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.

Flash Report on the Consolidated Results for the First Quarter Ended June 30,2024 [JGAAP]
August 8, 2024

Company Name:
DAIICHIKOSHO CO., LTD.
Stock Exchange Listing: Tokyo Stock Exchange
Code Number:
7458
URL:
https://www.dkkaraoke.co.jp/
Representative:
Tadahiro Hoshi, President
Contact:
Yasuhisa Nishihara, General Manager, Accounting Department
Phone:+81-3-3280-2151
Scheduled date of commencing dividend payments: —Preparation of supplementary material on financial results: None
Holding of financial results briefing: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Three Months Ended June 30, 2024 (From April 1, 2024, to June30, 2024)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales

Operating profit

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

36,886

4.3

4,647

(2.3)

4,164

(16.8)

35,381

16.9

4,757

57.5

5,003

54.5

Three Months Ended June30, 2024
Three Months Ended June30, 2023

Profit attributable toowners of parent
Millions of yen

Basic earnings per share

Diluted earnings per share

Yen

Yen

31.95

31.87

31.73

31.67

%

Three Months Ended June
3,407
(1.0)
30, 2024
Three Months Ended June
3,443
1.6
30, 2023(Note) Comprehensive income:Three Months Ended June 30, 2024: 3,734 million yen
Three Months Ended June 30, 2023: 3,796 million yen[(1.6)%][9.7%](2) Consolidated financial position
Total assets
As of June 30, 2024
As of March 31, 2024
(Reference) Shareholders’ equity:
As of June 30, 2024:
As of March 31, 2024:

Net assets

Equity ratio

Millions of yen

Millions of yen%

197,868
211,386

108,581108,991

54.1
50.9

107,145 million yen
107,581 million yen

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DAIICHIKOSHO

CO.,

LTD.

2. Dividend
First Quarter

Second Quarter

Annual dividend
Third Quarter

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2024
―
28.00
―
Year ending March 31, 2025―
Year ending March 31, 2025
28.00―
(forecast)(Note) Changes in dividends forecast from most recently announced figures: None

29.00

57.00

29.00

57.00

Year-end

Annual

3. Forecast of Consolidated Performance for FY2024, the Year Ending March 31, 2025 (From April
1, 2024, to March 31, 2025)(Percentage figures indicate increase/decrease from a year earlier for full-year forecasts andincrease/decrease from the corresponding quarter for quarterly forecasts)
Net sales
Operating profit
Ordinary profit
Six months ending
September 30, 2024
Year ending March 31,
2025 (full year)

Millions of yen%

Millions of yen%

Millions of yen%

74,300

4.3

8,700

(7.2)

8,400

(13.9)

152,700

4.1

18,8001.1

18,900(3.4)

Profit attributable toowners of parent
Millions of yen

Basic earnings per share%

Yen

Six months ending
9,300
41.4
87.56
September 30, 2024
Year ending March 31,
16,20028.9
152.522025 (full year)(Note) Changes in forecast of consolidated performance from most recently announced figures: Yes
For details of the amendment of the forecast of consolidated performance, please refer to the “NoticeConcerning the Amendment of Forecast of Performance” released today, August 8, 2024.

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DAIICHIKOSHO

CO.,

LTD.

*Notes(1) Significant changes in scope of consolidation during the period: None
(2) Adoption of special accounting policies for quarterly financial statements: None
(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Number of common shares issued
1) Number of shares issued
As of109,468,400 As of(including treasury shares)June 30, 2024
shares March 31, 2024
2) Number of treasury shares
As of
3,254,807 As of3) Average number of shares
June 30, 2024
shares March 31, 2024
during the period
Three months ended
106,673,919 Three months ended
June 30, 2024
shares June 30, 2023

109,468,400
shares2,613,807
shares108,547,545
shares* Review of the Japanese-language originals of the attached quarterly financial statements by certified public
accountants or an audit firm: None
* 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. For the conditions
underlying the assumptions made for financial results forecasts and their use, please see “Explanation of Forecastof Consolidated Performance and Other Forward-looking Information” on page 7 of the Attachments.

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CO.,

LTD.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Performance ................................................................................... 5(1) Explanation of Operating Results .......................................................................................................... 5(2) Explanation of Financial Position .......................................................................................................... 7(3) Explanation of Forecast of Consolidated Performance and Other Forward-looking Information ......... 7
2. Quarterly Consolidated Financial Statements and Primary Notes ............................................................ 8(1) Quarterly Consolidated Balance Sheets ................................................................................................. 8(2) Quarterly Consolidated Statements of Income and Comprehensive Income ...................................... 10(Quarterly Consolidated Statements of Income) .............................................................................. 10(Quarterly Consolidated Statements of Comprehensive Income) ..................................................... 11(3) Notes to Quarterly Consolidated Financial Statements ....................................................................... 12(Segment Information) ..................................................................................................................... 12(Notes in Case of Significant Changes in Shareholders’ Equity) ..................................................... 12(Notes on Going Concern Assumption) ........................................................................................... 12(Statements of Cash Flows) .............................................................................................................. 13(Significant Subsequent Events) ...................................................................................................... 13

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DAIICHIKOSHO

CO.,

LTD.

1. Qualitative Information on Quarterly Performance(1) Explanation of Operating Results
In the three months ended June 30, 2024 (the “three months under review”), Japan’s economy trended toward amoderate recovery, with signs of improvement in the employment and wages environment and a pickup of consumer
spending, boosted by an increase in inbound demand and other factors. The economic outlook, however, remains unclear,
mainly due to concerns about political instability overseas, the progressive depreciation of the yen, and continued pricehikes of commodities.
In the karaoke industry, where DAIICHIKOSHO CO., LTD. (the “Company,” together with its subsidiaries, the“Group”) operates, amid a moderate recovery in demand as a whole, mainly in the night business and the karaoke cabinmarkets, the Company’s mainstay markets, the trend toward a concentration of demand in central areas became even more
conspicuous in all trading areas.
As a result of taking a series of measures in our businesses amid such a situation, in the three months under review, net
sales amounted to 36,886 million yen (up 4.3% year on year), a record high first-quarter result. In terms of profits, due toan increase in selling, general and administrative expenses and other factors, operating profit was 4,647 million yen (down
2.3% year on year) and ordinary profit was 4,164 million yen (down 16.8% year on year). Profit attributable to owners ofparent amounted to 3,407 million yen (down 1.0% year on year).
(Millions of yen)

Net sales
Operating profit
Ordinary profit
Profit attributable to owners of parent

Three Months Ended
June 30, 2023
35,381
4,757
5,003
3,443

Three Months Ended
June 30, 2024
36,886
4,647
4,164
3,407

Year-on-yearchange
1,505
(109)
(838)
(35)

% change
4.3%(2.3)%(16.8)%(1.0)%

Operating results by segment are as follows.
(Commercial karaoke business)
In the commercial karaoke business, with the ongoing moderate recovery, mainly in the Company’s mainstay nightmarket and in the seniors’ market, which is a growth market for the Company, the number of DAM units in operation
increased by 2% year on year.
In such an environment, the Company sought to strengthen its stable profit base by taking measures in each market toincrease the number of DAM units in operation, as well as by expediting the replacement of previous models with newer
ones in equipment rentals continuously from the previous fiscal year. At the same time, we strived to improve our Karaoke
DAM products by further expanding our visual content, including live videos, animated videos, and music videos.
In the seniors’ market, due to broader awareness that “Singing is good for one’s health,” we expanded sales of FREE
DAM LIFE, a model developed exclusively for the senior’s market, through door-to-door sales activities targeting nursing
facilities and others. We also promoted the new features that lessen the burden on nursing facility staff.
As a result, although the new-product effect of LIVE DAM AiR, which was launched in April 2023, dropped off andrevenue from product sales, mainly in wholesale, failed to reach the level of the corresponding period of the previous fiscal
year, stock income increased due to increases in the number of equipment rentals and the number of DAM units in operation,
resulting in a 0.2% increase year on year in net sales. In terms of profit, operating profit decreased by 9.4% year on year,
mainly due to a fall in gross profit from product sales and an increase in selling, general and administrative expenses.
(Millions of yen)

Net sales
Operating profit

Three Months Ended
June 30, 2023
15,393
3,719

Three Months Ended
June 30, 2024
15,4183,370

Year-on-year change
24
(349)

% change
0.2%(9.4)%(Karaoke cabin and restaurant business)
In the karaoke cabin and restaurant business, we opened two karaoke cabins and four restaurants and closed four
restaurants, and we operated 508 karaoke cabins and 159 restaurants as of the end of the three months under review.

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DAIICHIKOSHO

CO.,

LTD.

The flow of customers continued its moderate upward trend since the beginning of the fiscal year, and sales at both
existing karaoke cabins and restaurants increased 5% year on year during the three months under review.
Under such circumstances, for BIG ECHO karaoke cabins, as a directly managed store, under the slogan “BIG SMILE,BIG ECHO. Let’s sing, laugh, and do more with everyone,” in addition to improving the quality of karaoke equipment andacoustic facilities as a chain directly operated by a karaoke system manufacture, we sought to build cleaner and more
comfortable cabin environments by expediting the refurbishment of cabins. We also increased convenience with theintroduction of automated reception and payment equipment, and by actively pursuing collaborations with diverse artists
and animation works as part of our “BIG SMILE CAMPAIGN,” strived to create a variety of joy and fun through karaoke.
For restaurants, we pursued the visualization of customer satisfaction by employing a system that is capable of collecting
and quantifying customer feedback easily, and we worked to improve the quality of the restaurants’ environment, customer
service, and food. We also strived to attract a wide range of customers, including by opening two DARTS ONE premises
in the darts business.
As a result, net sales increased by 5.1% year on year, and operating profit increased by 14.4% year on year.
(Millions of yen)

Net sales
Operating profit

Three Months Ended
June 30, 2023
15,012
1,219

Three Months Ended
June 30, 2024
15,7791,394Year-on-year change% change

766
175

5.1%
14.4%

(Music software business)
In the music software business, in addition to our efforts to discover new artists and create hit songs, we strived to build
a steady earnings model by concentrating our efforts on the music publishing business.
As a result, with the absence of the TV program production business due to the transfer of shares in the previous fiscal
year, net sales decreased by 15.1% year on year. However, product sales such as CDs and DVDs and the music publishingbusiness performed strongly, resulting in a 71.5% increase year on year in operating profit.
(Millions of yen)

Net sales
Operating profit

Three Months Ended
June 30, 2023
1,571
61

Three Months Ended
June 30, 2024
1,333
104

Year-on-year change
(237)
43

% change(15.1)%
71.5%(Other businesses)
In the other businesses, progress was made in the expansion of the parking business operating “The Park” brand as its
new pillar of revenue, and the business scale expanded to approximately 3,400 parking facilities and 38,000 parking spots
as of the end of the three months under review. This included Crest Co., Ltd., which became a subsidiary in the previous
fiscal year. The BGM business, which operates “Stardigio Air,” and the home-use karaoke service, “Karaoke@DAM,” also
performed strongly.
As a result, net sales increased by 28.0% year on year owing to factors such as an increase in revenue from the parking
business, and operating profit increased by 36.6% year on year.
(Millions of yen)

Net sales
Operating profit

Three Months Ended
June 30, 2023
3,404
414

Three Months Ended
June 30, 2024
4,356
566

6

Year-on-year change951
151% change
28.0%
36.6%

DAIICHIKOSHO

CO.,

LTD.

(2) Explanation of Financial Position
Total assets at the end of the three months under review decreased by 13,517 million yen from the end of the previous
fiscal year to 197,868 million yen.
Major changes from the previous fiscal year were, in current assets, a decrease in cash and deposits by 16,474 million
yen and an increase of 1,536 million yen in pre-paid expenses included in other.
In non-current assets, karaoke equipment for rental and karaoke cabin and restaurant facilities increased by 513 million
yen and 563 million yen, respectively.
Liabilities decreased by 13,107 million yen from the end of the previous fiscal year to 89,287 million yen.
This was mainly due to decreases of 1,002 million yen in notes and accounts payable – trade and 2,548 million yen inincome taxes payable in current liabilities.
In non-current liabilities, long-term borrowings decreased by 10,084 million yen.
Net assets decreased by 410 million yen from the end of the previous fiscal year to 108,581 million yen.
The decrease is primarily attributable to a decrease in retained earnings of 3,098 million yen due to the dividends ofsurplus and a decrease of 1,062 million yen due to purchase of treasury shares, despite an increase in retained earnings of
3,407 million yen due to profit attributable to owners of parent.

(3) Explanation of Forecast of Consolidated Performance and Other Forward-looking Information
For details of the amendment of the forecast of performance for the six months ending September 30, 2024 and thefiscal year ending March 31, 2025, please refer to the “Notice Concerning the Amendment of Forecast of Performance”
released today, August 8, 2024.
The forecast was prepared based on information available on the date this report was released, and actual results mayvary from forecast values due to various factors in the future.

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DAIICHIKOSHO

CO.,

LTD.

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

FY2023(As of March 31, 2024)
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, net
LandConstruction in progress
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

8

Current First quarter(As of June 30, 2024)

49,694
5,894
11,2167,005(331)
73,47933,220
5,674
10,931
7,967(289)
57,504

9,122
10,875
40,111
32,120
7,002
99,233

9,636
11,43940,111
32,246
7,374
100,808

5,668
5,616
11,285

5,515
5,653
11,1686,060
14,341
7,112(126)
27,388137,906
211,386

6,653
14,3767,479(122)
28,386140,363
197,868DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

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
Asset retirement obligations
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

9

FY2023(As of March 31, 2024)

Current First quarter(As of June 30, 2024)

4,332
12,885
4,746
1,214
13,73536,914

3,330
12,9502,198
658
14,73533,872

51,53341,449

666

524

7,986
1,879
3,414
65,480102,394

8,101
1,865
3,476
55,41589,287

12,3504,211
96,350(6,571)
106,340

12,3504,211
96,659(7,633)
105,587

1,466
(733)
188
320
1,240
374
1,035
108,991
211,386

1,741
(733)
235
314
1,557
398
1,037
108,581
197,868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 profit
Non-operating income
Interest income
Dividend income
Insurance claim income
Cooperative monetary aid received
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Cancellation penalty
Loss on refund of subsidy
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

10

Three Months Ended
June 30, 2023 (FromApril 1, 2023, to June 30,
2023)

Three Months Ended
June 30, 2024 (FromApril 1, 2024, to June30, 2024)

35,381
22,35513,0268,269
4,757

36,88623,54913,337
8,690
4,647

3
54
10
60
19
167
316

3
83
43
52
195
377

37
2
30
70
5,003

109
13
1
653
82
860
4,164

1
1

3
891
895

36
20
56
4,948
1,738
(240)
1,497
3,450
6
3,443

30
20
51
5,008
2,000
(409)
1,590
3,417
9
3,407

DAIICHIKOSHO

CO.,

LTD.

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

ProfitOther 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

11

Three Months Ended
June 30, 2023 (FromApril 1, 2023, to June 30,
2023)

Three Months Ended
June 30, 2024 (FromApril 1, 2024, to June30, 2024)

3,450

3,417

291
55
(1)
345
3,796

275
47
(5)
316
3,734

3,789

3,724

6

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DAIICHIKOSHO

CO.,

LTD.

(3) Notes to Quarterly Consolidated Financial Statements(Segment Information)[Segment information]
Three Months Ended June 30, 2023 (From April 1, 2023, to June 30, 2023)
1. Information on the amounts of net sales and profit or loss by reportable segment(Millions of yen)
Reportable segments

Net sales
Segment profit(Operating profit)

Notes:

Adjusted
amount(Note 2)

Postedamount to theconsolidated
quarterlystatements ofincomeCommercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other(Note 1)

Total

15,39315,012

1,571

31,9763,404

35,381－35,381

3,719

1,219

61

5,000

414

5,414

(657)

4,757

1. The category “Other” comprises a business segment not attributable to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (657) million yen adjustment posted to segment profit is primarily composed of general andadministrative expenses incurred by the administrative department at the head office that are not
attributable to any particular reportable segment.

2. Information on impairment loss of non-current assets or goodwill, etc. by reportable segment
The statements are omitted due to little significance.

Three Months Ended June 30, 2024 (From April 1, 2024, to June 30, 2024)
1. Information on the amounts of net sales and profit or loss by reportable segment(Millions of yen)
Reportable segments

Net sales
Segment profit(Operating profit)

Notes:

Adjusted
amount(Note 2)

Postedamount to theconsolidated
quarterlystatements ofincomeCommercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other(Note 1)

15,41815,7791,333

32,5304,356

36,886－36,886

3,370

1,394

104

4,869

566

5,435

(788)

4,647

Total

1. The category “Other” comprises a business segment not attributable to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (788) million yen adjustment posted to segment profit is primarily composed of general andadministrative expenses incurred by the administrative department at the head office that are not
attributable to any particular reportable segment.

2. Information on impairment loss of non-current assets or goodwill, etc. by reportable segment
The statements are omitted due to little significance.

(Notes in Case of Significant Changes in Shareholders’ Equity)
Not applicable.

(Notes on Going Concern Assumption)
Not applicable.

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DAIICHIKOSHO

CO.,

LTD.

(Statements of Cash Flows)
The Company has not prepared quarterly consolidated statements of cash flows for the three months ended June 30,2024. Depreciation (including amortization of intangible assets excluding goodwill), amortization of goodwill, andamortization of negative goodwill for the three months ended June 30, 2024 are as follows.
(Millions of yen)Three Months Ended
June 30, 2023 (FromApril 1, 2023, to June 30,
2023)
2,747
18
0

Depreciation
Amortization of goodwill
Amortization of negative goodwill

Three Months Ended
June 30, 2024 (FromApril 1, 2024, to June30, 2024)
3,282
134
0

(Significant Subsequent Events)(Sale of Non-current Assets)
At a meeting of the Board of Directors held on July 29, 2024, the Company resolved to sell held assets and concluded
a sale agreement on the same day.
(1) Reason for Sale
The Company will sell the following non-current assets held by the Company to improve asset efficiency
through the effective use of management resources.
(2) Details of the sale1) Overview of company that is the counterparty to the sale
Name
Mitsui Fudosan Residential Co., Ltd.
Address
Name and position of representative
Description of business
CapitalDate of incorporation
Relationship between the Company
and this company

3-2-1 Nihonbashi Muromachi-cho, Chuo-ku, Tokyo
Toru Kamura
President
Medium- and high-rise housing business, single-dwelling housingbusiness, rental housing business, other40.0 billion yen
December 26, 2005
There are no capital, personnel, or trading relationships or mattersconstituting an affiliated party between the buyer and the Company
that should be stated.

2) Overview of assets to be soldAddress
Type of asset

Nos. 1-4, 451 & No. 1, 452 Higashigotanda 2-chome, Shinagawaku, Tokyo
Land (1,732.87 m2)

Current stateLand used for parking

Date of sale

September 6, 2024 (scheduled)

Sale price8,500 million yen(3) Impact of sale on consolidated earnings
Due to the sale of this non-current asset, the Company plans to record 4,390 million yen in gain on sale of noncurrent assets as extraordinary income in September 2024.

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