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.

FY2020, the year ending March 31, 2021

Flash Report on the Consolidated Results for the Second Quarter Ended
September 30, 2020 [JGAAP]
November 19, 2020

Company Name:
Stock Exchange Listing:Code Number:
URL:
Representative:
Contact:

DAIICHIKOSHO CO., LTD.
Tokyo Stock Exchange
7458
https://www.dkkaraoke.co.jp/Tadahiro Hoshi, President
Yasuhisa Nishihara,
Corporate Officer and General Manager, Accounting Department
Phone:+81-3-3280-2151
Date to Submit the Quarterly Securities Report: November 13, 2020
Start Date for Dividend Payment: December 4, 2020
Availability of Supplementary Briefing Material on Quarterly Financial Results: Available
Schedule of Quarterly Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Six Months Ended September 30, 2020 (From April 1, 2020, toSeptember 30, 2020)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Six months ended
September 30, 2020
Six months ended
September 30, 2019

Operating income

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

42,778(39.8)(1,642)―(746)―

71,018

1.7

9,993

(4.6)

10,697(4.7)

Net income attributable toowners of parent
Millions of yen%Six months ended(3,881)
September 30, 2020
Six months ended
6,655
September 30, 2019
(Note) Comprehensive income:Six months ended September 30, 2020:
Six months ended September 30, 2019:

Yen

Fully diluted net income
per share
Yen―(69.38)―(8.2)

117.45117.30

Basic earnings per share(3,327) million yen ― %6,702 million yen (8.1) %(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of September 30, 2020
207,328
As of March 31, 2020
181,567(Reference) Shareholders’ equity:
As of September 30, 2020: 125,666 million yen
As of March 31, 2020:
134,419 million yen

1

127,384
136,205

Equity ratio
%
60.6
74.0

DAIICHIKOSHO

CO.,

LTD.

2. Dividend
First Quarter
Yen――Second QuarterYen
56.00
56.00

Annual dividend
Third Quarter
Yen―Year ended March 31, 2020
Year ending March 31, 2021
Year ending March 31, 2021―(forecast)(Note) Changes in dividends forecast from most recently announced figures: None

Year-end
Yen
57.00

AnnualYen
113.0057.00

113.003. Forecast Consolidated Performance for FY2020, the Year Ending March 31, 2021 (From April 1,2020, to March 31, 2021)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen
Millions of yen%%%
96,500(34.0)(4,000)―(2,600)-2,―-103,600-(29.2)-1,400-(92.7)800-(86.1)
Net salesYear ending March 31,
2021 (full year)

Net income attributable toowners of parent
Millions of yen%

Basic earnings per share

Yen
Year ending March 31,
undecided―
undecided
2021 (full year)(Note) Changes in forecast of consolidated performance from most recently announced figures: Changed*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting inchanges in scope of consolidation): None
(2) Adoption of special accounting policies for quarterly financial statements: None
(3) Changes in accounting standard, accounting estimation change and error correction
1) Changes due to changes in accounting standard: None
2) Changes due to changes in accounting standard except (3) 1): None
3) Changes due to accounting estimation change: None
4) Error correction: None
(4) Number of common shares issued
1) Number of shares issued
As of57,234,200 As of57,234,200(including treasury shares)
September 30, 2020
shares March 31, 2020
shares2) Number of shares of treasury
As of1,609,212 As of904,712
shares
September 30, 2020
shares March 31, 2020
shares3) Average number of shares
Six months ended
55,954,420 Six months ended
56,665,846
during the period
September 30, 2020
shares September 30, 2019
shares* These consolidated financial results are outside the scope of quarterly review by Certified Public Accountants orauditing corporations.
* Explanation for the appropriate use of performance forecasts and other special notes:
The statements regarding forecast of financial results in this report are based on the information that is available, aswell 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.

2

DAIICHIKOSHO

CO.,

LTD.

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

FY2019(As of March 31, 2020)
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

3

Current Second quarter(As of September 30, 2020)

47,992
4,758
7,777
5,331(122)
65,73772,362
4,086
9,401
6,524(802)91,571

9,813
20,11840,6007,402
77,935

8,177
19,62841,095
7,908
76,8102,900
7,299
10,199

2,800
6,685
9,485

3,157
15,2499,358(71)
27,693
115,829
181,567

3,696
15,424
10,482(143)
29,460115,757
207,328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 (andother officers)
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

4FY2019(As of March 31, 2020)

Current Second quarter(As of September 30, 2020)

4,929
2,7862,117
1,184
11,41522,433

2,359
19,338
1,448
1,655
10,54235,344

11,04532,613

943

815

7,270
3,668
22,92745,361

7,435
3,735
44,59979,944

12,350
4,003
123,891(4,589)135,656

12,350
4,114
116,798(6,870)126,393

(221)
(733)
(26)
(254)
(1,236)310
1,475
136,205
181,567

250
(733)
(26)
(216)
(726)
352
1,365
127,384
207,328DAIICHIKOSHO

CO.,

LTD.

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

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Cooperative monetary aid received
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidies income
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment lossLoss on sales of investment securities
Loss on valuation of investment securities
Loss on COVID-19
Total extraordinary losses
Income (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income (loss)
Net income attributable to non-controlling interests
Net income (loss) attributable to owners of parent

5

Six months ended
September 30, 2019
(From April 1, 2019, toSeptember 30, 2019)

Six months ended
September 30, 2020
(From April 1, 2020, toSeptember 30, 2020)

71,01843,85927,15917,165
9,993

42,77830,277
12,50014,142(1,642)

13
192
20
605
831

19
142
420
600
1,181

66
2－
57
127
10,69795570
114
285(746)

039－
40－
0
2,360
2,361

95
67
96
130－
391
10,346
3,570
68
3,638
6,708
52
6,655

114
192
－
1
6,258
6,567
(4,952)325(1,440)(1,114)(3,837)44(3,881)

DAIICHIKOSHO

CO.,

LTD.

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

Net income (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustmentRemeasurements 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

6

Six months ended
September 30, 2019
(From April 1, 2019, toSeptember 30, 2019)

Six months ended
September 30, 2020
(From April 1, 2020, toSeptember 30, 2020)

6,708(3,837)

9(66)
51(5)
6,702

471
037509(3,327)6,650(3,371)

52

44

DAIICHIKOSHO

CO.,

LTD.

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)Six months ended
September 30, 2019
(From April 1, 2019, toSeptember 30, 2019)
Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Impairment loss
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 sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assetsSubsidy income
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Decrease (increase) in advance payments - trade
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other
Other, net
SubtotalInterest and dividends received
Interest paid
Proceeds from subsidy income
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 sales of property, plant and equipment
Purchase of intangible assets
Payments for acquisition of video licenses
Proceeds from sales of investment securities
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Loan advances
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

7

Six months ended
September 30, 2020
(From April 1, 2020, toSeptember 30, 2020)

10,3466,991
301
67(4,952)
7,434
318
192

(50)

(128)

(96)
66
55
56
130
95－
495
(2,660)33
1,150
1,231(796)(57)
17,36196(67)－(5,901)
11,489

(78)
95(0)
(0)
1
114
(2,360)946(1,526)48(47)(2,738)(87)
115(2,654)
79
(95)
2,360
(1,285)(1,595)(13)－(4,325)1(2,652)
(953)
189

(32)
24
(2,883)3(1,615)(522)
1－28(76)
194
(720)
91
163
(8,100)

(306)
118
(451)
174
(92)
(5,555)DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)Six months ended
September 30, 2019
(From April 1, 2019, toSeptember 30, 2019)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Dividends paid
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11570(814)(6,500)(3,152)(0)(16)(10,299)(55)(6,966)56,43949,4738

Six months ended
September 30, 2020
(From April 1, 2020, toSeptember 30, 2020)
6,203
31,610(740)(10)(3,249)(2,280)(21)
31,511024,361
47,232
71,593

DAIICHIKOSHO

CO.,

LTD.

Notes to the Quarterly Consolidated Financial Statements(Segment Information)
Six months ended September 30, 2019 (From April 1, 2019, to September 30, 2019)(Millions of yen)
Reportable segments
Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

31,04331,441

3,867

7,298

3,185

47

Sales
Segment income(Operating income)

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

OtherTotal

66,351

4,666

71,018－71,018

10,531819

11,351(1,357)

9,993

Note: The (1,357) million yen adjustment posted to segment income is primarily composed of general and administrative
expenses incurred by the administrative department at the head office that are not attributable to any particular
reportable segment.

Six months ended September 30, 2020 (From April 1, 2020, to September 30, 2020)(Millions of yen)
Reportable segments
Commercial
karaokeKaraokecabin andrestaurantMusic
softwareSubtotal

24,178

11,184

2,970

5,069

(5,843)120

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

Adjusted
amount(Note)

Postedamount to theconsolidated
quarterlystatements ofincome

Other

Total

38,333

4,444

42,778－42,778

(653)

231

(421)

(1,220)(1,642)

Note: The (1,220) million yen adjustment posted to segment income or segment loss is primarily composed of generaland administrative expenses incurred by the administrative department at the head office that are not attributable toany particular reportable segment.

(Additional Information)
As for the impairment of non-current assets and tax-effect accounting, etc., we estimate future cash flows, recoverability ofdeferred tax assets and other matters assuming that the negative impact due to the spread of COVID-19 on our businessresults will continue until the end of the current consolidated fiscal year, even though the impact will gradually diminish
going forward.

(Notes to the Quarterly Consolidated Statements of Income)Subsidies income
Employment adjustment subsidies, which are subsidies provided to cover salaries, etc. for the period during which
employees were furloughed, as well as subsidies, etc. received from the national government, local municipalities, etc.
following the spread of COVID-19, have been posted to “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 a measure
to furlough (special leave of absence) all employees in principle. In addition, karaoke cabins and restaurants operated by theCompany as well as those operated by our clients were required to close temporarily, following the requests from thenational government and local municipalities.
In light of these events, fixed costs of karaoke cabins and restaurants operated by the Company during the period of closureand fixed costs in relation to leasing of commercial karaoke equipment, including salaries for the period during which
employees were furloughed, have been posted to “loss on COVID-19.”9