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.

FY2022, the year ended March 31, 2023

Flash Report on the Consolidated Results for the Year Ended March 31, 2023
[JGAAP]May 15, 2023

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
Date of the Ordinary General Meeting of Shareholders: June 23, 2023
Start Date for Dividend Payment:
June 26, 2023
Scheduled Date to Submit the Securities Report:
June 27, 2023
Availability of Supplementary Briefing Material on Financial Results: Available
Schedule of Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Year Ended March 31, 2023 (From April 1, 2022, to March 31,
2023)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Millions of yen

Year ended March 31, 2023
Year ended March 31, 2022

128,156
94,787

Operating profit
%
35.2
1.6

Millions of yen

12,954(289)

Profit attributable toowners of parent

Ordinary profit%――

Basic earnings per share%
Year ended March 31, 2023
8,320
60.1
Year ended March 31, 2022
5,196―
(Note) Comprehensive income:Year ended March 31, 2023: 9,018 million yen [74.4 %]Year ended March 31, 2022: 5,170 million yen [― %]Millions of yen

Yen
76.21
47.61

Ordinary profit to total
assetsReturn on equity%――

Millions of yen

13,601
888

Diluted earnings per share
Yen
76.08
47.54

Operating profit to net
sales

%
%
%
Year ended March 31, 2023
7.9
7.4
10.1
Year ended March 31, 2022
5.0
0.5
(0.3)
(Reference) Equity in net income of unconsolidated subsidiaries and affiliates:
Year ended March 31, 2023: ― million yen
Year ended March 31, 2022: ― million yen(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Basic earnings per share and diluted
earnings per share were calculated as if said split had been carried out at the beginning of the previous fiscal
year.

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(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

%
56.4
57.4

Net assets per shareYen
974.95948.33As of March 31, 2023
188,623
107,915
As of March 31, 2022
180,389
105,160(Reference) Shareholders’ equity:
As of March 31, 2023: 106,451 million yen
As of March 31, 2022: 103,543 million yen(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Net assets per share were calculated as
if said split had been carried out at the beginning of the previous fiscal year.

(3) Consolidated cash flows

Year ended March 31, 2023
Year ended March 31, 2022

Net cash providedby (used in)operating activities

Net cash providedby (used in)investing activities

Net cash providedby (used in)financing activities

Cash and cash
equivalents at endof period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

24,86918,165(12,104)(9,297)(9,493)(8,487)71,423
68,125

2. DividendYear ended March 31, 2022
Year ended March 31, 2023
Year ending March 31, 2024
(forecast)First Quarter
Second Quarter
Yen
Yen
―
56.00
―
56.00
―

Annual dividend
Third Quarter
Yen――

Year-end
Yen
57.00
57.00

―

29.00

28.00

Aggregate amount ofdividend (total)

Payout ratio (consolidated)

AnnualYen
113.00113.0057.00

Ratio of dividends to net
assets (consolidated)
%
5.9
5.9

Millions of yen%
Year ended March 31, 2022
6,169
118.7
Year ended March 31, 2023
6,168
74.1
Year ending March 31, 2024
58.2
(forecast)(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Actual dividend amounts before stock
split are listed for the year ended March 31, 2022 and year ended March 31, 2023. The stock split is reflected
in amounts listed for the year ending March 31, 2024 (forecast).

3. Forecast of Consolidated Performance for FY2023, the Year Ending March 31, 2024 (From April
1, 2023, to March 31, 2024)
Net sales
Millions of yen

Six months ending
September 30, 2023
Year ending March 31,
2024 (full year)(Percentage figures indicate increase/decrease from a year earlier.)
Operating profit
Ordinary profit
Millions of yen
Millions of yen%%%

68,900

13.6

6,900

26.2

7,300

26.4

141,000

10.0

15,00015.8

16,000

17.6

Profit attributable toowners of parent
Six months ending
September 30, 2023
Year ending March 31,
2024 (full year)

Basic earnings per share

Millions of yen

%

Yen

4,900

(18.2)

44.88

10,700

28.6

98.00

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(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. The stock split has been taken into
account for basic earnings per share for forecast consolidated performance for the year ending March 31,2024.

*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting inchanges in scope of consolidation): None
(2) 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: Yes
4) Retrospective restatement: None
(Note) For details, please refer to “Changes in Accounting Policies” on page 18 of the Attachments.
(3) Number of common shares issued
1) Number of shares issued
As of109,468,400 As of
109,468,400(including treasury shares)
March 31, 2023
shares March 31, 2022
shares2) Number of treasury shares
As of
282,604 As of
282,520
3) Average number of shares
March 31, 2023
shares March 31, 2022
sharesduring the period
Year ended
109,185,829 Year ended
109,151,448
March 31, 2023
shares March 31, 2022
shares(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Number of shares issued, number oftreasury shares, and average number of shares during the period were calculated as if said split had been
carried out at the beginning of the previous fiscal year.

(Reference) Outline of Nonconsolidated Financial Results
1. Nonconsolidated Performance for the Year Ended March 31, 2023 (From April 1, 2022, to March
31, 2023)(1) Nonconsolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Operating profit
Ordinary profit
Millions of yen
MillionsofyenMillionsof yen%%%89,36738.5
9,514―
10,756―64,504
5.0
(402)
―
511
―
Net salesYear ended March 31, 2023
Year ended March 31, 2022

ProfitBasic earnings per share
Diluted earnings per share
%
Yen
Yen
Year ended March 31, 2023
6,849
118.2
62.73
62.63
Year ended March 31, 2022
3,139
―
28.76
28.72
(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Basic earnings per share and diluted
earnings per share were calculated as if said split had been carried out at the beginning of the previous fiscal
year.
Millions of yen(2) Nonconsolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

Equity ratio
%
37.4
38.9

Net assets per shareYen
511.98501.70

As of March 31, 2023
149,471
56,192As of March 31, 2022
140,877
54,998(Reference) Shareholders’ equity:
As of March 31, 2023: 55,900 million yen
As of March 31, 2022: 54,778 million yen(Note) Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Net assets per share were calculated as
if said split had been carried out at the beginning of the previous fiscal year.

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* These consolidated financial results are outside the scope of audit by Certified Public Accountants or auditing
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. For the conditions
underlying the assumptions made for financial results forecasts and their use, please see “1. Overview of Operating
Results, etc. (4) Future Outlook” on page 9 of the Attachments.

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CO.,

LTD.

Table of Contents - Attachments
1. Overview of Operating Results, etc. ................................................................................................................ 6(1) Overview of Operating Results for the Fiscal Year under Review .............................................................. 6(2) Overview of Financial Position for the Fiscal Year under Review .............................................................. 8(3) Overview of Cash Flows for the Fiscal Year under Review ........................................................................ 8(4) Future Outlook ............................................................................................................................................. 9
2. Basic Policy on Selection of Accounting Standards ........................................................................................ 9
3. Consolidated Financial Statements and Primary Notes ................................................................................. 10(1) Consolidated Balance Sheets ..................................................................................................................... 10(2) Consolidated Statements of Income and Comprehensive Income ............................................................. 12(Consolidated Statements of Income) .................................................................................................... 12(Consolidated Statements of Comprehensive Income) .......................................................................... 13(3) Consolidated Statements of Changes in Equity ......................................................................................... 14(4) Consolidated Statements of Cash Flows .................................................................................................... 16(5) Notes to Consolidated Financial Statements ............................................................................................. 18(Notes on Going Concern Assumption) ................................................................................................. 18(Changes in Accounting Policies) .......................................................................................................... 18(Consolidated Statements of Income) .................................................................................................... 18(Segment Information) ........................................................................................................................... 18(Per Share Information) .......................................................................................................................... 21(Significant Subsequent Events) ............................................................................................................ 21

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1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Fiscal Year under Review
In the fiscal year ended March 31, 2023 (the “fiscal year under review”), due to the gradual mitigation of the impact of
the COVID-19 pandemic on economic activities, Japan’s economy saw signs of consumer spending and other mattersreturning back to normal. The economic outlook, however, remains unclear due to sharp fluctuations in exchange rates andprice hikes of commodities.
In the karaoke industry, where DAIICHIKOSHO CO., LTD. (the “Company,” together with its subsidiaries, the“Group”) operates, amid the lifting of quasi-emergency measures and related requests in the previous fiscal year, many
karaoke cabins and restaurants both in the night business and the karaoke cabin markets resumed normal operation.
Although there were still impacts of the pandemic on business locations, attracting customers late at night and some otheraffairs, the markets were in a recovery trend as a whole, partly due to the fact that no administrative restrictions were
imposed on operation throughout the fiscal year under review, despite the resurgence of infections, such as the seventh andeighth waves.
As a result of various measures taken in each businesses amid this situation, in the fiscal year under review, net sales
amounted to 128,156 million yen (up 35.2% year on year), operating profit was recorded of 12,954 million yen (a loss of
289 million yen in the previous year), ordinary profit was 13,601 million yen (a profit of 888 million yen in the previousyear), and profit attributable to owners of parent amounted to 8,320 million yen (up 60.1% year on year).
The Group posted 2,928 million yen of subsidy income (15,206 million yen in the previous fiscal year) in extraordinary
income from various subsidies covering the previous fiscal year, such as employment adjustment subsidies and subsidies
for shorter business hours, as well as extraordinary losses of 3,130 million yen (1,862 million yen in the previous fiscal
year) as impairment losses on non-current assets in karaoke cabins and restaurants.
Net sales
Operating profit
Ordinary profit
Profit attributable to owners of parent

FY2021
94,787
(289)
888
5,196

FY2022
128,156
12,954
13,601
8,320

Year-on-year change
33,36913,244
12,712
3,124(Millions of yen)
% change
35.2%
―
―
60.1%

Operating results by segment are as follows.
(Commercial karaoke business)
In the commercial karaoke business, due to the continued absence of various operating restrictions and resumption ofoperation/new store openings on the parts of customers, the business environment was in a recovery trend particularly inregard to stores operating at night, such as snack bars, which are our main market.
In light of these circumstances, in order to recover lost numbers on the amount of DAM units in operation (a key
challenge in the current fiscal year) we established a website to facilitate karaoke equipment orders in the previous fiscal
year, “Karaoke no Madoguchi (Karaoke Sales Portal),” and a real estate information website in April, “Yorumise Navi
(Searchable Nightlife Real Estate Directory)” in April. In addition to face-to-face sales, which are our strength, we also
strived to build online sales structures such as by holding online events for nursing facilities and other targets in the seniors’
market.
In addition, we strived to improve our Karaoke DAM products by further expanding our visual content, including live
videos, animated videos and music videos, including “Liview!” contents. “Liview!” is a feature that was released in theprevious fiscal year that allows users to enjoy the atmosphere of live performances from a karaoke cabin.
We also launched “FREE DAM LIFE” in October, our latest model exclusively for the DK elder system, which includes
new features to reduce workloads for staff working at nursing facilities. These features include “Omakase Rec,” which
automatically creates and plays recreational activity programs, and “Remote Session,” which allows sharing and remote
operation of programs for multiple facilities through simultaneous pairing. We aimed to both replace old models andacquire new customers in the seniors’ market.
As a result, net sales and operating profit increased by 8.5% and 11.6%, respectively, year on year.
FY2021
Net sales
Operating profit

FY2022
53,18812,18657,731
13,5936

Year-on-year change
4,542
1,407

(Millions of yen)
% change
8.5%
11.6%

DAIICHIKOSHO

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(Karaoke cabin and restaurant business)
In the karaoke cabin and restaurant business, we opened 15 karaoke cabins and 14 restaurants and closed 10 karaokecabins and 18 restaurants, and so operate 508 karaoke cabins and 171 restaurants as of the end of the fiscal year underreview.
Thanks to the lifting in the previous fiscal year of various government requests made due to the pandemic, we have seena return of customer flow since the beginning of the fiscal year under review. Despite the lingering impact of the pandemic
on issues such as our ability to establish locations and to attract late-night customers, and temporary halts in recovery due toa resurgence in infections such as with the seventh and eighth waves, we were able to maintain normal operations
throughout the fiscal year under review. This contributed to existing karaoke cabin sales recovering to a levelapproximately 25% lower than before the COVID-19 pandemic and restaurants to a level approximately 15% lower, for an
approximately 105% increase for karaoke cabins and approximately 135% increase for restaurants, year on year.
In light of these circumstances, for Big Echo karaoke cabins we strove to bolster equipment and increase customer
satisfaction, for instance by increasing the number of stores with “LIVE DAM Ai” (our most premium karaoke model)
installed in all rooms to 44. We also focused on attracting more young customers, including by using social media topromote the joy of karaoke and through the introduction of “Saikyo Gakuwari (Best Student Discount)” at all karaokecabins. We also strove to strengthen our restaurants business, for instance by creating a new business type “Ginten,”locations in Ginza Corridor Street, Tokyo and Meieki 3-chome, Nagoya.
As a result, net sales increased by 111.4% year on year, and an operating loss was recorded at 59 million yen.
FY2021
Net sales
Operating profit

FY2022

24,402(11,299)

51,584(59)

Year-on-year change
27,181
11,240(Millions of yen)
% change111.4%―(Music software business)
In the music software business, product sales of CDs and DVDs saw a slight recovery as the music industry regained
vigor, for instance with events and concerts resuming. The TV program production business also made steady progress.
As a result, net sales and operating profit increased by 6.6% and 186.0%, respectively, year on year.
FY2021
Net sales
Operating profit

FY2022
6,029
79

6,430
228

Year-on-year change
400148(Millions of yen)
% change
6.6%
186.0%(Other businesses)
In other businesses, our parking business operating under the brand name “The Park,” which will serve as a new pillar ofrevenue, made steady progress, with business scale reaching approximately 2,000 parking facilities and 26,000 parking
spots as of the end of the fiscal year under review.
As a result, net sales increased by 11.1% year on year thanks to the increase in revenue from the parking business, andoperating profit increased by 57.0% year on year.
FY2021
Net sales
Operating profit

FY2022
11,166
1,006

12,411
1,581

7Year-on-year change
1,244
574

(Millions of yen)
% change
11.1%
57.0%

DAIICHIKOSHO

CO.,

LTD.

(2) Overview of Financial Position for the Fiscal Year under Review
Total assets at the end of the fiscal year under review increased by 8,233 million yen from the end of the previous fiscal
year to 188,623 million yen.
Major causes included increases in cash and deposits, accounts receivable - trade and inventories under current assets of
3,598 million yen, 1,240 million yen and 4,139 million yen, respectively.
Liabilities increased by 5,478 million yen year on year to 80,707 million yen.
Major causes included increases in notes and accounts payable - trade, short-term borrowings, accounts payable - otherand income taxes payable under current liabilities of 2,339 million yen, 7,412 million yen, 2,520 million yen and 1,120
million yen, respectively.
In non-current liabilities, asset retirement obligations increased by 2,018 million yen and long-term borrowings
decreased by 10,570 million yen.
Net assets increased by 2,755 million yen year on year to 107,915 million yen.
The increase is primarily attributable to an increase in retained earnings of 8,320 million yen due to profit attributable toowners of parent and a decrease in retained earnings of 6,168 million yen due to the dividends of surplus.

(3) Overview of Cash Flows for the Fiscal Year under Review
Cash and deposits (hereinafter referred to as “funds”) at the end of the fiscal year under review increased by 3,298
million yen from the previous fiscal year to 71,423 million yen.
The following is an overview of cash flows in the fiscal year under review.
(Cash Flows from Operating Activities)
Funds provided by operating activities increased by 6,703 million yen year on year to 24,869 million yen, mainly
due to profit before income taxes of 13,337 million yen, depreciation of 10,867 million yen, impairment losses of 3,130
million yen, an increase in inventories of 4,137 million yen, an increase in trade payables of 2,330 million yen, an
increase in accounts payable – other of 2,318 million yen and income taxes paid of 2,790 million yen.
(Cash Flows from Investing Activities)
Funds used in investing activities increased by 2,807 million yen year on year to 12,104 million yen, mainly due topurchase of property, plant and equipment of 7,462 million yen, purchase of intangible assets of 3,199 million yen andpayments for acquisition of video licenses of 1,246 million yen.
(Cash Flows from Financing Activities)
Funds used in financing activities increased by 1,005 million yen year on year to 9,493 million yen, mainly due toa net decrease in short-term borrowings of 2,235 million yen, repayments of long-term borrowings of 1,052 million yen
and dividends paid of 6,168 million yen.
(Reference) Cash flow indicators
As of March 31
2019

2020

2021

2022

2023

Equity ratio (%)

69.3

74.0

55.8

57.4

56.4

Equity ratio at market value (%)

169.8

89.4

125.2

105.3

126.4

0.7

0.5

6.5

2.6

1.8

188.7

243.8

39.2

90.9

143.4

Ratio of interest-bearing debt to cash
flow (years)
Interest coverage ratio (times)
Notes:

Equity ratio is shareholders’ equity divided by total assets.
Equity ratio at market value is market capitalization divided by total assets.
Ratio of interest-bearing debt to cash flow is interest-bearing debt divided by cash flow.
Interest coverage ratio is cash flow divided by interest expenses.

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1.

All figures are calculated on a consolidated basis.

2.

Market capitalization is calculated by multiplying closing share price at fiscal year-end by the number of shares issued
less treasury shares at fiscal year-end.

3.

Cash flows from operating activities on the consolidated statements of cash flows are used as “cash flow.”

4.

Interest-bearing debt represents the sum of all liabilities on the consolidated balance sheets subject to interest payment.
Interest paid on the consolidated statements of cash flows is used as “interest expenses.”(4) Future Outlook
The economic outlook is expected to remain uncertain due to factors such as political instability overseas and theongoing price hikes for fuel and other commodities. However, with the downgrading of the infectious disease category(under Infectious Diseases Control Law) for COVID-19 in May, the market environments are likely to continue to recoverand the karaoke industry is expected to return to near pre-COVID-19 levels.
In response to these circumstances the Group has released a new corporate message (“Singing as we go”), and will
strive to create demand and appeal to customers through not only the joy of singing, but also through the contributions
karaoke makes to physical and mental health and its status as an indispensable service for society.
In the commercial karaoke business, in addition to working to increase the number of DAM systems in operation
through a sales structure that utilizes local-based face-to-face sales as well as websites, we will pursue investment into
replacement of rental equipment assets (which had slowed due to the impact of COVID-19), with a focus on LIVE DAM
AiR which was released for sale in April, and investment into karaoke contents such as sound tracks and video, aiming tostrengthen our stable profit base and further increase the value of DAM brand, the number one karaoke brand. Additionally,in the seniors’ market, we will contribute to extending healthy lifespans and reducing workloads for care facility staff
through sales and marketing of FREE DAM LIFE, which was released for sale in October of last year.
In the karaoke cabins and restaurants business, although customer levels are expected to recover as the COVID-19
pandemic comes to an end, utility costs and other expenses are expected to increase, so we will work to establish leanearning models and strengthen competitiveness of locations through efforts such as efficient operations (collaboration withdarts businesses) and scrap and build. Additionally, as Big Echo is approaching its 35th anniversary, we will strive to appeal
to customers with the joy of karaoke and stimulate the desire to sing, through a variety of campaigns such as collaboration
with artists.
In the music software business, we will work to discover new artists and create hit songs while also working toconstruct an earnings model that is not dependent on major hits.
Additionally, in the parking business, which we are currently focusing on as a new business, we will pursue
development of new facilities, including M&As, and aim to grow the size of the business, while also working to spreadawareness of The Park brand through methods such as television commercials.
Based on the above, we expect net sales of 141,000 million yen, operating profit of 15,000 million yen, ordinary profitof 16,000 million yen and profit attributable to owners of parent of 10,700 million yen in the next fiscal year.
The earnings forecast has been made based on information available as of the publication date of this material, andactual operating results may differ from such forecasts due to various factors.

2. Basic Policy on Selection of Accounting Standards
The Group’s policy for the time being is to apply Japanese GAAP. The Group will consider whether to apply
International Financial Reporting Standards (IFRS) taking into account trends of other companies in Japan.

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CO.,

LTD.

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

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Karaoke equipment for rental
Accumulated depreciation
Karaoke equipment for rental, net
Karaoke cabin and restaurant facilities
Accumulated depreciation
Karaoke cabin and restaurant facilities, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Leasehold and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

10

FY2021(As of March 31, 2022)

FY2022(As of March 31, 2023)

68,214
44
4,082
7,596
4,796
(457)
84,277

71,812
44
5,323
11,735
4,888(374)
93,42913,953(9,036)
4,916
50,813(44,518)
6,294
44,978(34,598)
10,38040,341
6,830(5,776)
1,053
62,987

13,894(8,954)
4,939
51,490(45,183)
6,306
46,078(36,885)
9,192
40,2187,436(5,801)
1,634
62,292

996
5,861
6,858

606
6,056
6,663

4,507
508
6,520
13,4491,346(64)
26,267
96,112
180,389

4,914
516
5,117
14,4771,352(140)
26,237
95,193
188,623DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Accounts payable - other
Income taxes payable
Contract liabilities
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
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

11

FY2021(As of March 31, 2022)

FY2022(As of March 31, 2023)

2,614
6,098
6,453
1,985
968
1,141
2,395
21,658

4,954
13,511
8,974
3,106
1,038
1,151
2,551
35,28841,705
77

31,135
44

993

1,113

7,846
－
2,946
53,57075,229

7,991
2,018
3,115
45,41980,707

12,3504,114
87,733(570)
103,628

12,3504,211
89,885(571)
105,876

606
(733)
69
(26)
(84)
219
1,397
105,160
180,389

1,047
(733)
99
160
574
292
1,172
107,915
188,623DAIICHIKOSHO

CO.,

LTD.

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Promotion expenses
Packing and freight expenses
Remuneration for directors (and other officers)
Provision for retirement benefits for directors (and otherofficers)
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Rent expenses
Depreciation
Other
Total selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Commission income
Insurance claim income
Cooperative monetary aid received
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Commission expenses
Cancellation penalty
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on bargain purchase
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Loss on sale of investment securities
Loss on valuation of investment securities
Loss on COVID-19
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

12

FY2021(From April 1, 2021, to
March 31, 2022)

FY2022(From April 1, 2022, toMarch 31, 2023)

94,78765,951
28,835

128,156
83,71544,441

1,047
913
682
1,168

1,265
1,365
718
1,114

162

157

12,780
875
564
1,074
741
9,114
29,124(289)

13,346
899
573
1,035
739
10,27031,486
12,954

22
197
142
355
255
11
645
1,630

23
131
136
259
187
－
418
1,156

199
48
15
61
126
452
888

173
86
14
39
196
510
13,601

104－－
15,20615,311

81
0
112
2,928
3,121

80
1,862
0
108
6,452
8,505
7,695
1,971
500
2,471
5,223
26
5,196

104
3,130
－
150
－
3,385
13,337
3,800
1,177
4,978
8,359
38
8,320

DAIICHIKOSHO

CO.,

LTD.

(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

13

FY2021(From April 1, 2021, to
March 31, 2022)

FY2022(From April 1, 2022, toMarch 31, 2023)

5,223

8,359

(203)
36
114
(52)
5,170

441
30
186
658
9,018

5,143

8,979

26

38

DAIICHIKOSHO

CO.,

LTD.

(3) Consolidated Statements of Changes in Equity
FY2021 (from April 1, 2021, to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Cumulative effects of changes inaccounting policies
Restated balance

Capital surplus

Retainedearnings(10,958)

Total
shareholders'equity104,289(10,958)

104,355

Treasury shares

12,3504,114

98,783

12,3504,114

98,84865

65

Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares(6,165)(6,165)

5,196

5,196

Disposal of treasury shares(40)(10,104)

Cancellation of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes in items other thanshareholders' equity
Total changes during period(0)282
10,104

(0)
242
－
－

－
12,350

Balance at end of period(11,114)87,733－
4,114

10,387(570)(726)
103,628

Accumulated other comprehensive income

Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Valuationdifference on
available-for-salesecurities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

810

(733)

32

Remeasurementsof defined benefit
plans

(140)

Total
accumulated
othercomprehensive
income(31)

ShareacquisitionrightsNon-controllinginterests

Total net
assets388

1,383

106,030
65

810

(733)

32

(140)

(31)

388

1,383

106,095

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesCancellation of treasury
sharesChange in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period(6,165)
5,196
(0)
242
－
－
(203)

－

36

114

(52)

(169)

13

(208)

(203)

－

36

114

(52)

(169)

13

(934)

606

(733)

69

(26)

(84)

219

1,397

105,160

14

DAIICHIKOSHO

CO.,

LTD.

FY2022 (from April 1, 2022, to March 31, 2023)(Millions of yen)
Shareholders’ equity
Share capital

Capital surplus

12,350

Balance at beginning of period
Cumulative effects of changes inaccounting policies
Restated balance

Retainedearnings

4,114

Treasury shares

87,733

(570)

Total
shareholders'equity103,628－

12,3504,114

87,733(570)

103,628

Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares(6,168)(6,168)

8,320

8,320
(0)

(0)
－
－

Disposal of treasury shares
Cancellation of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes in items other thanshareholders' equity
Total changes during period

96

96
4,211

－
12,350

Balance at end of period

96

2,151
89,885

(0)
(571)

2,248
105,876

Accumulated other comprehensive income

Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Valuationdifference on
available-for-salesecurities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

606

(733)

69

Remeasurementsof defined benefit
plans

(26)

Total
accumulated
othercomprehensive
income(84)

ShareacquisitionrightsNon-controllinginterests

Total net
assets219

1,397

105,160
－

606

(733)

69

(26)

(84)

219

1,397

105,160

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesCancellation of treasury
sharesChange in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period(6,168)
8,320
(0)
－
－
96
441

－

30

186

658

73

(225)

506

441

－

30

186

658

73

(225)

2,755

1,047

(733)

99

160

574

292

1,172

107,915

15

DAIICHIKOSHO

CO.,

LTD.

(4) Consolidated Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Impairment losses
Increase (decrease) in provision for retirement benefits for
directors (and other officers)
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assets
Subsidy income
Gain on bargain purchase
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Decrease (increase) in advance payments to suppliers
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies received
Income taxes paid
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 sale of property, plant and equipment
Purchase of intangible assets
Payments for acquisition of video licenses
Proceeds from sale of investment securities
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Payments for acquisition of businesses
Loan advances
Proceeds from collection of loans receivable
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

16

FY2021(From April 1, 2021, to
March 31, 2022)

FY2022(From April 1, 2022, toMarch 31, 2023)

7,695
11,840118
1,862

13,337
10,867
108
3,130

94

119

(220)
199
(64)
0
108
(23)
(15,206)
－
(554)
1,355
108
(74)
7
(3,577)
(254)
3,414
220
(199)
15,759(1,028)18,165

(155)
173
(26)
(0)
150
22
(2,928)(112)(1,233)(4,137)
49
(351)
2,330
2,318
918
24,581
155
(173)
3,096
(2,790)24,869(45)785(6,261)649(2,985)(1,283)
0
(50)

(334)
34
(7,462)333(3,199)(1,246)
0
－

(251)

－

－

143

(1,067)
(82)
383
(144)
643
412
(9,297)

(16)
(149)
212
(671)
356
(102)
(12,104)

DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

FY2021(From April 1, 2021, to
March 31, 2022)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Purchase of treasury shares
Purchase of shares of subsidiaries not resulting in change inscope of consolidation
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

17

FY2022(From April 1, 2022, toMarch 31, 2023)(1,855)
11,250(11,707)(6,162)(0)(2,235)130(1,052)(6,168)
(0)

－

(159)

(12)
(8,487)64
445
67,68068,125(7)(9,493)26
3,298
68,12571,423

DAIICHIKOSHO

CO.,

LTD.

(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.

(Changes in Accounting Policies)(Changes in estimates of asset retirement obligations)
In accordance with new information obtained such as recent construction results, estimates for costs required to return
locations to their original state when retiring stores have changed during the fiscal year under review. Due to these changes,
estimated restoration costs for some properties now exceed the leasehold and guarantee deposits under building leaseagreements, etc., thus precluding the previously used accounting method, whereby in lieu of calculating asset retirement
obligation liabilities, reasonable estimates were made for leasehold and guarantee deposits that could be expected not to be
returned and the burden for fiscal years in question included as expenses (hereafter referred to as “simplified treatment”).
As a result, we have switched to a standard accounting treatment for the properties in question as of the end of the fiscal
year under review.
Due to changes in estimates and this change from simplified to standard treatment, asset retirement obligations included
in other under current liabilities and asset retirement obligations under non-current liabilities increased by 82 million yen
and 2,018 million yen, respectively, on consolidated balance sheets for the fiscal year under review.
Additionally, this change in estimates resulted in an impairment loss being posted for property, plant and equipment,
and as a result profit before income taxes decreased by 516 million yen on consolidated statements of income for the fiscal
year under review.
Additionally, due to this change in estimates, the amount of leasehold and guarantee deposits not expected to berefunded as per simplified treatment increased by 719 million yen.

(Consolidated Statements of Income)Subsidy income
Following the issuance of the declaration of state of emergency due to the spread of COVID-19, employment
adjustment subsidies, which are subsidies that are provided to cover salaries, etc. for the period during which employees are
furloughed, as well as subsidies, etc. that are received from the national government, local municipalities, etc., have beenposted in subsidy income.
Loss on COVID-19
Following the issuance of the declaration of state of emergency due to the spread of COVID-19, we implemented ameasure to furlough (special leave of absence) employees in predetermined areas. In addition, karaoke cabins andrestaurants operated by the Company as well as those operated by our clients closed temporarily or opened for shorter hours,
following the requests from the national government and local municipalities.
In light of these events, fixed costs of karaoke cabins and restaurants operated by the Company during the period ofclosure and fixed costs in relation to leasing of commercial karaoke equipment, including salaries for the period during
which employees were furloughed, have been posted in loss on COVID-19.

(Segment Information)
1. Overview of reportable segments
Reportable segments of the Group consist of units for which separate financial information is available and are regularly
reviewed by the Company’s Board of Directors to determine allocation of management resources and evaluate
performance.
The Group operates business headquarters by product and service at its head office, each of which formulates acomprehensive strategy for its products and services and performs business activities.

18

DAIICHIKOSHO

CO.,

LTD.

Accordingly, the Group consists of segments by product and service based on business headquarters, and has threereportable segments, namely, the Commercial Karaoke business, the Karaoke Cabin and Restaurant business and the Music
Software business.
The Commercial Karaoke business sells and leases commercial karaoke equipment, and provides on-demand karaoke
video and audio contents. The Karaoke Cabin and Restaurant business operates karaoke cabins and restaurants. The Music
Software business produces and sells music and visual software.
2. Information on the calculation method for the amounts of sales, profit or loss, assets, liabilities and other items byreportable segment
Segment profit is based on operating profit.
Assets are not allocated to business segments.

19

DAIICHIKOSHO

CO.,

LTD.

3. Information on the amounts of sales, profit or loss, assets, liabilities and other items by reportable segment

FY2021 (From April 1, 2021, to March 31, 2022)(Millions of yen)
Commercial
karaoke

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other(Note 1)

Total

Adjusted
amount(Note 2)

Postedamount to theconsolidated
statements ofincomeSales
Sales to third parties
Intersegment sales
and transfers
Total
Segment profit orSegment loss (Operating
profit or Operating loss)
Other items
Depreciation andamortization
Amortization of
goodwill

Notes:

53,18824,402

6,029

83,62011,166

94,787－

94,787

－

－

－

－

－

－

－

－

53,18824,402

6,029

83,62011,166

94,787－

94,787

12,186(11,299)

79

966

1,006

1,973

(2,262)

(289)

7,091

2,233

23

9,349

677

10,026163

10,190

－

46

－

46

72

118

－

118

1. The category “Other” comprises a business segment not attributed to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (2,262) million yen adjustment posted to segment profit or segment loss is primarily composed ofgeneral and administrative expenses incurred by the administrative department at the head office that are
not attributable to any particular reportable segment.

FY2022 (From April 1, 2022, to March 31, 2023)(Millions of yen)
Commercial
karaoke

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other(Note 1)

Total

Adjusted
amount(Note 2)

Postedamount to theconsolidated
statements ofincomeSales
Sales to third parties
Intersegment sales
and transfers
Total
Segment profit orSegment loss (Operating
profit or Operating loss)
Other items
Depreciation andamortization
Amortization of
goodwill

Notes:

57,731

51,584

6,430

115,745

12,411

128,156－

128,156

－

－

－

－

－

－

－

－

57,731

51,584

6,430

115,745

12,411

128,156－

128,156

13,593(59)

228

13,762

1,581

15,343(2,388)

12,954

6,647

1,999

22

8,669

695

9,365

150

9,515

22

－

－

22

85

108

－

108

1. The category “Other” comprises a business segment not attributed to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (2,388) million yen adjustment posted to segment profit or segment loss is primarily composed ofgeneral and administrative expenses incurred by the administrative department at the head office that are
not attributable to any particular reportable segment.

20

DAIICHIKOSHO

CO.,

LTD.

(Per Share Information)
FY2021
FY2022(From April 1, 2021, to March 31, 2022) (From April 1, 2022, to March 31, 2023)
Net assets per share

948.33 yen

974.95 yen

Basic earnings per share

47.61 yen

76.21 yen

Diluted earnings per share

47.54 yen

76.08 yen

Notes:

1. Shares were split on April 1, 2023 at a ratio of 2 for 1 common share. Net assets per share, basic earnings
per share and diluted earnings per share were calculated as if said split had been carried out at the
beginning of the previous fiscal year.
2. The basis of calculation of basic earnings per share and diluted earnings per share are as follows:
FY2021
FY2022(From April 1, 2021, to March 31, 2022) (From April 1, 2022, to March 31, 2023)

Basic earnings per share
Profit attributable to owners of parent(Millions of yen)

5,196

8,320

－

－

Profit attributable to owners of parent relating
to common shares(Millions of yen)

5,196

8,320

Average number of common shares during theperiod (Thousand shares)

109,151

109,185

Adjustment to profit attributable to owners ofparent (Millions of yen)－－

Increase in number of common shares(Thousand shares)

161

179

[Of which, share acquisition rights](Thousand shares)

[161]

[179]

－

－

Amount not attributable toshareholders (Millions of yen)commonDiluted earnings per share

Overview of potential shares not included in thecalculation of diluted earnings per share due tolack of dilutive effect(Significant Subsequent Events)(Stock Split and Partial Amendments to the Articles of Incorporation in Connection with Stock Split)
At a meeting of the Board of Directors held on February 8, 2023, the Company resolved and carried out matters relating
to a stock split and partial amendment of the Articles of Incorporation in connection with said stock split, as described
below.

(1) Purpose of the stock split
The purpose of the stock split is to increase the liquidity of the Company’s shares and broaden the investor base by
reducing the amount per investment.

21

DAIICHIKOSHO

CO.,

LTD.

(2) Method of the stock split
With March 31, 2023, as the record date, each share of the Company’s common stock held by shareholders who arerecorded in the shareholders registry as of the end of March 31, 2023, will be split at a ratio of 2 for 1.

(3) Number of shares to be increased by the stock split
Total number of shares issued before the stock split
Number of shares to be increased by the stock split
Total number of shares issued and outstanding after the stock split
Total number of shares authorized after the stock split

54,734,200 shares
54,734,200 shares
109,468,400 shares
400,000,000 shares(4) Schedule for the stock split
Date of public notice of record date
Record date
Effective date

March 1, 2023
March 31, 2023
April 1, 2023

(5) Effect on per share information
The effect on per share information is listed under “(5) Notes to Consolidated Financial Statements (Per ShareInformation).

(6) Partial amendment to the Articles of Incorporation in connection with the stock split
1) Reason for the amendment to the Articles of Incorporation
Following the stock split, the total number shares authorized to be issued defined in Article 5 of the Company’s Articles
of Incorporation shall be changed as of April 1, 2023, according to Article 184, Paragraph 2 of the Companies Act.
2) Details of amendments to the Articles of Incorporation
Details of the changes are as follows. (Amended parts are underlined.)
Current Articles of Incorporation

After the Amendment(Total number shares authorized to be issued)
Article 5. The total number shares authorized to be issued
by the Company shall be 200,000,000 shares.

Article 5. The total number shares authorized to be issued
by the Company shall be 400,000,000 shares.

3) Schedule of amendments to the Articles of Incorporation
Effective Date April 1, 2023
(Repurchase of Treasury Shares)
At a meeting of the Board of Directors held on February 8, 2023, the Company resolved and carried out matters relating
to the repurchase of treasury shares under Article 156 of the Companies Act as applied mutatis mutandis pursuant to Article
165, Paragraph 3 of the Act as described below.

(1) Details of resolution by Board of Directors to repurchase treasury shares
1) Reason for the repurchase
To improve capital efficiency and return profits to shareholders
2) Type of shares to be repurchased
Common shares of the Company
3) Number of shares to repurchase (amount after stock split)
Up to 4,000,000 shares
4) Total amount of repurchase
Up to 6,000,000,000 yen

22

DAIICHIKOSHO

5) Period of the repurchase
From April 3, 2023, to September 30, 2023
6) Method of the repurchaseMarket purchase on the Tokyo Stock Exchange(2) April 3-30, 2023 implementation status (trade basis)
1) Number of shares repurchased: 475,100 shares2) Total amount of repurchase: 1,096,799,687 yen

23

CO.,

LTD.