TOKYO, Aug. 11, 2009 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. (Nasdaq:IIJI - News; TSE1:3774) ("IIJ") today announced its consolidated financial results for the three months ended June 30, 2009 ("1Q09").(1)

Highlights of First Quarter FY2009 Financial Results




* Revenue was JPY15,835 million ($164 million), down 3.0% YoY.
While recurring revenues increased YoY, systems construction
revenue decreased as a result of the weak IT related investments
in Japan.

* Operating income was JPY351 million ($4 million), down 14.7% YoY
due to increase in operating loss related to our new ATM
operation business of JPY165 million YoY, while operating income
from connectivity and outsourcing service and SI increased 21.9%
YoY to JPY584 million.

* Net income attributable to IIJ(2) was JPY180 million ($2
million), up 6.7% YoY.

Overview of 1st Quarter FY2009 Financial Results and Business Outlook

"In an economic environment that continues to remain challenging, our operating income was above our original target largely because operating income from connectivity and outsourcing service and SI increased along with the increase in recurring revenues and the continuous tight cost control, while operating loss related to our ATM operation business increased as it is still in its course of business start up," said Koichi Suzuki, President and CEO of IIJ.

"As for the situation of our recurring revenue (87.7% of our 1Q09 total revenue), while it increased by 6.4% YoY, it dropped by 1.0% compared to 4Q08. There were price pressures which are common in the beginning of the fiscal year with corporate trying to reduce their running cost. However, we believe it will increase in the following quarters, especially because corporate needs for cost reduction are a following wind toward our outsourcing services. Security related services such as SMX service or anti-DDoS service are also expected to grow because companies must prevent their network from getting attacked. Needs for reliable and stable connectivity services also remain strong. Connectivity of over 1Gbps has been increasing quarter by quarter and we believe this trend will continue.

"As for SI, although anticipated, our systems construction revenue decreased by 40.6% YoY. Corporate customers are withholding their investments due to the sudden change in economy from the latter half of FY2008. Yet we see some light towards its recovery compared to when the economy was at a halt during last fiscal year. While we strive to receive orders, we will continue with our resolute operation for tight cost control through the rest of the fiscal year and increase SI gross margin.

"For our mid-term growth, we'll continuously introduce new services, which we believe will result in strengthening the basis of our business. In July 2009, we've introduced a new service brand 'LaIT' which offers reliable but affordable services packed with our technology to mid- to small-sized enterprises. We are also preparing the launch of cloud computing related services and additional features for our services such as IIJ Mobile service, email related services and VPN services.

"We hope that these new service developments will contribute to the innovation of the internet, as well as strengthening the basis of our business growth and lead to revenue growth."