Vol.

48

2022.4.12022.9.30

Securities Code: 7458

To Our Stakeholders

TOP MESSAGE
Let me take this opportunity to express my appreciation to our shareholders for their continued support.
There was a sharp increase in the number of new cases of COVID-19 in July, with the disease continuing to spread following its emergence at the end of 2019.
However, since the lifting of priority measures to prevent the spread of the disease in March of this year, no restrictions have been imposed by the government on theoperations of our Group’s stores or those of our customers’ stores, and during the second quarter, both our commercial karaoke business and our karaoke room andrestaurant business, which are our main businesses, showed a recovery trend.
Under these circumstances, the Group has been working on a variety of measures with two key tasks for the current fiscal year: to recover the number of DAM
online karaoke operating units, which declined due to the COVID-19 pandemic, and to return the karaoke room and restaurant business to profitability. Based on the
results up to the second quarter, we are seeing significant progress.
In the commercial karaoke business, in addition to face-to-face sales, which is one of the Company’s strengths, we strived to build a sales structure that alsoutilizes the Internet and to strengthen DAM’s product appeal by further enhancing video content, including live performances and animation, such as the new “LIVIEW!”In the karaoke room and restaurant business, the Group strengthened its facilities by introducing the premium LIVE DAM Ai model, and in addition to attracting
customers by using SNS to appeal to a wide range of customers, including students, we are also focusing on the development of new types of restaurants.
Furthermore, the scale of the parking business, which we are focusing on as the third pillar of our business, is steadily expanding.
Although it is expected to take some time for the COVID-19 pandemic to be completely contained, the business environment is steadily recovering compared to theprevious periods. Now is the time for us to widely promote the value of karaoke as “an indispensable service for society that contributes to people’s mental and physicalhealth” in addition to “the joy of singing” as our mission. In October, we formed this desire into a new Group corporate message, “Singing as we go,” and announced it on
our website and in other media.
As a leading company in the karaoke industry, the Company will continue to grow by further enhancing the appeal of karaoke under the corporate philosophy of “moremusic to society, more service to society,” and by contributing to the development of the entire karaoke industry as well as to the resolution of societal issues.
We ask for your continued support and understanding.
President

DAIICHIKOSHO Group’s New Corporate Message

Singing as We Go
Let’s sing as we go everyday. If we sing, tomorrow will be a better day.
We have formulated a new Group corporate message based on our desire for ever yone
to enjoy karaoke more, as it energizes the body and mind. We will continue to spread thewonderful power of singing throughout society and help enrich people’s day-to-day lives
through a variety of actions centered on this message.
Special website launchedhttps://www.clubdam.com/singing/

Tadahiro Hoshi

INTERVIEW
Director and Senior Corporate Officer, General Manager of Sales Management Headquarters

Interview with Kenji Otsuka

Sales structure under the impact of COVID-19

In addition, based on our Basic Policy on Sustainability, the Grouphas raised “extending healthy life expectancy” and “enhancing quality of

Almost three years have passed since COVID-19 began to spread. During

life” as key issues, and the promotion of karaoke to the market for elderly

this period, the karaoke industry has been severely affected, primarily byresidents is part of this policy. Specifically, we are introducing karaoke

declarations of a state of emergency.

equipment to community centers, day service facilities, and nursing care

On the other hand, despite the various restrictions on day-to-day life,

facilities for elderly residents as we believe that there is a strong needcustomers are steadily returning to karaoke every time a declaration or otherfor karaoke in these facilities. The DK ELDER SYSTEM can also be usedmeasure is lifted. The COVID-19 pandemic has helped us to realize once

as a regular karaoke system, and is equipped with many contents based

again that songs are an inseparable part of day-to-day life and that karaokeon evidence from research conducted jointly with universities, etc. This is

has taken root as a familiar culture that can be enjoyed by all.

greatly appreciated by facility staff, who are struggling with recreational

Amid these circumstances, the Sales Management Headquarters has

activities for the facility users. The newest model, FREE DAM LIFE, launchedovercome this crisis hand-in-hand with our customers by continuing our face-in this October, is equipped with an automatic function “Omakase-rec” that

to-face marketing that is closely linked to each region through the provision

plays recreation programs that suit the user’s motor functions and otherof infection prevention products and other measures. In addition, we havefactors, as well as a remote session function that allows sessions to be held

made the preparations that can be made in the face of the temporar y

between distant facilities, which we hope will help improve the environment

shrinkage of the market due to the COVID-19 pandemic, such as establishingat nursing facilities.

the “Karaoke no Madoguchi” (consultation desk for karaoke) and “YorumiseNavi” (search navigation for properties for night entertainment) and building

We are striving to return the number of DAM units in operation toa sales structure utilizing the Internet. The parking business, which we began

the level seen before the decline due to the COVID-19 pandemic, as one

promoting nationwide about six years ago, is also steadily expanding, backedof our key tasks for the current fiscal year. We are also working to boost

by our longstanding business activities that are closely linked to each region.

the recovery of existing markets, such as snack bars and karaoke rooms,
while developing the seniors’ market and other growth markets, as well

Conveying the wonderful power of singing to all ofsociety
The impact of the COVID-19 infection on the economy has been graduallydiminishing.
In response to this situation, we have formulated a new Group
corporate message: “Singing as we go.” This message expresses our desire

as creating new places to sing. In addition, we believe that expanding ourstable business base by strengthening the parking business as the third
pillar of our business, utilizing our nationwide sales network, will lead to thedevelopment of DAIICHIKOSHO.
We will continue to increase the value of karaoke and singing, and wewill implement measures to contribute to the resolution of societal issues byinvigorating the karaoke industry.

for everyone to enjoy karaoke more, as it energizes the body and mind.
One of our efforts to realize this desire is the provision of Harmony
microphones, which have been redesigned into pink and white versions.
Black is the color that has generally been associated with microphones, but
we aim to promote the value of karaoke with the bright, clean, and vibrantHarmony microphones. Hoping to contribute to the development of theConsultation service to support the installationof karaoke equipment in stores and facilities

karaoke industry by making karaoke more accessible to a wider range of
people than ever before, we have already switched out the microphones inall rooms of our BIG ECHO store to the latest Harmony microphones, and are
introducing the microphones not only in karaoke rooms but also in snackbars and other customer outlets.

Information website about rental properties
for use as snack bars and clubs.

CLOSE-UP
LIVE DAM Ai
The Company puts its utmost efforts into supporting
anime and voice-actor content with DAM!
In pursuit of the enjoyment factor of karaoke, the Company has been striving to enhance visualcontent, such as live videos and music videos. As part of these efforts, we launched the DAM
Anime Club in April to enable customers to enjoy anime songs and voice-actor content more thanever at karaoke.
The DAM Anime Club’s official Twitter account will provide information on anime and voiceactors, and together we will create karaoke tracks that you want to sing.
In addition, more than 200 voice actors have participated in “Anison Vocal,” DAM’s uniquecontent in which popular voice actors sing animation songs that they have chosen, and more than
300 songs have been available.
DAM will continue to enhance
anime and voice-actor content,
as well as other content thatmaximizes the enjoyment of
karaoke.

©Tatsuki Fujimoto / Shueisha/MAPPADK ELDER SYSTEM
The latest FREE DAM LIFE model is now available.
On Octo b e r 4, 2022, we l a u n c h e d F R E E D A M L I F E , th e l a te s t m odel dedi c at ed t o t he D K ELD E R S YS TE M , acomprehensive lifestyle functional improvement device currently used in more than 25,500 facilities for the elderly.
In addition to beautiful images and clear sound, the new model is an evolution of the lightweight and highly usable
FREE DAM, equipped with a wide variety of content and a significantly increased number of recreation programs.

Enhancement of music and video contents
More than 130,000 songs are available and so are more than 1,450 video contents. More than 1,200 elder systemcontents are available to support functional training and prevent the need for nursing care.
Songs
Over

130,000

Songs with guide vocal
Over

10,000

Video contents
Over

1,450

Elder system contents
Over

1,200
*As of October 2022

The newly-launched FREE DAM app is ana pplic a t i o n e xc l u s i ve f or F R E E D A M L I F E th a t
a llo w s u s e r s t o s e a r c h f o r s o n g s , a n d c r e a te ,register and reserve recreation programs fromthe ir s ma r t p h o n e s a n d oth e r d e v i c e s w i th o u thaving to operate the DAM system.
Screenshot of the FREE DAM app main menu

Official DK ELDER SYSTEM website
https://dk-eldersystem.com/

NEWS DIGESTBIG ECHO’s latest initiatives
Utilization of SNS and launch of the “Saikyo Gakuwari (Best student discount)”
In September, BIG ECHO became the first karaokeroom operator to launch an official TikTok accounta nd w e a r e ma ki n g e f f o r ts to c o n v e y th e fu nfactor of karaoke by utilizing social networking
services including Twitter.
In addition, we will continue to implement
measures to provide opportunities to experience
the enjoyment and pleasure of singing, including
the “Saikyo Gakuwari (Best student discount)”
offered at all stores.
TikToktwitter

New business model in the restaurant businessNew business model featuring freshly fried tempura and shochu on tap

Japanese-style tap bar “Gin ten” opened on September 16.
On September 16, 2022, a Japanese-style tap bar “Ginten” opened on Ginza Corridor Gai. At
Ginten, customers can enjoy healthy tempura and a wide variety of atemaki (a kind of rolledsushi as nibbles for drinks). A table-top tap allows customers to pour any amount of shochu
they want at any time, which is available with no additional charge for 60 minutes, so there
is no waiting time hindering the enjoyment of unlimited drinks. The interior of the restaurant
features a clean, white, wooden counter and table seating area, and blue mosaic tiles are used
as a point of interest to create a stylish yet comfortable space that evokes a sense of nostalgia.
We will continue to develop attractive stores and services that meet customer needs andlocation characteristics, and aim to attract more customers by pursuing customer satisfaction.

Parking business THE PARK

Sustainability at DAIICHIKOSHOThe Company is promoting its coin parking business, which
utilizes the business network of karaoke that is closely

Disclosure based on the TCFD recommendations

linked to each region, under the name THE PARK. Roll out of

We will analyze the risks and opportunities posed by climate

the business is progressing well having grown to encompass

change, reflect them in our management strategies and risk

1,900 facilities and 23,000 parking spaces as of the end ofmanagement, and disclose our progress in order to contribute to the

September 2022. Going forward, it will continue growing as

decarbonization of society as a whole while aiming for further growth.

a new pillar of the DAIICHIKOSHO Group.
Trends of number of facilities and number of parking spaces

See our website for details.

■ Number of parking spaces (right axis) ● Number of facilities (left axis)

2,500

25,0001,500

15,000

500

5,000

0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022/90

https://www.dkkaraoke.co.jp/english/csr/
environment/

FINANCIAL HIGHLIGHTS
2021/3Item

2022/32023/3

Second quarter Fourth Quarter Second quarter Fourth Quarter Second quarter Fourth Quarter(Forecast)

Operating results (Millions of yen)
Net sales

42,778
1,642
3.8
746
3,881

93,316
2,693
2.9
1,194
18,782

39,529
1,945
4.9
1,176
1,429

94,787
289
0.3
888
5,196

60,671
5,469
9.0
5,773
5,990

126,500
12,0009.5
12,80010,000207,328
127,384

186,795
106,030

176,804
101,733

180,389
105,160

184,480
108,286

−
−

1,595
5,555
31,511
71,593

7,755
9,539
22,174
67,680

1,606
5,049
3,314
57,715

18,1659,297
8,487
68,125

11,367
5,901
3,500
70,124

−
−
−
−

69.38
2,259.18
56.00

338.54
1,912.19
57.00

26.20
1,834.75
56.00

95.21
1,896.65
57.00

109.73
1,953.02
56.00

183.17−57.00

Payout ratio

−
−
60.6
−

0.6
15.7
55.8
−

−
−
56.7
−

0.5
5.0
57.4
118.7

−
−
57.8
−

−
−
−
61.7

Net sales (Millions of yen)

Operating profit (Millions of yen)

Operating profit
Operating profit to net sales (%)
Ordinary profit
Profit attributable to owners of parent
Financial position (Millions of yen)
Total assets
Net assets
Cash flows (Millions of yen)
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Cash and cash equivalents at the end of period
Per share data (Yen)
Basic earnings per share
Net assets per share
Dividend per share (interim/year-end)
Major management indicators (%)
Ordinary profit to total assets (ROA)
Return on equity (ROE)
Equity ratio

Second quarter

Fourth Quarter

Second quarter

Fourth Quarter

Second quarter

126,500

10,000(Forecast)

5,196(Forecast)

94,787

5,469

60,67142,778△3,881△289

39,529△1,642 △2,693 △1,945
2021/3

Fourth Quarter

12,000(Forecast)

93,316

Profit attributable to owners of parent (Millions of yen)2022/32023/32021/3

5,990△1,429△18,7822022/32023/32021/32022/32023/3

Overview by Segment

47.3%

Commercial Karaoke
Business

37.4%

Karaoke Room andRestaurant Business

28,716 百万円
Operating profit
7,472 百万円

22,702 百万円
Operating profit
1,671 百万円

Net sales (Millions of yen)

Net sales (Millions of yen)

Net sales

Second quarter

Fourth Quarter

Operating profit (Millions of yen)

Second quarter

Fourth Quarter

12,18653,18825,18328,7165,792

2022/32023/32022/3

Net sales

Second quarter

24,402

7,472

Fourth QuarterD ue to the reopening of customer stores andan increase in new store openings following thelifting of various COVID-related requests, thebusiness environment is trending toward
recovery, centered on stores operating at night,
such as snack bars, which are our main market.
Building a sales structure that also utilizes the Internet-“Karaoke no Madoguchi (consultation desk for
karaoke)”: Supporting the introduction of karaokeequipment; “Yorumise Navi (search navigation forproper ties for night enter tainment )”: Proper t y
information website for stores operating at night; Online
events for the seniors’ market such as nursing facilities.
W e strengthened DAM’s product appeal
by enhancing video contents such as live
videos, animation videos, and music
videos, including a new content “LIVIEW!”

2022/3

Second quarter

Fourth Quarter△1,671

22,7026,3312023/3Operating profit (Millions of yen)

5.3%

Music Software Business

3,221 百万円
Operating profit
98百万円

Net sales

Net sales (Millions of yen)

Second quarter

Fourth Quarter△6,981

2,717

3,221

2022/32022/32023/32023/3K araoke: 6 stores opened, 3 stores closed, 506 stores as of end of current period
Restaurants: 6 stores opened, 6 stores closed,
175 stores as of end of current periodA s various COVID-related requests were lifted in theprevious period, the number of customers at stores has been
gradually recovering since the beginning of the period.
In addition to the continued impact of COVID-19 on somebusiness locations and late-night hours, the impact of the“seventh wave” led to a decline, and sales at existing stores
were down approx. 30% in the second quarter compared topre-COVID-19 level (those in the same period of the previous
fiscal year were down 80% compared to pre-COVID-19 level).
W e improved facilities mainly by installing the premiumLIVE DAM Ai model in all karaoke rooms at 42 stores,
and we also focused on attracting young customers bylaunching the “Saikyo Gakuwari (Best student discount)”
at all stores in June and utilizing SNS.

Second quarter

79

6,029

△11,2992023/3Operating profit (Millions of yen)

10.0%

Other Businesses

6,030 百万円
Operating profit
788 百万円

Net sales

Net sales (Millions of yen)

Fourth Quarter

Second quarter

98

11,166

Fourth Quarter2023/3I n addition to the music industry regaining
vigor and product sales of CDs, DVDs, etc.
being on a recovery track, with events andconcerts starting to resume, the TV program
production business also performed well.

Second quarter

1,006

5,297

6,030

2022/32023/324
2022/3Operating profit (Millions of yen)

Fourth Quarter

788

374
2022/32023/3T he parking business, which operates underthe brand name THE PARK, performed wellwith a total of 1,900 facilities and 23,000
par k i ng spac es i n pl ac e at th e en d of th esecond quarter.

PICK UP! ARTIST Profiles of the DAIICHIKOSHO Group’s artists
Enka (Popular Ballad)/Kayokyoku (Pop Songs)

J-POP

Tetsuji Kimura

FES

The second son of Ichiro Toba, one of Japan’s leading enka
singers. Fascinated by enka since childhood, he has been
ac t iv e on stages numerous ti me s s i n ce h i g h s ch o o l . I n
2016, he formed the pop duo “Ryutetsu Nikki” with his older
brother Ryuzo. Their singing ability that transcended genres
attracted much attention. He decided to debut as a solo enka
singer while continuing his work with “Ryutetsu Nikki.” In his
debut song “Nidaime,”he delivers a powerful singing voice
as the successor of his father Ichiro Toba’s “Stout Enka.”

A festival idol unit formed in 2013. They
ha v e become r egular s a t lar ge idol
festivals such as TOKYO IDOL FESTIVAL
and @ J A M, and bo a s t t op-r ank ing
popularity. The Thailand-themed song
“Hohoemi no Kuni” has seen a significant
increase in the number of YouTube music
video views in Southeast Asian countries,
as well as in India, Turkey, Ukraine, andMexico. In addition, they received an official
invitation from the Tourism Authority ofThailand and held a solo concert.

TIVE

CORPORATE INFORMATION (as of September 30, 2022)
Corporate Profile

Executive Officers

Corporate name

DAIICHIKOSHO CO., LTD.

Established

April 16, 1973

Capital12,350 million yen

Number of
employees

Parent: 1,894
Group: 3,381

Description of main Commercial karaoke business, karaoke room and restaurant
businesses
business, music software business and other businesses
Consolidated
subsidiaries

Domestic sales subsidiaries: 26 companies
Other domestic subsidiaries: 12 companies
Overseas subsidiaries: 2 companies

Number of authorized shares

200,000,000 shares

Number of outstanding shares

54,734,200 shares

Director (outside)

Chika Masuda

Director

Harutoshi Hoshi

Corporate Auditor(standing, outside)

Hiroshi Umetsu

Director

Kenji Otsuka

Corporate Auditor(standing)

Fumiaki Koizumi

DirectorTakeshi Iijima

Corporate Auditor(outside)

Masumi Arichika

Director (outside)

Atsuya Furuta

Corporate Auditor(part-time)

Hiroyoshi Shibano■ Individual shareholders and others 40.21%■ Financial instruments business operators 1.90%■ Business companies and other corporations 9.08%

23,888

Number of shareholders■ Foreign companies and individuals 24.77%■ Financial institutions 24.04%

Shareholder Special Benefits

Major Shareholders
Number of shares held(Thousands of shares)

Shareholders recorded in the final shareholder registry on September 30, 2022 as holding 100
or more shares will be granted special benefits coupons according to the number of shares held.

Shareholding ratio(%)

The Master Trust Bank of Japan, Ltd.
(Trust account)

7,698

14.10

Tadahiro Hoshi

6,246

11.44

Harutoshi Hoshi

Tadahiro Hoshi

Shareholding Ratio by Category

Status of the Shares

Name of shareholder

President

6,119

Details of benefits

11.21

JP MORGAN CHASE BANK 380055

2,871

5.26

Hoshi Create Co., Ltd.

2,449

4.49

Issued semiannually
Special benefits coupon (*1)

Exchange with CD(s) (*2)

100 to 999 shares

Ten sheets of
500-yen coupon

1 CD

1,000 shares or more

25 sheets of
500-yen coupon

2 CDs

Number of shares held(*1) T he coupons can be used at BIG ECHO and KARAOKE MAC karaoke rooms and restaurants operated by the DAIICHIKOSHO Group
including RAKUZO, UMEKO-NO-IE, and BISTRO-YA.
(*2) C D albums are granted in exchange for total face value of coupons held.

Timing of delivery On or after December 2, 2022
Validity period

January 1, 2023 to June 30, 2023

* Shareholding ratio is calculated after deducting 142,602 treasury shares.

Information for Shareholders
Business term

From April 1 of each year to March 31 of the following year

Ordinary General Meeting of Shareholders

June of each year

Record date for the above

Ordinary General Meeting of Shareholders: March 31
Other occasions: Other record date separately determined asnecessary upon a public notice

Record date of shareholders toreceive dividends from surplus

Year-end dividend: March 31
Interim dividend: September 30

Number of shares constituting one unit

100 shares

Electronic public notice

Method of public notice

If it is impracticable to provide an electronic public notice because of an accident or any
other unavoidable reason, a public notice will be provided in the Nihon Keizai Shimbun.

Transfer agent and account management
institution for the special account

Mitsubishi UFJ Trust and Banking Corporation

Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Division
1-1 Nikko-cho, Fuchu-shi, Tokyo
Telephone: 0120-232-711 (toll-free in Japan only)
Contact of above
Postal address:(postal address and telephone number)
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Division
Shin-Tokyo Post Office, PO Box No. 29,
137-8081, Japan

Location: 5-5-26 Kitashinagawa, Shinagawa-ku, Tokyo 141-8701, Japan
Telephone: +81-3-3280-2151 (switchboard)