News Releases

Sumary of Fiscal Year Ending March 2005 First Quarter Consolidated Financial Result and
Business Performance
August 4, 2004

Company name Daiwabo Information System Co., Ltd. (Code No. 9912, First Section of Tokyo Stock Exchange/Osaka Securities Exchange)
Company representative Hirokazu Matsumoto, President
Contact person Osamu Koyama, General Manager, Finance Department (PHONE: +81-6-6281-1161)

1.Matters Related to Preparation of Quarterly Results Summary
(1) Are there differences between the accounting methods used in this report and the methods recognized in recent consolidated accounting years?
-In some cases simplified accounting standards were used for allowance reserves.
(2) Are there any changes in the accounting method from the one used in the last consolidated accounting year? NO
(3) Are there any changes within scope of consolidated and equity methods used in this report? NO

2.Summary of Results for First Quarter of Fiscal Year Ending March 2005(April 1, 2004 to June 30, 2004)
(1)Progress of Corporate Results (consolidated) (All amounts below 1 million yen are rounded off.)
Sales volume Operating profit Ordinary income The first quarter
(current) net income
March 2005,first quarter
March 2004, first quarter
million yen %
82,980 6.8
77,724 -
million yen %
574 -
-1 -
million yen %
497 -
-77 -
million yen %
160 -
-223 -
(Reference) March 2004 period

Net income per share Net income per share after adjustments for potential stocks
March 2005, first quarter
March 2004, first quarter
Yen Sen
9 79
-13 68
Yen Sen
- -
- -
(Reference) fiscal year ending March 2004
92 22
- -

Note) The percentages shown for the sales volume, operating profit, etc., indicate the percentage increase or decrease relative to the same quarter of the previous year.

[Qualitative Information Regarding Progress of Corporate Results]
In the first quarter 2004, corporate profits showed discernible evidence of recovery as a whole promoted by the growth in demand for digital household electronics and brisk export, which encouraged improvement in Japan's economy. Corporate capital investments also showed the upward trend in this period.
Japan Electronics and Information Technology Industries Association (JEITA) announced that, contributed by the broadened demand from small-to-medium-sized businesses, the growth of the personal computer industry remained solid with the demand in replacement and addition as an engine of the growth. The total number of units shipped in Japan posted the fifth consecutive quarterly rise including this quarter, rising 2 percent from the same period a year ago. However, it fell 5 percent in terms of money value owing to the continuous fall in per-unit price though the percentage was narrower than the previous one.
Under such market conditions, the DIS group has been and will implement a sales campaign to expand the sales of server machines in this fiscal year with the phrase "take on a challenge of selling 40,000 server machines" as a motto, implementing the customer first policy and practicing community-based marketing approach as usual. We also focused on expanding the sales of peripheral equipment and software as well as increasing the number of customers who use our support service.
We concluded an agreement to create an alliance with Tomen Cyber Business, which became one of our affiliated companies in March 2004 with the acquisition of a 29.9 percent stake in the Tomen group, in order to sell VDSL modem and middleware products, the bread-and-butter products of Tomen Cyber Business, as well as launching the maintenance service of those products through our nation-wide sales locations.
On June 25 this year, we successfully extended the scope of ISO 14001 certification, the international standards for environmental management system, to cover our Osaka Head Office, Tokyo Head Office, Tokyo Sales Department and Kansai Sales Department, following the achievement of the certification by the Procurement and Sales Promotion Division and Sales Planning Department in June 2003. We intend to achieve the company-wide ISO certification in the future.

[Characteristics of Quarterly Results for DIS Group]
There is a general tendency for most of the system installation and inspection to be done in March and September in the system integration business. However, our efforts to level out performance by reviewing delivery schedule and to reform that business structurally brought the company to profitability.
The first quarter sees the lowest level of performance in a whole fiscal year for the DIS group as a whole, to which the increase in labor costs owing to the joining of newly graduated students contributes.

(2) Financial Trends (consolidated)
Total assets Shareholder capital Shareholder capital percentage Shareholder capital per share
March 2005, first quarter
March 2004, first quarter
million yen
million yen
Yen Sen
1,698 76
1,597 91
(Reference) fiscal year ending March 2004 133,192 27,873 20.9
1,704 85

[Qualitative Information Regarding Financial Trends (consolidated)]
The total assets of the DIS Group in the first quarter of this year are greatly reduced in comparison with the end of the previous consolidated fiscal year. This is the result of concentrated sales at the end of the quarter. More specifically, the sales credits and procurement debts were both at high levels at the end of the previous period and the recovery of credits and payment of procurement debts took place during the first quarter of this year.
Comparing with the same period last year, the net income rose indexed to the rate of increase in total assets.

3. Consolidated Results Forecast for Fiscal Year Ending March 2005 (April 1, 2004 to March 31, 2005)
There has been no revision in the projected consolidated results for both fiscal and mid-fiscal year 2004, announced on May 13, 2004, because the first quarter performance has been, and is, proceeding according to our plan. However, the actual results may differ from the projected ones due to the influence of various factors.

Direct inquiries to
Osamu Koyama, Finance Department
PHONE +81-6-6281-1161
FAX +81-6-6258-2636