DAIICHIKOSHO

CO.,

LTD.

FY2008, the year ending March 31, 2009

Flash Report on the Consolidated Results for the Interim Period Ended
September 30, 2008
November 10, 2008

Company Name: DAIICHIKOSHO CO., LTD.
Code Number: 7458
(URL http://www.dkkaraoke.co.jp)
Stock Exchange Listing: JASDAQ
Representative: Yasutaka Wada, President
Contact: Eiji Hata, Managing Director and Executive Director, Administration Headquarters
Phone: (03) 3280-2151
Scheduled Date to Submit the Quarterly Securities Report: November 14, 2008
(Amounts below one million yen are truncated.)
1. Consolidated Performance for the Interim Period Ended September 2008 (from April 1, 2008, to September 30,2008)(1) Consolidated operating results (cumulative) (Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Operating income
Ordinary income¥ Million%¥ Million%¥ Million%
Interim Period ended
61,902―
7,863―
8,300―
September 2008
Interim Period ended
62,188
(1.6)
7,895
18.5
7,989
16.5
September 2007
Net income¥ Million
Interim Period ended
September 2008
Interim Period ended
September 2007

Net income per share

Fully diluted net incomeper share%¥¥

5,058―73.33

―

2,122

(46.3)

30.49―(2) Consolidated financial position
Total assets

Net assets

Equity ratio¥ Million¥ Million
Interim Period ended
123,176
74,618September 2008
Year ended March 2008
124,72172,399(Reference) Shareholders’ equity
Interim Period ended September 2008: ¥73,993 million
Year ended March 2008: ¥71,862 million

Net assets pershare%¥
60.1

1,081.13

57.6

1,036.52

Dividend per share
Second Quarter
Third Quarter
Yen
Yen
0.00
―
0.00
―

Year-end
Yen
25.00
―

Annual
Yen
25.00
―

―

30.00

30.00

2. Dividend(Reference dated)

First Quarter
Yen――Year ended March 2008
Year ending March 2009
Year ending March 2009――(forecast)
Note: Revision of dividend forecast during the period under review: No1

DAIICHIKOSHO

CO.,

LTD.

3. Forecast Consolidated Performance for FY2008, the Year Ending March 31, 2009 (from April 1, 2008, to March31, 2009)(Percentage figures indicate increase/decrease from a year earlier)
Net sales
Operating income
Ordinary income¥ Million%¥ Million%¥ Million%
Year ending March 31,
125,700(0.9)
15,700(4.1)
15,800(3.8)
2009 (full year)
Net income¥ Million8,000

Net income per share%
36.3¥
Year ending March 31,116.89
2009 (full year)
Note: Revision of forecast consolidated performance during the period under review: Yes
4. Other(1) Change in important subsidiaries during the period under review (Change in specific subsidiaries causing achange in the scope of consolidation): No(2) Adoption of simplified accounting methods and special accounting methods for quarterly consolidated financial
statements: Yes(3) Change in accounting principals, procedure and presentation methods for preparation of quarterly consolidated
financial statements (Items set forth in “Changes in important matters in preparing the quarterly consolidatedfinancial statements”)
1) Changes following a revision of accounting standards: Yes
2) Other changes: Yes(4) Number of common shares issued
1) Number of shares issued (including treasury stock):
Interim period ended September 2008: 69,600,596 sharesYear ended March 2008: 69,600,596 shares
2) Number of shares of treasury stock:
Interim period ended September 2008: 1,159,346 sharesYear ended March 2008: 270,292 shares
3) Average number of shares during the period:
Interim period ended September 2008: 68,980,104 sharesInterim period ended September 2007: 69,599,952 shares* Explanation for the appropriate use of performance forecasts and other special notes:▪ Effective from the fiscal year ending March 31, 2009, the “Accounting Standard for Quarterly Financial Reporting”(ASBJ Statement No. 12) and the “Guidance on Accounting Standard for Quarterly Financial Reporting” (ASBJ
Guidance No. 14) have been applied. The quarterly consolidated financial statements have been prepared inaccordance with “Regulations for Quarterly Consolidated Financial Statements.”▪ The projections shown in this document are estimated based on information available as of the issue date of thisreport, and therefore the actual results for future periods could differ greatly from these forecast figures due tovarious unknown factors.

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DAIICHIKOSHO

CO.,

LTD.

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

Current interim period(As of September 30, 2008)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise
Finished goods
Raw materials
Work in process
OtherAllowance for doubtful accounts
Total current assets
Noncurrent 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
Investments and other assets
Lease and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

FY2007(As of March 31, 2008)
Condensed

26,527
8,906
4,635
225
72
208
5,469(436)45,60828,789
9,017
4,048
202
76
249
5,466(436)47,414

8,154
13,926
17,741
7,879
47,702
6,333

8,069
13,62917,485
8,026
47,211
6,324

13,583
11,037(1,087)23,53377,568123,176

12,99912,074(1,302)
23,77177,307
124,721(Millions of yen)

Current interim period(As of September 30, 2008)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Provision for retirement benefits
Provision for directors' retirement benefits
Negative goodwill
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity

3FY2007(As of March 31, 2008)
Condensed

4,505
13,360
3,161
1,504
9,253
31,784

4,552
12,152
3,689
1,098
9,935
31,428

10,185
2,844
1,929
363
1,451
16,77348,558

14,469
2,772
1,849
391
1,410
20,89352,322DAIICHIKOSHO

CO.,

LTD.

Current interim period(As of September 30, 2008)
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Valuation and translation adjustmentsValuation difference on available-for-salesecurities
Revaluation reserve for land
Foreign currency translation adjustment
Total valuation and translation adjustments
Minority interests
Total net assets
Liabilities and net assets

4

12,35020,36243,380(1,238)74,855

FY2007(As of March 31, 2008)
Condensed
12,35020,36240,149(266)
72,595(106)

47(777)23(861)
624
74,618123,176(845)
64(733)537
72,399124,721

DAIICHIKOSHO

CO.,

LTD.

(2) Quarterly Consolidated Statement of Income
Current interim period(Millions of yen)

Current interim period(From April 1, 2008, toSeptember 30, 2008)
61,90235,61926,283
18,419
7,863

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Cooperative monetary aid received
Amortization of negative goodwill
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Reversal of allowance for doubtful accountsIndemnity of cancellation of leases
Reversal of loss on cancellation of a new businessTotal extraordinary income
Extraordinary loss
Loss on disposal of noncurrent assets
Loss on sales of investment securities
Loss on valuation of investment securities
Total extraordinary loss
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Income taxes
Minority interests in income
Net income

127
38
180
27
427
802
176
100
89
366
8,300
167
128
119
148
420
216
6305
528
8,192
3,087
(45)
3,041
92
5,058

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DAIICHIKOSHO

CO.,

LTD.

(3) Quarterly Consolidated Statement of Cash Flows(Millions of yen)

Current interim period(From April 1, 2008, toSeptember 30, 2008)

Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of negative goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Interest and dividends income
Interest expenses
Loss (gain) on disposal of noncurrent assets
Loss (gain) on valuation of investment securitiesDecrease (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
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investment 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
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from return of lease and guarantee deposits
Other, net
Net cash provided by (used in) investment activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Cash dividends paid
Purchase of treasury stock
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 the beginning of the year
Cash and cash equivalents at the end of the period

6

8,192
6,583
(27)
(213)
405
79
(166)
176
199
305
94
(584)
362
(20)
506
15,891
165(176)(3,644)
12,236(211)
162(5,782)113(1,896)
(593)
136
(165)
234
(993)
403
(35)
(8,630)394
1,840(5,311)(1,730)(972)(4)(5,783)(134)(2,312)28,30025,988DAIICHIKOSHO

CO.,

LTD.

(Segment Information)
a. Business segments
Current interim period (From April 1, 2008, to September 30, 2008)
Item(Millions of yen)
Eliminations Consolidated
and corporate

Commercial
karaokeKaraokecabin andrestaurantMusic
software30,578129

19,518
―

6,499
85

5,306
416

61,902
632

―
(632)

61,902―30,707
5,242

19,518
2,384

6,585
1,011

5,723
815

62,534
9,453(632)(1,589)61,902
7,863

Sales(1) Sales to third parties(2) Intersegment sales
and transfers
Total
Operating income

OtherTotal(Changes in significant accounting policies)(Inventories)
Loss on devaluation of inventories in the music software business, which was recorded as non-operating expenses
until the previous fiscal year, is recorded as cost of sales, effective from the first quarter of the fiscal year ending
March 31, 2009.
As a result of this change, operating income for the music software business for the interim period ended September
30, 2008, decreased ¥246 million, as compared with the amounts calculated using the former method.
(Classification for recording promotion expenses)
Promotion expenses for increasing promotion effect in the commercial karaoke business, which were formerly
recorded as operating expenses, are partially recorded as a deduction from sales, effective from the first quarter ofthe fiscal year ending March 31, 2009.
As a result of this change, sales for the commercial karaoke business for the interim period ended September 30,
2008, decreased ¥354 million, as compared with the amounts calculated using the former method. There are noeffects, however, on operating income.
b. Geographical segments
Current interim period (From April 1, 2008, to September 30, 2008)
As sales in Japan account for more than 90% of the sum of sales in each region of the respective geographicalsegments, the segment information by geographical region is omitted.
c. Overseas sales
Current interim period (From April 1, 2008, to September 30, 2008)
As sales overseas account for less than 10% of consolidated net sales for the interim period ended September 30,
2008, overseas sales-related information is omitted.

7