Non-Consolidated Financial Results
for the Fiscal Year Ended April 30, 2017
[Japanese GAAP]
June 9, 2017
Company name: Asukanet Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2438
URL: https://www.asukanet.co.jp
Representative: Yukio Fukuda, Representative Director, President & CEO
Contact: Kenya Kono, Managing Director & CFO
Phone: +81-82-850-1200
Scheduled date of Annual General Meeting of Shareholders: July 28, 2017
Scheduled date of commencing dividend payments: July 31, 2017
Scheduled date of filing annual securities report: July 31, 2017
Availability of supplementary briefing material on annual financial results: Available
Schedule of annual financial results briefing session: Scheduled (for institutional investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Non-Consolidated Financial Results for the Fiscal Year Ended April 30, 2017
(May 1, 2016 to April 30, 2017)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Fiscal year endedApril 30, 2017
April 30, 2016

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

%

5,438
5,173

5.1
3.9

800
773

3.6
21.2

804
776

3.6
20.7

572
547

4.6
28.7

Rate of returnon equity

Ordinary income
to total assets

Diluted earnings
per share

Basic earnings
per share

Operatingincome to net
sales

Fiscal year ended
Yen
Yen
%
%
April 30, 2017
34.19
34.01
13.0
15.9
April 30, 2016
32.65
32.39
13.6
16.7
(Reference) Equity in earnings of affiliated companies
Fiscal year ended April 30, 2017: ¥- million
Fiscal year ended April 30, 2016: ¥- million

%

14.7
15.0

(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

5,325
As of April 30, 2017
4,820
As of April 30, 2016
(Reference) Equity: As of April 30, 2017: ¥4,597 million
As of April 30, 2016: ¥4,183 million

Equity ratio

Net assets per share

Million yen

%

Yen

4,603
4,190

86.3
86.8

274.56250.03(3) Non-Consolidated cash flows

Fiscal year endedApril 30, 2017
April 30, 2016

Cash flow fromoperating activities

Cash flow frominvesting activities

Cash flow fromfinancing activities

Cash and cash
equivalents at end of
periodMillion yen

Million yen

Million yen

Million yen

818
765

(293)
(357)

(164)
(200)

1,673
1,313

1

2. Dividends
Annual dividends
1st
2nd
3rd
Year-endquarter-end quarter-end quarter-end
Yen
Yen
Yen
Yen

Fiscal year endedApril 30, 2016
Fiscal year endedApril 30, 2017
Fiscal year ending
April 30, 2018
(Forecast)

Yen

Total
dividends(Annual)Million yen

Total

Dividend
payout ratio

Dividends to
net assets

%

%

-

0.00

-

10.00

10.00

167

30.6

4.2

-

0.00

-

10.00

10.00

167

29.3

3.8

-

0.00

-

10.00

10.00

31.0

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2018
(May 1, 2017 to April 30, 2018)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%%

Basic earnings
per share

ProfitMillion yen%

Yen

Full year
5,696
4.7
771 △3.7
776 △3.6
541 △5.5
32.31
As the Company manages its financial results at an annual base, the financial results forecast for the first half is notdisclosed.
* Notes:(1) 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(2) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
April 30, 2017: 17,464,000 shares
April 30, 2016: 17,464,000 shares2) Total number of treasury shares at the end of the period:
April 30, 2017: 717,741 shares
April 30, 2016: 730,141 shares
3) Average number of shares during the period:
Fiscal year ended April 30, 2017: 16,739,285 sharesFiscal year ended April 30, 2016: 16,753,989 shares*These financial results are outside the scope of audit.
* 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.

2

○ Contents of Attached Materials
1. Overview of Business Results(1) Overview of Business Results for this Fiscal Year
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.
In February 2017 we began a business partnership with Unirobot, Inc., a company which developed, manufactures, and sells
the social robot unibo.
Following is an overview of the business results for each segment. The results figures for each segment include internal intersegment sales.
(1) Memorial design service businessIn this business, although there was a difficult struggle for income from processing of photos of the deceased during thefirst quarter, there was a recovery beginning from the second quarter. In addition to steady growth in sales related to videos,signage, and other funeral presentation tools, there were also strong sales of frames and supplies.
In terms of income, there was an increase in PR expenses due to strengthening participation at exhibitions, however as aresult of efficiency improvements in image processing operations, there was stable growth in segment income and results
exceeded expectations.
As a result of the above, sales were 2,427,256 thousand yen (104.1% year-on-year), and segment income was 796,315
thousand yen (104.2% 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.
For the professional photography market in Japan, in addition to acquiring customers through our own marketing activities,
we also further extended our presence in the market through activities such as exhibits at exhibitions and holding digital
photography seminars. We also worked to capture customers by holding workshops and photo contests, and releasing a photoselection app, among other efforts. As a result, we have seen strong sales centered on our primary product ZEN Lay Flat.
For the general Japanese consumer market3 in addition to an efficient internet advertising campaign, we also worked tocapture customers among photography enthusiasts and others who are focused on design and quality by means that included
holding various campaign events and exhibiting at the "CP+" exhibition. However the competitive environment was harsh
and acquiring new customers was difficult, and sales fell below expectations. On the other hand, there was steady growth insales related to OEM supply as a result of the increasing presence of our services in the market.
In terms of income, particular boosts were received from growth in OEM sales and improvement to the operating rate. In
addition, we were able to appropriately control advertising costs and other expenses, and the result was a large increase insegment income.
As a result of the above, sales were 2,951,308 thousand yen (106.1% year-on-year) and segment income was 657,557
thousand yen (121.1% 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.

3

In this business, we are placing top priority on the AI plates which are capable of projecting images in mid-air. For glass
plates, although we have achieved stable improvement in imaging quality and are also able to produce large-size plates, wehave not yet achieved sufficient reduction in costs.
For resin plates, we continued to carry out trials using both a new production method and the same method as for glass
plate production. Although there remain some uncertainties regarding quality, cost, and other elements, the use of a new
production method intended for mass production has allowed us to produce prototypes that ensure a consistent level ofquality, and the possibility of mass production is now in sight. As a result, we have decided to give priority to establishing a
mass production system using this new production method in the future.
In terms of marketing, we exhibited in Japan at the Digital Signage Japan and Tokyo Design Week exhibitions, providing
aerial imaging experiences to many visitors. In addition, we renovated the exhibits at our Tokyo branch showroom andincreased the number of sales staff, and carried out proactive marketing activities. As before, sales have been restricted tolimited applications and small lot sales, primarily due to insufficient matching in the price area. However we intend to utilize
the AI plate sales site and expand sales of products including resin plates. We also exhibited at three overseas exhibitions
beginning from March of this year using the overseas brand ASKA3D, giving many persons around the world their first lookat aerial imaging. We received many inquiries related to signage and other applications, and are continuing to follow them up.
We are also planning to exhibit at three more overseas exhibitions beginning from May.
In terms of expenses, as a result of active participation in exhibitions in Japan and overseas, both advertising expenses andtravel expenses were higher. Expenses were also higher due to R&D aimed at achieving mass production and to active patentapplications.
As a result of the above, sales were 60,534 thousand yen (103.8% year-on-year) and segment loss was 183,742 thousandyen (compared to a loss of 88,845 thousand yen in the previous year).
As a result of the above segment results, overall sales in all business areas were 5,438,199 thousand yen (105.1% year-onyear). In terms of profit, despite a larger loss in the aerial imaging business, growing income in the personal publishing business
contributed to ordinary income of 804,617 thousand yen (103.6% year-on-year) and net income of 572,312 thousand yen(104.6% year-on-year).

(2) Overview of the Financial Status during this Fiscal Year
(Assets)
Current assets at the end of this fiscal year increased by 506,280 thousand yen from the end of the previous fiscal year toreach 3,309,387 thousand yen. The primary reasons for this increase were strong income results and an increase in cash andsavings of 360,107 thousand yen.
Fixed assets at the end of this fiscal year decreased by 1,451 thousand yen from the end of the previous fiscal year to reach
2,015,859 thousand yen. Although there was an increase of 106,900 thousand yen in investment securities, the primary reason
for this decrease was a decrease of 121,096 thousand yen in tangible fixed assets.
(Liabilities)
Current liabilities at the end of this fiscal year increased by 84,794 thousand yen from the end of the previous fiscal year toreach 708,204 thousand yen. The primary reasons for this increase were an increase of 30,232 thousand yen in accounts
payable and an increase of 23,070 thousand yen in income taxes payable.
Fixed liabilities at the end of this fiscal year increased by 6,963 thousand yen from the end of the previous fiscal year toreach 13,597 thousand yen. The primary reason for this increase was an increase of 7,115 thousand yen in other liabilities(lease obligations).
(Net assets)
Net assets at the end of this fiscal year increased by 413,072 thousand yen from the end of the previous fiscal year to reach
4,603,444 thousand yen. The primary reason for this increase was an increase of 402,964 thousand yen in retained earnings.

4

(3) Overview of Cash Flows during this Fiscal Year
Cash and cash equivalents (hereafter referred to as "funds") increased by 360,107 thousand yen from the end of the previous
fiscal year to reach 1,673,251 thousand yen. Although we invested in equipment and software development, and acquired
investment securities, this increase was the result of steady acquisition of funds from operating activities due to solid income
results.
(Cash flow due to operating activities)
Funds acquired as a result of operating activities during this fiscal year were 818,011 thousand yen (compared to acquisitionof 765,127 thousand yen during the previous fiscal year). This result was primarily due to payment of 217,589 thousand yen inincome taxes, while recording depreciation expenses of 309,336 thousand yen and net income before taxes of 801,712 thousand
yen.
(Cash flow due to investment activities)
Funds expended as a result of operating activities during this fiscal year were 293,619 thousand yen (compared to
expenditure of 357,110 thousand yen during the previous fiscal year). This result was primarily due to the acquisition of102,685 thousand yen in tangible fixed assets, 88,988 thousand yen in intangible fixed assets, and 99,000 thousand yen in
investment securities.
(Cash flow due to financing activities)
Funds expended as a result of financing activities during this fiscal year were 164,281 thousand yen (compared to
expenditure of 200,401 thousand yen during the previous fiscal year). This result was primarily due to payment of 166,410
thousand yen in dividends.

(4) Future Outlook
Despite signs of recovery including a recovery in corporate earnings and improvement in the employment environment, theoutlook for the economy during the coming fiscal year is expected to remain highly unpredictable as a result of unstableoverseas economic conditions, primarily in emerging nations.
Under these conditions, our company is operating a business that is consistent with the current times in which services arecustomized from minimum lot sizes to meet individual needs, and aims to capture stable demand. Both the memorial design
service business and personal publishing business have established a solid business foundation and achieved stable income,however we recognize that there are issues from the perspective of further growth and will carry out measures aimed at
expanding these business areas. For the aerial imaging business that we are engaged in as a new challenge, although more timethan expected has been required, we have positioned the achievement of mass production at a suitable price and acceleration ofmarketing as critical matters for the establishment of the business. We will also continue to challenge ourselves to develop new
businesses and services.
In the memorial design service business, we will make use of our strengths in image processing technologies, in-housesupport systems, and a diverse range of funeral presentation tools to develop new customers and increase the unit price forexisting customers. We will also expand our e-commerce service and cloud service aimed at funeral companies.
In the personal publishing business, we will add new product items and improve our photo collection ordering software, andwill also hold various seminars and participate in exhibitions, conduct events, and take other steps to capture customers. We will
also focus on expanding our OEM supply aimed at smartphone users, and carry out personnel reinforcement and equipment
investment to support increased production.
In the aerial imaging business, we will address the establishment of a mass production system capable of producing AI plates
for aerial imaging at suitable prices. We will also actively exhibit at exhibitions in Japan and overseas and reinforce our followup programs after exhibitions in order to promote sales of AI plates.
As a result of the above, as a result of expected increases in personnel expenses, depreciation expenses, and shipping
expenses in the personal publishing business, segment income is expected to decline. Consequently in the forecast for the year
ending April 30, 2018, we are expecting sales of 5,696 million yen (104.7% year-on-year), operating income of 771 million yen(96.3% year-on-year), ordinary income of 776 million yen (96.4% year-on-year), and net income of 541 million yen (94.5%

5

year-on-year).
In addition, various matters in the personal publishing business, such as overseas markets and general consumer markets,
contain elements of uncertainty. Because sales in overseas markets are conducted in the local currencies, they are susceptible tothe effects of changing exchange rates. The aerial imaging business and other new business areas also involve technologicalresearch and marketing that we have not engaged in before, and many uncertain elements are involved in its commercialization.
Note: The above forecast was created based on information available at the time this material was released, and actual results may
differ from the forecast values due to a variety of factors.

6

2. Financial Statements for the fiscal year ended April 30, 2017
(1) Balance sheet(unit:1000s yen)Previous fiscal year
(As of April 30th, 2016)

Current fiscal year
(As of April 30th, 2017)

AssetsCurrent assets
Cash and deposits
Notes

1,918,143
648

2,278,251
1,320

Accounts receivable-trade
Merchandise and products

609,991
123,936

685,197
166,123Work in progress
Raw materials and supplies

13,42350,72012,03856,972

Advance payment
Deferred tax asset

24,09363,50646,49962,466

OthersAllowance for doubtful accounts

2,446(3,803)

3,682(3,163)2,803,106

3,309,387

Buildings, net
Constructs

514,797
7,576

499,750
6,877

Machinery and equipment, net
Vehicles552,201
1,782

422,616
8,704

Tools, furniture and fixtures
Land

117,598432,702

134,911432,702

Total tangible fixed assets

1,626,659

1,505,562

196,351

211,874

Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets
Investments and other assets
Total fixed assets
Total assets

7

194,300

298,423

2,017,310

2,015,859

4,820,417

5,325,247

(unit:1000s yen)Previous fiscal year
(As of April 30th, 2016)

Current fiscal year
(As of April 30th, 2017)

Liabilities
Current liabilities
Accounts payable-trade
Accounts payable

123,714
112,816

118,905
143,049

Accrued payment
Income taxes payable

64,846120,200

67,998143,270

Advances
Deposits

11,586
11,265

26,171
11,759Provision for bonuses
Others129,700
49,281129,000
68,050Total current liabilities

623,410708,204

6,634

6,482

―

7,115

Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities

6,634

13,597630,045

721,802

Capital stock
Capital surplus

490,300
606,585

490,300
606,585

Retained earnings
Treasury stock

3,400,136(315,115)

3,803,101(309,764)

Total shareholders' equity

4,181,905

4,590,222

Total liabilities
Net assets
Shareholders’ equity

Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments

2,086

7,579

2,086

7,579

Subscription rights to shares

6,380

5,642

4,190,372

4,603,444

4,820,417

5,325,247

Total net assets
Total liabilities and net assets8(2) Profit and loss statement(unit:1000s yen)

21st fiscal year
(May 1, 2015-April 30, 2016)

22nd fiscal year
(May 1, 2016-April 30, 2017)

5,173,363
2,532,252

5,438,199
2,625,921

Gross profit

2,641,110

2,812,277

Selling, general, and administrative expenses

1,867,846

2,011,472

773,264

800,804

1,852

1,060

1,095
646

1,161
545

Net Sales
Cost of sales

Operating income
Non-operating income
Interest received
Dividends received
Commissions received
OthersTotal non-operating income

759

1,223

4,352

3,990

875
273

178
―

Non-operating expenses
Foreign exchange losses
Treasury stock acquisition cost
Total non-operating expenses
Ordinary income

1,148

178

776,468

804,617

4,802

2,904

Extraordinary losses
Loss on retirement of fixed assets

4,802

2,904

Net income before taxes

Total extraordinary losses

771,665

801,712

Income taxes

224,658

229,399

Net income

547,006

572,3129

(3) Statement of cash flows(unit:1000s yen)stnd

21 fiscal year
(May 1, 2015-April 30, 2016)

22 fiscal year
(May 1, 2016-April 30, 2017)

Net income before taxes
Depreciation expenses

771,665
273,401

801,712309,336

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement
benefits
Stock compensation expenses
Interest and dividends received

1,154
11,300

567
(700)

(161)

(151)

1,021
(2,947)―(2,221)

273
9

―
2

4,802

2,904

Cash flows resulting from operating activities

Treasury stock acquisition cost
Foreign exchange losses (gains)
Loss on disposal of fixed assets
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventory assets
Increase (decrease) in accounts payable-trade(46,344)(77,187)(51,322)
23,545(47,054)(4,808)

Increase (decrease) in accrued consumption taxes
Others(12,869)(25,920)

18,76932,198Subtotal

947,608

1,033,368

Interest and dividends received
Income taxes paid

2,972
(185,452)

2,231(217,589)

Cash flows due to operating activities

765,127

818,011(249,857)(106,499)(102,685)(88,988)―7,420(99,000)
1,440(605,000)
605,000(605,000)
605,000(8,173)(4,386)(357,110)(293,619)

Cash dividends paid
Proceeds from disposal of treasury stock(132,606)
24,528(166,410)
2,604

Purchase of treasury stock
Others(91,068)(1,254)―(474)

Cash flows due to financing activities(200,401)(164,281)

Cash flows due to investing activities
Purchase of property, plant, and equipment
Purchase of intangible fixed assets
Purchase of investment securities
Collection of loans receivable
Payments into time deposits
Proceeds from withdrawal of time deposits
OthersCash flows due to investing activities
Cash flows due to financing activities

Effect of exchange rate on cash and cash equivalents

(9)

(2)

Net increase (decrease) in cash and cash equivalents

207,606

360,107

Balance of cash and cash equivalents at beginning of year

1,105,536

1,313,143

Balance of cash and cash equivalents at end of quarter

1,313,143

1,673,25110

(4) Notes Regarding the Financial Statements(Segment information, etc.)
Information related to the amounts of sales, income or loss, assets, liabilities, and other items for each reporting segment
Year 21 (May 1, 2015 – April 30, 2016)(unit:1000s yen)

Reporting segment
Adjustments

Amountrecorded infinancialstatements

1,607

―

5,173,363

132

―

(132)

―

58,336

5,171,888

1,607

(132)

5,173,363

543,161(88,845)

1,218,869(16,176)(429,428)

773,264

219,815

15,672

254,342271

18,787

273,401

Memorial
designservicesbusiness

Personal
publishing Aerial imaging
business
servicesbusiness

Total

2,332,106

2,781,312

58,336

5,171,755

―

132

―

2,332,106

2,781,445

764,553

18,854

Other

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

Year 22 (May 1, 2016 – April 30, 2017)(unit:1000s yen)
Reporting segment
Memorial design
services business

Personal
Aerial imaging
publishingbusiness
services business

Adjustments
Total

Amountrecorded infinancialstatements

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

2,427,256

2,951,308

59,634

5,438,199―

5,438,199

―

―

900

900

(900)

―

2,427,256

2,951,308

60,534

5,439,099(900)

5,438,199

796,315

657,557(183,742)

1,270,130(469,325)

800,804

21,057251,170

11,610283,838

25,498309,336

Other items
Depreciation expenses

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

11