Non-Consolidated Financial Results
for the Nine Months Ended January 31, 2020
[Japanese GAAP]
March 6, 2020
Company name: Asukanet Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2438
URL: https://www.asukanet.co.jp
Representative: Matsuo Yuji, Representative Director, President & COO
Contact: Kono Kenya, Senior Managing Director & CFO
Phone: +81-82-850-1200
Scheduled date of filing quarterly securities report: March 13, 2020
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. Non-Consolidated Financial Results for the Nine Months Ended January 31, 2020
(May 1, 2019 to January 31, 2020)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Nine months ended
January 31, 2020
January 31, 2019

Million yen

%

4,954
4,676

Operating income

Ordinary income

Million yen

Million yen

5.9
5.6

Basic earnings
per share

649
699%

(7.1)
15.7651702

Profit%

(7.2)
14.9

Million yen%

460479(4.1)
16.1

Diluted earnings pershare

Nine months ended
Yen
Yen
January 31, 2020
27.32
January 31, 2019
28.50
28.49
(Note) Diluted earnings per share for the nine months ended January 31, 2020 is not presented as there were no
potential shares.
(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

6,279
As of January 31, 2020
6,271
As of April 30, 2019
(Reference) Equity: As of January 31, 2020: ¥5,702 million
As of April 30, 2019: ¥5,431 million

Equity ratio

Million yen%5,702
5,431

90.8
86.6

2. Dividends
Annual dividends
2nd
3rdYear-end
quarter-end
quarter-end

1stquarter-end
Yen

Yen

Fiscal year ended April 30, 2019
0.00
Fiscal year ending April 30, 2020
0.00
Fiscal year ending April 30, 2020
(Forecast)(Note) Revision to the forecast for dividends announced most recently: NoTotal

Yen

Yen

Yen-11.00

11.00

10.00

10.00

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2020
(May 1, 2019 to April 30, 2020)(% indicates changes from the previous corresponding period.)
Basic earnings
Net sales
Operating income
Ordinary income
Profitper share
Million yen%

Million yen%

Million yen%

Full year
6,738
7.0
824 (5.1)
829 (5.1)(Note) Revision to the financial results forecast announced most recently: No

Million yen%

Yen

545

(9.0)

32.36

* Notes:(1) Accounting policies adopted specially for the preparation of quarterly financial statements: Yes(2) 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(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
January 31, 2020: 17,464,000 shares
April 30, 2019: 17,464,000 shares2) Total number of treasury shares at the end of the period:
January 31, 2020: 623,057 shares
April 30, 2019: 622,941 shares
3) Average number of shares during the period:
Nine months ended January 31, 2020: 16,840,987 shares
Nine months ended January 31, 2019: 16,834,906 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 Fiscal Year
During the cumulative first 3 quarters of this fiscal year, although there was continuing improvement in the employment andincome environment, the economy of Japan faced growing uncertainty about the future due to the prolonged trade friction
between the United States and China, and to concerns about the effects of the spreading coronavirus outbreak on the global
economy.
Asukanet operates three business areas, each with different positioning and characteristics. They are (1) the memorial design
service business, which adds digital processing and remote output services for photos of the deceased to a funeral business thatis largely unaffected by economic trends, (2) the personal publishing business, which provides ideas for new photo output
methods that allow users to create complete photo collections beginning from just a single book, and (3) the aerial imaging
business, which is utilizing unique, recently-developed technologies aiming to create a new market and achieve dreams.
Following is an overview of the business results for each segment. The results figures for each segment include internalinter-segment sales.
(1) Memorial design service businessIn this business, although sales in our primary business areas –equipment sales and sales of video and other funeralproduction services – were somewhat higher than expectations, the results were up from the same period in the previous year.
During the cumulative first 3 quarters of this fiscal year, sales of processing photos of the deceased were lower than the same
period in the previous year due to warm winter. Then, our sales of frames and supplies were also below expectations.
Therefore, sales were slightly higher than the same period in the previous year.
We also worked to expand the presence of the “tsunagoo” service which connects chief mourner and participants, as one
type of our “funeral tech” that has brought extensive use of IT technologies to the funeral market.
On the other hand in terms of income, segment income was down slightly as a result of factors including an increase inpersonnel expenses resulting from hiring additional image processing operators as well as in research and development
expenses.
As a result, sales were 1,915,859 thousand yen (101.1% year-on-year), and segment income was 500,126 thousand yen(94.9% year-on-year).
(2) Personal publishing service businessThis business operates AsukaBook for the professional photography market in Japan, and MyBook for the general Japanese
consumer market. We are also engaged in OEM supply of photo albums and photo prints based on photos that were takenwith smartphones.
In the professional photographer market, in addition to our own marketing activities, we intended to increase in sales ofASUKABOOK as a result of activities such as conducting seminars and workshops as well as the release of the GLAMPiC
data delivery service. Therefore, sales of professional photographer market increased.
In the general consumer market, we conducted a number of programs including efficient internet advertising and a variety ofcampaigns, as well as the use of SNS. We also conducted promotions for calendars and graduation albums, which are seasonalproducts. As a result, we achieved strong sales centering on the full-flat type photo album that opens up so it is completely flat,
and achieved results that were up from the same period in the previous fiscal year despite the harsh competitive environment.
In addition, sales of OEM products grew as the presence of our services expanded in the market,
In terms of income, in addition to higher personnel expenses and a shipping price hike, costs were higher for a number ofother reasons including completion of the new plant (West Building) located adjacent to our headquarter, an increase indepreciation expenses resulting from production equipment operation, and associated relocation expenses. Despite the highercosts, segment income saw steady growth partly as a result of rising sales centered on the OEM division.
As a result, sales were 2,962,001 thousand yen (110.2% year-on-year), and segment income was 712,735 thousand yen(102.0% year-on-year).
(3) Aerial imaging businessThis business was launched in March 2011, 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.
For glass ASKA3D plates, although sufficient cost reductions have not yet been achieved, we are providing large-size plates
that are capable of high-quality aerial imaging. Although still in small lots, sales for signage and aerial development areincreasing. We also are working on development of a new manufacturing process that combines high mass productivity andlow cost.
For plastic ASKA3D plates, we worked to acquire mass production orders that fit our current production scale and pricerange based on the first-stage mass production system, however at the present time we are still limited to sample-scale sales.
We are implementing improvements aimed at further reducing costs and increasing brightness, and are also conducting
development for high heat-resistance materials.
Although more time than initially expected has been required for commercialization, we have confirmed that there are large
needs for the use of aerial imaging among corporations in all fields, both in Japan and overseas. We will work to resolve theissues in order to meet these needs.
In terms of marketing, sales were down from the same period in the previous year, partially due to our focus on sample
sales of inexpensive plastic ASKA3D plates. In November 2019, we exhibited at the Finding Japan domestic exhibition. Theexhibit proposed an application of these plates for use in a sub monitor that allows aerial operations simply by connecting itwith a PC, and introduced new technologies that double the image projection distance and also improve image quality.
In terms of expenses, although we were able to control advertising expenses, R&D and patent related expenses of both glass
and plastic ASKA3D plates were higher as well as personnel expense. As a result, segment loss was larger than the sameperiod in the previous year.
As a result, sales were 79,097 thousand yen (77.1% year-on-year), and segment loss was 176,127 thousand yen (comparedto a loss of 163,133 thousand yen in the same quarter of the previous year).
As a result of the above, sales were 4,954,648 thousand yen (105.9% year-on-year). In terms of income, as a result of steady
growth in segment income in the personal publishing business, a decrease in segment income in the memorial design service
business due to warm winter, and a higher segment loss in the aerial imaging service business, ordinary income was 651,231
thousand yen (92.8% year-on-year) and net income was 460,034 thousand yen (95.9% year-on-year).

(2) Overview of the Financial Status during this Quarter.
Current assets at the end of this third quarter increased by 8,218 thousand yen from the end of the previous fiscal year toreach 6,279,732 thousand yen. Despite a decrease in cash and savings of 592,974 thousand yen, this was primarily due to anincrease in accounts receivable-trade of 92,825 thousand yen, an increase in tangible fixed assets of 269,155 thousand yen
resulting from construction of the new plant (West Building) and other factors, and an increase in investment and othersecurities of 208,516 thousand yen resulting from the purchase of corporate bonds and other factors.
Current liabilities at the end of this third quarter decreased by 262,940 thousand yen from the end of the previous fiscal year
to reach 577,539 thousand yen. This decrease was primarily due to a decrease in income taxes payable of 131,400 thousand yen
and a decrease in bonus reserve of 68,000 thousand yen.
Net assets at the end of this third quarter increased by 271,158 thousand yen from the end of the previous fiscal year to reach
5,702,193 thousand yen. Despite a decrease of 185,251 thousand yen resulting from the payment of dividends from surplus, thiswas primarily due to recording net income of 460,034 thousand yen

5. Financial Statements for the Third Quarter(1) Balance sheet(Units: 1,000s yen)Previous fiscal year
(ended April 30, 2019)
Asset
Current assets
Cash and deposits
Accounts receivable-trade
Merchandise and products
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accountsTotal current assets
Fixed assets
Tangible fixed assets
Buildings, net
Machinery and equipment, net
Land

Current 3rd quarter(ended Jan. 31, 2020)

2,274,763
827,239
172,942
23,551
78,072
36,842(2,914)3,410,498

1,681,788
920,064
177,197
26,751
92,36928,564(3,478)2,923,258

508,636
409,561
844,060

916,754489,600
844,060

Construction in progress

399,350

180,348

Total tangible fixed assets

2,161,609

2,430,765

Total intangible fixed assets
Total investments and other assets
Investment securities
Others202,370

202,370

228,800
268,235

425,007
280,544

Total investment and others

497,035

705,552

2,861,016

3,356,474

6,271,514

6,279,732

169,180
173,963
187,900
144,200
155,905

132,718
155,193
56,50076,200149,020

831,149

569,631

6,009
3,320

6,009
1,897

Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Provision for bonuses
OthersTotal current liabilities
Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total liabilities and net assets
Total liabilities and net assets

9,330

7,907

840,479

577,539

490,300
606,585
4,608,076(268,850)
5,436,110

490,300
606,585
4,882,858(269,031)
5,710,711(5,076)(8,518)(5,076)(8,518)5,431,034

5,702,193

6,271,514

6,279,732

(2) Profit and loss statement for first three quarters

Net Sales
Cost of sales(unit:1000s yen)First three quarters of the previous First three quarters of the current
fiscal year
fiscal year
(May 1, 2019 – Jan. 31, 2020)(May 1, 2018 – Jan. 31, 2019)
4,676,804
4,954,648
2,252,871
2,413,601

Gross profit

2,423,932

2,541,046

Selling, general, and administrative expenses

1,724,696

1,891,619

699,235

649,426

348
1,010
381
960
950
467

770
950
287
―
1,051
172

4,118

3,232

1,246

1,340

Operating income
Non-operating incomeInterest received
Dividends received
Commissions received
Income from insurance
Gain on forfeiture of unclaimed dividends
OthersTotal non-operating income
Non-operating expense
Foreign exchange losses
Others

―

87

1,246

1,427

702,107651,231

424

145

424

145

Net income before taxes

701,682

651,086

Income taxes

221,865

191,052

Net income

479,817460,034

Total non-operating expenses
Ordinary income
Extraordinary loss
Loss on retirement of fixed assets
Total extraordinary losses

[Segment information]
Cumulative first three quarters of the previous fiscal year (May 1, 2018 – Jan. 31, 2019)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial design
service business

Personal
Aerialpublishingimaging businessservice business

Adjustments

Amountrecorded in
profit and loss
statement

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)

1,895,540

2,687,439

93,823

4,676,804―

4,676,804

―

―

8,714

8,714

(8,714)―

1,895,540

2,687,439

102,537

4,685,518(8,714)

4,676,804

527,213698,974(163,133)

1,063,054(363,819)

699,235

Cumulative first three quarters of the previous fiscal year (May 1, 2019 – Jan. 31, 2020)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial design
service business

Personal
Aerialpublishingimaging businessservice business

Adjustments

Amountrecorded inprofit and loss
statement

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)

1,915,859

2,962,001

76,787

4,954,648―

4,954,648

―

―

2,310

2,310

(2,310)―1,915,859

2,962,001

79,097

4,956,958(2,310)4,954,648

500,126

712,735(176,127)

1,036,734(387,307)

649,426

This is the summarized translation of released report for your reference.
Please refer to the original Japanese financial document.