DAIICHIKOSHO

CO.,

LTD.

FY2015, the year ending March 31, 2016

Flash Report on the Consolidated Results for the Interim Period Ended
September 30, 2015 [JGAAP]
November 6, 2015

Company Name:
DAIICHIKOSHO CO., LTD.
Stock Exchange Listing: Tokyo (JASDAQ)
Code Number:
7458
URL:
http://www.dkkaraoke.co.jp
Representative:
Saburo Hayashi, President
Contact:
Shigeki Kobayashi,
Corporate Officer; and General Manager, Accounting Department
Phone:+81-3-3280-2151
Scheduled Date to Submit the Quarterly Securities Report: November 13, 2015
Start Date for Dividend Payment: December 4, 2015
Availability of Supplementary Briefing Material on Quarterly Financial Results: Available
Schedule of Quarterly Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Interim Period Ended September 30, 2015 (From April 1, 2015,to September 30, 2015)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
70,362

Operating income
Ordinary income% Millions of yen% Millions of yen%
8.2
9,910
2.3
10,727(0.6)

65,046

0.2

Millions of yen

Interim Period endedSeptember 30, 2015
Interim Period ended
September 30, 2014

9,688

Net income attributable toowner of parent
Millions of yen%
6,467
(0.4)

Interim Period ended
September 30, 2015
Interim Period ended
6,491
September 30, 2014
(Note) Comprehensive income:Basic earnings per share

5.3

Interim Period ended September 30, 2015:
Interim Period ended September 30, 2014:(4.0)

10,791

Yen
111.85

Fully diluted net income pershareYen
111.82111.75－4,013million yen
6,251million yen(35.8) %9.5 %(2) Consolidated financial position
Total assetsMillions of yen

Net assets
Millions of yen

As of September 30, 2015
177,631
109,692
As of March 31, 2015
180,312110,264(Reference) Shareholders’ equity:
As of September 30, 2015: 108,428 million yen
As of March 31, 2015:
109,049 million yen

1(0.6)

Equity ratio
%
61.0
60.5

DAIICHIKOSHO

2.

CO.,

LTD.

Dividend
First Quarter

Second Quarter
Yen
50.00
54.00

Annual dividend
Third Quarter

Year-end
Yen
50.00

Year ended March 31, 2015——
Year ending March 31,—2016
Year ending March 31,—2016 (forecast)(Note) Changes in dividends forecast from most recently announced figures: Yes

Annual54.00

Yen
100.00108.003. Forecast Consolidated Performance for FY2015, the Year Ending March 31, 2016
(From April 1, 2015, to March 31, 2016)
Net sales
Millions of yen

Year ending March 31,
2016 (full year)

142,500(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income% Millions of yen% Millions of yen%
7.1

20,700Net income attributable toowner of parent
Millions of yen%

8.7

22,500

6.7

Basic earnings per shareper share
Yen

Year ending March 31,
13,300(2.6)
230.782016 (full year)(Note) Changes in forecast of consolidated operating results from most recently announced figures: None*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting
from changes 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: Yes
2) Changes due to changes in accounting standard except (3) 1): None
3) Changes due to accounting estimation change: None
4) Error correction: None
1) Number of shares issued
As of57,634,200 As of
58,025,000(including treasury stock)
September 30, 2015
shares March 31, 2015
shares2) Number of shares of
As of2,963 As of
2,879
treasury stock
September 30, 2015
shares March 31, 2015
Shares3) Average number of sharesInterim Period ended
57,826,375 Interim Period ended
58,093,822
during the period
September 30, 2015
shares September30, 2014
shares* Presentation regarding the implementation status of the quarterly review:This flash report on the consolidated results for the Three months is not covered by the quarterly review procedure
stipulated in the Financial Instruments and Exchange Act. At the time of the publication of this report, the quarterly
review procedure for quarterly consolidated financial statements is being implemented.
* 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, aswell 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(1) Quarterly Consolidated Balance Sheets(Millions of yen)

FY2014(As of March 31, 2015)
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, netLand
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

3

Current Second quarter(As of September 30,2015)

59,747
7,016
6,933
6,363
(139)
79,92052,735
6,021
6,350
8,144
(125)
73,126

9,262
17,23626,3395,554
58,393

11,39018,92027,5496,055
63,915

1,235
6,350
7,585

2,101
5,908
8,010

13,263
14,392
6,844(87)
34,413
100,392
180,312

9,598
14,562
8,502(83)
32,578104,505
177,631DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Provision for directors' retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earningsTreasury stock
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 benefits plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

4FY2014(As of March 31, 2015)

Current Second quarter(As of September 30,2015)

4,723
3,949
5,007
1,063
12,70227,446

5,502
4,292
4,176
1,534
9,697
25,202

10,00023,1612,426
4,780
2,233
42,60270,04810,00023,344
1,184
5,010
3,195
42,73567,93812,3504,001
93,439(8)
109,782

12,350
4,001
95,310(12)
111,649

318
(733)
210
(528)
(733)
1,215
110,264
180,312(2,155)
(733)
151
(482)
(3,220)27
1,236
109,692
177,631DAIICHIKOSHO

CO.,

LTD.

(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(Millions of yen)Three months ended
September 30, 2014
(From April 1, 2014, toSeptember 30, 2014)
Net sales
Cost of salesGross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on disposal of non-current assets
Impairment loss
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

5

Three months ended
September 30, 2015
(From April 1, 2015, toSeptember 30, 2015)

65,04638,53526,511
16,823
9,688

70,362
43,19027,172
17,261
9,910

526
786
1,312

411
752
1,164

138
71
209
10,791

170
177
347
10,727

14
173
187

8
8

159
0
159
10,819
4,685
(387)
4,298
6,521
29
6,491

160
208
368
10,3674,233(367)
3,866
6,500
32
6,467

DAIICHIKOSHO

CO.,

LTD.

(Quarterly Consolidated Statements of Comprehensive Income)(Millions of yen)Three months ended
September 30, 2014
(From April 1, 2014, toSeptember 30, 2014)
Net income
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 theparent
Comprehensive income attributable to minority interests

6

Three months ended
September 30, 2015
(From April 1, 2015, toSeptember 30, 2015)

6,521

6,500(361)4149(269)6,251(2,473)(59)
46(2,486)
4,013

6,221

3,981

2932

DAIICHIKOSHO

CO.,

LTD.

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)Previous interim period(From April 1, 2014, toSeptember 30, 2014)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Impairment loss
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Interest and dividend incomeInterest expenses
Loss(gain) on sales of investment securities
Loss (gain) on disposal of non-current assets
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Increase in time and saving deposits
Proceeds from decrease in time and saving deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for acquisition of video licenses
Purchase of investment securities
Proceeds from sales of investment securities
Payments for transfer of business
Payments of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

7

Current interim period(From April 1, 2015, toSeptember 30, 2015)

10,8196,554
0390

10,367
7,429
208
471

10

(1,242)(617)
138(173)
144

(488)
170
151

503

963

413
135
(446)
(16)
(1,471)
16,386610(135)(5,418)
11,442583
83
800(1,399)(930)
17,167525(171)(5,049)12,472(140)
198(7,693)20(2,052)(985)(5,044)
5,224
(175)
345
(665)
219
(54)
(10,804)(417)
56(10,014)23(1,700)(1,421)(1,577)
(299)
336
(365)
251
(190)
(15,320)DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)Previous interim period(From April 1, 2014, toSeptember 30, 2014)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

8207
11,430(1,907)(2,037)
(603)
(18)
7,071
66
7,775
44,381
52,156

Current interim period(From April 1, 2015, toSeptember 30, 2015)
350
1,460
(1,285)(2,901)(1,700)(23)(4,100)(46)(6,996)60,00753,011DAIICHIKOSHO

CO.,

LTD.

(4) Segment Information
Interim Period ended September 30, 2014 (From April 1, 2014, to September 30, 2014)
Reportable segments(Millions of yen)
Postedamount to the
Adjusted
consolidated
amountquarterly(Note)
statements ofincome

Commercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other

Total

Sales

32,05625,2784,484

61,8193,227

65,046－65,046

Segment income(Operating income)7,244

3,229

33

10,507568

11,075(1,387)

9,688(Note) The (1,387) million yen adjustment posted to Segment income is primarily composed of General and
Administrative Expenses incurred from the administrative department at the head office that are not attributable toany particular segment.

Interim Period ended September 30, 2015 (From April 1, 2015, to September 30, 2015)
Reportable segments(Millions of yen)
Postedamount to theAdjusted
consolidated
amountquarterly(Note)statements ofincome

Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

OtherTotalSales

35,247

27,348

4,325

66,921

3,441

70,362－70,362

Segment income orSegment loss
(Operating income or
Operating loss)

7,941

2,757

(24)

10,673735

11,408(1,498)9,910(Note) The (1,498) million yen adjustment posted to Segment income is primarily composed of General and
Administrative Expenses incurred from the administrative department at the head office that are not attributable toany particular segment.

9DAIICHIKOSHO

CO.,

LTD.

(5) Issues Related to Summary Information (Notes)
Changes to Accounting Policies, Changes to Accounting Estimates, and Revision Restatements(Changes to Accounting Policies)
Following the adoption of revised standards, from the period under review, the Company has applied the “AccountingStandards for Business Combination” (Accounting Standards Board of Japan (ASBJ) Accounting Standards Statement
No.21 dated September 13,2013; hereinafter the “Accounting Standards for Business Combination”), the “AccountingStandard for Consolidated Financial Statements” (ASBJ Statement No. 22 dated September 13,2013; hereinafter the“Consolidated Financial Statements Accounting Standards”), and the “Accounting Standards for Business Divestitures”(ASBJ Statement No. 7 dated September 13,2013; hereinafter the “Business Divestitures Accounting Standards”),As aresult, the method of recording the amount of difference caused by changes in the Company’s ownership interests in
subsidiaries in the case of subsidiaries under ongoing control of the Company was changed to one in which it is recorded ascapital surplus, and the method of recording acquisition-related costs was changed to one in which they are recognized as
expenses for the fiscal year in which they are incurred. Furthermore, for business combinations carried out on or after thebeginning of the period under review, the accounting method was changed to one in which the reviewed acquisition costallocation resulting from the finalization of the provisional accounting treatment is reflected in the quarterly consolidated
financial statements for the quarterly period to which the date of business combination belongs. In addition, thepresentation method for “net income” and other related items was changed, and the presentation of “minority interests” waschanged to “non-controlling interests.” To reflect these changes, the Company has reclassified its quarterly and full-year
consolidated financial statements for the first three months of the previous fiscal year and the previous fiscal year.
In the consolidated statements of cash flows, the Company has been changed to method of presenting whereby cash flows
pertaining to acquisition or sales of subsidiaries’ shares don’t result in change in the scope of consolidation state under theclass of “Cash flows from financing activities”, and cash flows pertaining to acquisition-related costs of subsidiaries’ shares
don’t result in change in the scope of consolidation or expenses incurred for acquisition or sales of subsidiaries’ shares
involving a change in the scope of consolidation state under the class of “Cash flows from operating activities”.
The Accounting Standard for Business Combinations has been applied prospectively since the beginning of the period
under review, according to the transitional handling prescribed in Article 58-2(4) of “Accounting Standard for BusinessCombinations”, Article 44-5(4) of “Consolidated Financial Statements Accounting Standards”, and Article 57-4(4) of“Accounting Standards for Business Combination”.
These changes in accounting policies have minimal impact on profit and loss for the period under review.

Additional Information(Provision for directors' retirement benefits)
Resolution was made at the Board of Directors meeting on May 18, 2015, to abolish the Provision for Directors’ Retirement
Benefits Policy. In connection with that, at the general meeting of shareholders on June 19, 2015, it was passed byagreement to pay for every director the retirement benefits that correspond to their administration when they retire, about
the directors in office on or after this general meeting.

10