News Releases

January 31, 2006
Summary Report on Financial and Business Results (Consolidated) for the third Quarter of the Fiscal year ending March, 2006

List of Company Daiwabo Information System Co., Ltd. Listing Stock Exchange (Section)
Osaka Securities Exchange
Tokyo Stock Exchange (1st)
Code No. 9912
Location of Head Office 2-5, 3 chome, Hommachi, Chuo-ku, Osaka
Representative Hirokazu Matsumoto, President and CEO
Inquiry Section Osamu Koyama,
Managing Director in charge of Personnel Dept. & Finance Dept.
General Manager of Corporate Planning Dept.
PHONE +81-6-6281-1161  

1.Matters concerning the preparation of summary report on performance for the third quarter
(1) Are any convenient accounting methods adopted?
The standard for allocating reserves are based on convenient method.
(2) Are there any changes in the accounting method compared to the one applied in the most recent fiscal year? NO
(3) Are there any changes in the scope of consolidation and the equity method?
Consolidated subsidiaries: New: 1, Excluded: 2
Firms accounted for under the equity method: New: 1, Excluded: 1

2.Summary of business results for the third quarter of the fiscal year ending March, 2006 (April 1, 2005 - December 31, 2005)
(1)Progress in business results (consolidated) (Fraction less than 1 millions of yen omitted)
  Net Sales Operating Income Ordinary Income Net Income
March 2006, third quarter
March 2005, third quarter
millions of yen %
259,864 0.9
257,665 7.4
millions of yen %
1,886 -14.3
2,201 92.9
millions of yen %
1,776 -4.6
1,862 147.6
millions of yen %
1,050 37.9
761 176.7
Fisical year ending March

  Net Income per Share Net Income per Share(Diluted)
March 2006, third quarter
March 2005, third quarter
Yen Sen
57 07
46 58
Yen Sen
53 50
- -
Fisical year ending March
146 70
135 56
Note) Percentages shown in the columns of sales volume, operating profit, and others indicate the rate of increase/decrease relative to the same period of the preceding year.

[Qualitative Information on the Current Progress towards Operating Results (Consolidated)]
Japan's economy in the third quarter of the current financial year has been on a steady recovery track mainly due to the rise in corporate earnings, an increase in equipment investment in the private sector, the improvement in employment conditions, and a rebound in consumer spending.
According to an announcement by the Japan Electronics and Information Technology Industries Association (JEITA), the domestic personal computer market continued to be strong in the third quarter of the current fiscal year (October to December 2005) with 2.89 million units sold (5% over the same period of the previous year). This represented positive growth for 11 consecutive quarters in terms of the number of units. As a result of the continued fall in unit selling prices, however, the value of personal computer sales remained at 92% of those posted in the corresponding quarter of the preceding year. The personal computer market for corporate customers remained favorable, with equipment investment resulting from improved business results also being active in the small and medium-sized business sectors, and strong replacement demand for the personal computers playing a major role in the marketplace. The consumer market, spurred by the increase in bonus payments, also continued to be brisk.
With “Challenge for new growth – Quality and Quantity” as its catchphrase, our group aims to become a distributor chosen by customers by handling products in large volumes and improving the quality of our service, as well as by pursuing our basic policy of customer-first, community-based sales and low-cost operations. As in the previous year, we are currently promoting a sales campaign to sell 1.2 million the personal computers and 50 thousand servers to achieve the targets “Over The Million” and “Challenge for 50 thousand servers,” respectively.
We held software solution and security seminars nationwide to institute anti-information leakage measures and IT-based asset management. To boost our business results, we also focused our efforts on sales expansion in such business categories as security, service and support, digital home information equipment, IP Internet Phone, database software, middleware, software licensing, our exclusive product lines, and backup hardware and software.
ZOA Corporation went public on the Jasdaq Securities Exchange. With the selling-off of its shares, voting rights held by DIS decreased to 40%. As a result, ZOA Corporation became an affiliate accounted for by the equity method from the previous consolidated subsidiary, and “over-the-counter retailing of information technology products” disappeared from our list of segmented business categories during the current consolidated fiscal period.
Consolidated sales in the third quarter of the current fiscal year came to 259.864 billion yen, with an operating profit of 1.886 billion yen and a pretax profit of 1.776 billion yen.
We posted a special profit of 79 million yen from the selling off of the shares in ZOA Corporation, and a variable profit of 146 million yen based on the equity method. With an extraordinary decrease of 115 million yen from the loss in the elimination of fixed assets, our net profit for the third quarter of the current fiscal year amounted to 1.05 billion yen.
[Characteristics of our group’s business results for the fourth quarter of the current fiscal year]
In Japan, many businesses have fixed the end of their business year at March. Therefore, the introduction of new systems, their reception after inspection, and their delivery tend to be concentrated in March, the end of the fiscal year. It is likely that performance in the fourth quarter (from January to March, 2006) will significantly affect our group's business results for the entire fiscal year.

(2) Changes in financial position (consolidated)
  Total Assets Shareholder's Equity Ratio of Shareholders' Equity to Total Assets Shareholders' Equity per Share
March 2006, third quarter
March 2005, third quarter
millions of yen
millions of yen
Yen Sen
1,790 73
1,726 11
Fisical year ending March
136,012 31,154 22.9
1,804 68

[Qualitative information on fluctuations in our financial situation (consolidated)]
The financial conditions of our group in the third quarter of the current fiscal year were as follows.
Compared with the corresponding period of the previous year, total assets declined by 2.125 billion yen to 121.685 billion yen. A major factor for this decrease was that cash, deposits, and long-term borrowings declined because ZOA Corporation became an affiliate accounted for under the equity method instead of a consolidated subsidiary.
Capital funds increased by 5.892 billion yen from the same period of the preceding year to 34.14 billion yen. This is due to corporate bonds with share warrants issued in October 2004 were converted into shares. The shareholder capital ratio saw a sharp rise to 28.0% from 22.8% from the same period of the preceding year.

3. Forecast of consolidated business results for fiscal year ending March 2006(April 1, 2005 - March 31, 2006)
  Net Sales Ordinary Income Net Income
Entire fiscal Year
millions of yen
millions of yen
millions of yen
Note) Estimated net income per share for the fiscal year (full year):¥165.61
  * Actual business results may differ from estimates mentioned above due to various factors.
[Qualitative information concerning the expected business results]
In the third quarter, everything moved nearly as planned, and we have therefore not changed our projection for the business results announced on November 2, 2005.
The expected net profit per share has been corrected to account for the increase in the number of shares issued following the conversion of the corporate bonds with share warrants into shares in the third quarter of the current fiscal year.

Daiwabo Information System Co., Ltd.
Osamu Koyama,
Director of Finance Dept
PHONE +81-6-6281-1161
Fax +81-6-6258-2636