DAIICHIKOSHO

CO.,

LTD.

Translation
This report is a translation of excerpts from original Japanese Flash Report and for reference purpose only. In case of discrepancy between this reportand original Japanese Flash Report, the latter shall prevail.

FY2020, the year ending March 31, 2021

Flash Report on the Consolidated Results for the First Quarter Ended June 30,
2020 [JGAAP]
August 24, 2020

Company Name:
Stock Exchange Listing:Code Number:
URL:
Representative:
Contact:

DAIICHIKOSHO CO., LTD.
Tokyo Stock Exchange
7458
https://www.dkkaraoke.co.jp/Tadahiro Hoshi, President
Yasuhisa Nishihara,Corporate Officer and General Manager, Accounting Department
Phone:+81-3-3280-2151
Date to Submit the Quarterly Securities Report: August 12, 2020
Start Date for Dividend Payment: ―Availability of Supplementary Briefing Material on Quarterly Financial Results: None
Schedule of Quarterly Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Three Months Ended June 30, 2020 (From April 1, 2020, to June30, 2020)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales

Operating incomeOrdinary income

Millions of yen%

Millions of yen%

Millions of yen%

16,645(53.1)(1,189)

―

(719)

―

35,492

1.9

5,270(1.5)

5,593

(3.9)

Three months ended
June 30, 2020Three months ended
June 30, 2019

Net income attributable toowners of parent
Millions of yen%

Yen

Fully diluted net income
per shareYen(91.17)

―

62.99

62.90

Basic earnings per share

Three months ended(5,113)―June 30, 2020Three months ended
3,568
(6.3)
June 30, 2019
(Note) Comprehensive income:Three months ended June 30, 2020: (4,815) million yen ― %Three months ended June 30, 2019: 3,510 million yen (9.7) %(2) Consolidated financial position
Total assets
As of June 30, 2020
As of March 31, 2020
(Reference) Shareholders’ equity:
As of June 30, 2020:
As of March 31, 2020:

Net assets

Millions of yen

Millions of yen

206,771
181,567

126,817
136,205

125,002 million yen
134,419 million yen

1Equity ratio
%
60.5
74.0

DAIICHIKOSHO

CO.,

LTD.

2. Dividend
First Quarter
Yen――Second Quarter
Yen
56.00

Annual dividend
Third Quarter
Yen―

Year ended March 31, 2020Year ending March 31, 2021
Year ending March 31, 2021
56.00―(forecast)(Note) Changes in dividends forecast from most recently announced figures: Changed

Year-end
Yen
57.00
57.00

AnnualYen
113.00113.003. Forecast Consolidated Performance for FY2020, the Year Ending March 31, 2021 (From April 1,2020, to March 31, 2021)
Net sales
Millions of yen

Six months ending
September 30, 2020
Year ending March 31,2021 (full year)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen%%%44,200(37.8)(1,300)

―

(700)

―

114,700(21.6)

7,300(61.7)

8,200(59.3)Net income attributable toowners of parent
Millions of yen%

Basic earnings per share

Yen
Six months ending(4,000)(71.55)―September 30, 2020
Year ending March 31,600(95.2)
10.73
2021 (full year)(Note) Changes in forecast of consolidated performance from most recently announced figures: Changed*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting inchanges in scope of consolidation): None
(2) Adoption of special accounting policies for quarterly financial statements: None
(3) Changes in accounting standard, accounting estimation change and error correction
1) Changes due to changes in accounting standard: None
2) Changes due to changes in accounting standard except (3) 1): None
3) Changes due to accounting estimation change: None
4) Error correction: None
(4) Number of common shares issued
1) Number of shares issued
As of57,234,200 As of
57,234,200(including treasury shares)June 30, 2020
shares March 31, 2020
shares2) Number of shares of treasury
As of1,331,212 As of904,712
sharesJune 30, 2020
shares March 31, 2020
shares3) Average number of shares
Three months ended 56,093,869 Three months ended 56,655,138
during the period
June 30, 2020
shares June 30, 2019
shares* These consolidated financial results are outside the scope of quarterly review by Certified Public Accountants orauditing corporations.
* Explanation for the appropriate use of performance forecasts and other special notes:
The statements regarding forecast of financial results in this report are based on the information that is available, as
well as estimates, assumptions and projections that are believed to be reasonable at the time of publication.
Therefore, there might be cases in which actual results greatly differ from forecast values.

2DAIICHIKOSHO

CO.,

LTD.

Quarterly Consolidated Financial Statements and Primary
Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)

FY2019(As of March 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Karaoke equipment for rental, net
Karaoke cabin and restaurant facilities, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Leasehold and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

3Current First quarter(As of June 30, 2020)

47,992
4,758
7,777
5,331
(122)
65,737

69,976
2,981
9,515
7,632(659)89,447

9,813
20,11840,6007,402
77,935

8,973
19,52841,0998,088
77,6892,900
7,299
10,199

2,950
6,852
9,802

3,157
15,2499,358(71)
27,693
115,829
181,5673,474
15,153
11,407(203)
29,831
117,323
206,771DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors (and otherofficers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

4FY2019(As of March 31, 2020)

Current First quarter(As of June 30, 2020)

4,929
2,786
2,117
1,184
11,41522,433

3,176
8,992
1,151
613
11,382
25,317

11,04542,762

943

779

7,270
3,668
22,92745,361

7,340
3,753
54,636
79,953

12,350
4,003
123,891(4,589)135,656

12,350
4,003
115,566(5,958)125,962

(221)
(733)
(26)
(254)
(1,236)310
1,475
136,205
181,567

30
(733)
(29)
(227)
(960)
334
1,481
126,817
206,771DAIICHIKOSHO

CO.,

LTD.

(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(Millions of yen)

Net salesCost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Cooperative monetary aid received
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidies income
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment lossLoss on sales of investment securities
Loss on valuation of investment securities
Loss on COVID-19
Total extraordinary losses
Income (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income (loss)
Net income attributable to non-controlling interests
Net income (loss) attributable to owners of parent

Three months ended
June 30, 2019
(From April 1, 2019, toJune 30, 2019)

Three months ended
June 30, 2020
(From April 1, 2020, toJune 30, 2020)

35,492
21,672
13,8208,550
5,270

16,645
11,1285,5166,706(1,189)

582
20
284
393

470
420
213
708

37
5－
2670
5,593

37
8132
60
239(719)

0－－
0－
057
58

29
962－
－
101
5,491
1,957(68)
1,888
3,602
33
3,568

5

*1

*2

85
71－
1
6,258
6,417
(7,078)111(2,098)(1,986)(5,091)22(5,113)DAIICHIKOSHO

CO.,

LTD.

(Quarterly Consolidated Statements of Comprehensive Income)(Millions of yen)

Net income (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6

Three months ended
June 30, 2019
(From April 1, 2019, toJune 30, 2019)

Three months ended
June 30, 2020
(From April 1, 2020, toJune 30, 2020)

3,602(5,091)

(89)
(28)
25
(91)
3,510

252
(2)
27
276
(4,815)

3,477(4,837)33

22

DAIICHIKOSHO

CO.,

LTD.

Notes to the Quarterly Consolidated Financial Statements(Segment Information)
Three months ended June 30, 2019 (From April 1, 2019, to June 30, 2019)(Millions of yen)
Reportable segments

Sales
Segment income(Operating income)

Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

15,59815,549

2,068

3,893

1,659

46

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

OtherTotal

33,2172,275

35,492－35,492

5,599

415

6,014

(744)

5,270

Note: The (744) million yen adjustment posted to segment income is primarily composed of general and administrativeexpenses incurred by the administrative department at the head office that are not attributable to any particular
reportable segment.

Three months ended June 30, 2020 (From April 1, 2020, to June 30, 2020)(Millions of yen)
Reportable segments

Sales
Segment income orSegment loss
(Operating income orOperating loss)

Commercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

10,138

2,932

1,523

1,748

(2,354)63

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

OtherTotal

14,5952,050

16,645－

16,645(542)

18(524)(665)(1,189)Note: The (665) million yen adjustment posted to segment income or segment loss is primarily composed of general andadministrative expenses incurred by the administrative department at the head office that are not attributable to any
particular reportable segment.

(Additional Information)
As for the impairment of non-current assets and tax-effect accounting, etc., we estimate future cash flows, recoverability ofdeferred tax assets and other matters assuming that the negative impact due to the spread of COVID-19 on our businessresults will continue, albeit slightly, until the end of the current consolidated fiscal year, even though the impact will
gradually diminish going forward.

(Notes to the Quarterly Consolidated Statements of Income)*1 Subsidies income
Employment adjustment subsidies, which are subsidies provided to cover salaries, etc. for the period during which
employees were furloughed, as well as subsidies, etc. received from the national government, local municipalities, etc.
following the spread of COVID-19, have been posted to “subsidies income.”*2 Loss on COVID-19
Following the issuance of the declaration of state of emergency due to the spread of COVID-19, we implemented a measure
to furlough (special leave of absence) all employees in principle. In addition, Karaoke cabins and restaurants operated by
the Company as well as those operated by our clients were required to close temporarily, following the requests from thenational government and local municipalities.
In light of these events, fixed costs of Karaoke cabins and restaurants operated by the Company during the period of closureand fixed costs in relation to leasing of commercial Karaoke equipment, including salaries for the period during which
employees were furloughed, have been posted to “loss on COVID-19.”

7

DAIICHIKOSHO

CO.,

LTD.

(Significant Subsequent Events)(Repurchase of treasury shares)
At the meeting of the Board of Directors held on August 7, 2020, the Company has resolved on matters in relation to therepurchase of treasury shares, based on the provisions of Article 156 of the Companies Act as applied in replacement of theprovisions of Article 165, Paragraph 3 of the Companies Act.
(1) Reason for repurchase
For the purpose of improvement of capital efficiency and shareholder returns(2) Class of shares to be repurchased
Common shares of the Company(3) Total number of shares to be repurchased(Up to) 1,600,000 shares(4) Total amount of repurchase cost
(Up to) 5,000 million yen(5) Repurchase period
From August 11, 2020 through March 31, 2021
(6) Repurchase method
Purchase from the market on the Tokyo Stock Exchange8