Non-Consolidated Financial Results
for the Six Months Ended October 31, 2020
[Japanese GAAP]
December 8, 2020
Company name: Asukanet Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2438
URL: https://www.asukanet.co.jp
Representative: Yuji Matsuo, Representative Director & President
Contact: Kenya Kono, Senior Managing Director & CFO
Phone: +81-82-850-1200
Scheduled date of filing quarterly securities report: December 14, 2020
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Available
Schedule of quarterly financial results briefing session: Scheduled (for institutional investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Non-Consolidated Financial Results for the Six Months Ended October 31, 2020
(May 1, 2020 to October 31, 2020)(1) Non-Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Six months ended
October 31, 2020
October 31, 2019

Operating income

Ordinary income

ProfitMillion yen%

Million yen%

Million yen%

Million yen

%

2,584
3,142

(17.8)
7.9

(56)
323

5.6

(7)
324

4.6

(10)
228

8.3

Basic earnings
per share

Diluted earnings per
share

Six months ended
Yen
Yen
October 31, 2020
(0.62)
October 31, 201913.57
(Note) Diluted earnings per share is not presented as there were no potential shares.
(2) Non-Consolidated Financial Position
Total assets

Net assets

Million yen

6,302
As of October 31, 2020
6,607
As of April 30, 2020
(Reference) Equity: As of October 31, 2020: ¥5,588 million
As of April 30, 2020: ¥5,750 million

Equity ratio

Million yen

%

5,588
5,750

88.7
87.0

2. Dividends
1stquarter-end

2ndquarter-end

Yen

Yen

Annual dividends
3rdYear-endquarter-end

Total

Yen

Yen

Yen

-

10.00

10.00

-

7.00

7.00

Fiscal year ended April 30, 2020
0.00
Fiscal year ending April 30, 2021
0.00
Fiscal year ending April 30, 2021
(Forecast)(Note) Revision to the forecast for dividends announced most recently: No

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2021
(May 1, 2020 to April 30, 2021)(% indicates changes from the previous corresponding period.)
Basic earnings
Net sales
Operating income
Ordinary income
Profitper share
Million yen%

Million yen%

Million yen%

Million yen

Full year
5,775 (12.2)
200 (71.8)
250 (64.8)(Note) Revision to the financial results forecast announced most recently: Yes%

Yen

164 (67.2)

9.76* Notes:(1) Accounting policies adopted specially for the preparation of quarterly financial statements: Yes(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
October 31, 2020: 17,464,000 shares
April 30, 2020: 17,464,000 shares2) Total number of treasury shares at the end of the period:
October 31, 2020: 615,057 shares
April 30, 2020: 623,057 shares
3) Average number of shares during the period:
Six months ended October 31, 2020: 16,842,856 shares
Six months ended October 31, 2019: 16,841,001 shares* These quarterly financial results are outside the scope of quarterly review procedures by a certified public
accountant or an audit corporation.
* Explanation of the proper use of financial results forecast and other notes
The earnings forecasts and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions that the Company believes are reasonable, and actual results
may differ significantly from these forecasts due to a wide range of factors.

4. Overview of Business Results(1) Overview of Business Results for these Two Quarters of Fiscal Year
Conditions were extremely difficult during the first two quarters of this fiscal year, with the global
coronavirus pandemic causing a slowdown in both business activities and personal spending. As the end of
the pandemic is still not in sight, the future continues to be uncertain.
Asukanet operates three business areas, each with different positioning and characteristics. They are (1) the
memorial design service business, which adds digital processing and remote output services for photos of thedeceased to a funeral business that is largely unaffected by economic trends, (2) the personal publishingbusiness, which provides ideas for new photo output methods that allow users to create complete photocollections beginning from just a single book, and (3) the aerial imaging business, which is utilizing unique,recently-developed technologies aiming to create a new market and achieve dreams.
Following is an overview of the business results for each segment. The results figures for each segment
include internal inter-segment sales.
(1) Memorial design service businessIn this business, funerals continue to be reduced in size due to the coronavirus pandemic, and although
there is a trend towards a recovery in income from processing photos of the deceased, conditions remaindifficult for videos and other funeral production services. Sales of equipment, frames, and supplies are also
struggling, and sales were down from the same period in the previous year. However on the sales front, we
saw steady growth in the number of new contracts as a result of efforts to call attention to our focus
restoration tool. In addition the “tsunagoo” service is continuing to expand its presence in the market withthe addition of condolence gift acceptance functions and development of web services that are available atany time and place. “tsunagoo” was released as one type of our “funeral tech” that has brought extensive useof IT technologies to the funeral market.
In terms of income, despite a reduction in advertising expenses, travel and transportation expenses, thedecline in sales, coupled with an increase in personnel costs for image processing operators as well as onetime cost for relocation of Kanto Operation Center due to reduction of fixed expense, resulted in a decline insegment income.
As a result, sales were 1,151,737 thousand yen (94.6％ year-on-year), and segment income was 250,342
thousand yen (84.2％ year-on-year).
(2) Personal publishing service businessThis business operates AsukaBook for the professional photography market in Japan, and MyBook for thegeneral Japanese consumer market. We are also engaged in OEM supply of photo albums and photo prints
based on photos that were taken with smartphones.
In the professional photographer market, although there was steady growth in products for photo studios,sales of our primary service of wedding photo albums were down as it was strongly affected by the many
wedding ceremonies which were postponed due to the coronavirus pandemic. Although conditions are
difficult, based on expectations for a recovery in demand when the coronavirus pandemic subsides, we
continued programs including life-size photo contests and AsukaBook seminars conducted via the Internet.
As one new program in this area, we added a photo data sales function to the GLAMPiC data delivery
service and new product releases.
In the general consumer market, the reduction in opportunities to take photographs due to voluntary
restrictions on travel and events has resulted in a temporary drop in demand for photo albums. As a result,sales were down from the same period in the previous year, including in the OEM Division. Under these
conditions, we conducted a 20th anniversary campaign for “MyBook” and conducted campaigns integrated
with the MyBookLife and Autoalbum services.

In terms of income, we succeeded in reducing advertising expenses, travel and transportation expenses,
delivery expense and also restructured our production workplace personnel. However there were large
effects from the declining operating rate that accompanied the drop in sales, and there was a large decrease
in segment income.
As a result, sales were 1,378,878 thousand yen (73.5% year-on-year), and segment income was 80,272
thousand yen (20.2％ year-on-year).
(3) Aerial imaging businessThis business was launched in March 2011, aiming to create a market through new image and video
expressions utilizing aerial imaging technologies. We are developing, manufacturing, and selling both glass
and plastic “ASKA3D plates” that utilize our original technologies to project images in mid-air.
For glass ASKA3D plates, although the current volume of supply is still not sufficient, we carried out
sales for signage and development purposes. Our production system is gradually taking shape, and we plan
to strengthen sales during the second half of the year. At the same time at the technical development center
that was established to shift to in-house mass production of glass ASKA3D plates, we are constructing a
prototype production system and conducting repeated trials aimed at establishing mass production
technologies.
For plastic ASKA3D plates, in the environment of the coronavirus pandemic as well as broadcasted bymedia, much attention is being given to the use of aerial imaging for touchless operations. We received
numerous inquiries and proceeded with sample sales to use the plates incorporated into products.
In the area of marketing, although we were unable to promote sales through exhibitions, we carried out
marketing through our own activities in the Japan market and established agents in 3 locations in overseas
markets, reinforcing our sales system. The number of products installed and the number of verification tests
are increasing, as are the numbers of products created by our business partners, and we will continue
working to obtain mass-production orders for mid-sized lots.
In terms of sales, sales were higher than the same period in the previous fiscal year due to higher sales ofplastic plates.
In terms of profit and loss, despite the reduction of advertizing expense and travel and transportation
expense, the higher R&D expenses required for the establishment of a technical development center resulted
in a larger segment loss than the same period in the previous fiscal year.
As a result, sales were 54,248 thousand yen (104.5% year-on-year), and segment loss was 123,145
thousand yen (compared to a loss of 109,474 thousand yen in the same quarter of the previous year).
As a result of the above, sales were 2,584,234 thousand yen (82.2% year-on-year). In terms of income,primarily as a result the large decline in segment income in the personal publishing business, ordinary loss was
7,313 thousand yen (compared to ordinary income of 324,855 thousand yen in the first two quarters of theprevious fiscal year). and net loss for the quarter was 10,459 thousand yen (compared to net income of
228,604 thousand yen in the first two quarters of the previous fiscal year).

(2) Overview of the Financial Status
1, Assets, liabilities, and net assets(Assets)
Current assets at the end of this second quarter decreased by 305,068 thousand yen from the end of theprevious fiscal year to reach 6,302,620 thousand yen. Despite an increase in tangible fixed assets of 116,710
thousand yen due largely to expansion of production equipment, this decrease was primarily due to thepayment of dividends and other expenses that produced a decrease in cash and savings of 348,192 thousandyen.
(Liabilities)
Liabilities at the end of this second quarter decreased by 142,893 thousand yen from the end of the previous
fiscal year to reach 714,410 thousand yen. This was primarily due to a decrease in the provision for officer
retirement benefits of 100,000 thousand yen and a decrease in income taxes payable of 74,000 thousand yen.
(Net assets)
Net assets at the end of this second quarter decreased by 162,175 thousand yen from the end of the previous
fiscal year to reach 5,588,210 thousand yen. This was primarily due to a decrease of 168,409 thousand yen as aresult of dividend payments.
2, Overview of cash flows in this fiscal year
The balance of cash and cash equivalents (hereafter referred to as “cash”) at the end of this quarter end
declined by 348,192 thousand yen from the end of the previous fiscal year to reach 1,207,624 thousand yen.
(Cash flows from operating activities）
Net cash expended as a result of operating activities during the consolidated first 2 quarters was 73,462
thousand yen (compared to a gain of 260,181 thousand yen in the same period of the previous fiscal year).
This was primarily due to a decrease in the provision for officer retirement benefits of 100,000 thousand yen
and payment of 72,273 thousand yen in corporate taxes.
(Cash flows from investing activities）
Net cash expended as a result of investing activities during the consolidated first 2 quarters was 104,674
thousand yen (compared to an expenditure of 483,629 thousand yen in the same period of the previous fiscal
year). Despite recording income of 108,887 thousand yen from sales of insurance, this was primarily due topayment of 165,908 thousand yen for acquisition of tangible fixed assets.
(Cash flows from financing activities）
Net cash expended as a result of financing activities during the consolidated first 2 quarters was 169,375
thousand yen (compared to an expenditure of 186,052 thousand yen in the same period of the previous fiscal
year). This was primarily due to payment of 168,554 thousand yen in dividends.
(3) Future Outlook
Based on the results of the consolidated first 2 quarters of this fiscal year and the future outlook, we haverevised the forecast figures that were announced on June 9, 2020 in the results forecast for the fiscal year
ending April 30, 2021. For details, please refer to “Notice of Revision to Full-Year Results Forecast” inJapanese that was released on this date.

5．Financial Statements for the First Two Quarters(1) Balance sheet
Previous fiscal year
(ended April 30, 2020)
Asset
Current assets
Cash and deposits
Accounts receivable-trade
Merchandise and products
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings, net
Machinery and equipment, net
Land
Others, net
Total tangible fixed assets
Total intangible fixed assets
Total investments and other assets
Investment securities
OthersTotal investment and others
Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Provision for bonuses
Provision for officer retirement benefit
OthersTotal current liabilities
Fixed liabilities
Provision for retirement benefits
OthersTotal fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets(Units: 1,000s yen)
Current 2nd quarter(ended Oct. 31, 2020)

1,960,817
798,034
190,796
49,083
98,23829,155(4,351)
3,121,774

1,612,624
727,705
176,31499,31393,35135,004(5,424)
2,738,890

905,868
448,625
844,060
236,969
2,435,524
221,573954,207552,298
844,060
201,667
2,552,235
242,746

523,634
305,182
828,816
3,485,914
6,607,688

531,347
237,401
768,748
3,563,730
6,302,620

167,630
162,859
87,100150,900
100,000
181,380
849,870

145,855
273,507
13,100149,900―
126,249
708,612

6,009
1,423
7,432
857,303

5,670
127
5,797
714,410490,300
606,585
4,924,463(269,031)
5,752,316

490,300
606,585
4,753,332(265,577)
5,584,639(1,930)3,570(1,930)5,750,385
6,607,688

3,570
5,588,210
6,302,620

(2) Profit and loss statement for 1st two quarters

Net Sales
Cost of sales(unit:1000s yen)First two quarters of the previous First two quarters of the current
fiscal year
fiscal year
(May 1, 2020 – Oct. 31, 2020)(May 1, 2019 – Oct. 31, 2019)
3,142,930
2,584,234
1,571,304
1,462,724

Gross profit

1,571,625

1,121,509

Selling, general, and administrative expenses

1,247,931

1,178,063

Operating income

323,694(56,554)

Non-operating income
Interest received
Dividends received
Commissions received
Insurance cancellation refund
Subsidy income
Exclusion of unpaid dividend
Others

517
500
194
―
―
1,051
102

341
675
148
32,60014,615―
1,582

Total non-operating income

2,365

49,962

1,131
73

722
―

Non-operating expenses
Foreign exchange losses
OthersTotal non-operating expenses

1,204

722

324,855(7,313)Extraordinary income
Income from sales of fixed assets―

329

Ordinary income

Total extraordinary income―

329

Extraordinary losses
Loss from disposed fixed assets

145

2,313

Total extraordinary losses

145

2,313

Net income before taxes

324,710(9,298)

Income taxes

96,1051,160

Net income

228,604(10,459)(3) Statement of cash flows(unit:1000s yen)First two quarters of the previous First two quarters of the current
fiscal year
fiscal year
(May 1, 2020 – Oct. 31, 2020)(May 1, 2019 – Oct. 31, 2019)
Cash flows resulting from operating activities
Net income before taxes
Depreciation expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for officer retirement
benefit
Increase (decrease) in provision for retirement benefit
Interest and dividends received
Expense to buy back its securities
Foreign exchange losses (gains)
Insurance cancellation refund
Subsidy income
Gain on sales of fixed assets
Loss on disposal of fixed assets
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventory assets
Increase (decrease) in accounts payable-trade
Increase (decrease) in accrued consumption taxes
Others324,710
166,776
1,134
7,600

(9,298)
188,750
1,073(1,000)―(100,000)―(1,017)
1
890
―
―
―
145

(339)
(1,016)―681(32,600)(14,615)
(329)
2,313

(2,147)70,328(18,047)(151)(52,996)578(30,861)(21,774)(42,640)(20,261)

Subtotal

427,476(11,,590)

Interest and dividends received
Subsidy received
Income taxes paid

949―
(168,243)

1,341
9,060
(72,273)

Cash flows due to operating activities

260,181(73,462)

Cash flows due to investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant, and equipment
Income from sales of tangible assets
Purchase of intangible fixed assets
Purchase of investment securities
Income from sales of insurance
Others(405,000)
605,000(410,447)―(58,741)(201,394)―(13,047)(405,000)
405,000(165,908)420(42,007)―108,887(6,065)

Cash flows due to investing activities(483,629)(104,674)(184,981)
(122)
(948)

(168,554)―(820)(186,052)(169,375)

Cash flows due to financing activities
Cash dividends paid
Expense to buy back its shares
OthersCash flows due to financing activities
Effect of exchange rate on cash and cash equivalents

(890)

(681)

Net increase (decrease) in cash and cash equivalents(410,392)(348,192)

Balance of cash and cash equivalents at beginning of year

1,669,763

1,555,817

Balance of cash and cash equivalents at end of quarter

1,259,371

1,207,624

(Additional information)(Accounting estimate of the effects of the coronavirus pandemic)
The coronavirus pandemic is having an effect on our company’s business results for reasons including smaller funeral sizes
and reduced orders for wedding photo albums.
In the “(Additional information) (Accounting estimate of the effects of the coronavirus pandemic)” in the financial results
report from the consolidated first quarter, we assumed that conditions would begin to return to normal in the memorial designbusiness and personal publishing business (our primary business areas) during the second half of this fiscal year. However basedon the information, including external information, available at the time when the second quarter statement of financial results
was created, we have reviewed this assumption and now expect that conditions will gradually begin returning to normal in thememorial design service business beginning from the third quarter of this fiscal year, and that conditions will gradually begin
returning to normal in the personal publishing business beginning from the fourth quarter of this fiscal year.
This change in assumptions has been applied to the accounting estimate; however there is no change to the estimate
conclusions from those announced at the end of the previous fiscal year.

[Segment information]
Cumulative first quarter of the current fiscal year (May 1, 2019 – Oct. 31, 2019)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial
designservicebusiness

Personal
publishing
servicebusiness

Aerialimagingbusiness

Adjustments

Amountrecorded in
profit and loss
statement

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)

1,218,103

1,875,024

49,803

3,142,930―

3,142,930

―

―

2,100

2,100

(2,100)―1,218,103

1,875,024

51,903

3,145,030(2,100)3,142,930

297,390

396,453(109,474)

584,369(260,675)

323,694

Cumulative first quarter of the current fiscal year (May 1, 2020 – Oct. 31, 2020)
Information related to the amounts of sales, income, and loss for each reporting segment(Units: 1,000s yen)
Reporting segment
Memorial
designservicebusiness

Personal
publishing
servicebusiness

Aerialimagingbusiness

Adjustments

Amountrecorded in
profit and loss
statement

Total

Sales
Sales to outside
customers
Inter-segment internalsales and transfers
Total
Segment income (loss)

1,151,737

1,378,878

53,6182,584,234―

2,584,234

―

―

630

630

(630)

―

1,151,737

1,378,878

54,2482,584,864(630)

2,584,234

250,342

80,272(123,145)

207,469(264,023)(56,554)

This is the summarized translation of released report for your reference.
Please refer to the original Japanese financial document.