UBIC, INC.

CIK:0001550935|SEC Filings

Consolidated Statements of Operations - JPY (¥) ¥ in Thousands	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
Total revenue	¥ 11,254,626	¥ 12,144,243	¥ 11,220,775
Selling, general and administrative expenses	4,550,456	4,945,915	5,481,912
Restructuring charge	0	781,372
Total operating expense	10,902,490	12,723,540	12,399,626
Operating income (loss)	352,136	(579,297)	(1,178,851)
Interest income	2,580	2,658	3,634
Interest expense	(121,398)	(94,516)	(125,743)
Gain (loss) on derivatives	107,951	(56,861)	43,594
Foreign currency exchange gain (loss)	(18,772)	(137,065)	(13,751)
Dividend income	14,400	11,250	14,400
Gain on revaluation of investments in securities	23,400
Other—net	(30,638)	67,929	(60,255)
Income (loss) before income taxes	329,659	(785,902)	(1,316,972)
Income tax expense (benefit)	101,291	(101,857)	(458,109)
Net income (loss)	228,368	(684,045)	(858,863)
Less: Net income attributable to noncontrolling interests	10,133	10,617	6,224
Net income (loss) attributable to FRONTEO, Inc. shareholders	¥ 218,235	¥ (694,662)	¥ (865,087)
Net income (loss) attributable to FRONTEO, Inc. shareholders per share:
Basic	¥ 5.7	¥ (18.3)	¥ (23.8)
Diluted	¥ 5.5	¥ (18.3)	¥ (23.8)
Service
Total revenue	¥ 11,240,100	¥ 12,128,568	¥ 11,208,041
Cost of revenue	6,337,508	6,980,578	6,904,980
Reimbursed direct costs
Total revenue	14,526	15,675	12,734
Cost of revenue	¥ 14,526	¥ 15,675	¥ 12,734

Consolidated Statements of Cash Flows - JPY (¥) ¥ in Thousands	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	¥ 228,368	¥ (684,045)	¥ (858,863)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	815,867	1,016,974	1,048,627
Share-based compensation expense	22,996	73,846	53,032
Impairment loss	8,920	73,161
Deferred income tax benefit	(103,792)	(145,487)	(498,899)
Foreign currency exchange loss (gain)	(135,986)	240,715	(214,400)
Interest expense	121,398	94,516	125,743
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease (increase) in trade accounts receivable	27,804	576,566	(293,771)
Decrease (increase) in inventories	36,850	32,724	(64,436)
Decrease (increase) in prepaid expenses	(54,147)	158,471	(32,929)
Decrease in other current assets	9,446	106,829	15,392
Decrease (increase) in rental deposits	(28,734)	6,613	775
Increase (decrease) in trade accounts payable	33,808	(118,966)	8,260
Increase (decrease) in accrued income taxes	(164,726)	137,694	8,913
Increase (decrease) in accrued expense and other current liabilities	(108,992)	23,911	(75,451)
Increase (decrease) in other liabilities	(39,254)	(211,035)	391,185
Other—net	9,953	120,364	(3,972)
Net cash provided by (used in) operating activities	679,779	1,502,851	(390,794)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired			(230,341)
Proceeds from sales of available-for-sale securities			100,000
Purchase of property and equipment	(252,933)	(211,054)	(328,436)
Payment for capitalized computer software costs	(661,525)	(348,687)	(486,185)
Other—net	(282)	(58,616)	(8,115)
Net cash used in investing activities	(914,740)	(618,357)	(953,077)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt	1,190,000	3,100,000	4,370,000
Repayment of short-term debt	(1,590,000)	(2,600,000)	(3,422,000)
Proceeds from long-term bank borrowings	400,000	200,000	1,855,897
Repayment of long-term bank borrowings	(1,000,873)	(826,084)	(750,641)
Proceeds from issuance of common stock, including stock options exercised	67,928	31,012	184,375
Proceeds from issuance of convertible notes			2,500,000
Purchase of subsidiary stock from a noncontrolling shareholder		31,542
Payments of contingent and accrued consideration		(97,463)	(497,459)
Dividends paid			(107,253)
Other—net	(78,995)	(76,061)	(66,447)
Net cash provided by (used in) financing activities	(1,011,940)	(237,054)	4,066,472
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	42,361	(53,276)	14,621
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(1,204,540)	594,164	2,737,222
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	5,127,346	4,533,182	1,795,960
CASH AND CASH EQUIVALENTS, END OF YEAR	3,922,806	5,127,346	4,533,182
ADDITIONAL CASH FLOW INFORMATION:
Interest paid, net of amounts capitalized	39,944	42,820	22,833
Income taxes paid–net of refunds (refund of income taxes)	369,809	(94,063)	(10,845)
NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of convertible notes to equity			1,344,715
Outstanding payments for acquisition of property and equipment, and capitalized computer software costs included in trade accounts payable	81,529	73,931	121,567
Capital lease obligation	¥ 10,210	¥ 53,522	¥ 113,847

Consolidated Balance Sheets ¥ in Thousands, $ in Thousands	Mar. 31, 2019 JPY (¥)	Mar. 31, 2018 JPY (¥)
Current Assets:
Cash and cash equivalents	¥ 3,922,806	¥ 5,127,346
Short-term investments	1,078	1,098
Trade accounts receivable, net of allowance for doubtful accounts of ¥ 81,065 thousand and ¥84,715 thousand as of March 31, 2018 and 2019, respectively	2,584,550	2,549,128
Inventories	3,878	40,739
Prepaid expenses	268,200	248,361
Other current assets	86,694	121,229
Total Current Assets	6,867,206	8,087,901
Property and equipment—net	732,286	755,882
Capitalized computer software costs—net	1,120,792	802,935
Goodwill	2,100,446	2,010,554
Customer relationship–net	1,599,671	1,671,595
Other intangible assets—net	73,759	94,150
Investments in securities	872,115	848,715
Investments	221,980	212,480
Rental deposits	161,533	124,074
Deferred tax assets	58,339
Other assets	34,425	59,420
TOTAL ASSETS	13,842,552	14,667,706
Current Liabilities:
Trade accounts payable	468,726	418,630
Short-term bank borrowing	1,100,000	1,500,000
Current portion of long-term debt	2,194,592	977,270
Accrued income taxes	80,293	230,618
Retirement and severance benefits	14,696	8,012
Accrued expenses	716,430	754,715
Other current liabilities	245,762	388,115
Total Current Liabilities	4,820,499	4,277,360
Noncurrent Liabilities:
Long-term debt	3,361,049	5,107,395
Retirement and severance benefits	57,021	57,919
Deferred tax liabilities	81,205	106,253
Derivative liabilities	163,522	271,473
Other liabilities	341,429	358,791
Total Noncurrent Liabilities	4,004,226	5,901,831
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock: Authorized 72,000,000 shares; Issued and outstanding, 38,029,862 shares and 38,123,862 shares at March 31, 2018 and 2019, respectively	2,866,533	2,816,126
Additional paid-in capital	2,521,537	2,482,021
Retained earnings (accumulated deficit)	(11,301)	(801,392)
Accumulated other comprehensive loss	(408,449)	(47,678)
Treasury stock, at cost—630 shares and 696 shares at March 31, 2018 and 2019, respectively	(90)	(26)
Total FRONTEO, Inc. shareholders’ equity	4,968,230	4,449,051
NONCONTROLLING INTERESTS	49,597	39,464
Total Equity	5,017,827	4,488,515
TOTAL LIABILITIES AND EQUITY	¥ 13,842,552	¥ 14,667,706