of the Tokyo Stock Exchange) 1. About Our Largest Shareholder (As of March 31, 2017) 2. Position of the Listed Company (IIJ) within NTT Group and other relationships The ownership percentage by NTT, which is IIJ's largest shareholder, was 26.9% as of March 31, 2017, including its indirect ownership. However, IIJ's business activities are not affected by NTT's ownership in IIJ and IIJ is maintaining its management independence. IIJ uses services provided by Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation for a significant portion of IIJ’s access circuits, services provided by NTT Communications Corporation for a significant portion of IIJ’s domestic and international backbone circuits, and services provided by NTT DOCOMO, INC for a significant portion of IIJ’s mobile infrastructure, to provide Internet connectivity and other services to IIJ’s customers. IIJ also leases a part of Internet data center facilities from NTT Group companies to provide Internet data center services. The aggregate amount paid to for these services was JPY23,005 million for the fiscal year ended March 31, 2017. 4. Policy Concerning Measures to Protect Minority Shareholders in Transactions with NTT Group Business transactions with the NTT Group are within the scope of normal business practices and there is no special contract made in relation to the investment by NTT Group.

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