Non-Consolidated Financial Results
for the Fiscal Year Ended April 30, 2019
[Japanese GAAP]
June 11, 2019
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 & COO
Contact: Kenya Kono, Senior Managing Director & CFO
Phone: +81-82-850-1200
Scheduled date of Annual General Meeting of Shareholders: July 26, 2019
Scheduled date of commencing dividend payments: July 29, 2019
Scheduled date of filing annual securities report: July 29, 2019
Availability of supplementary briefing material on annual financial results: Available
Schedule of annual financial results briefing session: Scheduled (for institutional investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Non-Consolidated Financial Results for the Fiscal Year Ended April 30, 2019
(May 1, 2018 to April 30, 2019)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Fiscal year endedApril 30, 2019
April 30, 2018

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

%

6,295
5,904

6.6
8.6

868
788

10.1
(1.5)

873
795

9.7
(1.1)

598
556

7.5
(2.7)

Basic earnings
per share

Diluted earnings
per share

Rate of return on
equityOrdinary income
to total assets

Operating income
to net sales

Fiscal year ended
Yen
Yen
April 30, 2019
35.57
35.56
April 30, 2018
33.20
33.08
(Reference) Equity in earnings of affiliated companies:

%

%

%

(2) Non-Consolidated Financial Position
Total assets

11.5
14.6
11.6
14.4
Fiscal year ended April 30, 2019: ¥- million
Fiscal year ended April 30, 2018: ¥- million

Net assets

Million yen

Equity ratio

13.8
13.4

Net assets per share

Million yen

%

5,431
5,000

86.6
87.4

322.49297.45

Cash flow fromoperating activities

Cash flow frominvesting activities

Cash flow fromfinancing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

919
788

(795)
(596)

6,271
As of April 30, 2019
5,715
As of April 30, 2018
(Reference) Equity: As of April 30, 2019: ¥5,431 million
As of April 30, 2018: ¥4,997 million

Yen(3) Non-Consolidated Cash Flows

Fiscal year endedApril 30, 2019
April 30, 2018

(161)
(157)

Million yen

1,669
1,706

2. Dividends
Annual dividends
1st
2nd
3rd
Year-endquarter-end quarter-end quarter-end
Fiscal year endedApril 30, 2018
Fiscal year endedApril 30, 2019
Fiscal year ending
April 30, 2020
(Forecast)

Total

Total
dividends(Annual)Dividend
payoutratio

Dividends
tonet assets

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

0.00

-

10.00

10.00

168

30.1

3.5

-

0.00

-

11.00

11.00

185

30.9

3.5

-

0.00

-

10.00

10.00

30.9

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2020
(May 1, 2019 to April 30, 2020)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%%

Basic earnings
per share

ProfitMillion yen%

Yen

Full year
6,738
7.0
824 (5.1)
829 (5.1)
545
(9.0)
32.36
As the Company manages its financial results at an annual base, the financial results forecast for the first half is notdisclosed.
* Notes:(1) 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(2) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
April 30, 2019: 17,464,000 shares
April 30, 2018: 17,464,000 shares2) Total number of treasury shares at the end of the period:
April 30, 2019: 622,941 shares
April 30, 2018: 662,541 shares
3) Average number of shares during the period:
Fiscal year ended April 30, 2019: 16,836,406 sharesFiscal year ended April 30, 2018: 16,773,986 shares* These financial results are outside the scope of audit 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) Explanation of business results
During the current fiscal year, the economy of Japan overall continued a gradual recovery as a result ofcontinuing upward trend for corporations and income generating circumstances. However the future outlook
remains unpredictable due to uncertainty in overseas economies resulting from the growing trade dispute
between the United States and China, and to concerns of an economic slowdown of China.
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 ofthe deceased to a funeral business that is largely unaffected by economic trends, (2) the personal publishingbusiness, which provides ideas for new photo output methods that allow users to create complete photocollections 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 internal inter-segment sales.
(1) Memorial design service businessIn this business, although sales of supply products were strong, revenue from our primary business area –processing photos of the deceased, and revenue from videos and other funeral production services, were
somewhat below expectations. Equipment sales also struggled as they faced a rebound from the strong
performance last year. As a result, sales for the overall business increased only slightly from the previous year.
Introduction of our new service “tsunagoo” at funeral companies is proceeding. This service utilizes our
extensive customer base in the funeral market to connect together funeral companies, the bereaved, andmourners. In addition to functions that allow users to order offerings and condolence messages, it also
features improved reception and record system functions.
In terms of income, in addition to an increase in personnel costs resulting from expanding the staff of the
Image Processing Division and from higher shipping expenses due to price hikes, there was also an increasein R&D expenses. As a result, there was a small decrease in segment income.
As a result, sales were 2,538,699 thousand yen (100.6% year-on-year), and segment income was 716,975
thousand yen (95.5% year-on-year).
(2) Personal publishing service businessThis business operates “AsukaBook” for the professional photographer market, and “MyBook” for thegeneral consumer market. We are also engaged in OEM supply of photo albums and photo prints based on
photos that were taken with smartphones.
In the Japan professional photographers market, in addition to acquiring customers through our own
marketing activities, we also exhibited at exhibitions, held digital photo seminars and workshops acrossJapan, and continued introducing new products. All of these combined to produce strong sales in the primarybusiness area of wedding photo albums. We also carried out the “Life Size Baby Photo” promotion andproposed the use of this service in the architecture and pet photo markets as part of our efforts to open up
new markets other than weddings.
In the Japan general consumer market, we conducted efficient internet advertising and a variety of
campaigns, and also promoted our services by means such as SNS and exhibiting at the “CP+” exhibition.
Despite the intense competition in this market, our new full-flat type photo album that opens up so it iscompletely flat was well received, and sales to general consumers were higher than the previous year. In thearea of OEM supply, the growing penetration of our services in the market has resulted in steady growth insales.
In terms of income, despite higher expenses including a shipping price hike and growing personnel
expenses, there was steady growth in segment income due to the improved operating rate. As a result,segment income increased more than expected.
As a result, sales were 3,619,794 thousand yen (110.6% year-on-year) and segment income was 916,511
thousand yen (117.8% 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” that utilize our original technologies to project images in mid-air. We focus
on the mass production of ASKA3D plates as our most important task.
For glass ASKA3D plates, sufficient cost reductions have still not yet been achieved, however we areproviding large-size plates that are capable of high-quality aerial imaging. Although still for small lots, weare receiving growing numbers of inquiries both from Japan and overseas for signage use by the effect ofdomestic and overseas exhibitions. We are also working on new manufacturing development that will
ensure both quality and productivity.
For plastic ASKA3D plates, in addition to sample sales of the upgraded versions that were developed andreleased in November of last year, we also carried out mass production trials aimed at improving quality
stability and yield in preparation for future mass production. In May of this year, we successfully shifted toPhase 1 mass production starting from monthly production of 3,000 plates. In the future, we will continue
working to improve quality and reduce production costs, and will strive for production that meets customer
needs.
In terms of marketing, in addition to sales of glass ASKA3D plates, we also focused on sample sales ofthe plastic ASKA3D plates that are expected to be used in large-lot embedded product applications. Since
their release, these products have been delivered to nearly 250 companies in Japan and overseas. We
exhibited at 3 exhibitions in Japan including FINETECH JAPAN, as well as 2 exhibitions overseas – CeBITin Germany and C-Touch & Display Shenzhen in Shenzhen, China. The potential for aerial imaging wasevaluated highly at these exhibitions. Cases of real commercial applications have also emerged, includingshop displays and products containing these plates that are used in commercial beauty equipment. In the
future, we will focus on gaining orders for mass produced plastic ASKA3D plates that are the best fit for ourcurrent production scale and our sense of market price expectations.
In terms of expenses, advertising expenses were lower as a result of exhibiting at fewer exhibitions thanthe previous year, and R&D expenses were higher as a result of research for the launch of mass production(primarily plastic ASKA3D plates). In addition, personnel expenses were higher due to the hiring of new
employees, and travel and transportation expenses were higher primarily due to overseas marketing. We also
recorded an inventory write-down of our old-model glass ASKA3D plates.
As a result, sales were 146,632 thousand yen (124.0% year-on-year) and segment loss was 241,608
thousand yen (compared to a loss of 250,467 thousand yen in the same period of the previous year).
As a result of the above, sales during this fiscal year were 6,295,992 thousand yen (106.6% year-on-year). In
terms of income, as a result of steady growth in segment income in the personal publishing business, ordinary
income was 873,121 thousand yen (109.7% year-on-year) and net income was 598,924 thousand yen (107.5%
year-on-year).
(2) Overview of the financial status during this fiscal year
(Assets)
Current assets at the end of this fiscal year increased by 73,588 thousand yen from the end of the previous
fiscal year to reach 3,410,498 thousand yen. Despite a decrease in cash and savings of 37,017 thousand yen
due to the purchase of land and payment of building construction costs, this increase was primarily due to anincrease in accounts receivable of 98,789 thousand yen resulting from an increase in sales.
Fixed assets at the end of this fiscal year increased by 482,027 thousand yen from the end of the previous
fiscal year to reach 2,861,016 thousand yen. The primary reasons for the increase were an increase of
232,553 thousand yen in land and an increase of 225,236 thousand yen in construction in progress.
(Liabilities)
Current liabilities at the end of the current fiscal year increased by 126,965 thousand yen from the end of
the previous fiscal year to reach 831,149 thousand yen. The primary reasons for the increase were increasesof 42,909 thousand yen in accounts payable-trade, 11,602 thousand yen in accounts payable-other, and
50,000 thousand yen in income taxes payable.
Fixed assets at the end of this fiscal year decreased by 2,369 thousand yen to 9,330 thousand yen(Net assets)
Net assets at the end of this fiscal year increased by 431,020 thousand yen to reach 5,431,034 thousand
yen. The primary reason for the increase was an increase of 424,492 thousand yen in retained earnings.
(3) Overview of cash flows in this fiscal year
The balance of cash and cash equivalents (hereafter referred to as “cash”) at the end of this fiscal year
declined by 37,017 thousand yen from the end of the previous fiscal year to reach 1,669,763 thousand yen.
Despite acquiring steady cash from operating activities as a result of recording strong profits, this decline wasdue to payments related to buying land for the headquarters and constructing buildings.
(Cash flows from operating activities）
Net cash acquired as a result of operating activities during this fiscal year was 919,926 thousand yen(compared to 788,191 thousand yen during the previous fiscal year). The primary factors affecting this result

were pre-tax net income of 864,268 thousand yen and depreciation expenses of 295,005 thousand yen on one
hand, and the payment of 244,927 thousand yen in income taxes on the other.
(Cash flows from investing activities）
Net cash expended as a result of investment activities during this fiscal year was 795,405 thousand yen(compared to 596,942 thousand yen during the previous fiscal year). This was primarily due to the acquisitionof 696,432 thousand yen in tangible fixed assets and 94,736 thousand yen in intangible fixed assets.
(Cash flows from financing activities）
Net cash expended as a result of financing activities during this fiscal year was 161,639 thousand yen(compared to 157,530 thousand yen during the previous fiscal year). This was primarily due to the paymentof 168,058 thousand yen in dividends.
(4) Future outlook
Despite signs of recovery including a recovery in corporate earnings and improvement in the employment
environment, the outlook for the economy during the coming fiscal year is expected to remain highly
unpredictable as a result of unstable economic conditions between US and China and other overseas situation.
Under these conditions, our company is operating a business that is consistent with the current times inwhich services are customized from minimum lot sizes to meet individual needs, and aims to capture stabledemand. Both the memorial design service business and personal publishing business have established a solid
business foundation and achieved stable income, however we recognize that there are issues from theperspective of further growth and will carry out measures aimed at expanding these business areas. In theaerial imaging business that we are conducting as a new business area, more time has been required than was
initially expected. However we expect to make great leaps forward now that we have begun the first step of
the supply of plastic ASKA3D plate. We will also continue to challenge ourselves in the development of new
business and services.
In the memorial design service business, we will make use of our strengths in image processing
technologies, in-house support systems, and a diverse range of funeral presentation tools to develop new
customers and increase the unit price for existing customers. We will be launching a variety of new services
under the label of “So-Tech” – IT services for the funeral market.
In the personal publishing business, we will add new product items and improve our photo collection
ordering software, and will also hold various seminars and participate in exhibitions, conduct events, and takeother steps to capture customers. There has also been strong growth in sales from OEM supply to smartphoneusers, and we increase our production capacity for its further expansion.
In the aerial imaging business, we will address the establishment of a mass production system capable ofproducing AI plates for aerial imaging at suitable prices for BtoB users. In addition to expanding sales ofglass plates, we will carry out R&D investment and sample sales of plastic plates that we expect to be
combined with sensors and incorporated in products.
As a result of the above, regarding costs in the forecast for the fiscal year ending April 30, 2020, we areplanning for continued advance investment including advertising expenses and R&D expenses in the aerial
imaging business. In the personal publishing business, we are planning for an increase in depreciation
expenses as a result of active investment in printing and other equipment and the operation of our production
facilities at the headquarters site. In addition, we also expect costs to increase as a result of relocating a partof our production functions. In terms of sales, we expect strong growth in each business, and will focus oursales efforts primarily on the plastic plates in the aerial imaging business. We are forecasting sales of 6,738
million yen (107.0% compared to the current year), operating income of 824 million yen (94.9%), ordinary
income of 829 million yen (94.9%), and net income of 545 million yen (91.0%).
In addition, various matters in the personal publishing business, such as overseas markets and general
consumer markets, contain elements of uncertainty. Because sales in overseas markets are conducted in thelocal currencies, they are susceptible to the effects of changing exchange rates. The aerial imaging businessand other new business areas also involve technological research and marketing that we have not engaged in
before, and many uncertain elements are involved in its commercialization.
Note: The above forecast was created based on information available at the time this material was released, and actual results may
differ from the forecast values due to a variety of factors.

5. Financial Statements for the fiscal year ended April 30, 2019(1) Balance sheet(Units: 1,000s yen)Previous fiscal year
(Ended April 30, 2018)

Current fiscal year
(Ended April 30, 2019)

Asset
Current assets
Cash and deposits
Notes receivable-trade

2,311,781
594

2,274,763
1,512

Accounts receivable-trade
Merchandise and products

725,937
191,123825,727
172,942Work in progress
Raw materials and supplies

14,32562,20623,551
78,072

Prepaid expenses
Others31,2892,269

34,3782,464

Allowance for doubtful accounts
Total current assets(2,617)(2,914)

3,336,909

3,410,498

895,176(382,618)

925,358(416,721)

512,558

508,636

17,643(11,485)

19,245(11,764)

Fixed assets
Tangible fixed assets
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures (net)

6,157

7,480

1,407,637(1,011,099)

1,506,666(1,097,104)

396,538

409,561

9,661

9,288

Accumulated depreciation(2,786)(4,241)

Vehicles (net)

6,875

5,046

Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
VehiclesTools, equipments, and fixtures

352,591

381,142

Accumulated depreciation(217,329)(243,963)

Tools, equipments, and fixtures (net)135,261

137,179

611,507844,060

Land
Construction in progress

24,407

249,643

Total tangible fixed assets

1,693,306

2,161,609

20,603
180,165

17,123
172,391

Intangible fixed assets
Patents etc.
Software
Others

6,082

12,855

Total intangible fixed assets

206,851

202,370

Total investments and other assets
Investment securities

240,600

228,800

Paid capitalLong term advanced payment

10
3,390

10
2,819

Deferred tax assets
Others

94,080140,748

122,617
142,788

Total investment and others

478,829

497,035

2,378,988

2,861,016

5,715,897

6,271,514

Total fixed assets
Total assets

(Units: 1,000s yen)Previous fiscal year
(Ended April 30, 2018)

Current fiscal year
(Ended April 30, 2019)

Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other126,270
162,361

169,180
173,963

Accrued expense
Income taxes payable

72,320137,900

73,881
187,900

Advance received
Deposit received

16,526
11,991

16,704
12,322

Provision for bonuses
Others136,500
40,313

144,200
52,996

Total current liabilities

704,183

831,149

6,482

6,009

5,217

3,320

Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities

11,7009,330

715,883

840,479

490,300

490,300

Capital reserves

606,585

606,585

Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Total capital surplus

606,585

606,585

Retained earnings
Legal retained earnings

1,693

1,693

Other retained earnings
Retained earnings

4,181,890

4,606,383

Total retained earnings

4,183,583

4,608,076

Treasury stock(285,940)(268,850)

Total shareholders' equity

4,994,527

5,436,110

Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments

3,129(5,076)

3,129(5,076)

Subscription rights to shares

2,356

―

5,000,014

5,431,034

5,715,897

6,271,514

Total net assets
Total liabilities and net assets

(2) Profit and loss statement(unit:1000s yen)
23rd fiscal year
(May 1, 2017-April 30, 2018)

24th fiscal year
(May 1, 2018-April 30, 2019)

Net Sales
Sales from service

1,674,315

1,700,512

Sales of products
Sales of goods

3,420,030
809,664

3,796,290
799,189

Total sales

5,904,010

6,295,992

Cost of sales
Cost of service

773,678

813,317

Cost of product sales
Stock of product at beginning of the year

107,183

129,141

Cost of product sales during year

1,591,772

1,700,446

Total

1,698,955

1,829,587

20,995
129,141

15,740100,909

1,548,818

1,712,937

Transfer to other accounts
Stock of product at year end
Cost of production sales
Cost of goods sales
Stock of goods at beginning of the year

58,94061,981

Cost of goods sales during year

562,819562,879

Total

621,759

624,861

Transfer to other accounts

18,976

19,672

Stock of goods at year end

61,981

72,033

Cost of goods sales

540,800

533,155

2,863,298

3,059,410

Gross profit

Total cost of sales

3,040,712

3,236,581

Selling, general, and administrative expenses

2,252,012

2,367,900

788,700

868,681520

549

Dividends received
Commissions received

1,060
412

1,010
466

Revenue from insurance
Foreign exchange gains

3,999
14

960
―

825
415

950
554

7,249

4,492

Foreign exchange losses―

53

Total non-operating expenses―

53

Ordinary income

795,949

873,121Extraordinary losses
Loss on retirement of fixed assets

21,566

8,852

21,566

8,852

Net income before taxes

774,383

864,268

Current income taxes etc.

236,653

290,286

Income tax adjustment(19,161)(24,942)

Income taxes

217,492

265,343

Net income

556,890598,924

Operating income
Non-operating income
Interest received

Gain on forfeiture of unclaimed dividends
OthersTotal non-operating income
Non-operating expenses

Total extraordinary losses

(3) Statement of cash flows(unit:1000s yen)
23rd fiscal year
(May 1, 2017-April 30, 2018)

24th fiscal year
(May 1, 2018-April 30, 2019)774,383
309,094864,268
295,005

489
7,500

1,109
7,700

―

(472)

(1,581)(1,559)189
21,566

(101)
8,852

(41,133)(101,585)(32,520)(6,911)

7,365(27,773)

42,90912,719Others

6,065

41,359Subtotal

1,023,643

1,163,293

Cash flows resulting from operating activities
Net income before taxes
Depreciation expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement
benefits
Interest and dividends received
Foreign exchange losses (gains)
Loss on disposal of fixed assets
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventory assets
Increase (decrease) in accounts payable-trade
Increase (decrease) in accrued consumption taxes

Interest and dividends received

1,362

1,560

Income taxes paid

(236,814)(244,927)

Cash flows due to operating activities

788,191

919,926

Purchase of property, plant, and equipment
Purchase of intangible fixed assets(433,241)(58,482)(696,432)(94,736)

Purchase of investment securities
Collection of loans receivable(99,900)
1,440

―
400

Payments into time deposits
Proceeds from withdrawal of time deposits(605,000)
605,000(605,000)
605,000(6,758)(4,636)(596,942)(795,405)(167,225)(168,058)

11,592(1,897)

8,316(1,897)(157,530)(161,639)

(189)

101

Cash flows due to investing activities

OthersCash flows due to investing activities
Cash flows due to financing activities
Cash dividends paid
Purchase of treasury stock
OthersCash flows due to financing activities
Effect of exchange rate on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

33,529(37,017)

Balance of cash and cash equivalents at beginning of year

1,673,251

1,706,781

Balance of cash and cash equivalents at end of quarter

1,706,781

1,669,763

(4) Notes regarding the financial statements(Segment information etc.)
Information related to the amounts of sales, income or loss, assets, liabilities, and other items for each reporting segment.
Year 23 (May 1, 2017 – April 30, 2018)(Units: 1,000s yen)
Reporting segment
Memorial design
service business

Personal
Aerialpublishingimaging businessservice business

Adjustments
Total

Amountrecorded in
profit and loss
statement

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

2,524,634

3,271,521

107,8545,904,010―

5,904,010――

10,35010,350(10,350)―

2,524,634

3,271,521

118,204

5,914,360(10,350)

5,904,010

750,399

778,088(250,467)

1,278,019(489,318)

788,700

25,940234,820

17,701

278,463

30,630309,094

Other term
Depreciation

Year 24 (May 1, 2018 – April 30, 2019)(Units: 1,000s yen)
Reporting segment
Memorial design
service business

Personal
Aerialpublishingimaging businessservice business

Adjustments
Total

Amountrecorded in
profit and loss
statement

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

2,538,699

3,619,794

137,498

6,295,992―

6,295,992

―

―

9,134

9,134

(9,134)―

2,538,699

3,619,794

146,632

6,305,126(9,134)

6,295,992

716,975

916,511(241,608)

1,391,878(523,196)

868,681

29,886215,197

16,470261,555

33,450295,005

Other term
Depreciation

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