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.

FY2023, the year ending March 31, 2024

Flash Report on the Consolidated Results for the First Quarter Ended June 30,2023 [JGAAP]
August 9, 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 to Submit the Quarterly Securities Report: August 10, 2023
Start Date for Dividend Payment: ―Availability of Supplementary Briefing Material on Quarterly Financial Results: None
Schedule of Quarterly Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Three Months Ended June 30, 2023 (From April 1, 2023, to June30, 2023)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Three months ended June30, 2023
Three months ended June30, 2022

Operating profit

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

35,381

16.9

4,757

57.5

5,003

54.5

30,276

48.4

3,021

―

3,237

―

Profit attributable toowners of parent

Basic earnings per share

Diluted earnings per share

Millions of yen
%
Yen
Yen
Three months ended June
3,443
1.6
31.73
31.67
30, 2023
Three months ended June
3,390
31.05
31.01
―
30, 2022(Notes) 1. Comprehensive income:Three months ended June 30, 2023: 3,796 million yen 9.7%
Three months ended June 30, 2022: 3,458 million yen ― %2. 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.

(2) Consolidated financial position
Total assets
As of June 30, 2023
As of March 31, 2023

Net assets

Millions of yen

Millions of yen

173,515
188,623

105,591
107,9151

Equity ratio
%
60.0
56.4

DAIICHIKOSHO(Reference) Shareholders’ equity:
As of June 30, 2023:
As of March 31, 2023:

CO.,

LTD.

104,115 million yen
106,451 million yen

2. Dividend
First Quarter
Yen――

Second Quarter
Yen
56.00

Annual dividend
Third Quarter
Yen―

Year-end
Yen
57.00

AnnualYen
Year ended March 31, 2023
113.00Year ending March 31, 2024
Year ending March 31, 2024
28.00
29.00
57.00
―
(forecast)(Notes) 1. Changes in dividends forecast from most recently announced figures: None
2. 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, 2023.

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%%%

71,000

17.0

8,900

62.7

9,400

62.8

144,500

12.8

18,00038.9

19,10040.4

Profit attributable toowners of parent

Basic earnings per share%
Yen
Six months ending
6,400
6.8
59.29
September 30, 2023
Year ending March 31,
12,70052.6
117.652024 (full year)(Note) Changes in forecast of consolidated performance from most recently announced figures: Yes
For the revision of the forecast of consolidated performance, please refer to “Notice on the Revision of
Performance Forecast,” which was announced today (August 9, 2023).
Millions of yen

2

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 of
109,468,400 As of
109,468,400(including treasury
June 30, 2023
shares March 31, 2023
sharesshares)As of
1,521,607 As of
282,604
2) Number of treasury
June 30, 2023
shares March 31, 2023
sharessharesThree months ended
108,547,545 Three months ended
109,185,880
3) Average number ofJune 30, 2023
shares June 30, 2022
sharesshares during the period(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.
* These consolidated financial results are outside the scope of quarterly review 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 “Explanation of Forecastof Consolidated Performance and Other Forward-looking Information” on page 7 of the Attachments.

3

DAIICHIKOSHO

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(Notes on Going Concern Assumption) ................................................................................................. 12(Notes in Case of Significant Changes in Shareholders’ Equity) ........................................................... 12(Segment Information) ........................................................................................................................... 12(Quarterly Consolidated Statements of Income) .................................................................................... 13

4

DAIICHIKOSHO

CO.,

LTD.

1. Qualitative Information on Quarterly Performance(1) Explanation of Operating Results
In the three months ended June 30, 2023 (the “three months under review”), Japan’s economy showed signs of amoderate recovery due to the downgrading of the status of COVID-19 under the Act on the Prevention of Infectious
Diseases and Medical Care for Patients with Infectious Diseases in May and a recovery trend in consumer spending andcapital expenditures. The economic outlook, however, remains unclear mainly due to concerns that a downward swing in
the global economy could put pressure on Japan’s economy, as well as sharp fluctuations in exchange rates and price hikesof commodities.
In the karaoke industry, where DAIICHIKOSHO CO., LTD. (the “Company,” together with its subsidiaries, the“Group”) operates, while the negative impact of the COVID-19 pandemic waned, markets were on a recovery trend as awhole, mainly in the night business and the karaoke cabin markets, the Company’s mainstay markets.
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 35,381 million yen (up 16.9% year on year), operating profit was 4,757 million yen (up 57.5% year onyear), and ordinary profit was 5,003 million yen (up 54.5% year on year). Profit attributable to owners of parent amounted
to 3,443 million yen (up 1.6% year on year), as subsidy income of 1,675 million yen posted in the previous corresponding
period was absent in the three months under review.
(Millions of yen)

Net sales
Operating profit
Ordinary profit
Profit attributable to owners ofparentThree months ended
June 30, 2022
30,276
3,021
3,237

Three months ended
June 30, 2023
35,381
4,757
5,003

3,390

3,443

Year-on-year change% change

5,104
1,736
1,765

16.9%
57.5%
54.5%

53

1.6%

Operating results by segment are as follows.
(Commercial karaoke business)
In the commercial karaoke business, the Company sought to strengthen its stable profit base on the back of an
improvement in the business environment by increasing the number of equipment rentals and expediting the replacement ofprevious models with newer ones, which had slowed due to the impact of COVID-19. At the same time, we strived to
improve our Karaoke DAM products by further expanding our visual content, including live videos, animated videos, andmusic videos.
In such an environment, we launched LIVE DAM AiR, a successor of our flagship model, in April. With the expansionof the Ai Assistant function that allows users to queue a song and remotely operate the unit vocally through a microphone,
it is now compatible with speech in English, Chinese, and Korean. In addition, the Live Sound function, which reproduces
acoustic characteristics of actual concert venues, is now complemented by “Excite Live Hall,” which creates a huge chorusof several thousand persons singing together or engaging in call and response. These and other new functions that further
pursue the joy of singing received a favorable reception from users, and we have shipped more units than originally planned
since its release.
Furthermore, in the seniors’ market, the business environment improved as we could resume some of our door-to-doorsales activities targeting nursing facilities and others, which were not possible during the pandemic. We also focused on
utilizing the Internet by, for example, organizing online events periodically, in an effort to increase the number of units inoperation.
As a result, net sales increased by 7.4% year on year, owing to strong shipments of new products and steady increases in
the number of equipment rentals and the number of DAM units in operation, while operating profit decreased by 1.4% year
on year mainly due to an increase in selling, general and administrative expenses.

5DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Net sales
Operating profit

Three months ended
June 30, 2022
14,336
3,773

Three months ended
June 30, 2023
15,393
3,719

Year-on-year change% change

1,056
(53)

7.4%
(1.4%)(Karaoke cabin and restaurant business)
In the karaoke cabin and restaurant business, we opened two karaoke cabins and two restaurants and closed two
restaurants, and we operated 510 karaoke cabins and 171 restaurants as of the end of the three months under review.
Thanks to the downgrading of the status of COVID-19 under the Act on the Prevention of Infectious Diseases andMedical Care for Patients with Infectious Diseases in May, we have seen a recovery trend in the flow of customers since thebeginning of the three months under review. During the three months under review, existing karaoke cabin sales recovered
to a level approximately 10% lower than before the COVID-19 pandemic and restaurants to a level approximately 10%
higher, for an approximately 25% increase for karaoke cabins and approximately 35% increase for restaurants, year on
year.
Under such circumstances, for BIG ECHO karaoke cabins, which will mark its 35th anniversary in September, we tried
to bring back customers visiting karaoke cabins less frequently than before, through collaboration with popular artists suchas Yuuri and Momoiro Clover Z, while at the same time introducing the top-end model, LIVE DAM AiR, early andequipping BIG ECHO app with the Denmoku function, in an effort to enhance customer satisfaction.
For restaurants, we made efforts to increase customer traffic in a wide-ranging manner by, for example, expanding thecall center function to win more reservations for banquets and opening darts businesses (DARTS ONE Ueno Ekimae-ten,
REGALO Shinjuku Higashiguchi-ten). As a result, net sales increased by 32.1% year on year, and operating profit
amounted to 1,219 million yen.
(Millions of yen)

Net sales
Operating profit

Three months ended
June 30, 2022
11,365(530)

Three months ended
June 30, 2023
15,012
1,219

Year-on-year change% change

3,647
1,750

32.1%
―

(Music software business)
In the music software business, product sales of CDs and DVDs and the TV program production business made steadyprogress, while the music industry has been booming again as events and concerts have started to resume.
As a result, net sales decreased by 0.8% year on year and operating profit increased by 5.0% year on year.
(Millions of yen)

Net sales
Operating profit

Three months ended
June 30, 2022
1,582
58

Three months ended
June 30, 2023
1,571
61

Year-on-year change(11)2% change(0.8%)
5.0%(Other businesses)
In the other businesses, the parking business operating “The Park” brand as its new pillar of revenue made steadyprogress, and the business scale expanded to more than 2,100 parking facilities and 27,000 parking spots as of the end of thethree months under review.
As a result, net sales increased by 13.8% year on year owing to factors such as an increase in revenue from the parking
business, and operating profit increased by 1.6% year on year.
(Millions of yen)

Net sales
Operating profit

Three months ended
June 30, 2022
2,990
407

Three months ended
June 30, 2023
3,404
414

6

Year-on-year change413
6% change
13.8%
1.6%

DAIICHIKOSHO

CO.,

LTD.

(2) Explanation of Financial Position
Total assets at the end of the three months under review decreased by 15,107 million yen from the end of the previous
fiscal year to 173,515 million yen.
Major changes from the previous fiscal year were a decrease in cash and deposits by 19,964 million yen, and anincrease in prepaid expenses included in “other” by 1,868 million yen, in current assets.
In non-current assets, karaoke equipment for rental and karaoke cabin and restaurant facilities increased by 925 million
yen and 781 million yen, respectively.
Liabilities decreased by 12,783 million yen from the end of the previous fiscal year to 67,924 million yen.
Major changes from the previous fiscal year were decreases in notes and accounts payable – trade and income taxes
payable by 841 million yen and 1,351 million yen, respectively, in current liabilities.
In non-current liabilities, long-term borrowings decreased by 9,895 million yen.
Net assets decreased by 2,324 million yen from the end of the previous fiscal year to 105,591 million yen.
The decrease is primarily attributable to an increase in retained earnings of 3,443 million yen due to profit attributableto owners of parent, a decrease in retained earnings of 3,111 million yen due to the dividends of surplus, and a decrease of
3,012 million yen due to purchase of treasury shares.

(3) Explanation of Forecast of Consolidated Performance and Other Forward-looking Information
For the forecast of consolidated performance for the six months ending September 30, 2023, and the year ending March
31, 2024, please refer to “Notice on the Revision of Performance Forecast,” which was announced today (August 9, 2023).
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.

7

DAIICHIKOSHO

CO.,

LTD.

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

FY2022(As of March 31, 2023)
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
Land
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, 2023)

71,812
5,367
11,735
4,888(374)
93,42951,847
5,608
11,682
7,218(338)
76,0186,306
9,192
40,2186,574
62,292

7,232
9,974
40,218
6,796
64,221

606
6,056
6,663

588
5,871
6,459

4,914
14,477
6,986(140)
26,237
95,193
188,623

5,358
14,4707,126(138)26,816
97,497
173,515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

FY2022(As of March 31, 2023)

Current First quarter(As of June 30, 2023)

4,954
13,511
3,106
1,151
12,56435,288

4,113
13,376
1,754
629
12,88332,757

31,135

21,239

1,113

607

7,991
2,018
3,160
45,41980,707

8,129
1,971
3,218
35,16767,924

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

12,3504,211
90,217(3,583)103,195

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

1,339
(733)
155
159
920
303
1,172
105,591
173,515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
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
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Subsidy income
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 June30, 2022 (From April 1,
2022, to June 30, 2022)

Three months ended
June 30, 2023 (FromApril 1, 2023, to June 30,2023)

30,276
19,417
10,8587,837
3,021

35,381
22,35513,026
8,269
4,757

3
67
50
－
211
332

3
10
60
19
222
316

43
18
1
51
115
3,237

37
－
2
30
70
5,003

0
1,675
1,675

1
－
1

6
4
10
4,902
1,135
366
1,501
3,401
10
3,390

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

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 June30, 2022 (From April 1,
2022, to June 30, 2022)

Three months ended
June 30, 2023 (FromApril 1, 2023, to June 30,
2023)

3,401

3,450

(0)
49
8
57
3,458

291
55
(1)
345
3,796

3,448

3,789

10

6

DAIICHIKOSHO

CO.,

LTD.

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

(Notes in Case of Significant Changes in Shareholders’ Equity)
Pursuant to a resolution at the Board of Directors meeting held on February 8, 2023, the Company purchased 1,238,900
treasury shares. With this purchase and other factors, the amount of treasury shares increased by 3,012 million yen during
the three months ended June 30, 2023 and treasury shares amounted to 3,583 million yen at the end of the three months
under review.

(Segment Information)[Segment information]
Three months ended June 30, 2022 (From April 1, 2022, to June 30, 2022)
1. Information on the amounts of net sales and profit or loss by reportable segment(Millions of yen)
Reportable segments

Net sales
Segment profit orSegment loss
(Operating profit orOperating loss)

Notes:

Commercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other(Note 1)

Total

14,336

11,365

1,582

27,2852,990

30,276

3,773

(530)

58

3,300

407

3,708

Adjusted
amount(Note 2)

Postedamount to theconsolidated
quarterlystatements ofincome30,276
(687)

3,021

1. The category “Other” comprises a business segment not attributable to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (687) 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.

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, 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 orOperating loss)

Notes:

Adjusted
amount(Note 2)

Postedamount to theconsolidated
quarterlystatements ofincomeCommercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other(Note 1)

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

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 (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.

12

DAIICHIKOSHO

CO.,

LTD.

(Quarterly 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.

13