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.

FY2018, the year ending March 31, 2019

Flash Report on the Consolidated Results for the Second Quarter Ended
September 30, 2018 [JGAAP]
November 16, 2018

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
Scheduled Date to Submit the Quarterly Securities Report: November 9, 2018
Start Date for Dividend Payment: December 5, 2018
Availability of Supplementary Briefing Material on Quarterly Financial Results: Available
Schedule of Quarterly Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Six Months Ended September 30, 2018 (From April 1, 2018, toSeptember 30, 2018)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Millions of yen

Six months ended
September 30, 2018
Six months ended
September 30, 2017

Operating income
Ordinary income% Millions of yen% Millions of yen%

69,823

1.2

10,474(2.8)

11,225(2.2)

69,022

0.3

10,776

10.7

11,474

14.6

Net income attributable toowners of parent
Millions of yen%Six months ended
7,253
September 30, 2018
Six months ended
7,373
September 30, 2017
(Note) Comprehensive income:Six months ended September 30, 2018:
Six months ended September 30, 2017:

Yen

Fully diluted net income
per shareYen(1.6)

127.33127.1975.4

129.16129.04

Basic earnings per share

7,291 million yen (3.7) %7,568 million yen 12.0 %(2) Consolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

As of September 30, 2018
182,759
129,491
As of March 31, 2018180,190
125,356(Reference) Shareholders’ equity:
As of September 30, 2018: 127,861 million yen
As of March 31, 2018:
123,792 million yen

1Equity ratio
%
70.0
68.7

DAIICHIKOSHO

CO.,

LTD.

2. Dividend
First Quarter
Yen―Second QuarterYen
55.00

Annual dividend
Third Quarter
Yen―Year ended March 31, 2018Year ending March 31,―
56.00
2019
Year ending March 31,―
2019 (forecast)(Note) Changes in dividends forecast from most recently announced figures: None

Year-end
Yen
56.00

AnnualYen
111.0056.00

112.003. Forecast Consolidated Performance for FY2018, the Year Ending March 31, 2019 (From April 1,2018, to March 31, 2019)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen
Millions of yen%%%
Net salesYear ending March 31,
2019 (full year)

142,500

0.8

Net income attributable toowners of parent
Millions of yen%

21,2000.5

22,000

Basic earnings per share

Yen
Year ending March 31,
13,5002.9236.98
2019 (full year)(Note) Changes in forecast of consolidated performance from most recently announced figures: None

20.7

DAIICHIKOSHO

CO.,

LTD.

*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 of
57,234,200(including treasury shares)
September 30, 2018
shares March 31, 2018
shares2) Number of shares of treasury
As of266,262 As of266,228
sharesSeptember 30, 2018
shares March 31, 2018
shares3) Average number of shares
Six months ended
56,967,945 Six months ended
57,093,654
during the period
September 30, 2018
shares September 30, 2017
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.

3DAIICHIKOSHO

CO.,

LTD.

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

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
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, netLand
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4FY2017(As of March 31, 2018)

Current Second quarter(As of September 30,2018)45,538
5,132
4,969
6,252
5,660
(175)
67,37851,323
5,091－6,305
6,876(177)
69,4199,794
19,29938,053
8,258
75,405

9,520
19,30338,053
8,177
75,054

4,065
6,198
10,263

3,733
6,579
10,313

5,288
14,2637,656(65)27,142
112,812180,190

5,404
14,954
7,678(64)
27,972
113,340
182,759DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
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

5FY2017(As of March 31, 2018)

Current Second quarter(As of September 30,2018)

3,421
4,015
－
4,652
1,128
12,14625,365

3,550
3,998
6,500
4,068
1,596
10,54730,261

6,500
12,587
1,047
6,176
3,157
29,46954,834－
12,256
822
6,429
3,497
23,00653,26812,350
4,003
108,489(1,309)123,534

12,350
4,003
112,552(1,309)127,597

1,261
(733)
87(356)
258
203
1,359
125,356
180,190

1,218
(733)
89(309)
264
250
1,379
129,491
182,759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
Non-operating income
Interest income
Cooperative monetary aid received
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cancellation penalty
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on acquisition of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assetsImpairment loss
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

6

Six months ended
September 30, 2017
(From April 1, 2017, toSeptember 30, 2017)

Six months ended
September 30, 2018
(From April 1, 2018, toSeptember 30, 2018)

69,022
41,54427,47816,701
10,776

69,82342,44827,374
16,90010,474

25
173
235
540
975

35
169
219
568
993

161
18
97
278
11,4748176
84242
11,225

97
240
121

7－61
68

71
122
193
11,401
3,997
(1)
3,995
7,405
31
7,373

41
9
50
11,243
3,928
29
3,957
7,285
32
7,253

DAIICHIKOSHO

CO.,

LTD.

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

Net income
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 parentComprehensive income attributable to non-controllinginterests

7

Six months ended
September 30, 2017
(From April 1, 2017, toSeptember 30, 2017)

Six months ended
September 30, 2018
(From April 1, 2018, toSeptember 30, 2018)

7,405

7,285

126
(15)
51
162
7,568

(43)
1
46
5
7,291

7,536

7,258

3132

DAIICHIKOSHO

CO.,

LTD.

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Impairment loss
Increase (decrease) in provision for directors' retirement
benefits
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Gain on acquisition of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on disposal of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accounts payable - other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for acquisition of video licenses
Proceeds from sales of investment securities
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

8

Six months ended
September 30, 2017
(From April 1, 2017, toSeptember 30, 2017)

Six months ended
September 30, 2018
(From April 1, 2018, toSeptember 30, 2018)

11,401
7,328
299
122

11,243
7,237
331
9(89)

(224)

(78)
161
(254)
(24)
(0)
(25)

(124)
81
(252)
－(61)
34

1,677

41

(1,044)11
472(1,431)(1,220)17,308107(218)(2,939)38
14,296(48)
37
126(908)142
17,665125(81)(4,470)－13,239(567)
573(6,638)144(1,875)
(714)
5－

(37)
48
(5,032)11(2,247)(1,009)61(181)(5,142)－(285)
246
(154)
367
90
(13,951)(58)
233(1,111)
141
82(9,101)DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Cash dividends paid
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

9

Six months ended
September 30, 2017
(From April 1, 2017, toSeptember 30, 2017)

Six months ended
September 30, 2018
(From April 1, 2018, toSeptember 30, 2018)

72
900(1,218)(3,500)(3,141)(1,001)(22)(7,911)
254(7,313)
61,25453,941

186
520(1,063)－(3,190)(0)(15)(3,563)252
82649,736
50,563

DAIICHIKOSHO

CO.,

LTD.

Notes to the Quarterly Consolidated Financial Statements(Segment Information)
Six months ended September 30, 2017 (From April 1, 2017, to September 30, 2017)(Millions of yen)
Reportable segments
Commercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Sales

32,10728,907

4,022

Segment income orSegment loss
(Operating income or
Operating loss)

7,888

3,566

(3)

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

OtherTotal

65,0383,984

69,022－

69,022

11,451

784

12,236(1,459)

10,776

Note: The (1,459) 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.

Six months ended September 30, 2018 (From April 1, 2018, to September 30, 2018)(Millions of yen)
Reportable segments
Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

Sales

31,94130,031

3,606

Segment income orSegment loss
(Operating income orOperating loss)

8,082

3,054

(99)Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

Other

Total

65,578

4,244

69,823－69,823

11,036830

11,867(1,393)

10,474

Note: The (1,393) 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.

10