Non-Consolidated Financial Results
for the Three Months Ended July 31, 2017
[Japanese GAAP]
September 6, 2017
Company name: Asukanet Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2438
URL: https://www.asukanet.co.jp
Representative: Yukio Fukuda, Representative Director, President & CEO
Contact: Kenya Kono, Managing Director & CFO
Phone: +81-82-850-1200
Scheduled date of filing quarterly securities report: September 14, 2017
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Not available
Schedule of quarterly financial results briefing session: Not scheduled(Amounts of less than one million yen are rounded down.)
1. Non-Consolidated Financial Results for the Three Months Ended July 31, 2017
(May 1, 2017 to July 31, 2017)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Three months ended
July 31, 2017
July 31, 2016

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen%

1,388
1,230

12.9
2.7

141
135

4.7
18.2

142
135

5.4
16.5

98
91

7.1
17.2

Basic earningsper share

Three months ended
July 31, 2017
July 31, 2016

Operating income

Diluted earnings pershare
Yen

Yen

5.87
5.48

5.84
5.45

(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

5,191
As of July 31, 2017
5,325
As of April 30, 2017
(Reference) Equity: As of July 31, 2017: ¥4,535 million
As of April 30, 2017: ¥4,597 million

Equity ratio

Million yen%

4,539
4,603

87.4
86.3

2. Dividends
1stquarter-end
Yen

Annual dividends
2nd
3rd
Year-endquarter-end
quarter-end
Yen

Fiscal year ended April 30, 2017
0.00
Fiscal year ending April 30, 2018
Fiscal year ending April 30, 2018
0.00
(Forecast)(Note) Revision to the forecast for dividends announced most recently: NoTotalYen

YenYen-

10.00

10.00

-

10.00

10.00

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2018
(May 1, 2017 to April 30, 2018)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%%

Full year
5,696
4.7
771 (3.7)
776 (3.6)(Note) Revision to the financial results forecast announced most recently: NoBasic earnings
per shareProfit
Million yen%

Yen541

(5.5)

32.31

As the Company manages its financial results at an annual base, the financial results forecast for the first half is notdisclosed.
* Notes:(1) Accounting policies adopted specially for the preparation of quarterly financial statements: Yes(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
July 31, 2017: 17,464,000 shares
April 30, 2017: 17,464,000 shares2) Total number of treasury shares at the end of the period:
July 31, 2017: 688,941 shares
April 30, 2017: 717,741 shares
3) Average number of shares during the period:
Three months ended July 31, 2017: 16,752,963 shares
Three months ended July 31, 2016: 16,733,859 shares* These quarterly financial results are outside the scope of quarterly review procedures.
* Explanation of the proper use of financial results forecast and other notes
The earnings forecasts and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions that the Company believes are reasonable, and actual results
may differ significantly from these forecasts due to a wide range of factors.

4. Overview of Business Results(1) Explanation of Business Results
Asukanet operates three business areas, each with different positioning and characteristics. They are (1) thememorial design service business, which adds digital processing and remote output services for photos of thedeceased to the funeral business that is largely unaffected by economic trends, (2) the personal publishingbusiness, a challenging business which provides ideas for new photo output methods that allow users to create
complete photo collections beginning from just a single book, and (3) the aerial imaging business, which isutilizing unique, recently-developed technologies aiming to create a new market and achieve dreams.
Following is an overview of the business results for each segment. The result figures for each segment
include internal inter-segment sales.
(Memorial design service business)
In this business, we achieved strong income from our primary business operation – processing of photos ofthe deceased, and sales of hardware devices and frames were also strong. We also recorded sales of our AI
altar which is a product produced in collaboration with our aerial imaging business.
In terms of expenses, personnel expenses increased as we added more employees. There was also an
increase in travel, transportation, and other expenses.
As a result of the above, sales was 564,052 thousand yen (104.9% year-on-year) and segment income was152,477 thousand yen (98.2% year-on-year).
(Personal publishing business)
This business operates AsukaBook for the professional photographer market and MyBook for the general
consumer market.
In the professional photographer market, in addition to gaining contracts through our own marketing
activities, we saw sales increase as a result of exhibits at exhibitions, holding AsukaBook seminars, releasesof new products, and other measures.
In the ordinary consumer market, we worked to acquire orders primarily among photography enthusiasts
and others with a particular interest in personal publishing by means of various campaigns and effective
internet advertising. However the competitive environment is harsh and sales to ordinary consumers werebelow expectations. On the other hand, there was steady growth in sales related to OEM supply as a resultof the increasing presence of our services in the market.
In terms of income, we achieved a higher gross profit margin due to factors including a higher operating
rate, and were able to appropriately control expenses. The result was a large increase in segment income.
As a result of the above, sales was 793,852 thousand yen (115.6% year-on-year) and segment income was
187,774 thousand yen (142.6% year-on-year).
(Aerial imaging business)
This business was launched in March 2011, aiming to create a market through new image and video
expressions utilizing aerial imaging technologies.
In this business, we are placing top priority on launching mass production of the AI plates which arecapable of projecting images in mid-air.
For glass plates, although we have not yet achieved sufficient reduction in costs, we have succeeded in
improving the quality of the plates, including large-size glass plates, and have achieved results fromexhibitions and a gradual increase in sales primarily for signage applications. For resin plates, we areprioritizing repeated trials using a new production method that has good potential for mass production, andare working towards completing and providing prototypes in preparation for future mass production.
In terms of marketing, we exhibited at the Shop Sales Promotion Expo in Japan in July 2017, and exhibitedat 2 exhibitions overseas. In addition, we are planning exhibits for CEATEC in Japan and an exhibition inDubai during this fiscal year.
Although the lots for signage applications are small both in Japan and overseas, there has been growth insales of large-size AI plates and of package products that include the case and sensors. Sales weresignificantly higher than the same period in the previous fiscal year.
In terms of expenses, there were increases in advertising expenses and travel and transportation expenses
resulting from exhibitions in Japan and overseas, as well as an increase in patent application and otherexpenses.
As a result of the above, sales was 33,224 thousand yen (557.9% year-on-year) and segment loss was
72,351 thousand yen (compared with a loss of 36,204 thousand yen during the first quarter of the previous
fiscal year).
As a result of the above segment results, overall sales in all business areas was 1,388,970 thousand yen(112.9% year-on-year). In terms of profit, despite an increase in exhibition and other advance expenses in theaerial imaging business, strong growth in the personal publishing business resulted in ordinary income of142,931 thousand yen (105.4% year-on-year) and net income of 98,263 thousand yen (107.1% year-on-year).
(2) Explanation concerning financial status
Assets at the end of the first quarter of this fiscal year decreased by 133,399 thousand yen from the end of theprevious fiscal year to reach 5,191,847 thousand yen. This was due primarily to a decrease of 74,242 thousand
yen in cash and savings resulting from payment of income taxes and dividends, and to a decrease of 40,577
thousand yen in notes and accounts receivable.
Liabilities at the end of the first quarter of this fiscal year decreased by 69,623 thousand yen from the end of
the previous fiscal year to reach 652,179 thousand yen. This was due primarily to a decrease of 91,270
thousand yen in income taxes payable and a decrease of 61,100 thousand yen in provisions for bonuses.
Net assets at the end of the first quarter of this fiscal year decreased by 63,776 thousand yen from the end of
the previous fiscal year to reach 4,539,667 thousand yen. Despite recording quarterly net income of 98,263
thousand yen, this decrease was due primarily to payment of 167,462 thousand yen in dividends from surplus.
(3) Explanation of results forecasts and other future predictions
At the present time, there has been no change to the predicted results for the year ending April 30, 2018 thatwere announced on June 9, 2017.

5.Financial Statements for the First Quarter(1) Balance sheet
Previous fiscal year
(ended April 30, 2017)(Units: 1,000s yen)First quarter of the current fiscalyear(ended July 31, 2017)

AssetsCurrent assets
Cash and depositsNotes and accounts receivable-trade2,278,251
686,5172,204,009
645,939

Merchandise and products
Work in progress

166,123
12,038173,909
13,987

Raw materials and supplies
Others56,972
112,648

61,451
89,956

Allowance for doubtful accounts△3,163△3,2153,309,387

3,186,038

Buildings, net
Machinery and equipment, net

499,750422,616

495,861
391,687

Land
Others, net

432,702150,493432,702
184,307

Total tangible fixed assets

1,505,562

1,504,559

Intangible fixed assets
Investments and other assets

211,874
298,423

203,625
297,623

2,015,859

2,005,808

5,325,247

5,191,847

Current liabilities
Accounts payable-trade

118,905

121,899

Income taxes payable
Provision for bonuses

143,270129,000

52,00067,900

Others317,028

397,256

Total current liabilities

708,204

639,056

6,482
7,115

6,482
6,640

Total current assets
Fixed assets
Tangible fixed assets

Total fixed assets
Total assets
Liabilities

Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities

13,597

13,123721,802652,179

Shareholders’ equity
Capital stock

490,300

490,300

Capital surplus
Retained earnings

606,585
3,803,101

606,585
3,729,235

Total liabilities
Net assets

Treasury stock△309,764△297,334

Total shareholders' equity

4,590,222

4,528,785

7,579

6,954

7,579

6,954

Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Subscription rights to shares
Total net assets
Total liabilities and net assets

5,642

3,928

4,603,444

4,539,667

5,325,247

5,191,847

(2) Profit and loss statement
First quarter of the fiscal yearNet Sales
Cost of sales(Units: 1,000s yen)First quarter of the previous fiscal First quarter of the current fiscalyearyear(May 1, 2016 – July 31, 2016)(May 1, 2017 – July 31, 2017)
1,230,223
1,388,970
611,520664,785

Gross profit

618,703

724,184

Selling, general, and administrative expenses

483,514582,611

Operating income

135,188

141,572

Non-operating income
Interest received

272

167

Dividends received
Commissions received

611
138

610
135

Foreign exchange income
Others―35446
8

Total non-operating income

1,057

1,369

Non-operating expensesForeign exchange losses

636―

Others―10

Total non-operating expenses

636

10135,609

142,931

―

550

―

550

Net income before taxes

135,609142,381

Income taxes

43,87944,117

Net income

91,73098,263

Ordinary income
Extraordinary losses
Loss on retirement of fixed assets
Total extraordinary losses

[Segment information]
Cumulative first quarter of the previous fiscal year (May 1, 2016 – July 31, 2016)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial design
service business

PersonalAerial imaging
publishingbusiness
service business

Other

Adjustments

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)

537,559

686,708

5,955

1,230,223―

1,230,223

―

―

―

―

―

―

537,559

686,708

5,955

1,230,223―

1,230,223

155,231

131,725△36,204

250,751△115,562

135,188

Cumulative first quarter of the current fiscal year (May 1, 2017 – July 31, 2017)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial designservice business

Personal
Aerialpublishingimaging businessservice business

Adjustments

Amountrecorded in
profit and loss
statement

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)

564,052

793,852

31,064

1,388,970―

1,388,970

―

―

2,160

2,160

△2,160―564,052

793,852

33,224

1,391,130△2,1601,388,970

152,477

187,774△72,351

267,899△126,327

141,572

This is the summarized translation of released report for your reference.
Please refer to the original Japanese financial document.