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 ending March 31, 2023

Flash Report on the Consolidated Results for the First Quarter Ended June 30,
2022 [JGAAP]
August 8, 2022

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 12, 2022
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, 2022 (From April 1, 2022, to June30, 2022)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales

Operating income

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

30,276

48.4

3,021

―

3,237

―

20,39722.5(1,149)

―

(602)

―

Three months ended
June 30, 2022
Three months ended
June 30, 2021

Net income attributable toowners of parent
Millions of yen%

Yen

Fully diluted net income
per share
Yen

62.11

62.02

(5.95)―

Basic earnings per share

Three months ended
3,390―
June 30, 2022
Three months ended(324)―
June 30, 2021
(Note) Comprehensive income:Three months ended June 30, 2022: 3,458 million yen ― %Three months ended June 30, 2021: (82) million yen ― %(2) Consolidated financial position
Total assets
As of June 30, 2022
As of March 31, 2022
(Reference) Shareholders’ equity:
As of June 30, 2022:
As of March 31, 2022:

Net assets

Millions of yen

Millions of yen

181,175
180,389

105,518
105,160

103,880 million yen
103,543 million yen

1Equity ratio
%
57.3
57.4

DAIICHIKOSHO

CO.,

LTD.

2. Dividend
First Quarter
Yen――

Second Quarter
Yen
56.00

Annual dividend
Third Quarter
Yen―

Year ended March 31, 2022
Year ending March 31, 2023
Year ending March 31, 2023
56.00―
(forecast)(Note) Changes in dividends forecast from most recently announced figures: None

Year-end
Yen
57.00
57.00

AnnualYen
113.00113.003. Forecast of Consolidated Performance for FY2022, the Year Ending March 31, 2023 (From April
1, 2022, to March 31, 2023)
Net sales
Millions of yen

Six months ending
September 30, 2022
Year ending March 31,
2023 (full year)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen%%%

59,000

49.3

4,400

―

4,800

―

126,500

33.5

12,000―12,800―Net income attributable toowners of parent
Millions of yen%

Basic earnings per share

Yen
Six months ending
5,200
―
95.25
September 30, 2022
Year ending March 31,
10,00092.4
183.172023 (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 8, 2022).

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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 of54,734,200 As of
54,734,200(including treasury shares)June 30, 2022
shares March 31, 2022
shares2) Number of treasury shares
As of141,260 As of
141,260
3) Average number of shares
June 30, 2022
shares March 31, 2022
Sharesduring the period
Three months ended 54,592,940 Three months ended 54,523,771
June 30, 2022
shares June 30, 2021
shares* 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.

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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(Additional Information) ........................................................................................................................ 13(Quarterly Consolidated Statements of Income) .................................................................................... 13

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DAIICHIKOSHO

CO.,

LTD.

1. Qualitative Information on Quarterly Performance(1) Explanation of Operating Results
In the three months ended June 30, 2022 ( the “three months under review”), due to the gradual mitigation of impact of the
COVID-19 pandemic on economic activities, Japan’s economy saw signs of consumer spending and other matters back tonormal. The economic outlook, however, remains unclear as it is still not certain when the pandemic will end and due to therapid depreciation of the yen and surging prices of energy resources and raw materials.
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, many karaoke cabins andrestaurants both in the night business and the karaoke cabin markets resumed normal operation, and the markets were in arecovery trend as a whole, although there were still impacts of the pandemic on business locations, attracting customers late
at night and some other affairs.
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 30,276 million yen (up 48.4% year on year), operating income was recorded of 3,021 million yen (a lossof 1,149 million yen in the previous corresponding period), ordinary income was 3,237 million yen (a loss of 602 million
yen in the previous corresponding period), and net income attributable to owners of parent amounted to 3,390 million yen(a loss of 324 million yen in the previous corresponding period).
The Group posted 1,675 million yen of subsidies income covering the previous fiscal year (2,913 million yen in theprevious corresponding period) in extraordinary income from various subsidies, such as employment adjustment subsidies
and subsidies for shorter business hours.
The Group also plans to record approximately 1.2 billion yen from subsidies on the financial statements for the second
quarter and beyond of the fiscal year ending March 31, 2023.
(Millions of yen)

Net sales
Operating income
Ordinary income
Net income attributable toowners of parent

Three months ended
June 30, 2021
20,397(1,149)(602)

Three months ended
June 30, 2022
30,276
3,021
3,237

(324)

3,390

Year-on-year change% change

9,878
4,170
3,840

48.4%
―
―

3,715

―

Operating results by segment are as follows.
(Commercial karaoke business)
In the commercial karaoke business, due to the lifting of various requests followed by the resumption of operation of
our customers’ facilities and an increase in new store openings, the business environment was in the recovery trend
primarily in stores operating at night, such as snack bars, which are our main market.
In such an environment, in order to recover the number of DAM units in operation, which is the key challenge in thethree months under review, we opened a website to help owners of stores operating at night introduce karaoke equipment“Karaoke no Madoguchi (Consultation desk for karaoke)” in the previous fiscal year and a website providing property
information “Yorumise Navi (Search navigation for properties for night entertainment)” in April. In addition to face-to-facesales that is our strength, we also strived to build a sales system online by holding online events at nursing facilities in theseniors’ market and taking other steps.
In addition, we strived to improve our Karaoke DAM products by further expanding our visual contents such as live
videos, animated videos and music videos including “Liview!,” which was released in October last year and with whichusers can enjoy the atmosphere of live performances in karaoke cabins.
As a result, net sales and operating income increased by 10.8% and 19.9%, respectively, year on year.
(Millions of yen)

Net sales
Operating income

Three months ended
June 30, 2021
12,944
3,147

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

5Year-on-year change
1,392
625

% change
10.8％
19.9％

DAIICHIKOSHO

CO.,

LTD.

(Karaoke cabin and restaurant business)
In the karaoke cabin and restaurant business, we opened two restaurants and closed four restaurants in addition tochanging the business types of existing facilities, and we operate 503 karaoke cabins and 173 restaurants as of the end of thethree months under review.
Thanks to the lifting of various requests made due to the pandemic, we have seen the gradual return of customer flow
since the beginning of the three months under review, and the sales of existing karaoke cabins and restaurants in the threemonths under review recovered to the level of 30% lower than those before the COVID-19 pandemic (80% lower in theprevious corresponding period), although there were still impacts of the pandemic on business locations and attracting
customers late at night, among other impacts.
Under such circumstances, in BIG ECHO karaoke cabins, we strengthened our equipment by establishing 44 karaokecabins, of which “LIVE DAM Ai,” our most premium karaoke model, is installed in all rooms in order to improve customer
satisfaction by enhancing the appeal of karaoke. We also focused on attracting more young customers by advertising“Saikyo Gakuwari (Best student discount),” launched in all karaoke cabins in June.
As a result, net sales increased by 223.0% year on year, and operating loss was recorded at 530 million yen.
(Millions of yen)

Net sales
Operating income

Three months ended
June 30, 2021
3,519
(3,880)Three months ended
June 30, 2022
11,365(530)

Year-on-year change
7,846
3,349

% change
223.0%―(Music software business)
In the music software business, the product sales of CDs and DVDs saw a recovery trend while the music industry has
been booming again as events and concerts have gradually started to resume.
As a result, net sales and operating income increased by 15.2% and 25.2%, respectively, year on year.
(Millions of yen)

Net sales
Operating income

Three months ended
June 30, 2021
1,374
46

Three months ended
June 30, 2022
1,582
58

Year-on-year change% change

208
11

15.2%
25.2%

(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 1,800 parking facilities and 22,000 parking spots as of the end of the threemonths under review
As a result, net sales increased by 16.9% year on year thanks to the increase in income from the parking business, andoperating income increased by 108.3% year on year.
(Millions of yen)

Net sales
Operating income

Three months ended
June 30, 2021
2,559
195

Three months ended
June 30, 2022
2,990
407

6

Year-on-year change
431
211% change
16.9%
108.3%DAIICHIKOSHO

CO.,

LTD.

(2) Explanation of Financial Position
Total assets at the end of the three months under review increased by 785 million yen from the end of the previous fiscal
year to 181,175 million yen.
Major changes from the previous fiscal year were increases in notes and accounts receivable – trade and prepaid
expenses included in “other” by 394 million yen and 1,571 million yen, respectively, and decreases in cash and deposits
and inventories by 344 million yen and 220 million yen, respectively, in current assets.
Liabilities increased by 426 million yen from the end of the previous fiscal year to 75,656 million yen.
The primary increases and decreases are increases in notes and accounts payable- trade and accrued expenses included
in “other” by 298 million yen and 1,579 million yen, respectively, and decreases in income taxes payable and provision forbonuses by 760 million yen and 539 million yen, respectively, in current liabilities.
Net assets increased by 358 million yen from the end of the previous fiscal year to 105,518 million yen.
The increase is primarily attributable to an increase in retained earnings due to net income attributable to owners ofparent of 3,390 million yen and a decrease in retained earnings of 3,111 million yen due to the dividends of surplus.

(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, 2022, and the year ending March
31, 2023, please refer to “Notice on the Revision of Performance Forecast,” which was announced today (August 8, 2022)
The forecast was prepared based on information available on the date this report was released, and actual results mayvary from forecast values due to various factors in the future.

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DAIICHIKOSHO

CO.,

LTD.

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

FY2021(As of March 31, 2022)
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, 2022)

68,214
4,127
7,596
4,796
(457)
84,27767,869
4,521
7,375
5,850
(379)
85,238

6,294
10,38040,341
5,970
62,987

6,561
10,061
40,341
6,036
63,001

996
5,861
6,858

979
5,813
6,792

4,507
13,4498,375(64)26,267
96,112
180,389

4,516
13,697
8,067(139)
26,142
95,936
181,175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
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

FY2021(As of March 31, 2022)

Current First quarter(As of June 30, 2022)

2,614
6,098
1,985
1,141
9,817
21,6582,913
16,207
1,225
601
11,24932,19741,70531,481

993

984

7,846
3,024
53,57075,2297,932
3,060
43,45875,656

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

12,3504,114
88,012(570)
103,907

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

605
(733)
118
(17)
(26)
237
1,400
105,518
181,175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 (loss)
Non-operating income
Interest income
Insurance claim income
Cooperative monetary aid received
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Cancellation penalty
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Subsidies income
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Loss on COVID-19
Total extraordinary losses
Profit (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

10

Three months ended
June 30, 2021
(From April 1, 2021, toJune 30, 2021)

Three months ended
June 30, 2022
(From April 1, 2022, toJune 30, 2022)

20,397
14,4405,956
7,106(1,149)30,276
19,417
10,858
7,837
3,021

4
294
76
291
667

3
67
50
211
332

54
19
17
29
120
(602)

43
18
1
51
115
3,237

9
2,913
2,922

0
1,675
1,675

13
28
2,652
2,695
(375)
433
(496)
(62)
(312)
11
(324)

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

DAIICHIKOSHO

CO.,

LTD.

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

Profit (loss)
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 parent
Comprehensive income attributable to non-controllinginterests

11

Three months ended
June 30, 2021
(From April 1, 2021, toJune 30, 2021)

Three months ended
June 30, 2022
(From April 1, 2022, toJune 30, 2022)

(312)

3,401

196
22
10
229
(82)

(0)
49
8
57
3,458

(94)

3,448

11

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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)
Not applicable.

(Segment Information)[Segment information]
Three months ended June 30, 2021 (From April 1, 2021, to June 30, 2021)
1. Information on the amounts of sales and income or loss by reportable segment(Millions of yen)
Reportable segments

Sales
Segment income or
Segment loss
(Operating income or
Operating loss)

Notes:

Adjusted
amount(Note 2)

Postedamount to theconsolidated
quarterlystatements ofincomeCommercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other(Note 1)

Total

12,944

3,519

1,374

17,8382,559

20,397−

20,397

3,147(3,880)

46

(686)

195

(490)

(658)

(1,149)

1. The category “Other” comprises a business segment not attributable to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (658) million yen adjustment posted to segment income 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, 2022 (From April 1, 2022, to June 30, 2022)
1. Information on the amounts of sales and income or loss by reportable segment(Millions of yen)
Reportable segments

Sales
Segment income or
Segment loss
(Operating income or
Operating loss)

Notes:

Adjusted
amount(Note 2)

Postedamount to theconsolidated
quarterlystatements ofincomeCommercial
karaokeKaraokecabin and
restaurantMusic
softwareSubtotal

Other(Note 1)

14,336

11,365

1,582

27,2852,990

30,276－30,276

3,773

(530)

58

3,300

407

3,708

(687)

3,021

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 (687) million yen adjustment posted to segment income 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.

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DAIICHIKOSHO

CO.,

LTD.

(Additional Information)
Concerning the impairment of non-current assets, tax effect accounting, etc., the Company estimated future cash flows,
recoverability of deferred tax assets, etc. on the assumption that the impact of COVID-19 will gradually improvethroughout the fiscal year ending March 31, 2023, and that the performance of the Company will recover to the level before
the COVID-19 pandemic in the medium term.
No significant changes have been made to the assumptions made at the end of the previous fiscal year.

(Quarterly Consolidated Statements of Income)Subsidies 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 subsidies 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.

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