FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 For May 14, 2004 Commission File Number: 0-30204 Internet Initiative Japan Inc. (Translation of registrant's name into English) Jinbocho Mitsui Bldg. 1-105 Kanda Jinbo-cho, Chiyoda-ku, Tokyo 101-0051, Japan (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F: Form 20-F [ X ] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as per-mitted by Regulation S-T Rule 101(b)(1): ____ Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as per-mitted by Regulation S-T Rule 101(b)(7): ____ Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the reg-istrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a mate-rial event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [ X ] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ------------- THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE PROSPECTUS INCLUDED IN THE REGISTRATION STATMENT ON FORM F-3 (FILE NO. 333-12696) OF INTERNET INITIATIVE JAPAN INC. AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED. EXHIBIT INDEX Exhibit Date Description of Exhibit -------- ----- ---------------------- 1 5/14/2004 IIJ Announces Fourth Quarter and Full Fiscal Year Results for the Year Ending March 31, 2004 - Gross-Margin Expansion Leads the Way Toward Profitability - EXHIBIT 1 IIJ Announces Fourth Quarter and Full Fiscal Year Results for the Year Ending March 31, 2004; Gross-Margin Expansion Leads the Way Toward Profitability TOKYO & NEW YORK--(BUSINESS WIRE)--May 13, 2004--Internet Initiative Japan Inc. (Nasdaq: IIJIE) ("IIJ"), one of Japan's leading Internet access and comprehensive network solutions providers, today announced its financial results for the fourth quarter and full fiscal year ending March 31, 2004 ("FY 2003").(1) Highlights of fourth quarter FY2003 results: -- Revenues totaled JPY 11,617 million ($ 111.5 million), an increase of 20.6% compared to 3Q03 and a decrease of 10.9% compared to 4Q02. -- Operating income was JPY 350 million ($ 3.4 million), an increase of 48.3% from JPY 236 million in 3Q03 (which 3Q03 amount included the JPY 71 million of accounts receivable from Crosswave Communications Inc. ("Crosswave") that became collectible after previously being written-off), and a turnaround from an operating loss of JPY 446 million in 4Q02. The increase compared to 3Q03 reflects the increased revenues from our high-margin Systems Integration ("SI") services. The increase compared to 4Q02 reflects increased profitability of our SI services. -- Adjusted EBITDA(2) was JPY 1,358 million ($ 13.0 million), an increase of 11.5% from an adjusted EBITDA of JPY 1,218 million in 3Q03 and JPY 459 million in 4Q02. -- Net income was JPY 669 million ($ 6.4 million), a decrease from JPY 1,979 million in 3Q03 which amount included a special gain of JPY 1,572 million that was generated by the sale of an equity investment, and a substantial improvement from the net loss of JPY 9,290 million in 4Q02. Highlights of full FY2003 results: -- Revenues totaled JPY 39 billion ($ 372.2 million), a decrease of 11.9% from FY2002. The decrease largely reflects the first half of FY2003 decline in SI service and equipment sales revenues, which were adversely affected by weak corporate investment in Japan in that period. -- Operating loss of JPY 1.4 billion ($ 13.9 million), an improvement from an operating loss of JPY 1.7 billion in FY2002. Positive operating income in 3Q03 and 4Q03 were not sufficient to cover the first half year's operating loss. -- Net loss was JPY 105 million ($ 1.0 million), a significant improvement from JPY 16,477 million in FY2002 when net loss was negatively impacted by losses associated with our investment in Crosswave. Other factors affecting the improvement from FY2002 include positive operating income for the second half of FY2003, a special gain from the sale of an equity investment and income tax benefits associated with increased unrealized gains from certain available-for-sales securities. -- As a result of ongoing efforts to increase profitability throughout the Company, we expect yearly operating and net income to turn positive in FY2004. Overview of Fourth Quarter and Full FY2003 Financial Results and Business Outlook(3) "I am pleased to report that IIJ returned to profitability in the second half of FY2003," said Koichi Suzuki, President and CEO of IIJ. "Although the total revenue for FY2003 did not reach the level of FY2002 due to weak corporate investment and slow economic recovery in the first half, we achieved positive operating and net income in the second half largely as a result of our strategic focus on high margin SI and Value Added Services ("VAS") such as Internet security services and virtual private networks ("VPNs"). We believe that this strategy has successfully countered the negative impact of Crosswave's commencement of corporate reorganization in the first half of FY2003 and that we are now firmly positioned for sustained and profitable growth." President Suzuki continued, "Japan's economy is recovering and corporate IT investment has increased in the second half of FY2003. Broad economic growth, coupled with rapidly increasing demand by our enterprise customers for valued added and network services, such as security and operational outsourcing, provided good conditions for resumption in revenue growth. In this environment, we will continue to develop new high margin services for Japan's increasingly complicated, and critical, networked economy. By doing so, we hope to strengthen profitability and are expecting yearly operating and net income to be positive in FY2004." "Gross-margins for all of our business lines increased from the fourth quarter of FY2002 due to an increased emphasis on high margin products and services, as well as across-the-board cost reductions and internal efficiency improvements," said Yasuhiro Nishi, CFO of IIJ. "Connectivity and VAS gross-margin expansion reflects our reduction of Internet backbone costs by JPY 516 million in FY2003 and increased revenue from high margin VAS. SI service gross-margin increased due to our successful efforts to secure profitable SI contracts, of which a substantial amount are network-related." Revenues Revenues in 4Q03 totaled JPY 11,617 million, a decrease of 10.9% from JPY 13,036 million in 4Q02 and an increase of 20.6% from JPY 9,633 million in 3Q03. Table 1. Revenues (JPY in millions) ---------------------------------------------------------------------- Revenues 4Q03 4Q02 YoY 3Q03 QoQ % change % change ---------------------------------------------------------------------- Connectivity and value-added services: ---------------------------------------------------------------------- Dedicated access services 3,100 3,341 (7.2%) 3,204 (3.2%) ---------------------------------------------------------------------- Dial-up access services 758 765 (0.9%) 780 (2.8%) ---------------------------------------------------------------------- Total Connectivity Services 3,858 4,106 (6.0%) 3,984 (3.1%) ---------------------------------------------------------------------- Value-added services 1,104 931 18.5% 1,125 (1.9%) ---------------------------------------------------------------------- Other 537 381 40.8% 525 2.2% ---------------------------------------------------------------------- Total Connectivity and value-added services 5,499 5,419 1.5% 5,633 (2.4%) ---------------------------------------------------------------------- Systems integration revenues 4,001 4,905 (18.4%) 2,889 38.5% ---------------------------------------------------------------------- Equipment sales 2,117 2,712 (21.9%) 1,111 90.6% ====================================================================== Total revenues 11,617 13,036 (10.9%) 9,633 20.6% ---------------------------------------------------------------------- Connectivity and VAS revenues were JPY 5,499 million in 4Q03, an increase of 1.5% from JPY 5,419 million in 4Q02 and a decrease of 2.4% from JPY 5,633 million in 3Q03. Table 2. Connectivity Services (JPY in millions) ---------------------------------------------------------------------- Connectivity Services 4Q03 4Q02 YoY 3Q03 QoQ % change % change ====================================================================== Dedicated access services: ---------------------------------------------------------------------- IP Service + DC (connectivity) 2,423 2,518 (3.8%) 2,485 (2.5%) ---------------------------------------------------------------------- Others(4) 677 823 (17.7%) 719 (5.8%) ====================================================================== Total Dedicated Access Services 3,100 3,341 (7.2%) 3,204 (3.2%) ====================================================================== Dedicated access service revenues were JPY 3,100 million in 4Q03, a decrease of 7.2% compared to 4Q02 and a decrease of 3.2% compared to 3Q03. IP Service, including Data Center Connectivity services, decreased by 3.8% in 4Q03 compared to 4Q02 and decreased by 2.5% compared to 3Q03, mainly due to the cancellation of service by a regional electric power company's telecom service arm. IIJ FiberAccess/F Service revenue, which is included in Others, substantially increased compared to 4Q02 and steadily increased compared to 3Q03, however, the increase did not offset the revenue decreases in IIJ T1 Standard and IIJ Economy Service, which are also included in Others. Table 3. Number of Contracts ---------------------------------------------------------------------- 4Q03 4Q02 3Q03 ====================================================================== IP Services 64kbps - 128kbps 73 112 76 ---------------------------------------------------------------------- 192kbps - 768kbps 20 35 22 ---------------------------------------------------------------------- 1Mbps - 2Mbps 218 268 226 ---------------------------------------------------------------------- 3Mbps - 1.2Gbps 427 248 381 ---------------------------------------------------------------------- Number of Contracts of DC Connectivity Services 196 156 188 ---------------------------------------------------------------------- Other 6,292 4,489 5,991 ====================================================================== Total Dedicated Access Services 7,226 5,308 6,884 ---------------------------------------------------------------------- IIJ4U (Dial-up access services for retail market) 67,105 79,464 69,688 ---------------------------------------------------------------------- Other Dial-Up Access Services 628,762 450,320 597,232 ====================================================================== Total Dial-Up Access Services 695,867 529,784 666,920 ====================================================================== Table 4. Number of Contract Bandwidth (Unit: Gbps) ---------------------------------------------------------------------- 4Q03 4Q02 3Q03 ====================================================================== Dedicated Access Services 64.5 32.1 60.3 ---------------------------------------------------------------------- DC Connectivity Services 15.6 9.9 15.5 ====================================================================== Total Contract Bandwidth 80.1 42.0 75.8 ====================================================================== Dial-up access service revenues were JPY 758 million in 4Q03, a decrease of 0.9% compared to 4Q02 and a decrease of 2.8% compared to 3Q03. For dial-up services for individual customers, the decrease in IIJ4U service revenues was offset by the revenue growth of Original Equipment Manufacturer services, including the CDN ("Contents Delivery Network") platform and NTT's regional L-mode service. However, dial-up service revenues for corporate customers decreased due to an increase in their demand for lower-cost broadband services. Table 5. Value-added Services (JPY in millions) ---------------------------------------------------------------------- Value-Added Services 4Q03 4Q02 YoY 3Q03 QoQ % change % change ---------------------------------------------------------------------- Internet Data Center services 324 341 (5.2%) 373 (13.1%) ---------------------------------------------------------------------- Other value-added services 780 590 32.2% 752 3.7% ====================================================================== Total Value-Added Service Revenues 1,104 931 18.5% 1,125 (1.9%) ---------------------------------------------------------------------- VAS revenues were JPY 1,104 million in 4Q03, an increase of 18.5% compared to 4Q02 but a decrease of 1.9% compared to 3Q03. Internet Data Center services decreased by 5.2% compared to 4Q02 and by 13.1% compared to 3Q03. The revenue decrease from 3Q03 was mainly due to the absence in 4Q03 of "one-time" revenues associated with the construction of special facilities for large customers. Systems Integration services revenues decreased 18.4% to JPY 4,001 million in 4Q03 from JPY 4,905 million in 4Q02 and increased 38.5% from JPY 2,889 million in 3Q03. Equipment sales revenues were JPY 2,117 million in 4Q03, a decrease of 21.9% compared to 4Q02 and an increase of 90.6% compared to 3Q03. Cost and expenses Cost of revenues was JPY 9,915 million in 4Q03, a decrease of 16.8% compared to 4Q02 and an increase of 22.0% compared to 3Q03. Table 6. Costs and Expenses (JPY in millions) ---------------------------------------------------------------------- Costs and expenses: 4Q03 4Q02 YoY 3Q03 QoQ % change % change ---------------------------------------------------------------------- Cost of Revenues: ---------------------------------------------------------------------- Cost of connectivity and value-added services 4,810 5,033 (4.4%) 4,877 (1.4%) ---------------------------------------------------------------------- Cost of systems integration 3,054 4,248 (28.1%) 2,198 38.9% ---------------------------------------------------------------------- Cost of equipment sales 2,051 2,638 (22.3%) 1,050 95.4% ---------------------------------------------------------------------- Total of Cost of Revenues 9,915 11,919 (16.8%) 8,125 22.0% ---------------------------------------------------------------------- Sales and marketing 756 789 (4.2%) 699 8.2% ---------------------------------------------------------------------- General and administrative 518 662 (21.7%) 486 6.5% ---------------------------------------------------------------------- Research and development 78 113 (30.2%) 87 (9.4%) ====================================================================== Total costs and expenses 11,267 13,483 (16.4%) 9,397 19.9% ---------------------------------------------------------------------- Cost of Connectivity and VAS was JPY 4,810 million, a decrease of 4.4% compared to 4Q02 and a decrease of 1.4% compared to 3Q03. The gross-margin ratio for Connectivity and VAS in 4Q03 was 12.5%, compared to 7.1% in 4Q02 and 13.4% in 3Q03. The improvement in gross-margin since 4Q02 was largely the result of our continuous efforts to reduce Internet backbone costs. Table 7. Backbone Costs (JPY in millions) ---------------------------------------------------------------------- Backbone Costs 4Q03 4Q02 YoY 3Q03 QoQ % Change % Change ---------------------------------------------------------------------- International Backbone Costs 165 315 (47.7%) 156 5.7% ---------------------------------------------------------------------- Domestic Backbone Costs 902 1,075 (16.1%) 939 (3.8%) ---------------------------------------------------------------------- International backbone costs were JPY 165 million, a decrease of 47.7% compared to 4Q02 and an increase of 5.7% compared to 3Q03 as we benefited from our on-going efforts to optimize our network. Domestic backbone costs were JPY 902 million, a decrease of 16.1% compared to 4Q02 and a decrease of 3.8% compared to 3Q03. These decreases reflect a decline in backbone prices, which offset an increase in connection fees with NTT's regional access networks (FLET'S). Cost of SI service revenues was JPY 3,054 million in 4Q03, a decrease of 28.1% compared to 4Q02 and an increase of 38.9% compared to 3Q03. The gross margin for SI was 23.7% in 4Q03 compared to 13.4% in 4Q02 and 23.9% in 3Q03. The year-over-year improvement in gross-margin was the result of the increased profitability of SI development contracts and higher consulting fees for network services. Sales and marketing expenses were JPY 756 million in 4Q03, a decrease of 4.2% compared to 4Q02 reflecting a reduction in advertising expenses. Sales and marketing expenses increased of 8.2% compared to 3Q03 primarily as the result of inclusion in 3Q03 of JPY 71 million of income as a result of the reversal of allowance for doubtful receivables from Crosswave. General and administrative expenses were JPY 518 million in 4Q03, a decrease of 21.7% compared to 4Q02 and an increase of 6.5% compared to 3Q03. The expense decrease from 4Q02 reflects the absence in 4Q03 of costs associated with our move into a new office. Operating income (loss) Operating income was JPY 350 million in 4Q03, compared to an operating loss of JPY 446 million in 4Q02 and operating income of JPY 236 million in 3Q03. The improvement from 4Q02 is due to an increase in SI service profitability. The improvement from 3Q03 is due to an increase in SI service revenue. Other expenses for 4Q03 was JPY 226 million, compared to Other Expenses of JPY 360 million in 4Q02 and Other Income of JPY 1,570 million in 3Q03. The income in 3Q03 included a special gain on the sale of an equity investment, which amounted to JPY 1,572 million. Income tax benefit (expense) for 4Q03 was a benefit of JPY 891 million, compared to an expense of JPY 97 million in 4Q02 and a benefit of JPY 280 million in 3Q03. The increase compared to 4Q02 and 3Q03 is due to a decrease in the valuation allowance for deferred tax assets, which decrease is primarily attributable to the income tax effect of increased unrealized gains during the quarter on certain available-for-sale securities. Equity in net loss of equity method investees amounted to JPY 189 million in 4Q03, compared to JPY 8,407 million in 4Q02, and JPY 58 million in 3Q03. The year-over-year improvement largely reflects the absence of losses associated with our previous equity investment in Crosswave. Net income was JPY 669 million in 4Q03, compared to a net loss of JPY 9,290 million in 4Q02 and net income of JPY 1,979 million in 2Q03. The year-over-year improvement largely reflects the absence of losses associated with our previous equity investment in Crosswave and an increase in revenue from high margin business lines. The quarter-over-quarter improvement is the result of positive operating income and the income tax effect of increases in unrealized gains during the quarter on certain available-for-sale securities. Basic net income per ADS equivalent was JPY 8.73 in 4Q03, compared to a net loss of JPY 206.62 in 4Q02 and JPY 25.83 in 3Q03. Table 8. Other Financial Statistics (JPY in millions) ---------------------------------------------------------------------- Other Financial Statistics 4Q03 4Q02 YoY 3Q03 QoQ % Change % Change ====================================================================== Adjusted EBITDA(5) 1,358 459 195.5% 1,218 11.5% ---------------------------------------------------------------------- CAPEX, including capitalized leases(6) 1,014 936 8.4% 508 99.6% ---------------------------------------------------------------------- Depreciation and amortization(7) 1,030 933 10.4% 1,004 2.6% ---------------------------------------------------------------------- Reconciliation of Non-GAAP Financial Measures The following table summarizes the reconciliation of adjusted EBITDA to net income according to the consolidated statements of operations that are prepared and presented in accordance with U.S. generally accepted accounting principles in Appendix 1: Table 9. Adjusted EBITDA (JPY in millions) ---------------------------------------------------------------------- 4Q03 4Q02 3Q03 ====================================================================== Adjusted EBITDA 1,358 459 1,218 ---------------------------------------------------------------------- Depreciation and amortization(8) (1,008) (905) (982) ---------------------------------------------------------------------- Operating income (loss) 350 (446) 236 ====================================================================== Other income (expenses) (226) (361) 1,570 ---------------------------------------------------------------------- Income tax expense (benefit) (891) 97 (280) ---------------------------------------------------------------------- Minority interests in consolidated subsidiaries (157) 21 (49) ---------------------------------------------------------------------- Equity in net income (loss) of equity method investees (189) (8,407) (58) ====================================================================== Net income (loss) 669 (9,290) 1,979 ---------------------------------------------------------------------- The following table summarizes the reconciliation of capital expenditures to the purchase of property and equipment according to the consolidated statements of cash flows that are prepared and presented in accordance with U.S. generally accepted accounting principles in Appendix 4: Table 10. CAPEX (JPY in millions) ---------------------------------------------------------------------- 4Q03 4Q02 3Q03 ====================================================================== Capital expenditures 1,014 936 508 ---------------------------------------------------------------------- Acquisition of assets by entering into capital leases 778 772 168 ---------------------------------------------------------------------- Purchase of property and equipment 236 164 340 ---------------------------------------------------------------------- Fourth Quarter FY2003 Business Review Key Service Developments Enhancement of managed firewall services: In April 2004, IIJ enhanced its two Internet security managed firewall services. "IIJ Security Light Service", a low-cost service for small- and medium-sized enterprises ("SMEs"), has been enhanced to allow for increased broadband usage by SMEs in Japan. "IIJ Security Standard," a standard service for corporate customers, has been enhanced to provide greater reliability. Anti-virus and spam movements: Since the start of FY2003, IIJ has increased its involvement with industry groups formed to combat Internet viruses and spam. IIJ and IIJ America participated in founding the Messaging Anti Abuse Working Group and attended the December 2003 kick-off meeting. This group, which is composed of 19 international telecommunications companies, ISPs, and related businesses, is aimed at developing measures to combat spam e-mails and other unethical uses of the Internet. Additionally, on April 27, 2004, IIJ announced that it had joined the Japan Messaging User Group ("JMUG"), a working group established in Japan to discuss ways of implementing countermeasures against spam, viruses, and other Internet messaging related issues. Network Infrastructure Developments In 4Q03, IIJ continued to develop its Internet backbone in order to maintain the network quality that it provides to its customers. This quarter, IIJ installed one new circuit and upgraded one pre-existing circuit for the international backbone. For the domestic backbone, IIJ installed one new circuit and upgraded two pre-existing circuits. IIJ considered cost effectiveness and overall profitability in undertaking these upgrades. Key Developments of the IIJ Group Enhancement on security solutions: On April 26, 2004, IIJ announced that IIJ-Tech introduced Security Check-up Service. Security Check-up Service evaluates the overall security level of corporate e-mail systems and provides a diagnostic analysis of potential emerging threats. The service is targeted to customers that do not require a full instant diagnosis but require an initial glimpse and a thorough "check-up" of the security level of a company, which will be provided within approximately two weeks. Teleconference/Webcast On May 14 at 9:00 am (ET), IIJ will host a conference call to discuss the Company's results and outlook. There will be a simultaneous webcast available at www.vcall.com. A replay will also be available at the same URL. About Internet Initiative Japan Inc. Founded in 1992, Internet Initiative Japan Inc. (IIJ, NASDAQ: IIJIE) is one of Japan's leading Internet-access and comprehensive network solutions providers. The company has built one of the largest Internet backbone networks in Japan, and between Japan and the United States. IIJ and its group of companies provide total network solutions that mainly cater to high-end corporate customers. Services range from the delivery of new generation network services over an optical-fiber infrastructure that is optimized for data communications, to the construction of pan-Asian IP backbone networks. The company also offers high-quality systems integration and security services, Internet access, hosting/housing, and content design. 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 FY2004 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 expectation that net losses will continue or may increase; IIJ's ability to raise additional capital to cover its accumulated deficit; IIJ's ability to continue to increase subscribers to its connectivity services, particularly at higher bandwidths; IIJ's ability to generate significant revenues from its other services such as systems integration; the ability to compete in a rapidly evolving and competitive marketplace; the impact of technological changes in its industry; 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. (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. For all 4Q03 and full FY2003 results, translations of Japanese yen amounts into US dollars are solely for the convenience of readers outside of Japan and have been made at the rate of JPY 104.18 = US$1.00, the approximate exchange rate on March 31, 2004. (2) Please refer to the Reconciliation of Non-GAAP Financial Measures on page 5. (3) This Overview and Business Outlook contains forward-looking statements and projections such as statements regarding FY2004 operating and net profitability that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include, but are not limited to, the factors noted at the end of this release and to the risk factors and other information contained in IIJ's filings on Form 20-F and Form 6-K, as well as other filings and documents furnished to the Securities and Exchange Commission. IIJ plans to keep this press release publicly available on its Web site (www.iij.ad.jp), but may discontinue this practice at any time. IIJ intends to publish its next Overview and Business Outlook in its 1Q04 earnings release, presently scheduled for August 2004. (4) Others are IIJ FiberAccess/F Service, IIJ Ether Standard, IIJ DSL/F Service, IIJ T1 Standard and IIJ Economy Service. (5) Please refer to the Reconciliation of Non-GAAP Financial Measures below. (6) Please refer to the Reconciliation of Non-GAAP Financial Measures below. (7) Depreciation and amortization includes amortization of issuance cost of convertible notes. (8) Depreciation and amortization excludes amortization of issuance cost of convertible notes that was presented as other expenses. INTERNET INITIATIVE JAPAN INC. Appendix 1 ------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) ------------------------------------------------ For the Three Months Ended Mar 31, 2004, Mar 31, 2003 and Dec 31, 2003 (Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD) Except for Per Share and ADS Data) (1) Year-over-year Comparison Mar 31, 2004 -------------------------------------- % of Total USD (1) JPY Revenues ------------ ------------ ------------ Revenues: Connectivity and value- added services: Dedicated access services 29,760 3,100,452 26.7% Dial-up access services 7,275 757,947 6.5 Value-added services 10,593 1,103,558 9.5 Other 5,151 536,590 4.6 ------------ ------------ ------------ Total connectivity and value-added services 52,779 5,498,547 47.3 Systems integration revenues 38,409 4,001,449 34.5 Equipment sales 20,321 2,117,006 18.2 ------------ ------------ ------------ Total revenues 111,509 11,617,002 100.0 ------------ ------------ ------------ Costs and expenses: Cost of connectivity and value- added services 46,169 4,809,831 41.4 Cost of systems integration revenues 29,314 3,053,962 26.3 Cost of equipment sales 19,686 2,050,923 17.6 ------------ ------------ ------------ Total costs 95,169 9,914,716 85.3 Sales and marketing 7,256 755,928 6.5 General and administrative 4,971 517,884 4.5 Research and development 756 78,786 0.7 ------------ ------------ ------------ Total costs and expenses 108,152 11,267,314 97.0 ------------ ------------ ------------ Operating income(loss) 3,357 349,688 3.0 ------------ ------------ ------------ Other income(expenses) (2,170) (226,045) (1.9) ------------ ------------ ------------ Income(Loss) before income tax expense(benefit) 1,187 123,643 1.1 ------------ ------------ ------------ Income tax expense(benefit) (8,552) (890,928) (7.7) Minority interests in consolidated subsidiaries (1,510) (157,295) (1.4) Equity in net loss of equity method investees: Equity method net loss (1,810) (188,577) (1.6) Impairment loss on investment and deposits for Crosswave ------------ ------------ ------------ Net income(loss) 6,419 668,699 5.8% ============ ============ ============ Basic Net Income(Loss) Per Share 17,454 Basic Net Income(Loss) Per ADS Equivalent 8.73 Weighted Average Number of Shares 38,312 Weighted Average Number of ADS Equivalents 76,623,702 Year-over-year Comparison Mar 31, 2003 -------------------------------------- % of Total YOY JPY Revenues Chg % ------------ ------------ ------------ Revenues: Connectivity and value- added services: Dedicated access services 3,341,255 25.6% (7.2%) Dial-up access services 764,958 5.9 (0.9) Value-added services 931,399 7.2 18.5 Other 381,206 2.9 40.8 ------------ ------------ ------------ Total connectivity and value-added services 5,418,818 41.6 1.5 Systems integration revenues 4,905,429 37.6 (18.4) Equipment sales 2,712,192 20.8 (21.9) ------------ ------------ ------------ Total revenues 13,036,439 100.0 (10.9) ------------ ------------ ------------ Costs and expenses: Cost of connectivity and value- added services 5,033,266 38.6 (4.4) Cost of systems integration revenues 4,247,690 32.6 (28.1) Cost of equipment sales 2,638,334 20.2 (22.3) ------------ ------------ ------------ Total costs 11,919,290 91.4 (16.8) Sales and marketing 789,234 6.0 (4.2) General and administrative 661,502 5.1 (21.7) Research and development 112,845 0.9 (30.2) ------------ ------------ ------------ Total costs and expenses 13,482,871 103.4 (16.4) ------------ ------------ ------------ Operating income(loss) (446,432) (3.4) (178.3) ------------ ------------ ------------ Other income(expenses) (360,292) (2.8) (37.3) ------------ ------------ ------------ Income(Loss) before income tax expense(benefit) (806,724) (6.2) (115.3) ------------ ------------ ------------ Income tax expense(benefit) 97,256 0.8 (1,016.1) Minority interests in consolidated subsidiaries 21,342 0.2 (837.0) Equity in net loss of equity method investees: Equity method net loss (1,253,875) (9.6) (85.0) Impairment loss on investment and deposits for Crosswave (7,153,087) (54.9) 0.0 ------------ ------------ ------------ Net income(loss) (9,289,600) (71.3%) (107.2%) ============ ============ ============ Basic Net Income(Loss) Per Share (413,238) Basic Net Income(Loss) Per ADS Equivalent (206.62) Weighted Average Number of Shares 22,480 Weighted Average Number of ADS Equivalents 44,960,000 Sequential Comparison Dec 31, 2003 -------------------------------------- % of Total QOQ JPY Revenues Chg % ------------ ------------ ------------ Revenues: Connectivity and value- added services: Dedicated access services 3,204,046 33.3% (3.2%) Dial-up access services 779,544 8.1 (2.8) Value-added services 1,124,596 11.7 (1.9) Other 525,106 5.4 2.2 ------------ ------------ ------------ Total connectivity and value-added services 5,633,292 58.5 (2.4) Systems integration revenues 2,888,936 30.0 38.5 Equipment sales 1,110,927 11.5 90.6 ------------ ------------ ------------ Total revenues 9,633,155 100.0 20.6 ------------ ------------ ------------ Costs and expenses: Cost of connectivity and value- added services 4,876,741 50.6 (1.4) Cost of systems integration revenues 2,198,668 22.8 38.9 Cost of equipment sales 1,049,663 10.9 95.4 ------------ ------------ ------------ Total costs 8,125,072 84.3 22.0 Sales and marketing 698,948 7.3 8.2 General and administrative 486,332 5.1 6.5 Research and development 86,966 0.9 (9.4) ------------ ------------ ------------ Total costs and expenses 9,397,318 97.6 19.9 ------------ ------------ ------------ Operating income(loss) 235,837 2.4 48.3 ------------ ------------ ------------ Other income(expenses) 1,569,957 16.3 (114.4) ------------ ------------ ------------ Income(Loss) before income tax expense(benefit) 1,805,794 18.7 (93.2) ------------ ------------ ------------ Income tax expense(benefit) (280,406) (2.9) 217.7 Minority interests in consolidated subsidiaries (48,710) (0.5) 222.9 Equity in net loss of equity method investees: Equity method net loss (58,354) (0.6) 223.2 Impairment loss on investment and deposits for Crosswave ------------ ------------ ------------ Net income(loss) 1,979,136 20.5% (66.2%) ============ ============ ============ Basic Net Income(Loss) Per Share 51,658 Basic Net Income(Loss) Per ADS Equivalent 25.83 Weighted Average Number of Shares 38,312 Weighted Average Number of ADS Equivalents 76,623,702 Note (1): The translation of Japanese yen amounts into US dollar amounts with respect to the three months ended Mar 31, 2004 are included solely for the convenience of readers outside Japan and have been made at the rate of JPY 104.18 =$1, the approximate rate of exchange on Mar 31, 2004. INTERNET INITIATIVE JAPAN INC. Appendix 2 ------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) ------------------------------------------------ For the Years Ended Mar 31, 2004 and Mar 31, 2003 (Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD) Except for Per Share and ADS Data) (1) Year-over-year Comparison Mar 31, 2004 -------------------------------------- % of Total USD (1) JPY Revenues ------------ ------------ ------------ Revenues: Connectivity and value- added services: Dedicated access services 123,461 12,862,132 33.2% Dial-up access services 29,646 3,088,498 8.0 Value-added services 41,238 4,296,228 11.1 Other 20,328 2,117,794 5.4 ------------ ------------ ------------ Total connectivity and value-added services 214,673 22,364,652 57.7 Systems integration revenues 113,723 11,847,687 30.5 Equipment sales 43,839 4,567,123 11.8 ------------ ------------ ------------ Total revenues 372,235 38,779,462 100.0 ------------ ------------ ------------ Costs and expenses: Cost of connectivity and value- added services 192,431 20,047,438 51.7 Cost of systems integration revenues 94,564 9,851,726 25.4 Cost of other equipment sales 41,719 4,346,243 11.2 ------------ ------------ ------------ Total costs 328,714 34,245,407 88.3 Sales and marketing 33,859 3,527,490 9.1 General and administrative 20,143 2,098,481 5.4 Research and development 3,436 357,968 0.9 ------------ ------------ ------------ Total costs and expenses 386,152 40,229,346 103.7 ------------ ------------ ------------ Operating loss (13,917) (1,449,884) (3.7) ------------ ------------ ------------ Other income(expenses) 9,428 982,220 2.5 ------------ ------------ ------------ Loss before income tax expense(benefit) (4,489) (467,664) (1.2) ------------ ------------ ------------ Income tax expense(benefit) (20,474) (2,133,011) (5.5) Minority interests in consolidated subsidiaries 2,264 235,812 0.6 Equity in net loss of equity method investees: Equity method net loss (2,748) (286,317) (0.8) Impairment loss on investment, advances and deposits for Crosswave (16,510) (1,719,981) (4.4) ------------ ------------ ------------ Net loss (1,009) (105,139) (0.3%) ============ ============ ============ Basic Net Loss Per Share (3,316) Basic Net Loss Per ADS Equivalent (1.66) Weighted Average Number of Shares 31,711 Weighted Average Number of ADS Equivalents 63,421,571 Mar 31, 2003 -------------------------------------- % of Total YoY JPY Revenues Chg % ------------ ------------ ------------ Revenues: Connectivity and value- added services: Dedicated access services 13,814,977 31.4% (6.9%) Dial-up access services 3,155,137 7.2 (2.1) Value-added services 3,602,847 8.2 19.2 Other 1,725,736 3.9 22.7 ------------ ------------ ------------ Total connectivity and value-added services 22,298,697 50.7 0.3 Systems integration revenues 15,012,633 34.1 (21.1) Equipment sales 6,706,231 15.2 (31.9) ------------ ------------ ------------ Total revenues 44,017,561 100.0 (11.9) ------------ ------------ ------------ Costs and expenses: Cost of connectivity and value- added services 20,386,887 46.3 (1.7) Cost of systems integration revenues 13,090,220 29.7 (24.7) Cost of other equipment sales 6,416,525 14.6 (32.3) ------------ ------------ ------------ Total costs 39,893,632 90.6 (14.2) Sales and marketing 3,176,165 7.2 11.1 General and administrative 2,204,504 5.0 (4.8) Research and development 414,149 1.0 (13.6) ------------ ------------ ------------ Total costs and expenses 45,688,450 103.8 (11.9) ------------ ------------ ------------ Operating loss (1,670,889) (3.8) (13.2) ------------ ------------ ------------ Other income(expenses) (1,269,433) (2.9) (177.4) ------------ ------------ ------------ Loss before income tax expense(benefit) (2,940,322) (6.7) (84.1) ------------ ------------ ------------ Income tax expense(benefit) 911,365 2.1 (334.0) Minority interests in consolidated subsidiaries 153,251 0.4 53.9 Equity in net loss of equity method investees: Equity method net loss (5,625,299) (12.8) (94.9) Impairment loss on investment, advances and deposits for Crosswave (7,153,087) (16.2) (76.0) ------------ ------------ ------------ Net loss (16,476,822) (37.4%) (99.4%) ============ ============ ============ Basic Net Loss Per Share (732,955) Basic Net Loss Per ADS Equivalent (366.48) Weighted Average Number of Shares 22,480 Weighted Average Number of ADS Equivalents 44,960,000 Note (1):The translations of Japanese yen amounts into US dollar amounts with respect to the year ended Mar 31, 2004 are included solely for the convenience of readers outside Japan and have been made at the rate of JPY 104.18 =$1, the approximate rate of exchange on Mar 31, 2004. INTERNET INITIATIVE JAPAN INC. Appendix 3 ------------------------------ CONSOLIDATED BALANCE SHEETS(UNAUDITED) -------------------------------------- As of Mar 31, 2004, Mar 31, 2003 and Dec 31, 2003 (Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD))(1) Mar 31, 2004 -------------------------------------- USD (1) JPY % ------------ ------------ ------------ ASSETS ------ Current Assets: Cash and cash equivalent 117,914 12,284,239 28.7% Accounts receivable, net 86,333 8,994,156 21.1 Inventories 4,208 438,435 1.0 Prepaid expenses 5,353 557,703 1.3 Other current assets 3,124 325,422 0.8 ------------ ------------ ------------ Total current assets 216,932 22,599,955 52.9 Investments in and Advances to Equity Method Investees 7,469 778,152 1.8 Other Investments 76,136 7,931,893 18.6 Property and Equipment, net 82,568 8,601,905 20.1 Guarantee Deposits 19,919 2,075,123 4.9 Other Assets 7,198 749,897 1.7 ------------ ------------ ------------ Total assets 410,222 42,736,925 100.0% ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) ---------------------- Current Liabilities: Short-term borrowings 63,007 6,564,093 15.4% Accounts payable 68,996 7,187,976 16.8 Accrued expenses 4,361 454,366 1.1 Other current liabilities 4,645 483,925 1.1 Long-term borrowings-current portion 14,861 1,548,246 3.6 Capital lease obligations- current portion 22,920 2,387,754 5.6 ------------ ------------ ------------ Total current liabilities 178,790 18,626,360 43.6 Long-term Borrowings 22,154 2,308,019 5.4 Convertible Notes 113,573 11,832,000 27.7 Capital Lease Obligations- Noncurrent 27,647 2,880,298 6.7 Accrued Retirement and Pension Costs 698 72,687 0.2 Other Noncurrent Liabilities 1,547 161,122 0.4 ------------ ------------ ------------ Total liabilities 344,409 35,880,486 84.0 ------------ ------------ ------------ Minority Interest 6,165 642,311 1.5 ------------ ------------ ------------ Shareholders' Equity (Capital Deficiency): Common stock 132,131 13,765,372 32.2 Additional paid-in capital 226,892 23,637,628 55.3 Accumulated deficit (333,946) (34,790,430) (81.4) Accumulated other comprehensive income 34,993 3,645,558 8.5 Treasury stock (422) (44,000) (0.1) ------------ ------------ ------------ Total shareholders' equity (capital deficiency) 59,648 6,214,128 14.5 ------------ ------------ ------------ Total liabilities and shareholders' equity (capital deficiency) 410,222 42,736,925 100.0% ============ ============ ============ Mar 31, 2003 Dec 31, 2003 --------------------- --------------------- JPY % JPY % ------------ -------- ------------ -------- ASSETS ------ Current Assets: Cash and cash equivalent 3,588,352 11.2% 12,140,595 31.5% Accounts receivable, net 10,253,096 32.0 6,640,226 17.3 Inventories 417,666 1.3 196,252 0.5 Prepaid expenses 564,501 1.7 875,338 2.3 Other current assets 932,873 2.9 391,766 1.0 ------------ -------- ------------ -------- Total current assets 15,756,488 49.1 20,244,177 52.6 Investments in and Advances to Equity Method Investees 1,116,020 3.5 1,024,126 2.7 Other Investments 3,040,189 9.5 5,821,912 15.1 Property and Equipment, net 9,151,572 28.5 8,448,327 22.0 Guarantee Deposits 2,205,652 6.9 2,076,387 5.4 Other Assets 794,455 2.5 849,954 2.2 ------------ -------- ------------ -------- Total assets 32,064,376 100.0% 38,464,883 100.0% ============ ======== ============ ======== LIABILITIES AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) ---------------------- Current Liabilities: Short-term borrowings 4,823,599 15.0% 6,764,410 17.6% Accounts payable 8,406,170 26.2 4,611,586 12.0 Accrued expenses 389,495 1.2 513,996 1.3 Other current liabilities 551,985 1.7 594,974 1.5 Long-term borrowings- current portion 1,943,735 6.1 1,947,309 5.1 Capital lease obligations- current portion 2,716,386 8.5 2,415,596 6.3 ------------ -------- ------------ -------- Total current liabilities 18,831,370 58.7 16,847,871 43.8 Long-term Borrowings 3,456,265 10.8 1,945,434 5.0 Convertible Notes 15,000,000 46.8 11,832,000 30.7 Capital Lease Obligations- Noncurrent 3,635,780 11.3 2,801,993 7.3 Accrued Retirement and Pension Costs 80,601 0.3 67,557 0.2 Other Noncurrent Liabilities 185,201 0.6 180,329 0.5 ------------ -------- ------------ -------- Total liabilities 41,189,217 128.5 33,675,184 87.5 ------------ -------- ------------ -------- Minority Interest 879,495 2.7 486,388 1.3 ------------ -------- ------------ -------- Shareholders' Equity (Capital Deficiency): Common stock 7,082,336 22.1 13,765,372 35.8 Additional paid-in capital 17,068,353 53.2 23,637,628 61.5 Accumulated deficit (34,685,291) (108.2) (35,459,129) (92.2) Accumulated other comprehensive income 530,266 1.7 2,359,503 6.1 Treasury stock (63) 0.0 ------------ -------- ------------ -------- Total shareholders' equity (capital deficiency) (10,004,336) (31.2) 4,303,311 11.2 ------------ -------- ------------ -------- Total liabilities and shareholders' equity (capital deficiency) 32,064,376 100.0% 38,464,883 100.0% ============ ======== ============ ======== Note (1): The translation of Japanese yen amounts into US dollar amounts with respect to Mar 31, 2004 are included solely for the convenience of readers outside Japan and have been made at the rate of JPY104.18 =$1, the approximate rate of exchange on Mar 31, 2004. INTERNET INITIATIVE JAPAN INC. Appendix 4 ------------------------------ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ----------------------------------------------------------- For the Three Months Ended Mar 31, 2004, Mar 31, 2003 and Dec 31, 2003 (Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD))(1) Mar 31, 2004 Mar 31, 2003 Dec 31, 2003 ------------------------- ------------ ------------ USD (1) JPY JPY JPY ------------ ------------ ------------ ------------ Operating Activities: Net income (loss) 6,419 668,699 (9,289,600) 1,979,136 Depreciation and amortization 9,888 1,030,162 933,374 1,004,236 Provision for doubtful accounts 265 27,587 30,866 (40,428) Equity method net loss 1,810 188,577 1,253,875 58,354 Impairment loss on investment in and deposits for Crosswave - - 7,153,087 - Minority interests in net income (loss) of consolidated subsidiaries 1,510 157,295 (21,342) 48,710 Foreign exchange losses (gains) (131) (13,682) 149,262 12,279 Gain on retirement of convertible notes - - - (88,975) Net losses (gains) on other investments 407 42,352 184,723 (1,532,033) Decrease (increase) in accounts receivable (23,838) (2,483,404) (2,983,254) 138,452 Increase (decrease) in accounts payable 22,968 2,392,795 2,200,392 (70,261) Decrease (increase) in inventories (2,354) (245,201) 392,051 72,267 Deferred income taxes (8,680) (904,221) 91,486 (286,208) Other 3,798 395,710 395,418 (209,740) ------------ ------------ ------------ ------------ Net cash provided by operating activities 12,062 1,256,669 490,338 1,085,789 ------------ ------------ ------------ ------------ Investing Activities: Purchase of property and equipment (2,266) (236,028) (163,592) (339,621) Proceeds from sale-leaseback - - 66,940 - Proceeds from sales of other investment 637 66,387 13,663 1,946,875 Purchase of other investments (20) (2,138) - (6,039) Refund (payment) of guarantee deposits-net (6) (576) (1,387,210) 727 Other (36) (3,778) (7,606) (225) ------------ ------------ ------------ ------------ Net cash provided by (used in) investing activities (1,691) (176,133) (1,477,805) 1,601,717 ------------ ------------ ------------ ------------ Financing Activities: Proceeds from long-term borrowings 3,840 400,000 2,000,000 - Repayments of long-term borrowings (4,190) (436,477) (1,200,000) (1,036,247) Repurchase of convertible notes - - - (3,047,460) Principal payments under capital leases (6,647) (692,467) (656,238) (671,339) Net increase (decrease) in short-term borrowings (1,923) (200,316) 312,854 2,459,505 ------------ ------------ ------------ ------------ Net cash provided by (used in) financing activities (8,920) (929,260) 456,616 (2,295,541) ------------ ------------ ------------ ------------ Effect of Exchange Rate Changes on Cash (72) (7,632) (151,410) (34,305) ------------ ------------ ------------ ------------ Net Increase (Decrease) in Cash 1,379 143,644 (682,261) 357,660 ------------ ------------ ------------ ------------ Cash, Beginning of Period 116,535 12,140,595 4,270,613 11,782,935 ------------ ------------ ------------ ------------ Cash, End of Period 117,914 12,284,239 3,588,352 12,140,595 ============ ============ ============ ============ Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Mar 31, 2004 are included solely for the convenience of readers outside Japan and have been made at the rate of JPY104.18 =$1, the approximate rate of exchange on Mar 31, 2004. INTERNET INITIATIVE JAPAN INC. Appendix 5 ------------------------------ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ----------------------------------------------------------- For the Year Ended March 31, 2004, March 31, 2003 (Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD))(1) March 31, March 31, 2004 2003 ------------------------- ------------ USD (1) JPY JPY ------------ ------------ ------------ Operating Activities: Net loss (1,009) (105,139) (16,476,822) Depreciation and amortization 38,475 4,008,324 3,580,212 Provision for doubtful accounts 4,324 450,505 84,339 Equity method net loss 2,748 286,317 5,625,299 Impairment loss on investment, advance and deposits for Crosswave 16,510 1,719,981 7,153,087 Minority interests in net loss of consolidated subsidiaries (2,263) (235,812) (153,251) Foreign exchange losses 49 5,124 277,856 Gain on retirement of convertible notes (854) (88,975) - Losses (gains) on other investments-net (13,562) (1,412,858) 277,162 Decrease (increase) in accounts receivable 7,520 783,387 (1,351,380) Increase (decrease) in accounts payable (10,868) (1,132,209) 1,245,431 Decrease (increase) in inventories (296) (30,813) 198,597 Deferred income taxes (20,768) (2,163,571) 885,784 Other (1,544) (160,895) 235,378 ------------ ------------ ------------ Net cash provided by operating activities 18,462 1,923,366 1,581,692 ------------ ------------ ------------ Investing Activities: Purchase of property and equipment (15,908) (1,657,302) (1,315,390) Advances to Crosswave (16,510) (1,719,981) - Deposit of restricted cash for and purchase of stock purchase right of Crosswave - - (5,056,250) Proceeds from sales of other investment 20,835 2,170,584 - Purchase of other investments (3,126) (325,665) (51,671) Refund (payment) of guarantee deposits-net 6,470 674,018 (1,487,911) Other 56 5,883 33,301 ------------ ------------ ------------ Net cash used in investing activities (8,183) (852,463) (7,877,921) ------------ ------------ ------------ Financing Activities: Proceeds from long-term borrowings 3,839 400,000 2,000,000 Repayments of long-term borrowings (18,657) (1,943,735) (1,400,000) Repurchase of convertible notes (29,252) (3,047,460) - Principal payments under capital leases (26,234) (2,733,012) (2,475,433) Net increase in short-term borrowings 16,707 1,740,495 1,003,367 Proceeds from issuance of common stock 127,206 13,252,311 - ------------ ------------ ------------ Net cash provided by (used in) financing activities 73,609 7,668,599 (872,066) ------------ ------------ ------------ Effect of Exchange Rate Changes on Cash (418) (43,615) (289,272) ------------ ------------ ------------ Net Increase (decrease) in Cash 83,470 8,695,887 (7,457,567) ------------ ------------ ------------ Cash, Beginning of Period 34,444 3,588,352 11,045,919 ------------ ------------ ------------ Cash, End of Period 117,914 12,284,239 3,588,352 ============ ============ ============ Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to the year ended Mar 31, 2004 are included solely for the convenience of readers outside Japan and have been made at the rate of JPY104.18 =$1, the approximate rate of exchange on Mar 31, 2004. CONTACT: IIJ Investor/Media Relations Office Taisuke Ono/Hiroaki Tsuno +81-3-5259-6500 ir@iij.ad.jp SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Internet Initiative Japan Inc. Date: May 14, 2004 /s/ Koichi Suzuki ------------------------------------- Koichi Suzuki President, Chief Executive Officer and Representative Director