DAIICHIKOSHO

CO.,

LTD.

Translation
This report is a translation excerpts from original Japanese Flash Report and for reference purpose only. In case of discrepancy between this report andoriginal Japanese Flash Report, the later shall prevail.

FY2016, the year ended March 31, 2017

Flash Report on the Consolidated Results for the Year Ended March 31, 2017
[JGAAP]May 25, 2017

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

DAIICHIKOSHO CO., LTD.
Tokyo Stock Exchange7458
http://www.dkkaraoke.co.jp
Saburo Hayashi, President
Shigeki Kobayashi,
Corporate Officer and General Manager, Accounting Department
Phone:+81-3-3280-2151
Date of the Ordinary General Meeting of Shareholders: June 23, 2017
Start Date for Dividend Payment:
June 26, 2017
Scheduled Date to Submit the Securities Report:
June 27, 2017
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, 2017 (From April 1, 2016, to March 31,
2017)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Millions of yen

Year ended March 31, 2017
Year ended March 31, 2016

140,640
141,310

Operating income
Ordinary income% Millions of yen% Millions of yen%(0.5)
20,694
4.1
22,5396.7
6.2
19,886
4.5
21,1270.2

Net income attributable to
Basic earnings per shareowners of parent
Millions of yen%
Yen
Year ended March 31, 201711,115(11.8)
193.53
Year ended March 31, 2016
12,599(7.7)
218.25(Note) Comprehensive income:Year ended March 31, 2017: 14,385 million yen 41.9 %Year ended March 31, 2016: 10,134 million yen (22.6) %Fully diluted net income
per shareYen
193.38218.19Ordinary income to total
assets%%Year ended March 31, 2017
9.7
12.3
Year ended March 31, 2016
11.4
11.7
(Reference) Equity in net income of unconsolidated subsidiaries and affiliates:
Year ended March 31, 2017: ― million yen
Year ended March 31, 2016: ― million yen

Operating income to net
sales
%
14.7
14.1

Return on equity

1

DAIICHIKOSHO

CO.,

LTD.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of March 31, 2017
186,954
119,069
As of March 31, 2016
179,641
112,754(Reference) Shareholders’ equity:
As of March 31, 2017:
117,574 million yen
As of March 31, 2016:
111,402 million yen

Equity ratio
%
62.9
62.0

Net assets per shareYen
2,057.98
1,933.03(3) Consolidated cash flows

Year ended March 31, 2017
Year ended March 31, 2016

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 end of
periodMillions of yen

Millions of yen

Millions of yen

Millions of yen

33,07627,100(16,331)(27,434)(8,546)(7,299)61,25452,247

2. DividendYear ended March 31, 2016
Year ended March 31, 2017
Year ending March 31,2018 (forecast)First Quarter
Yen――

Second Quarter
Yen
54.00
54.00

Annual dividend
Third Quarter
Yen――

Year-end
Yen
54.00
55.00

AnnualYen
108.00109.00

―

55.00

―

55.00

110.00Aggregate amount ofdividend (total)

Payout ratio (consolidated)

Millions of yen

Year ended March 31, 2016
Year ended March 31, 2017
Year ending March 31,2018 (forecast)

%
49.5
56.3

6,224
6,243

Ratio of dividends to net
assets (consolidated)
%
5.7
5.5

48.0

3. Forecast Consolidated Performance for FY2017, the Year Ending March 31, 2018 (From April 1,
2017, to March 31, 2018)
Net sales
Millions of yen

Six months ending
September 30, 2017
Year ending March 31,2018 (full year)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income% Millions of yen% Millions of yen%

68,900

0.1

9,300

(4.5)

9,500

(5.1)

141,200

0.4

20,8000.5

21,300(5.5)

Net income attributable toowners of parent
Millions of yen%
Six months ending
September 30, 2017
Year ending March 31,2018 (full year)

Basic earnings per share
Yen

5,800

38.0

101.52

13,10017.9

229.302

DAIICHIKOSHO

CO.,

LTD.

*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting fromchanges in scope of consolidation): None
(2) Changes in accounting standard, accounting estimation change and error correction
1) Changes due to changes in accounting standard: Yes
2) Changes due to changes in accounting standard except (2) 1): None
3) Changes due to accounting estimation change: None
4) Error correction: None
(3) Number of common shares issued
1) Number of shares issued
As of57,434,200 As of
57,634,200(including treasury shares)
March 31, 2017
shares March 31, 2016
shares2) Number of shares of treasury
As of
303,168 As of
3,070
sharesshares March 31, 2016
sharesMarch 31, 2017
3) Average number of sharesYear ended
57,436,068 Year ended
57,728,772
during the period
March 31, 2017
shares March 31, 2016
shares(Reference) Outline of Nonconsolidated Financial Results
1. Nonconsolidated Performance for the Year Ended March 31, 2017 (From April 1, 2016, to March
31, 2017)(1) Nonconsolidated operating results
Net sales
Millions of yen

Year ended March 31, 2017
Year ended March 31, 2016

101,348
103,167(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income% Millions of yen% Millions of yen%(1.8)
15,4998.2
18,371
9.2
10.3
14,3232.8
16,8172.2

Net income
Millions of yen

Year ended March 31, 2017
Year ended March 31, 2016

9,617
10,518

Basic earnings per share
%
(8.6)
(8.2)

Yen
167.45182.20Fully diluted net income
per share
Yen
167.32
182.15(2) Nonconsolidated financial position
Total assets
Millions of yen

Net assets
Millions of yen

As of March 31, 2017
137,934
As of March 31, 2016
130,942(Reference) Shareholders’ equity:
As of March 31, 2017: 74,907 million yen
As of March 31, 2016: 70,559 million yen

75,08570,641Equity ratio
%
54.3
53.9

Net assets per shareYen
1,311.15
1,224.33* These consolidated financial results are outside the scope of audit.
* 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.

3

DAIICHIKOSHO

CO.,

LTD.

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

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Inventories
Deferred tax assets
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
Lease and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

FY2015(As of March 31, 2016)

FY2016(As of March 31, 2017)

51,478
7,113
1,007
6,243
1,110
5,153
(149)
71,95662,019
6,792
－
6,158
1,076
4,808
(181)
80,673

13,941(8,802)
5,138
41,774(30,830)
10,94345,087(25,975)
19,112
31,595
5,244(4,387)856
67,646

15,103(8,949)6,154
44,182(33,473)
10,70846,328(27,872)
18,45636,714
5,472(4,352)
1,119
73,153

1,882
5,971
7,853

1,321
5,807
7,129

9,997
502
5,547
14,2501,922(36)
32,184
107,684
179,641

4,959
456
4,480
14,2671,871(37)
25,998106,280
186,954DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds
Accounts payable-other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Provision for directors’ retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
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 benefits plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

5

FY2015(As of March 31, 2016)

FY2016(As of March 31, 2017)

4,048
4,201
－
7,375
3,237
1,086
3,770
23,718

3,343
14,163
3,500
9,315
3,206
1,096
3,566
38,191

10,00023,362
74
1,263
5,398
3,069
43,16866,8866,500
13,268
75
1,053
5,775
3,021
29,69367,884

12,350
4,001
98,329(13)
114,668

12,350
4,003
102,649(1,368)
117,634(2,074)
(733)
108
(566)
(3,265)
81
1,270
112,754
179,641

1,033
(733)
80
(440)
(60)
178
1,316
119,069
186,954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
Directors’ compensations
Provision for directors’ retirement benefits
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Rent expenses
Depreciation
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Cooperative monetary aid received
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on acquisition of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment loss
Loss on sales of investment securities
Loss on valuation of investment securities
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

6

FY2015(From April 1, 2015, to
March 31, 2016)

FY2016(From April 1, 2016, to
March 31, 2017)

141,310
86,91854,392

140,640
86,21054,430

2,285
1,850
982
1,587
201
13,712
863
579
1,273
648
10,52034,50519,886

2,005
1,455
875
1,494
158
13,596
844
604
1,254
611
10,83533,736
20,694

746
335
－
937
2,018

264
373
766
968
2,372

339
228
209
777
21,127

331
－
196
528
22,539

25
－
－
25

34
370
4
408

306
603
－
－
910
20,242
7,515
61
7,576
12,66666
12,599

417
1,431
8
3,365
5,224
17,723
6,627
(84)
6,542
11,18065
11,115DAIICHIKOSHO

CO.,

LTD.

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

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

FY2015(From April 1, 2015, to
March 31, 2016)

FY2016(From April 1, 2016, to
March 31, 2017)12,666

11,180(2,392)(101)(37)(2,531)
10,134

3,107
(28)
125
3,204
14,385

10,067

14,32066

65

DAIICHIKOSHO

CO.,

LTD.

(3) Consolidated Statements of Changes in Net Assets
FY2015 (from April 1, 2015, to March 31, 2016)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCumulative effects ofchanges in accounting
policies

Capital surplus

12,350Retained earnings

4,001

Total shareholders’equityTreasury shares

93,439(8)

109,782－

12,350

Restated balance

4,001

93,439(8)

109,782

Changes of items during period
Dividends of surplus(6,013)(6,013)

Net income attributable toowners of parent

12,59912,599Purchase of treasury shares
Retirement of treasury
sharesPurchase of shares of
consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(1,696)(1,700)(1,700)

1,696

－
－

－

－

4,890

(4)

4,885

12,350

4,001

98,329(13)

114,668

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

318

Revaluation
reserve for
land

(733)

Foreigncurrencytranslation
adjustment

210

Remeasurementsof defined benefits
plans

Total
accumulated
othercomprehensive
income

(528)

(733)

Subscription
rights tosharesNon-controllinginterests

Total net
assets－

1,215

110,264
－

318

(733)

210

(528)

(733)

－

1,215

110,264

Changes of items during
periodDividends of surplus(6,013)

Net income attributable toowners of parent

12,599Purchase of treasury shares(1,700)Retirement of treasury
shares－Purchase of shares of
consolidated subsidiaries－

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(2,392)

－

(101)

(37)

(2,531)81

54(2,394)(2,392)

－

(101)

(37)

(2,531)

81

54

2,490

(2,074)

(733)

108

(566)

(3,265)

81

1,270

112,7548

DAIICHIKOSHO

CO.,

LTD.

FY2016 (from April 1, 2016, to March 31, 2017)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCumulative effects ofchanges in accounting
policies

Capital surplus

12,350Retained earnings

4,001

Total shareholders’equityTreasury shares

98,329(13)228
12,350

Restated balance

4,001

114,668
228

98,557(13)

114,896

Changes of items during period
Dividends of surplus(6,213)(6,213)

Net income attributable toowners of parent

11,115

11,115Purchase of treasury shares
Retirement of treasury
sharesPurchase of shares of
consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(811)(2,166)(2,166)

811

－

2

2

－

2

4,091

(1,355)

2,738

12,350

4,003

102,649(1,368)

117,634

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities

Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance(2,074)

Revaluation
reserve for
land

(733)

Foreigncurrencytranslation
adjustment

108

Remeasurementsof defined benefits
plans

Total
accumulated
othercomprehensive
incomeSubscription
rights tosharesNon-controllinginterests

Total net
assets(566)(3,265)

81

1,270

112,754228(2,074)

(733)

108

(566)

(3,265)

81

1,270

112,983

Changes of items during
periodDividends of surplus(6,213)

Net income attributable toowners of parent

11,115Purchase of treasury shares(2,166)Retirement of treasury
shares－Purchase of shares of
consolidated subsidiaries

2

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period

3,107

－

(28)

125

3,204

96

46

3,347

3,107

－

(28)

125

3,204

96

46

6,086

1,033

(733)

80

(440)

(60)

178

1,316

119,0699

DAIICHIKOSHO

CO.,

LTD.

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

FY2015(From April 1, 2015, to
March 31, 2016)
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Increase (decrease) in provision for directors’ retirement
benefits
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Gain on acquisition of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assets
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Other, net
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
Purchase of investment securities
Proceeds from sales of investment securities
Payments for transfer of business
Payments of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

10

FY2016(From April 1, 2016, to
March 31, 2017)20,242
15,901603

17,723
16,187
1,431(1,163)

(210)

(869)
339
65
－
－
－
280

(389)
331
(815)
(370)
4
3,365
383

(113)

318

655
141
(651)
(928)
1,371
35,877901(340)(9,337)－
27,100

41
105
(680)
1,252
950
39,631521(278)(6,885)87
33,076(149)
93(19,674)
113(3,519)(2,264)(159)
0(1,577)
(604)
632
(740)
632
(216)
(27,434)(594)
69(16,831)75(3,592)(1,764)
－
6,135
－
(450)
509
(465)
548
30
(16,331)DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

FY2015(From April 1, 2015, to
March 31, 2016)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash 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

11

355
2,670
(2,573)(6,014)(1,700)(35)(7,299)(127)(7,760)60,00752,247FY2016(From April 1, 2016, to
March 31, 2017)
(49)
2,385
(2,467)(6,214)(2,166)(33)(8,546)809
9,007
52,247
61,254DAIICHIKOSHO

CO.,

LTD.

Notes to the Consolidated Financial Statements(Segment Information)
FY2015 (From April 1, 2015, to March 31, 2016)(Millions of yen)
Commercial
karaoke
Sales
Sales to third parties
Intersegment sales
and transfers
Total
Segment income(Operating income)
Other items
Depreciation andamortization
Amortization of
goodwill

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other

Total

Adjusted
amount(Note)

Postedamount to theconsolidated
statements ofincome68,55756,7599,027

134,3446,966

141,310－

141,310

－

－

－

－

－

－

－

－

68,55756,7599,027

134,3446,966

141,310－

141,310

14,145

7,158

189

21,492

1,517

23,010(3,123)

19,886

9,797

3,498

49

13,345412

13,75816

13,774

2

491

－

494

－

494

－

494

Note: The (3,123) 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.

FY2016 (From April 1, 2016, to March 31, 2017)(Millions of yen)
Commercial
karaoke
Sales
Sales to third parties
Intersegment sales
and transfers
Total
Segment income(Operating income)
Other items
Depreciation andamortization
Amortization of
goodwill

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other

Total

Adjusted
amount(Note)

Postedamount to theconsolidated
statements ofincome67,07657,2278,718

133,022

7,618

140,640－

140,640

－

－

－

－

－

－

－

－

67,07657,2278,718

133,022

7,618

140,640－

140,640

14,8607,536

20

22,417

1,426

23,843(3,149)20,694

9,987

3,394

37

13,419495

13,91554

13,969

2

435

－

437

－

437

－

437

Note: The (3,149) 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.

12

DAIICHIKOSHO

CO.,

LTD.

(Changes to Accounting Policies)(Revised Implementation Guidance on Recoverability of Deferred Tax Assets)
From the fiscal year under review, the Company has applied the “Revised Implementation Guidanceon Recoverability of Deferred Tax Assets” (Accounting Standards Board of Japan (ASBJ) Accounting
Statement No.26 of March 28, 2016; hereinafter called the “Revised Implementation Guidance on
Recoverability”), and has revised the part of accounting method regard to the recoverability ofdeferred tax assets.
The Revised Implementation Guidance on Recoverability has been applied following the transitional
handling prescribed in the paragraph 49 (4) of the Implementation Guidance on Recoverability, and thedifference between the amount of deferred tax assets in case where the paragraph 49 (3) 1 to 3 of the
Implementation Guidance on Recoverability was applied as of the beginning of the fiscal year underreview and the amount of deferred tax assets at the previous fiscal year-end has been added to retained
earnings at the beginning of the fiscal year under review.
As a result, deferred tax assets (Investments and other assets) and retained earnings at the beginning of
the fiscal year under review increased by 228 million yen respectively.
As the impact was reflected in net assets at the beginning of the fiscal year under review, the beginningbalance of retained earnings increased by 228 million yen on the consolidated statements of changes in
net assets.

(The change in depreciation method due to Tax Reform 2016)
Accompanying the revisions in Corporate Tax Law, the Company has applied the “Practical Solution
on a change in depreciation method due to Tax Reform 2016” (Practical Issues Task Force No.32 ofJune 17, 2016) from the fiscal year under review.
Depreciation method pertaining to facilities attached to buildings and structures acquired on or after
April 1, 2016 has changed to the straight - line method from the declining- balance method.
This change in accounting policy has minimal impact on profit and loss for the fiscal year underreview.

13