Non-Consolidated Financial Results
for the Three Months Ended July 31, 2020
[Japanese GAAP]
September 7, 2020
Company name: Asukanet Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2438
URL: https://www.asukanet.co.jp
Representative: Yuji Matsuo, Representative Director & President
Contact: Kenya Kono, Senior Managing Director & CFO
Phone: +81-82-850-1200
Scheduled date of filing quarterly securities report: September 14, 2020
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, 2020
(May 1, 2020 to July 31, 2020)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Three months ended
July 31, 2020
July 31, 2019

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

%

1,259
1,541

(18.3)
6.9

(40)
155

11.3

0
155

(99.6)
9.2

(1)
109

13.1

Basic earnings
per share

Three months ended
July 31, 2020
July 31, 2019

Diluted earnings per
share
Yen

Yen

(0.08)
6.48-(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen

%

5,583
5,750

88.0
87.0

6,341
As of July 31, 2020
6,607
As of April 30, 2020
(Reference) Equity: As of July 31, 2020: ¥5,583 million
As of April 30, 2020: ¥5,750 million
2. Dividends

Annual dividends
3rdquarter-end

1stquarter-end

2ndquarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended April 30, 2020

-

0.00

-

10.00

10.00

Fiscal year ending April 30, 2021

-

7.00

7.00

Fiscal year ending April 30, 2021
0.00
(Forecast)(Note) Revision to the forecast for dividends announced most recently: No

Year-endTotal

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2021
(May 1, 2020 to April 30, 2021)(% indicates changes from the previous corresponding period.)
Basic earnings
Net sales
Operating income
Ordinary income
Profitper share
Million yen%

Million yen%

Million yen%

Full year
6,368 (3.2)
436 (38.5)471 (33.7)(Note) Revision to the financial results forecast announced most recently: No

Million yen

%

Yen

325

(35.2)

19.36* 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, 2020: 17,464,000 shares
April 30, 2020: 17,464,000 shares2) Total number of treasury shares at the end of the period:
July 31, 2020: 623,057 shares
April 30, 2020: 623,057 shares
3) Average number of shares during the period:
Three months ended July 31, 2020: 16,840,943 shares
Three months ended July 31, 2019: 16,841,018 shares* These quarterly financial results are outside the scope of quarterly review procedures by a certified public
accountant or an audit corporation.
* 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) Overview of Business Results for this Fiscal Year
During the first quarter of this fiscal year, the economy of Japan saw a slowdown in economic activity and a large drop in
personal spending caused by the coronavirus pandemic. The global economy has also been largely affected by the spread ofcoronavirus infections, and with the added factor of trade friction between the U.S. and China, the future of the global economy
continues to be highly uncertain.
Asukanet operates three business areas, each with different positioning and characteristics. They are (1) the memorial design
service business, which adds digital processing and remote output services for photos of the deceased to a funeral business thatis largely unaffected by economic trends, (2) the personal publishing 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 is utilizing 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 results figures for each segment include internalinter-segment sales.
(1) Memorial design service businessIn this business, funerals have been reduced in size due to the coronavirus pandemic, slowing growth in our primarybusiness areas which are centered on processing photos of the deceased and on video and other funeral production services. In
connection with this, we also faced a difficult struggle for sales of frames and supplies. As a result, sales were down from thesame period in the previous fiscal year. Our efforts this quarter included the development and preparation for release of a web
condolence money reception service. This service will be added to the “tsunagoo” service that was released as one type of our“funeral tech” that has brought extensive use of IT technologies to the funeral market.
In terms of income, despite a reduction in advertising expenses and R&D expenses, the decline in sales, coupled with anincrease in personnel costs for image processing operators, resulted in a decline in segment income.
As a result, sales were 547,693 thousand yen (94.0％ year-on-year), and segment income was 102,446 thousand yen(76.0％ year-on-year).
(2) Personal publishing service businessThis business operates AsukaBook for the professional photography market in Japan, and MyBook for the general Japanese
consumer market. We are also engaged in OEM supply of photo albums and photo prints based on photos that were takenwith smartphones.
In the professional photographer market, although there was steady growth in products for photo studios, our primary
service of wedding photo albums faced difficult conditions as it was strongly affected by the many wedding ceremonies whichwere postponed due to the coronavirus pandemic. As one our new program in this area, we added a photo data sales function
to the GLAMPiC data delivery service.
In the general consumer market as well, our promotions for utilizing stay-at-home time to organize photos and order photo
albums produced some results. However business was affected by factors such as the voluntary reductions in travel and events
due to the coronavirus pandemic, and the same trend was seen in sales of OEM products. As a result, sales were down fromthe same period in the previous fiscal year.
In terms of income, we succeeded in reducing advertising expenses and travel and transportation expenses, and also
restructured our production workplace personnel. However there were large effects from the declining operating rate that
accompanied the drop in sales, and there was a large decrease in segment income.
As a result, sales were 684,302 thousand yen (73.1% year-on-year), and segment income was 49,276 thousand yen (23.2％
year-on-year).
(3) Aerial imaging businessThis business was launched in March 2011, aiming to create a market through new image and video expressions utilizing
aerial imaging technologies. We are developing, manufacturing, and selling both glass and plastic “ASKA3D plates” thatutilize our original technologies to project images in mid-air.

For glass ASKA3D plates, although the current volume of supply is still not sufficient, we carried out sales for signage anddevelopment purposes. Aiming to bring our mass production technology for glass ASKA3D plates in-house in June 2020, weestablished a technical development center, installed production equipment, and completed coordination and other workneeded for the start of prototype production.
For plastic ASKA3D plates, our objective is use of the plates incorporated into products. In the environment of thecoronavirus pandemic, much attention is being given to the use of aerial imaging for touchless operations. We received
numerous inquiries and proceeded with sample sales. We are carrying out verification tests for specific applications, and areworking to obtain mass-production orders for mid-sized lots.
In terms of sales, although sales of glass plates were down, sales of plastic plates were up and as a result sales were higher
than the same period in the previous fiscal year.
In terms of profit and loss, the higher R&D expenses required for the establishment of a technical development center
resulted in a larger segment loss than the same period in the previous fiscal year.
As a result, sales were 28,032 thousand yen (113.9% year-on-year), and segment loss was 52,602 thousand yen (compared
to a loss of 48,262 thousand yen in the same quarter of the previous year).
As a result of the above, sales were 1,259,398 thousand yen (81.7% year-on-year). In terms of income, primarily as a result thelarge decline in segment income in the personal publishing business and the establishment of a technical development center in
the aerial imaging business, ordinary income was 549 thousand yen (0.4% year-on-year) and net loss for the quarter was 1,376
thousand yen (compared to net income of 109,118 thousand yen in the first quarter of the previous fiscal year.

(2) Overview of the Financial Status during this Quarter
Current assets at the end of this first quarter decreased by 265,791 thousand yen from the end of the previous fiscal year toreach 6,341,897 thousand yen. This was primarily due to a decline in cash and savings of 207,614 thousand yen and a decrease inaccounts receivable-trade of 148,625 thousand yen.
Current liabilities at the end of this first quarter decreased by 98,468 thousand yen from the end of the previous fiscal year toreach 758,834 thousand yen. This was primarily due to a decrease in income taxes payable of 78,200 thousand yen and adecrease in the bonus reserve of 67,400 thousand yen.
Net assets at the end of this first quarter decreased by 167,322 thousand yen to reach 5,583,062 thousand yen. This wasprimarily due to a decrease of 168,409 thousand yen in payment of dividends from surplus.

5.Financial Statements for the First Quarter(1) Balance sheet(Units: 1,000s yen)Previous fiscal year
(ended April 30, 2020)
Asset
Current assets
Cash and deposits
Accounts receivable-trade
Merchandise and products
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings, net
Machinery and equipment, net
Land
Others, net
Total tangible fixed assets
Total intangible fixed assets
Total investments and other assets
Investment securities
OthersTotal investment and others
Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Provision for bonuses
Provision for officer retirement benefit
OthersTotal current liabilities
Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

Current 1st quarter(ended July 31, 2020)

1,960,817
798,034
190,796
49,083
98,23829,155(4,351)
3,121,774

1,753,202
649,408
165,389
90,30897,306143,279(4,764)
2,894,132

905,868
448,625
844,060
236,969

934,540
493,393844,060
185,438

2,435,524
221,5732,457,432
231,615

523,634
305,182
828,816
3,485,914
6,607,688

527,177
231,539758,716
3,447,764
6,341,897

167,630
162,859
87,100150,900
100,000
181,380
849,870

117,256
323,795
8,900
83,500―218,423
751,875

6,009
1,423
7,432
857,303

6,009
948
6,958
758,834

490,300
606,585
4,924,463(269,031)
5,752,316

490,300
606,585
4,754,676(269,031)
5,582,529(1,930)532(1,930)5,750,385
6,607,688

532
5,583,062
6,341,897

(2) Profit and loss statement for 1st quarter

Net Sales
Cost of sales(unit:1000s yen)First quarter of the previous fiscal First quarter of the current fiscal
year
year
(May 1, 2020 – July 31, 2020)(May 1, 2019 – July 31, 2019)
1,541,557
1,259,398
751,892
708,912Gross profit

789,664

Selling, general, and administrative expenses

633,825

590,489

Operating income (loss)

155,839(40,003)

Non-operating income
Interest received
Dividends received
Commissions received
Insurance cancellation refund
Others

229
500
88
―
102

309
675
69
32,6007,635

Total non-operating income

919

41,289

1,406
73

736
―

Non-operating expenses
Foreign exchange losses
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Income from sales of fixed assets
Total extraordinary income
Net income before taxes

550,486

1,480

736

155,279

549

―

329

―

329

155,279879

Income taxes

46,1602,256

Net income (loss)

109,118(1,376)

[Segment information]
Cumulative first quarter of the current fiscal year (May 1, 2019 – July 31, 2019)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial design
service 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)

582,379

935,833

23,345

1,541,557―

1,541,557

―

―

1,260

1,260

(1,260)―582,379

935,833

24,605

1,542,817(1,260)1,541,557

134,837

212,278(48,262)

298,854(143,014)

155,839

Cumulative first quarter of the current fiscal year (May 1, 2020 – July 31, 2020)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial design
service 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)

547,693684,30227,402

1,259,398―

1,259,398

―

―

630

630

(630)

―

547,693684,302

28,032

1,260,028(630)

1,259,398

102,446

49,276(52,602)

99,120(139,124)(40,003)

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