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 Third Quarter Ended December
31, 2020 [JGAAP]
February 22, 2021

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: February 12, 2021
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 Nine Months Ended December 31, 2020 (From April 1, 2020, toDecember 31, 2020)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales

Operating income

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

71,232(36.3)(1,171)―93(99.5)

111,832

3.6

16,484(1.3)

17,397(1.8)

Nine months ended
December 31, 2020
Nine months ended
December 31, 2019

Net income attributable toowners of parent
Millions of yen%

Basic earnings per share

Yen
Nine months ended(3,305)―(59.32)
December 31, 2020
Nine months ended
11,580(22.2)
204.42
December 31, 2019
(Note) Comprehensive income:Nine months ended December 31, 2020: (2,493) million yen ― %Nine months ended December 31, 2019: 11,688 million yen (18.1) %Fully diluted net income
per shareYen(2) Consolidated financial position
Total assets
As of December 31, 2020
As of March 31, 2020
(Reference) Shareholders’ equity:
As of December 31, 2020:
As of March 31, 2020:

Net assets

Millions of yen

Millions of yen

204,350
181,567

122,619
136,205

120,869 million yen
134,419 million yen

1Equity ratio
%
59.1
74.0

―
204.15DAIICHIKOSHO

CO.,

LTD.

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

Annual dividend
Third Quarter
Yen――Year ended March 31, 2020
Year ending March 31, 2021
Year ending March 31, 2021
(forecast)(Note) Changes in dividends forecast from most recently announced figures: None

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

Year ending March 31,2021 (full year)

96,500-103,600(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen%%%(34.0)(4,000)―(2,600)―-(29.2)-1,400-(92.7)-2,800-(86.1)

Net income attributable toowners of parent
Millions of yen%

Basic earnings per share

Yen
Year ending March 31,
undecided―
undecided
2021 (full year)(Note) Changes in forecast of consolidated performance from most recently announced figures: None

*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 of57,234,200(including treasury shares)
December 31, 2020
shares March 31, 2020
shares2) Number of shares of treasury
As of2,306,217 As of904,712
shares
December 31, 2020
shares March 31, 2020
shares3) Average number of shares
Nine months ended
55,731,042 Nine months ended
56,648,852
during the period
December 31, 2020
shares December 31, 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.

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DAIICHIKOSHO

CO.,

LTD.

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

FY2019Current Third quarter(As of March 31, 2020) (As of December 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
OtherAllowance 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

347,992
4,758
7,777
5,331
(122)
65,73770,887
4,404
9,283
6,493
(917)
90,151

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

7,537
19,64840,991
7,389
75,5672,900
7,299
10,199

2,634
6,414
9,049

3,157
15,2499,358(71)
27,693
115,829
181,5674,251
15,307
10,150(128)
29,581
114,198
204,350DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

FY2019Current Third quarter(As of March 31, 2020) (As of December 31, 2020)
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

44,929
2,786
2,117
1,184
11,41522,433

2,966
19,0881,492
1,112
12,73937,39911,04532,199

943

855

7,270
3,668
22,92745,3617,576
3,700
44,331
81,73012,350
4,003
123,891(4,589)135,656

12,350
4,114
114,259(9,372)
121,352

(221)
(733)
(26)
(254)
(1,236)310
1,475
136,205
181,567450(733)
8(207)
(482)
370
1,379
122,619
204,350DAIICHIKOSHO

CO.,

LTD.

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

Net sales
Cost 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
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 loss
Loss 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

5

Nine months ended
December 31, 2019
(From April 1, 2019, toDecember 31, 2019)

Nine months ended
December 31, 2020
(From April 1, 2020, toDecember 31, 2020)

111,832
69,21942,613
26,12916,484

71,23250,76020,472
21,643(1,171)

24
294
20
775
1,114

35
200
420
967
1,624

90
14－
95
201
17,397

151
956
140
359
93

0
39－
40

314
0
2,746
3,061

135
76
96
130－
439
16,998
5,093
262
5,355
11,642
62
11,580

118
731
0
1
6,258
7,110
(3,954)637(1,344)(707)(3,247)58(3,305)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

Nine months ended
December 31, 2019
(From April 1, 2019, toDecember 31, 2019)

Nine months ended
December 31, 2020
(From April 1, 2020, toDecember 31, 2020)

11,642(3,247)20(52)
77
46
11,688

671
35
47
754
(2,493)

11,626(2,551)6258

DAIICHIKOSHO

CO.,

LTD.

Notes to the Quarterly Consolidated Financial Statements(Segment Information)
Nine months ended December 31, 2019 (From April 1, 2019, to December 31, 2019)(Millions of yen)
Reportable segments
Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

Sales

49,64549,308

5,779

Segment income(Operating income)

11,107

6,079

125

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

OtherTotal

104,733

7,099

111,832－

111,832

17,311

1,199

18,511(2,026)

16,484

Note: The (2,026) million yen adjustment posted to segment income is primarily composed of general and administrative
expenses incurred by the administrative department at the head office that are not attributable to any particular
reportable segment.

Nine months ended December 31, 2020 (From April 1, 2020, to December 31, 2020)(Millions of yen)
Reportable segments
Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

Sales

38,582

20,882

4,748

Segment income orSegment loss
(Operating income or
Operating loss)

8,463(8,508)229

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

OtherTotal

64,213

7,018

71,232－71,232184

485670(1,841)(1,171)

Note: The (1,841) million yen adjustment posted to segment income or segment loss is primarily composed of generaland administrative expenses incurred by the administrative department at the head office that are not attributable toany 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 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)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.”
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 theCompany 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 whichemployees were furloughed, have been posted to “loss on COVID-19.”

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