Non-Consolidated Financial Results
for the Six Months Ended October 31, 2023
[Japanese GAAP]
December 8, 2023
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: December 14, 2023
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Available
Schedule of quarterly 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 Six Months Ended October 31, 2023
(May 1, 2023 to October 31, 2023)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Six months ended
October 31, 2023
October 31, 2022

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

%

3,251
3,160

2.9
7.8

90
137

(34.2)
21.1

104
150

(30.7)
28.1

65
103

(36.4)
29.4

Basic earnings
per share

Diluted earnings per
share

Six months ended
Yen
Yen
October 31, 2023
3.99
October 31, 2022
6.20
(Note) Diluted earnings per share is not presented as there were no potential shares.
(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

6,986
As of October 31, 2023
7,134
As of April 30, 2023
(Reference) Equity: As of October 31, 2023: ¥5,997 million
As of April 30, 2023: ¥6,203 million

Equity ratio

Million yen

%

5,997
6,203

85.8
86.9

2. Dividends
1stquarter-end

2ndquarter-end

Yen

Yen

Annual dividends
3rdYear-endquarter-end

Fiscal year ended April 30, 2023
0.00
Fiscal year ending April 30, 2024
0.00
Fiscal year ending April 30, 2024
(Forecast)(Note) Revision to the forecast for dividends announced most recently: No

Total

Yen

Yen

Yen

-

9.00

9.00

-

7.00

7.00

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2024
(May 1, 2023 to April 30, 2024)(% indicates changes from the previous corresponding period.)
Basic earnings
Net sales
Operating income
Ordinary income
Profitper share
Million yen%

Million yen%

Million yen%

Million yen

Full year
7,330
5.1
495
(15.4)
505 (18.3)(Note) Revision to the financial results forecast announced most recently: No%

Yen

353 (26.7)

21.28* 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):
October 31, 2023: 17,464,000 shares
April 30, 2023: 17,464,000 shares2) Total number of treasury shares at the end of the period:
October 31, 2023: 1,007,057 shares
April 30, 2023: 842,257 shares
3) Average number of shares during the period:
Six months ended October 31, 2023: 16,509,964 shares
Six months ended October 31, 2022: 16,721,532 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 Consolidated First Two Quarters
Asukanet operates three business areas, each with different positioning and characteristics. They are (1) the
funeral business, which adds digital processing and remote output services for photos of the deceased to afuneral business that is largely unaffected by economic trends, (2) the photo book business, which provides
ideas for new photo output methods that allow users to create complete photo collections beginning from justa single book, and (3) the aerial display business, which is utilizing unique, recently-developed technologies
aiming to create a new market and achieve dreams.
On December 4, we acquired shares in BET Co., Ltd., which operates the virtual “liver” (online streamer)agency “Razz Production,” and it became a subsidiary of our company. The details are as listed in “ Notes –Significant Subsequent Events.”
Following is an overview of the business results for each segment. The result figures for each segment
include internal inter-segment sales.
(Funeral business)
In this business, although a downturn in the numbers of funerals held nationwide was seen compared to theprevious year, there was strong growth in our primary business area of services processing photos of thedeceased as a consequence of steadily acquiring new contracts with funeral companies through our marketing
operations. As a result, there was a steady increase in sales of supply products such as ink, paper, and frames.
However sales of output systems for photos of the deceased and other hardware completed the cycle ofreplacement purchase demand, and sales were somewhat lower than the same period in the previous fiscalyear.
We have renovated the service site of our “tsunagoo” service, which faced difficulty in acquiring newcustomers, however use of this technology by existing clients is expanding.
In terms of income, due to the excessive workload on operators in the Image Processing Division, we
engaged in active staff recruitment. We also implemented a raise in the base salary as of the end of the previous
fiscal year. As a result, there was a slight decrease in segment income.
As a result, Q2 sales were 1,514,562 thousand yen (104.9% year-on-year), and Q2 segment income was288,597 thousand yen (92.5% year-on-year).
(Photo book business)
This business operates AsukaBook for the professional photography market in Japan, and MyBook for thegeneral Japanese 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 professional photographers market, in the second quarter we saw the effects from a rebound decline
in demand for our primary business of wedding photo albums, following an increase in ceremonies that had
been put off due to the coronavirus pandemic during the previous year. However due to strong sales of studio
photo albums such as for family photos and photos of children, sales were higher than the same period in theprevious fiscal year. Initiatives included holding online seminars, exhibiting at PHOTONEXT2023, andconducting the “Life-Size Baby Photo Awards 2023” and “Life-Size Pet Photo Awards 2023.”
However in the general consumer market, although there was a continuing recovery in domestic travel,
there was a delay in the recovery of overseas travel and a slow recovery from the decline in photo output, andconditions continued to be difficult, particularly in the OEM division. Sales fell below the level of the same
period in the previous fiscal year. For My Book, we released new products and actively carried out a varietyof campaigns, however it appears that time will be required for a recovery to pre-pandemic levels.
In terms of income, although we were affected by the soaring prices of raw materials and increased
personnel cost, the positive effect of several improvements and decreasing depreciation were large factors

driving an increase in segment income.
As a result, Q2 sales were 1,664,564 thousand yen (99.8% year-on-year), and Q2 segment income was285,306 thousand yen (100.8% year-on-year).
(Aerial display business)
This business is 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.
In the area of marketing, we are carrying out sales centered on our Marketing Division in Japan, and centeredon our agents overseas. In Japan, we exhibited at two events in Japan and obtained potential customers.
Reinforcement of our sales system delivered results, and we saw a definite increase in domestic sales.
However overseas, while sales activities at our China agent have mostly returned to normal and we haveachieved some results including installation of self-operated terminals at Chinese banks, in other areas project
delays are continuing and the results were below expectations. Sales were higher than the same period in theprevious fiscal year, centering primarily on sales of glass ASKA3D plates.
In terms of production and development, we made progress in production trials of ASKA3D plates usingmaterials with superior environmental performance, and those were well received at the exhibitions weparticipated in. We conducted production development at our technical development center, and we also
challenged ourselves in trials to gradually increase the sizes of our glass ASKA3D plates. We also reinforced
the structure of quality control to stabilize the supply of products.
In terms of profit and loss, segment loss was higher than the same period in the previous fiscal year due toour participation in exhibitions, advertising expenses and quality control, and expenses for research anddevelopment of new materials.
As a result, Q2 sales were 75,625 thousand yen (147.8% year-on-year), and Q2 segment loss was 164,789
thousand yen (compared to a loss of 161,274 thousand yen in the same quarters of the previous fiscal year).
As results of the above, sales were 3,251,417 thousand yen (102.9% compared to the same quarter of theprevious fiscal year). In terms of profits, there was a cost increase in company-wide expenses and decrease inprofit in the funeral business division. As a result, ordinary income was 104,048 thousand yen (69.3% year-onyear) and net income was 65,942 thousand yen (63.6% year-on-year).

(2) Overview of the Financial Status
1, Assets, liabilities, and net assets(Assets)
Current assets at the end of this second quarter decreased by 148,399 thousand yen from the end of theprevious fiscal year to reach 6,986,460 thousand yen. Despite an increase in products of 144,338 thousand yen,
this decrease was primarily due to a decrease in cash and savings of 376,221 thousand yen.
(Liabilities)
Liabilities at the end of this second quarter increased by 57,235 thousand yen from the end of the previous
fiscal year to reach 988,997 thousand yen. Despite a decrease in unpaid corporate tax of 40,800 thousand yen,
this was primarily due to an increase in unpaid expenses of 168,433 thousand yen.
(Net assets)
Net assets at the end of this second quarter decreased by 205,634 thousand yen from the end of the previous
fiscal year to reach 5,997,463 thousand yen. This was primarily due to an increase in treasury stock of 139,941
thousand yen and in dividend payment of 149,595 thousand yen.
2, 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 second quarter
declined by 376,221 thousand yen from the end of the previous fiscal year to reach 1,667,805 thousand yen.
(Cash flows from operating activities）
Net cash gained as a result of operating activities during the consolidated first two quarters was 77,784
thousand yen (compared to a gain of 82,660 thousand yen in the same period of the previous fiscal year).
Despite an increase in inventory of 75,536 thousand yen, this decrease was primarily due to net income of
97,341 thousand yen and depreciation of 182,200 thousand yen.
(Cash flows from investing activities）
Net cash expended as a result of investing activities during the consolidated first two quarters was 158,704
thousand yen (compared to an expenditure of 171,575 thousand yen in the same period of the previous fiscal
year). This was primarily due to payment of 109,854 thousand yen for acquisition of tangible fixed assets andpayment of 37,821 thousand yen for acquisition of intangible assets.
(Cash flows from financing activities）
Net cash expended as a result of financing activities during the consolidated first two quarters was 299,915
thousand yen (compared to an expenditure of 314,519 thousand yen in the same period of the previous fiscal
year). This was primarily due to payment of 149,331 thousand yen in dividends and payment of 149,865
thousand yen in treasury stock.
(3) Future Outlook
There are no changes to the future outlook for the fiscal year ending April 2024 that was announced on June
9, 2023.

。

5．Financial Statements for the second quarter of the Fiscal Year
(1) Balance sheet
Previous fiscal year
(Ended April 30, 2023)
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Merchandise and products
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accounts(Units: 1,000s yen)
End of current Q2(Ended Oct. 31 2023)

2,049,027
886,554477,047
185,485
89,29860,002(1,793)

1,672,805
874,845621,385
107,138
98,84354,091(2,095)

3,745,622

3,427,014

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

873,048
415,124
844,060
184,668

849,625547,623
844,060
226,590

Total tangible fixed assets

2,316,903

2,467,900

Intangible fixed assets
Total investments and other assets
Investment securities
Others219,310

212,637

634,410
218,613651,235
227,673

Total current assets

Total investment and others
Total fixed assets
Total assets

853,023

878,9083,389,237

3,559,455

7,134,859

6,986,460

Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Provision for bonuses
Others187,109
208,545
87,200193,800
245,681

182,716
376,979
46,400182,800
191,853

Total of current liabilities

922,337

980,748

5,351
4,072

4,894
3,354

Fixed liabilities
Provision for retirement benefits
Others

9,424

8,248

Total liabilities

Total fixed liabilities

931,761

988,997

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

490,300
624,486
5,561,278(487,857)

490,300
626,380
5,477,625(627,799)

6,188,207

5,966,507

14,89030,955

14,89030,955

6,203,097

5,997,463

7,134,859

6,986,460

Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

(2) Profit and loss statement

Net sales
Cost of sales(Units: 1000s yen)First two quarters of the previous First two quarters of the current
fiscal year
fiscal year
(May 1, 2022 – Oct. 31, 2022)(May 1, 2023 – Oct. 31, 2023)
3,160,445
3,251,417
1,714,196
1,816,678

Gross profit

1,446,248

1,434,739

Selling, general, and administrative expenses

1,308,770

1,344,339

137,478

90,400

1,159
600
173
8,884
2,469

2,518
675
145
8,717
2,489

13,286

14,546

―
587

450
448

Operating income
Non-operating income
Interest received
Dividends received
Commissions received
Foreign exchange gains
OthersTotal non-operating income
Non-operating expenses
Loss from investment entity
Expense for purchasing treasury stocks
Total non-operating expenses
Ordinary income
Extraordinary losses
Loss from retirement of fixed assets
Total extraordinary income

587

898

150,177

104,048

0

6,706

0

6,706

150,177

97,341

Income taxes

46,45331,399Net income

103,723

65,942

Net income before taxes

(3) Statement of cash flows(unit:1000s yen)First two quarters of the previous First two quarters of the current
fiscal year
fiscal year
(May 1, 2022 – Oct. 31, 2022)(May 1, 2023 – Oct. 31, 2023)
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
Interest and dividends received
Profit (loss) from investment management
Foreign exchange losses (gains)
Loss from divesture of fixed asset
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventory assets
Increase (decrease) in accounts payable-trade
Increase (decrease) in accrued consumption taxes
Others150,177
201,089
408
18,880―(1,759)―(5,829)097,341
182,200
302(11,000)(457)(3,193)450(4,614)
6,706(10,002)11,709(117,545)(26,114)(27,762)
13,026(75,536)(4,393)(71,362)
18,285

Subtotal

194,568

146,438

Interest and dividends received
Income taxes paid

1,099
(113,007)

1,683(70,336)

Cash flows due to operating activities

82,66077,784

Cash flows due to investing activities
Expenditure from time deposit
Income from withdrawal of time deposits
Purchase of tangible fixed assets
Purchase of intangible fixed assets
Collection of loans receivable
Others(5,000)5,000(140,497)(30,149)
147(1,076)(5,000)5,000(109,854)(37,821)148(11,177)

Cash flows due to investing activities(171,575)(158,704)(117,379)(196,421)(718)(149,331)(149,865)(718)(314,519)(299,915)

5,829

4,614

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(397,605)(376,221)

Balance of cash and cash equivalents at beginning of year

1,994,178

2,044,027

Balance of cash and cash equivalents at end of year

1,596,572

1,667,805

Cumulative first quarter of the current fiscal year (May 1, 2022 – Oct. 31, 2022)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Adjustments

Amountrecorded in
profit and loss
statement

3,160,445―

3,160,445

―

2,900

(2,900)―1,668,521

51,157

3,163,346(2,900)3,160,445

282,940(161,274)

433,687(296,209)

137,478

Funeral businessPhoto bookbusiness

Aerialdisplay business

1,443,666

1,665,621

51,157―2,900

1,443,666
312,020

Total

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

Cumulative first quarter of the current fiscal year (May 1, 2023 – Oct. 31, 2023)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Adjustments

Amountrecorded in
profit and loss
statement

3,251,417―

3,251,417

540

3,335

(3,335)―

1,664,564

75,6253,254,753(3,335)3,251,417

285,306(164,789)

409,113(318,713)

90,400Funeral businessPhoto bookbusiness

Aerialdisplay business

1,514,562

1,661,769

75,085―2,795

1,514,562
288,597

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)(Significant Subsequent Events)
Business merger resulting from acquisition
At a board of directors meeting held on November 17, 2023, Asukanet resolved to acquire shares in BET Co.,
Ltd. and make it a subsidiary of our company. A share transfer agreement was concluded on the same date andwe acquired the shares on December 4, 2023.
(1) Overview of business merger① Name of acquired company and its business areas
Name of acquired company: BET Co., Ltd.
Business areas:
Operation of a virtual “liver” (online streaming) studio andconsulting business for “liver” studios② Primary reasons for the business merger
In addition to expected future growth as a virtual “liver” studio, there are advantages gained from synergy,
including making use of the company’s knowledge regarding on-demand manufacturing in the Asukanet
photo book business, and providing character goods. We also expect that applying our company’s resources
including communication planning with fans and media mix development will also create new growth
opportunities.
③ Merger date
December 4, 2023 (share acquisition date)④ Legal form of merger
Acquisition of shares paid for with cash
⑤ Name of company after merger
The name will not be changed after the merger.
⑥ Share of voting rights acquired
100％⑦ Primary basis for deciding the company to acquireThis is based on our company acquiring shares paid for with cash.
(2) Acquisition cost for acquired company breakdown by price type
Acquisition priceCash and savings
Acquisition cost

400,000 thousand yen
400,000 thousand yen(3) Details and amounts of primary acquisition-related expenses
Remuneration to advisors, fees, etc.
37,856 thousand yen(4) Amount of generated goodwill, cause of generation, depreciation method, and depreciation period
Not confirmed at this time.
(5) Amounts of assets and liabilities received on date of merger, and primary details thereof
Not confirmed at this time.

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