Non-Consolidated Financial Results
for the Nine Months Ended January 31, 2019
[Japanese GAAP]
March 6, 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 filing quarterly securities report: March 14, 2019
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 Nine Months Ended January 31, 2019
(May 1, 2018 to January 31, 2019)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Nine months ended
January 31, 2019
January 31, 2018

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

%

4,676
4,429

5.6
9.9

699
604

15.7
(7.0)

702
611

14.9
(6.4)

479
413

16.1
(7.0)

Basic earnings
per share

Nine months ended
January 31, 2019
January 31, 2018

Operating income

Diluted earnings per
share
Yen

Yen

28.50
24.64

28.49
24.55

(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

5,891
As of January 31, 2019
5,715
As of April 30, 2018
(Reference) Equity: As of January 31, 2019: ¥5,313 million
As of April 30, 2018: ¥4,997 million

Equity ratio

Million yen

%

5,313
5,000

90.2
87.4

2. Dividends
1stquarter-end
Yen

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

Fiscal year ended April 30, 2018
0.00
Fiscal year ending April 30, 2019
0.00
Fiscal year ending April 30, 2019
(Forecast)(Note) Revision to the forecast for dividends announced most recently: No

Total

Yen

Yen

Yen

-

10.00

10.00

10.00

10.00

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2019
(May 1, 2018 to April 30, 2019)(% 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
6,111
3.5
806
2.2
811
1.9
(Note) Revision to the financial results forecast announced most recently: No

Million yen

%

Yen

567

1.8

33.74

* 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):
January 31, 2019: 17,464,000 shares
April 30, 2018: 17,464,000 shares2) Total number of treasury shares at the end of the period:
January 31, 2019: 622,941 shares
April 30, 2018: 662,541 shares
3) Average number of shares during the period:
Nine months ended January 31, 2019: 16,834,906 shares
Nine months ended January 31, 2018: 16,768,281 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. Qualitative Information Concerning the Business Results(1) Explanation of business results
During the cumulative first 3 quarters of this fiscal year, the economy of Japan overall continued a gradual
recovery as a result of continuing economic stimulus by the government and financial measures by the Bankof Japan. 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 resulting from an increase in the consumption tax in Japan.
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 revenue from our primary business area – processing of photos of the deceased– was up from the previous year, growth was less than expected, and sales of hardware devices also suffereda rebound drop from the previous year. As a result, there was only small growth in sales.
As one program, we have proceeded with the introduction of our “tsunagoo” service for funeral companies
that connects the bereaved family and other mourners. It was released as one of our “So-Tech” services –services using IT technologies for the funeral market. In addition to the “Asuka Altar” collaboration projectwith the aerial imaging business that targets funeral companies, we also developed and released the“Omokage” product that targets ordinary households.
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 starting from autumn of lastyear, there was also an increase in R&D expenses. As a result, there was a small decrease in segment income.
As a result, sales were 1,895,540 thousand yen (101.6% year-on-year), and segment income was 527,213
thousand yen (96.7% 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.
For the professional photographer market, in addition to our own marketing activities, we also acquired
new customers and conducted new product promotions through seminars and workshops across Japan. We
also expanded the functions of the “ASUKABOOK Maker” photo album ordering software. As a result, sales
in the professional photographer market were strong. In addition, we held the “Life Size Baby Photo Award”
contest and worked to expand our life size photo service in the market.
For the general consumer market, we conducted efficient internet advertising and a variety of campaigns,
and also worked to expand the presence of our services by utilizing SNS and other means. The introductionof our new full-flat type photo album that opens up so it is completely flat was effective, and despite theintense competitive environment, sales in the general consumer market grew beyond the level of the previous
year. There was also steady growth in sales related to OEM supply as a result of the growing presence of ourservices in the market. We also continued preparations for exhibiting at the CP+ exhibition.
In terms of income, despite higher expenses including a shipping price hike last autumn and growing
personnel expenses, there was steady growth in segment income due to the higher gross profit marginresulting from the improved operating rate and to suitable control of advertising expenses and sales
promotion expenses.
As a result, sales were 2,687,439 thousand yen (108.5% year-on-year) and segment income was 698,974
thousand yen (115.9% 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.
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, weare receiving growing numbers of inquiries both from Japan and overseas. We are also working on new
manufacturing development that will ensure both quality and productivity.
For resin ASKA3D plates, in addition to sales of the upgraded versions that were developed and releasedin November of last year, we also carried out mass production trials aimed at improving quality stability andyield in preparation for future mass production. Since their release, we have sold samples to around 200
companies in Japan and overseas, and these companies are conducting studies for incorporating these plates
into their own products. In the production area, we have conducted repeated mass production trials, and aremaking progress in improving the production methods and calibrating the production conditions. At thesame time, we are expanding and improving our equipment to enable production of quantities ranging fromseveral thousand to 10 thousand plates per month.
In terms of marketing, we are focusing primarily on the supply of sample resin ASKA3D plates, which
are expected to be used in large lots in customer products in the future. We exhibited at 2 domestic
exhibitions including FINETECH JAPAN and overseas at C-Touch & Display Shenzhen in Shenzhen,
China. At these events, we primarily exhibited our resin ASKA3D plates and have conducted follow-up of
event inquiries.
In terms of expenses, as a result of concentrated research and development aimed at improving the qualityof plastic ASKA3D plates, there was an increase in R&D expenses including prototyping and die costs.
Personnel expenses were higher as a result of reinforcing our staff, and there was also an increase in travel
expenses, primarily as a result of events held overseas. However because the number of exhibitions was lessthan the same period in the previous fiscal year, advertising expenses were lower.
As a result, sales were 102,537 thousand yen (105.3% year-on-year) and segment loss was 163,133
thousand yen (compared to a loss of 187,792 thousand yen in the same period of the previous year).
As a result of the above, sales during these consolidated 3 quarters were 4,676,804 thousand yen (105.6%
year-on-year). In terms of income, as a result of steady growth in segment income in the personal publishingbusiness and a reduction in the segment loss in the aerial imaging business, ordinary income was 702,107
thousand yen (114.9% year-on-year) and net income was 479,817 thousand yen (116.1% year-on-year).
(2) Overview of the Financial Status during this Fiscal Year
(Assets)
Assets at the end of these consolidated 3 quarters increased by 175,170 thousand yen from the end of theprevious fiscal year to reach 5,891,068 thousand yen. Despite a decrease in cash and savings of 447,715
thousand yen, this result was primarily due to an increase in notes and accounts receivable of 114,184 thousand
yen, and an increase in tangible fixed assets of 505,953 thousand yen as a result of land and other asset
purchases.

(Liabilities)
Current liabilities at the end of this 3Q decreased by 137,854 thousand yen from the end of the previous
fiscal year to reach 578,029 thousand yen. This was primarily due a decrease of 23,000 thousand yen inincome taxes payable and a decrease of 65,300 thousand yen in provision for bonuses.
(Net assets)
Net assets at the end of this 3Q increased by 313,025 thousand yen from the end of the previous fiscal year
to reach 5,313,039 thousand yen. This was primarily due to net income of 479,817 thousand yen, and adecrease of 168,014 thousand yen in dividend of surplus.

5．Financial Statements for the First Quarter(1) Balance sheet
Previous fiscal year
(ended April 30, 2018)
Asset
Current assets
Cash and deposits
Accounts receivable-trade and notes
Merchandise and products
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accounts(Units: 1,000s yen))First three quarters of the current
fiscal year
(ended Jan. 31, 2019)

2,311,781
726,531
191,123
14,32562,20633,559(2,617)

1,864,065
840,716
201,394
16,91972,01525,362(3,586)

3,336,909

3,016,886

Fixed assets
Tangible fixed assets
Buildings, net
Machinery and equipment, net
Land
Others, net

512,558
396,538
611,507
172,702516,155
441,851
844,060
397,192

Total tangible fixed assets

1,693,306

2,199,260

Total intangible fixed assets
Total investments and other assets

206,851478,829202,261
472,660

2,378,988

2,874,181

Total current assets

Total fixed assets

5,715,897

5,891,068

Liabilities
Current liabilities
Accounts payable-trade
Income taxes payable
Provision for bonuses
OthersTotal assets

126,270
137,900
136,500
303,512

126,474
114,900
71,200255,546

Total current liabilities

704,183

568,121

6,482
5,217

6,112
3,794

11,7009,907

Total liabilities

715,883

578,029

Net assets
Shareholders’ equity
Capital stock
Capital reserves
Retained earnings
Treasury stock

490,300
606,585
4,183,583(285,940)

490,300
606,585
4,488,968(268,850)

Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities

4,994,527

5,317,003

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

Total shareholders' equity

3,129(3,963)

3,129(3,963)

Subscription rights to shares

2,356

―

5,000,014

5,313,039

5,715,897

5,891,068

Total net assets
Total liabilities and net assets

(2) Profit and loss statement
First two quarters of the fiscal year

Net Sales
Cost of sales(unit:1000s yen)First three quarters of the previous First three quarters of the current
fiscal year
fiscal year
(May 1, 2017 – Jan. 31, 2018)(May 1, 2018 – Jan. 31, 2019)
4,429,265
4,676,804
2,137,661
2,252,871

Gross profit

2,291,604

2,423,932

Selling, general, and administrative expenses

1,687,396

1,724,696

604,207699,235

410
1,060
327
141
3,999

348
1,010
381
―
960

825
112

950
467

6,878

4,118

―

1,246

―

1,246

Ordinary income

611,086

702,107

Extraordinary losses
Loss on retirement of fixed assets

15,174424

15,174424

Net income before taxes

595,911

701,682

Income taxes

182,728

221,865

Net income

413,182

479,817

Operating income
Non-operating income
Interest received
Dividends received
Commissions received
Foreign exchange gains
Income from insurance
Income on disposal of unpaid dividend
OthersTotal non-operating income
Non-operating expenses
Foreign exchange losses
Total non-operating expenses

Total extraordinary losses

[Segment information]
Cumulative first 3 quarters of the previous fiscal year (May 1, 2017 – Jan. 31, 2018)
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
Total

Amountrecorded in
profit and loss
statement

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

1,865,125

2,477,095

87,044

4,429,265―

4,429,265――

10,35010,350(10,350)―

1,865,125

2,477,095

97,3944,439,615(10,350)

4,429,265

545,087

602,935(187,792)

960,230(356,022)

604,207

Cumulative first 3 quarters of the current fiscal year (May 1, 2018 – Jan. 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
Total

Amountrecorded in
profit and loss
statement

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

1,895,540

2,687,439

93,823

4,676,804―

4,676,804

―

―

8,714

8,714

(8,714)―

1,895,540

2,687,439

102,537

4,685,518(8,714)

4,676,804

527,213698,974(163,133)

1,063,054(363,819)

699,235

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