Consolidated Financial Results
for the Nine Months Ended January 31, 2024
[Japanese GAAP]
March 11, 2024
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: March 14, 2024
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Not available
Schedule of quarterly financial results briefing session: Not scheduled(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended January 31, 2024
(May 1, 2023 to January 31, 2024)(1) Consolidated Operating Results (cumulative)(% indicates changes from the previous corresponding period.)
Profit attributable toNet sales
Operating income
Ordinary income
owners of parent
Nine months ended
Million yen%
Million yen%
Million yen%
Million yen%
January 31, 2024
5,201336
356232January 31, 2023
(Note) Comprehensive income: For the nine months ended January 31, 2024: ¥250 million [-%]For the nine months ended January 31, 2023: ¥ - million [-%]
Basic earnings
per share

Diluted earnings pershare

Nine months ended
Yen
Yen
January 31, 2024
14.07
January 31, 2023
(Note) Diluted earnings per share is not presented as there were no potential shares. Since the quarterly consolidated
financial results are prepared from the nine months ended January 31, 2024, figures for the fiscal year endedApril 30, 2023 and percentage changes from the previous corresponding period are not shown.
(2) Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

Equity ratio
%

6,866
6,166
89.8
As of January 31, 2024
As of April 30, 2023
(Reference) Equity: As of January 31, 2024: ¥6,166 million
As of April 30, 2023: ¥ - million(Note) Since the quarterly consolidated financial results are prepared from the nine months ended January 31,2024, figures as of April 30, 2023 are not shown.

2. Dividends
1stquarter-end

2ndquarter-end

YenYenAnnual dividends
3rdYear-end
quarter-endFiscal 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: NoTotalYen

YenYen

-

9.00

9.00

7.00

7.00

3. 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.)
Profit attributable Basic earnings
Net sales
Operating income
Ordinary income
to owners of parentper share
Million yen%

Million yen%Million yen%

Million yen%

Yen

Full year
7,090
444469310
18.81(Note) Revision to the financial results forecast announced most recently: Yes(Notes) 1. The Company transitioned to a consolidated accounting from the nine months ended January 31, 2024.
For details, please refer to “Notice Regarding Announcement of Consolidated Financial Forecast Dueto Transition to Consolidated Accounting” announced today.
2. Since the quarterly consolidated financial results are prepared from the nine months ended January 31,2024, percentage changes from the previous corresponding period are not shown.
* Notes:(1) Changes in significant subsidiaries during the period: No(Changes in specified subsidiaries resulting in the change in scope of consolidation)
Newly included: — company (—)
Excluded: — company (—)(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes(3) 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(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
January 31, 2024: 17,464,000 shares
April 30, 2023: 17,464,000 shares2) Total number of treasury shares at the end of the period:
January 31, 2024: 1,007,057 shares
April 30, 2023: 842,257 shares
3) Average number of shares during the period:
Nine months ended January 31, 2024: 16,492,290 shares
Nine months ended January 31, 2023: 16,688,269 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 Three Quarters
Because the Asukanet Group is creating quarterly consolidated financial statements beginning from the third
quarter of this consolidate fiscal year, we have not performed comparative analysis with the same period in theprevious consolidated fiscal year or with the previous consolidated fiscal year.
Asukanet operates three business areas, each with different positioning and characteristics. They are (1) thefuneral 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.
In December 2023, we acquired shares in BET Co., Ltd., which operates a virtual “liver” (online streamer)business, and it became a subsidiary of our company. Because the deemed acquisition date for BET Co., Ltd. isDecember 31, 2023, it is consolidated only in the balance sheet for this third quarter of this consolidated fiscalyear.
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 was seen compared to the previous
year, there was strong growth in our primary business area of services processing photos of the deceased as aconsequence of steadily acquiring new contracts with funeral companies through our marketing operations.
Sales of output systems for photos of the deceased and other hardware completed the cycle of replacement
purchase demand, and sales were somewhat stable during these three quarters. We have renovated the servicesite of our “tsunagoo” service, which has faced difficulty in acquiring new customers despite the expanding
use of this technology by existing clients.
In terms of income, due to the excessive workload on operators in the Image Processing Division, weengaged 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, Q3 sales were 2,405,477 thousand yen, and Q3 segment income was 532,257 thousand yen.
(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, after the second quarter we saw the effects from a rebounddecline 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 salesof studio photo albums such as for family photos and photos of children, sales were higher than the same
period in the previous fiscal year. Initiatives included holding online seminars, such as explanation session ofbusiness materials and videos of product processing.”
In the general consumer market, due to a delay in the recovery of overseas travel and a slow recovery fromthe decline in photo output, current conditions continued to be difficult, particularly in the OEM division.
Under these difficult conditions, we carried out a variety of campaigns and photo contests, a program for “MyBook New Year’s Cards,” and promotions for calendars and graduation albums as seasonal products.
In terms of income, we achieved a certain level of cost reductions as a result of work mechanization andKAIZEN activities, however the increased burden of fixed expenses resulting from a declining operating rate
and the effects of higher costs due to rising material prices and other factors resulted in a difficult struggle forsegment income.
With the acquisition of BET Co., Ltd. as a subsidiary and the deployment of a virtual “liver” (onlinestreamer) business, we have also started plans for providing photo goods and other products. We also recorded
expenses related to advisors and other matters that were generated as a result of acquiring a subsidiary during
this consolidated third quarter. Because the deemed acquisition date for BET Co., Ltd. is December 31, 2023,
it is not included in the results for these consolidated first three quarters.
As a result, Q3 sales were 2,687,473 thousand yen, and Q3 segment income was 515,561 thousand yen.
(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 terms of sales, we are conducting sales centered on our own company’s sales operations in Japan and onagents overseas. In Japan, we have received steady orders for signage and aerial operation orders, however
overseas progress continues to be delayed particularly for orders in the Middle East and North America, andsales fell below expectations. In addition to supporting participation in exhibitions by our North American
agent, we also engaged in other initiatives such as reinforcing the sales staff and strengthening the quality
assurance system.
In terms of production and development, we are working to increase the size of glass plates at our researchand development center, and have delivered some progress. For plastic plates, we are repeating trials for stableproduction using superior environmentally-friendly materials.
In terms of profit and loss, as a result of fewer mistakes and an increase in more profitable orders, grossprofit was higher. However personnel expenses increased as a result of reinforcing our staff, and there werealso increases in R&D expenses and patent-related expenses.
As a result, Q3 sales were 113,912 thousand yen, and Q3 segment loss was 234,838 thousand yen.
As results of the above, consolidated sales were 5,201,946 thousand yen, ordinary income was 356,336
thousand yen and net income attributable to parent company was 232,079 thousand yen.
(2) Overview of the Financial Status
1. Assets, liabilities, and net assets(Assets)
Total consolidated assets at the end of this third quarter of this fiscal year reached 6,866,454 thousand yen.
This includes 1,228,677 thousand yen in cash and deposits, 983,917 thousand yen in accounts receivable,
835,547 thousand yen in buildings and 844,060 thousand yen in land.
(Liabilities)
Total consolidated liabilities at the end of this third quarter of this year reached 700,391 thousand yen. This
includes 148,968 thousand yen in accounts payable, and 183,954 thousand yen in unpaid expenses.
(Net assets)
Total consolidated net assets at the end of this third quarter of this fiscal year reached 6,166,062 thousandyen. This includes 490,300 thousand yen in capital stock, 626,380 thousand yen in capital surplus, 5,643,762
thousand yen in retained earnings, and -627,799 thousand yen in treasury stock.

2.

Overview of future outlook in this fiscal year
Asukanet has shifted to consolidated accounting beginning from the third quarter of the fiscal year ending
April 30, 2024. For details, please refer to “Notice of Correction to Consolidated Results Forecast andIndividual Results Forecasts Resulting from the Start of Consolidated Accounting” released on this date.
The above forecasts were created based on the information available at the time these materials were released,
and the actual results may differ from the forecast values depending on a variety of future factors.

5. Financial Statements for the third quarter of the Fiscal Year
(1) Consolidated Balance sheet(Units: 1,000s yen)
End of current Q3(Ended Jan. 31 2024)
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Merchandise and products
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accounts

1,228,677
983,917654,456
71,035
95,84850,446-2,842

Total current assets

3,081,539

Fixed assets
Tangible fixed assets
Buildings, net

835,547

Machinery and equipment, net
Land
Others net
Total tangible fixed assets
Intangible fixed assets
GoodwillOthers

501,922844,060
205,955
2,387,486
308,533
198,930

Total intangible fixed assets

507,463

Total investments and other assets
Investment securities
Others664,059
225,905

Total investment and others

889,964

Total fixed assets
Total assets

3,784,914
6,866,454

Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Provision for bonuses
Others148,968
183,954
60,087
92,140207,541

Total of current liabilities

692,692

Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities
Total liabilities

4,704
2,994
7,699
700,391

(Units: 1,000s yen)
End of current Q3(Ended Jan. 31 2024)
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
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

490,300
626,380
5,643,762-627,799
6,132,643
33,41933,4196,166,062
6,866,454

(2) Consolidated Profit and loss statement

Net sales
Cost of sales(Units: 1000s yen)First three quarters of theconsolidated fiscal year
(May 1, 2023 – Jan. 31, 2024)
5,201,946
2,816,481

Gross profit

2,385,465

Selling, general, and administrative expenses

2,048,970

Operating income
Non-operating income
Interest received
Dividends received
Commissions received
Insurance gain
Exchange gain
OthersTotal non-operating income

336,494
3,828
1,575
221
4,462
7,891
2,760
20,740Non-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 losses

450
448
898
356,336
7,917
7,917

Net income before taxes

348,419

Income taxes etc.

116,340

Total income taxes

116,340

Net income

232,079

Net income attributable to parent company

232,079

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Toal other comprehensive income(Units: 1000s yen)First three quarters of theconsolidated fiscal year
(May 1, 2023 – Jan. 31, 2024)
232,079
18,52818,528

Quarterly comprehensive income

250,608(Breakdown)
Net comprehensive income attributable to parent company

250,608

(Segment information)
Cumulative first three quarters of the current fiscal year (May 1, 2023 – Jan. 31, 2024)
Information related to the amounts of consolidated sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Adjustments

Amountrecorded in
profit and loss
statement

5,201,946―

5,201,946

540

4,917

(4,917)―2,687,473

113,9125,206,863(4,917)5,201,946

515,561(234,838)

812,980(476,486)

336,494

Funeral businessPhoto bookbusiness

Aerialdisplay business

2,405,477

2,683,096

113,372―

4,377

2,405,477
532,257

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)(Business merger issue)(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” studios
Primaryreasonsforthebusinessmerger②In 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)
December 31, 2023 (assumed 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) Results period of acquired corporation included in the quarterly consolidated profit and loss statement forthe consolidated first three quarters
Because the deemed acquisition date is December 31, 2023, and the difference from the third consolidated
quarter settlement date is less than three months, only the balance sheet has been consolidated. As a result, theresults of the acquired corporation are not included in the quarterly consolidated profit and loss statement for
the first consolidated three quarters.
(3) Acquisition cost for acquired company breakdown by price type
Acquisition priceCash and savings
400,000 thousand yen
Acquisition cost
400,000 thousand yen(4) Details and amounts of primary acquisition-related expenses
Remuneration to advisors, fees, etc.
37,854 thousand yen(5) Amount of generated goodwill, cause of generation, depreciation method, and depreciation period① Amount of generated goodwill
308,533 thousand yen② Cause of generation
Primarily expected excess earning power resulting from future business growth③ Depreciation method and depreciation period
Straight-line method over eight years(Significant post-balance sheet events)
Not applicableThis is the summarized translation of released report for your reference.
Please refer to the original Japanese financial document.